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Why Faith In Gold? (One Simple Statistic)

Tyler Durden's picture


Submitted by Tim Price via Sovereign Man blog,

On December 31st, 1964, the Dow Jones Industrial Average stood at 874. On December 31st, 1981, it stood at 875. In Buffett’s words, “I’m known as a long term investor and a patient guy, but that is not my idea of a big move.”

To see in stark black and white how the US stock market could spend 17 years going nowhere– even when the GDP of the US rose by 370% and Fortune 500 company sales went up by a factor of six times during the same period– the price chart for the Dow is shown below.


20140106 tim price rates1 Why do we have faith in gold? (one simple statistic)

So the US stock market suffered a Japan-style lost decade, and then some. Back to Buffett, again:

“To understand why that happened, we need first to look at one of the two important variables that affect investment results: interest rates.


“These act on financial valuations the way gravity acts on matter: The higher the rate, the greater the downward pull. That’s because the rates of return that investors need from any kind of investment are directly tied to the risk-free rate that they can earn from government securities.


“So if the government rate rises, the prices of all other investments must adjust downward, to a level that brings their expected rates of return into line.


“In the 1964-81 period, there was a tremendous increase in the rates on long-term government bonds, which moved from just over 4% at year-end 1964 to more than 15% by late 1981. That rise in rates had a huge depressing effect on the value of all investments, but the one we noticed, of course, was the price of equities.


“So there–in that tripling of the gravitational pull of interest rates- -lies the major explanation of why tremendous growth in the economy was accompanied by a stock market going nowhere.”

So how you feel about asset allocation this year should largely be a function of how you feel about interest rates.

And if you fear that interest rates are more likely to rise– triggered, perhaps, by a combination of Fed tapering and general weariness / revulsion at the manipulation of so many financial assets– then you should perhaps question your commitment to western equity markets as well as to bonds.

As Buffett wrote in a 1999 article in Fortune magazine, “Secular equity bull markets occur when long-term rates are dropping… and secular bears occur when rates are rising.” This is hardly rocket science.

Of course, 2014 could be yet another year in which equity markets rise further, driven by hopes and expectations of still more QE. But that’s not a bet we’re entirely comfortable making.

Since we’re primarily attracted by valuations and not by momentum, we’re now fishing for equities in a clearly demarcated pool (Asia and Japan– because that’s where values are most compelling).

We are not interested in most western markets because the value isn’t visible to us and the underlying growth (fundamentals, anybody?) looks pathetic.

And our monetary authorities have showered financial markets with kerosene by ensuring that the conventional ‘risk-free’ alternative to equities (i.e. government debt) is anything but.

Yet our exposure to ‘alternative’ assets, primarily precious metals, proved variously problematic last year.

2013 was the year that the mainstream financial media went aggressively anti-gold, and in his magisterial (and deeply witty) 2013 Year In Review, Cornell chemistry professor and economic agent provocateur David Collum cites three pertinent quotations from the New York Times:

“There is simply nothing in the economic picture today to cause a rush into gold. The technical damage caused by the decline is enormous and it cannot be erased quickly. Avoid gold and gold stocks”;


“Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels”;


“The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators’ dreams into a nightmare.”

But as Collum also points out, these quotes are from 1976, when the spot price of gold fell from $200 to $100 an ounce. Thereafter, gold rose from $100 to $850.

Why do we continue to keep the faith with gold (and silver)? We can encapsulate the argument in one statistic.

Last year, the US Federal Reserve enjoyed its 100th anniversary, having been founded in a blaze of secrecy in 1913. By 2007, the Fed’s balance sheet had grown to $800 billion.

Under its current QE programme (which may or may not get tapered according to the Fed’s current intentions), the Fed is printing $1 trillion a year.

To put it another way, the Fed is printing roughly 100 years’ worth of money every 12 months. (Now that’s inflation.)

Conjuring up a similar amount of gold from thin air is not so easy.


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Mon, 01/06/2014 - 16:31 | 4305352 hedgeless_horseman
Mon, 01/06/2014 - 16:32 | 4305361 Stuart
Stuart's picture

Whoever is using the paper market to drive down prices so they can clean physical off the shelves agrees with you. 

Mon, 01/06/2014 - 16:34 | 4305373 Kaiser Sousa
Kaiser Sousa's picture


guesss who figured out the action in Gold and Silver today...

Mon, 01/06/2014 - 16:45 | 4305400 Pladizow
Pladizow's picture

Between '64' and '81', Wall St couldnt do whatever the fuck it wanted!

Mon, 01/06/2014 - 18:19 | 4305681 Osmium
Osmium's picture

True.  And when did Wall Street hatch the 401k idea to steal more money from more people?  1979 - 1980 I think

Mon, 01/06/2014 - 19:06 | 4305815 Papasmurf
Papasmurf's picture

Remember when Bush pushed to privitize social security?

Mon, 01/06/2014 - 21:52 | 4306377 philipat
philipat's picture

And I also remember that, in those days, Banks were actually honest and trustworthy institutions. Bank Managers were pillars of society. How much things have changed as a result of American exceptionalism??

Mon, 01/06/2014 - 16:45 | 4305413 nope-1004
nope-1004's picture

LMFAO.... "not sure if it was a big fund or what that caused prices to fall...."


IDIOT statement, read by an IDIOT reporter, paid to read the IDIOT teleprompter.


Mon, 01/06/2014 - 16:51 | 4305428 DoChenRollingBearing
DoChenRollingBearing's picture




I wonder what CNBS would say if/when FOFOA's $55,000 comes true...  Would that lead to anyone getting fired?




Mon, 01/06/2014 - 17:18 | 4305523 stacking12321
stacking12321's picture

why would they fire someone for doing what they are ordered to do?

only thing that will happen is cnbs will lose credibility, but, i would say they don't have much to begin with.


Mon, 01/06/2014 - 16:53 | 4305435 Ignatius
Ignatius's picture

Gold manipulation is like the 'revelations' of domestic spying:  they want us to know.

Mon, 01/06/2014 - 16:57 | 4305456 Herd Redirectio...
Herd Redirection Committee's picture

Bugs Bunny (when we were kids_) preached defeatism: "If you can't beat 'em, join'em"

These days we have experts tell us "Don't fight the Fed"

Mon, 01/06/2014 - 18:49 | 4305758 Soul Glow
Soul Glow's picture

Mom and Pop investors have the memory of radiated tuna fish.  Only 6 years ago did they see one of the greatest wealth transfers ever occur - away from them and into the hands of the banks - and yet nowhere more so than the USA can we see faith being put back into stocks as every retail investor rushes back in the stock market.

Many of these people were the same ones who got taken in 2001, the early '90s, and '87.  These are of the Boomer class, an entilted egotistical generation far more interested in being right in the past than being right in the future.  This generation thinks they stopped the war in Vietnam although that war was lost when Saigon fell.  The Boomer generation thinks of themselves as the first feminists yet support a POTUS who was/is more womanizing than Hugh Hefner.  The Boomer generation repeats mistake after mistake and have followed WS off of a cliff.  

But now the chickens come home to roost, and with no meal stored.  Their faith is back in the stock market and they will get plucked and skinned ike never before.  Coo-coo-cachoo, Boomers.

Mon, 01/06/2014 - 19:53 | 4305989 Buzz Hacksaw
Buzz Hacksaw's picture

I've watched these pick pocket events you speak of. I've said for years "Set 'em up to knock 'em down".

All those boomers cam't possibly fit in that little car.


Mon, 01/06/2014 - 19:03 | 4305802 therover
therover's picture

For me it's if you can't beat em, CHEAT em.

Mon, 01/06/2014 - 20:11 | 4306039 Jack Napier
Jack Napier's picture

Taking a line from Letterman's Top 10... drumroll please!

If you can't beat em...

10) You don't deserve to win.
9) Try harder.
8) Beat them, literally.
7) Redesign your game plan.
6) Make up your own rules.
5) Stop giving a shit about the rat race and live your life.
4) Call an impromptu meeting with Sailor Jerry.
3) Be your own central bank! Gold+Silver=Winning
2) It's worth saying again, beat them, literally!
1) Don't play their game!!

Mon, 01/06/2014 - 17:07 | 4305490 swmnguy
swmnguy's picture

Quite so.  The aticipated effect on our behavior of all of us knowing this stuff is their goal.  The behavior effect is far more wide-ranging than the direct results of the actions.

Mon, 01/06/2014 - 18:23 | 4305688 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

It certainly would have a chilling (in the west) psych ops effect wouldn't it?


2010:  "Silly gold bugs see all sorts of shadow men moving the price about because they aren't very knowlegable about how markets work and fill in the blanks with their overactive imaginations."

2013:  "Stand the fuck back, because we are gonna jam it so far down, your friends will call just to see how you are. We OWN this system, the markets and the regulators so we can do you anything we want.  Any sized cramdown any size market corner goes because we say it does.  And this is just the shit you can see.  We have 1000 to 1 leverage in the derivatives markets which don't even have a pretense of regulation.  Do you understand what that means you monetary boyscouts?  You have no idea what you are up against."


My only consolation is that the public seems to own almost no gold so if it hits an FOFOA type price, people will maybe look at it like bitcoin going up to $1000 rather than gold holders having committed some crime against them.

Mon, 01/06/2014 - 17:05 | 4305483 swmnguy
swmnguy's picture

From the story you linked:

"Logic events are not out of the ordinary for electronic markets," CME Group spokesperson Damon Leavell wrote to "All trades stand and our technology performed as designed."

That just sounds funny, doesn't it.  Funny-peculiar, not funny-haha.

Mon, 01/06/2014 - 21:54 | 4306383 I Drink Your Mi...
I Drink Your Milkshake's picture

Looks like they read that Oct '13 IMF report too.


Mon, 01/06/2014 - 16:44 | 4305397 Rainman
Rainman's picture

The Chinese have been talking about USSA gold price smackdowns for some time.

Mon, 01/06/2014 - 16:35 | 4305369 DoChenRollingBearing
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+ 12

Gold is forever, or at least for your children, grandchildren...

Mon, 01/06/2014 - 16:40 | 4305391 Skateboarder
Skateboarder's picture

I gave one of my best friends his first oz of silver yesterday to jumpstart his collection. He had not considered buying PMs before, but when he saw real money for the first time, he was a 'convert' immediately. :)

Mon, 01/06/2014 - 16:48 | 4305414 DoChenRollingBearing
DoChenRollingBearing's picture



+ 1 for spreading it around.  FOFOA sez that the more de-centralized the gold is held, the better (silver counts in my book).

But, I had NO SUCH LUCK giving away 1/10th oz gold coins to a couple of nieces and nephews...  You either get it, or you do not.  I am done with preaching to heathen (non-PM holders).

Mon, 01/06/2014 - 16:55 | 4305454 Temporalist
Temporalist's picture

DCRB the impact of a big coin, like 1oz of silver, in a child's hand is what you need to look for.  You could even go for a 2oz or larger silver coin to match the 1/10th.oz of gold but still kids like how big and heavy a silver coin is...a 1/10th oz gold coin is just not impressive if they don't know the value.

Mon, 01/06/2014 - 17:30 | 4305554 bwh1214
bwh1214's picture

Telling isn't it. I think people can actually tell when things are over or undervalued compared to one another, kid or adult. I think people can tell when holding the same dollar amounts of silver and gold which one they want. And your right instead of giving the kids a 1/10 oz coin, give them a 5 oz ATB quater, they will love it I promise.

Mon, 01/06/2014 - 17:53 | 4305610 franzpick
franzpick's picture

"when he saw real money for the first time"

Ron Paul asked Bernanke 'is gold money'?, to which bernie answered "No".

But Paul asked it the wrong way: had he asked "In India, is gold money?", Bernie would have had to spit out the word Yes...

Mon, 01/06/2014 - 19:21 | 4305870 hunglow
hunglow's picture

I have never been to India.  We are not in India but I think I would like to ride on top the trains, I think.

Mon, 01/06/2014 - 19:16 | 4305852 Papasmurf
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I remember as a boy, getting my first laminated quarter and knowing the value was gone.

Mon, 01/06/2014 - 21:46 | 4306355 WmMcK
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Absolutely agree.  The 1.5 oz Canadian Polar Bears make great gifts for kids. 

Tue, 01/07/2014 - 23:54 | 4310422 MeelionDollerBogus
MeelionDollerBogus's picture

indeed. Some may shudder but I let my silver & gold, all coins & bars, be played with by toddlers. the whole stack.
I know, age 2 and 4 and you'd think "oh no, snot all over my maples!!"
Yes, I know.
But those children will never, EVER forget what real money is. Ever.
It's something now clearly understood. The weight, the sound, how shiney it is & they did listen a little about the difference of paper and gold (and silver).
They were girls too. So when I explained at the time how many barbie dolls you can get with just ONE gold wafer (1 oz) their eyes lit up.
They got it.

Mon, 01/06/2014 - 16:57 | 4305457 Skateboarder
Skateboarder's picture

The more affinity one has to digital money (it is very high in Gen-Y/Millenials), the harder it is to accept that 'something silly like an ounce of gold' can cost 1200 dollars or something like that. "Dude, that's, like, half a pound of weeeed maaaan."

Luckily my amigo already long held the belief that cash is king and digital money is worthless when the power goes out.

Mon, 01/06/2014 - 17:01 | 4305463 Spungo
Spungo's picture

omg billion dollar idea. Let's make a weed backed currency called Weedcoin.

Mon, 01/06/2014 - 17:10 | 4305503 LoneStarHog
LoneStarHog's picture

Weedcoin? ...It is sure to go up in smoke.

Mon, 01/06/2014 - 17:45 | 4305591 ParkAveFlasher
ParkAveFlasher's picture

The Germans did try - among other things - a grain-backed currency in the Weimar Republic.  They also did a mortgage-backed mark.  There is nothing new under the sun, besides tomahawk missiles, and a price-control regime that automatically taps all phones, tracks all citizens via GPS-enabled phones or predictive analysis, and records video from all enabled devices that memorizes undisguisable physical characteristics, and simultaneously produces predictive algorithms to deduce possible network affiliations between citizens that might join together in government opposition or at least defection from the price control cartel. 

I'd say we are in new territory there, with tomahawk missiles and the omniscient state.

Mon, 01/06/2014 - 22:23 | 4306479 Tall Tom
Tall Tom's picture

Weedcoin...Now that is a good idea. Hell it can even have a Commodity Futures Market based in Washington State and Colorado. There will always be a demand.


Good idea.

Mon, 01/06/2014 - 17:40 | 4305580 The Wisp
The Wisp's picture

when you give gold as a Gift ( i have ) you always  use the Line.. if you ever decide to sell it, I would like first Shot

Mon, 01/06/2014 - 22:01 | 4306405 I Drink Your Mi...
I Drink Your Milkshake's picture

Boy, you don't keep up with CNBC, do you?


Mon, 01/06/2014 - 19:07 | 4305817 therover
therover's picture

+1 and then some. I have been doing the same thing, and have converted several. It's easier with silver due to the price, but soon enough 10 gram gold bars and 1/4 ounce gold coins start to get bought by the converted too. Then the bigger stuff. One of my friends got his first 1 ounce gold eagle last week.

Only a matter of time.

Tue, 01/07/2014 - 23:51 | 4310410 MeelionDollerBogus
MeelionDollerBogus's picture

saw the same thing at work years ago.
I brought in one of my gold ounce wafers & took it right out of the case & put it in his hand.
He was a doubter until then but the look in his eyes, the feel of the weight, the purity, you could see it.
No one can hold that in their hands and pretend it's not money. The illusion is destroyed on contact.

Mon, 01/06/2014 - 17:46 | 4305592 fockewulf190
fockewulf190's picture

Picked up more phyzz over the weekend.  Happy everytime I can trade pieces of paper for solid hard assets.  I´m pretty much counting on having to burn through a good portion of my stack in order to get through the Great Reset, so I doubt there will be much left for any beneficiaries...especially since no western government has any idea of what to do when the derivatives time bomb blows the entire worlds economic system apart.  I´m expecting draconian this and Mad Max that, mixed with terrible suffering for billions.  I really hope I´m wrong, but seeing that Obama is out playing more golf than ever, I´m going to keep stacking.

Mon, 01/06/2014 - 17:03 | 4305470 TheGardener
TheGardener's picture

Gold is a daring bet.

Like a return to a gold standard.

Like a return to morals and such.

Like a return to monarchy.

Mon, 01/06/2014 - 17:13 | 4305517 Spungo
Spungo's picture

Don't let rose color glasses fool you about the gold standard. The gold standard had a lot of problems. Being tied to hard assets can cause financial gridlock during periods of recession. Fiat currency is far superior as long as inflation is kept low. The reason the US dollar is dying is because the government and fed refuse to admit there is inflation. In the 1970's, the calculation for inflation included housing prices. Houses going up 10-20% per year was a sign of extremely high inflation. Since about 1980, they've stopped including house prices and only look at rent prices. This hides a huge amount of inflation. They're also ignoring all of the inflation in the stock market.

Mon, 01/06/2014 - 17:55 | 4305630 donsluck
donsluck's picture

"as long as inflation is kept low" now there is the rub. It is the reason fiat always fails, and gold/silver has survived as money for thousands of years.

Mon, 01/06/2014 - 17:57 | 4305631 fockewulf190
fockewulf190's picture

Every single fiat currency that ever existed has gone to zero.  Gold and silver are still around.  If you were to find some Reichsmarks in an old shoebox, they may be interesting to look at, but are essentially worthless.  Find some gold dubloons in an old ship wreck, your going to party your ass off.

Mon, 01/06/2014 - 18:57 | 4305787 Soul Glow
Soul Glow's picture

Fiat currency is far superior

The definition of fiat means "by decree".  So you are saying that it is best to use a standard of time/value "by decree" than one which holds tangible value?

What if someone came to your bank and said "all of the units you are using to measure wealth are no longer of value".  How would that make you feel?  Because that would be done by decree, as such with the value of fiat currency.

Tue, 01/07/2014 - 23:43 | 4310387 MeelionDollerBogus
MeelionDollerBogus's picture

periods of recession are shorter & less intense under a hard asset system.
Making liquidity scarce at those times is good & proper: it's what actually stops misallocation of wealth & permits savings to rebuild.
Permanent liquidity is actually bad for the economy. Gridlock is a solution, not a problem, because it's infrequent. It's like your immune system: it attaches to invaders & stops them. Permitting them full access would make you ill or dead. That's what we got now. No immune system, fiat liquidity is no-holds-barred, no immune system, no way to recover from illness.

Fiat currency guarantees inflation is not low: stating it's fine as long as inflation is low is like saying nuclear bombs are fine for keeping warm as long as you don't go critical.

Mon, 01/06/2014 - 17:37 | 4305581 Canadian Dirtlump
Canadian Dirtlump's picture

Gold is proven. Like the faith you have in shaving companies because the hair on men's faces is always growing:

Mon, 01/06/2014 - 17:55 | 4305615 Deo vindice
Deo vindice's picture

Aren't you supposed to put warnings on pictures that can frighten children (in this case, maybe even adults)? ;-)

Tue, 01/07/2014 - 03:26 | 4307198 fockewulf190
fockewulf190's picture

My dog barked and left a pile after seeing that.....thing.

Mon, 01/06/2014 - 18:51 | 4305771 Hobbleknee
Hobbleknee's picture

Is that one of the guys from ABBA?

Mon, 01/06/2014 - 20:10 | 4306038 Canadian Dirtlump
Canadian Dirtlump's picture

Here's a hint. The gambler just broke even in the senate.

Mon, 01/06/2014 - 18:53 | 4305775 forwardho
forwardho's picture

As a long term friend of Bill's.

That is priceless.

Mon, 01/06/2014 - 16:31 | 4305353 HardlyZero
HardlyZero's picture

Gold is elementary and atomic.

Mon, 01/06/2014 - 16:29 | 4305357 insanelysane
insanelysane's picture

Because in the new world order, only China makes crap for sale, and they accept gold as payment.

Mon, 01/06/2014 - 16:36 | 4305370 sixsigma cygnus...
sixsigma cygnusatratus's picture

Contrary to popular belief, governments and banks don't hate gold, they hate it when YOU have gold.  And that's a perfect reason to own it.

Mon, 01/06/2014 - 16:46 | 4305416 kralizec
kralizec's picture

Sounds like a compelling reason for them to confiscate it too...just like FDR did...

Just sayin'...

(cough) boating accident (cough)

Mon, 01/06/2014 - 17:25 | 4305550 wmbz
wmbz's picture

FDR did not actually "confiscate" peoples gold. He issued Executive Order 6102 which was a gold call-in. The price was set at $20.67 per ounce. Many folks went and exchanged their gold for the $20.67. Even the it was "the law" many folks did not turn in what gold they had. My grandfather stashed his few coins away for many years.

Mon, 01/06/2014 - 20:32 | 4306110 satoshi101
satoshi101's picture

FDR made it mandatory to turn in your gold, with a $10k fine if you didnt', in 1933 $10k was like a $1 million dollars today. That was an astronomical FINE for those who hid gold, in fact its safe to say that it was the fines that made the government richer.

Neighbors were rewarded 10% for turning in their neighbors if they knew of unreported gold, familys were paid to fuck familys, wives were paid to report husbands.

The only exempt was collectible gold coin, all else was confiscated. Wedding rings of course, but BAR GOLD in any form was illegal go hold, and the collectible had to be really of historical value.

Why MUST You fuck head FBI trolls here lie by the 1,000's with this bullshit.

It's coming again, only problem is this time they fuck you in the brain to BUY paper-gold, so there is nothing to steal.


Mon, 01/06/2014 - 22:55 | 4306606 Tall Tom
Tall Tom's picture

First is is clear that you have never read Executive Order 6102.

Second nobody was ever prosecuted for not redeeming their Gold using EO 6102. (There were a few prosecutions under DIFFERENT LAWS.) You have NOT read the History

Third the E.O. stated that nobody could own over $100 Face Value of Gold within the BORDERS of the United States. That means that OFFSHORE HOLDINGS WERE EXEMPT.

(Dwight D. Eisenhower gave more teeth to the law in 1959 when he decalred that Foreign Holdings were illegal. Of course the Swiss Bankers did not share information with the US Authorities at the time.)

Fourth the fact that ALL Gold JEWELRY was exempted from EO 6102 made the law TOOTHLESS.

Fifth the fact that Coins with Numismatic Value were EXEMPT from seizure again made the law TOOTHLESS.


Here is a link to the History of Executive Order 6102


You will find out that it was a MYTH that there were Safe Deposit Box Seizures. (Not that I will ever trust a Bank...)


Fianlly here is the link to the TEXT of the Executive Order 6102 so that you cannot continue to Bullshit others on this site.


Do you really believe that it is wise to destroy any shred of credibility that you have? Anybody can do this research. It took me all but two minutes to acquire the links.


Go away troll.



Tue, 01/07/2014 - 23:29 | 4310334 MeelionDollerBogus
MeelionDollerBogus's picture

anything in a deposit box was automatically confiscated.

Mon, 01/06/2014 - 17:35 | 4305575 Frank N. Beans
Frank N. Beans's picture

Not sure that applies to China and its citizens buying gold hand over fist lately.

Mon, 01/06/2014 - 18:46 | 4305754 forwardho
forwardho's picture

China owns it's people. Every coin bought by the private collector, will at some point belong to the collectors owner.

Win, Win.

Try claiming a boating accident in the PRC, Your family will be charged for the round used in your execution.

Mon, 01/06/2014 - 20:27 | 4306100 satoshi101
satoshi101's picture

CHINA is 1000X more 'FREE' than the USA, the USA has everyone in prison,

The USA beats children, and fuck's grandma's,

The USA fingerbangs infants at airports,

The CHINESE government told its people BUY GOLD

The CHINESE government told its people, DONT BUY BTC its a FRAUD

The chinese gov cares about its people, the USA wants to eat, fuck, tax, and kill its people.

Go to china moron, and see a free country with your own eyes.


Mon, 01/06/2014 - 20:58 | 4306180 Exponere Mendaces
Exponere Mendaces's picture



I see the voice of "China" or whatever you are is still firmly situated in the loony bin.

China ran supportive Bitcoin news segments on government run TV stations, and forbid their banks to touch it, since they're having a bit of a credit problem right now - ring-fencing the situation. Personal use of Bitcoin in China is still happening, just use your brain and do some googling for Hong Kong based exchanges.

But don't let pesky facts get in the way of your double-spaced tinfoil rants, no sireee....



Mon, 01/06/2014 - 16:37 | 4305382 Doug Eberhardt
Doug Eberhardt's picture

Physical Gold sales are slow to start the year but the December dip was bought about as a strongly as the April 2013 dip. I love dips! Give me more!


Mon, 01/06/2014 - 16:55 | 4305440 Magnum
Magnum's picture

I live in a large city with a relatively strong economy supported by various industries, and the local coin shop selliing bullion is deader than a doornail save for the imported software tech labor from India who show up constantly to buy one maple leaf.  

The lack of US public purchasing of metals has to play some role in that price has really dropped a lot over the last couple of years.  Apparently there is enough gold to supply the Asians who hoard it at home.

Mon, 01/06/2014 - 17:04 | 4305471 Tinky
Tinky's picture

Brilliant thesis, and based on it, one can only assume that when gold rose from 200 to 1900, people were queuing up around the block to buy bullion from that very same coin shop (and others like it around the country).

Mon, 01/06/2014 - 17:23 | 4305538 Magnum
Magnum's picture

So in your mind there is a strong demand for gold bullion in USA?  LOL.  Demand is practically non-existent.  

Mon, 01/06/2014 - 17:31 | 4305558 HardlyZero
HardlyZero's picture

Agreed, but China is taking 1Kg and 100g bars at .999 and .9999 fineness.  They say the Swiss refineries are going 3 shifts and expanding to meet the Chinese demand.

Amazing.  Time will tell.

Tue, 01/07/2014 - 05:46 | 4307350 Villageidiot777
Villageidiot777's picture

I think the question is: In which currency that gold is paid? USD, EUR, CHF, CNY?

Mon, 01/06/2014 - 19:28 | 4305893 Tinky
Tinky's picture

Boy, you really are obtuse.

The point, aside from exposing your example for what it is, is that demand from people on the street has been largely irrelevant to gold price.

Mon, 01/06/2014 - 21:44 | 4306346 Being Free
Being Free's picture

Demand is practically non-existent.

It is better to walk alone, than with a crowd going in the wrong direction.

Mon, 01/06/2014 - 23:05 | 4306639 Tall Tom
Tall Tom's picture

I wonder why that it is that I have absolutely no problems selling Gold. and, I have never had a problem selling the United States.


The Demand is practically non-existent? I have far too many bidders for my Gold at current Paper prices. And yet I do not sell...


LMAO. You are so full of shit. I have a hard enough time buying more of it at my bidding, pal.


Sell Gold to me. I want your Gold. I have too much competition for it.

Mon, 01/06/2014 - 17:06 | 4305479 fijisailor
fijisailor's picture

So I guess that means you're homeless and spend all your time hanging out in front of the LCS watching who goes in and out? Please post the name of that LCS so I can call them up and ask about that.

Mon, 01/06/2014 - 17:22 | 4305533 Magnum
Magnum's picture

I know you don't visit a LCS that is crowded with buyers.  I am a PM enthusiast.  Over the last five years (since October 2008) I have visited countless times, often weekly and always monthly, so we're talking hundreds of visits.  I am a regular at coin shows.  What do you know about physical demand?

Do not argue: there is almost no public demand in USA for gold bullion.  Two million people live near me and I can walk in at any time during the day and see not more than half dozen customers in the LCS.  Often I am tne ONLY one there.  Went to Australia as well, same story but even deader, and bizarre insane prices for brand new coins with huge premiums because they are sold in fancy boxes or part of some limited set that has fuckall value other than the gold. Have been to Europe many times, same story.  There is a group of people who buy gold, don't get me wrong, but demand for physical gold = LOW.  zzzzzzzz.

Mon, 01/06/2014 - 17:43 | 4305589 Frank N. Beans
Frank N. Beans's picture


'Mericans buy gold as it goes up.

Chinese and Indians buy when the price goes down.


To wit: One of my LCS is about to go bust because it is so slow, but during the upswing in prices a couple years ago they were going gang busters.  I am trying to keep them in bidnis.

Mon, 01/06/2014 - 17:57 | 4305638 Magnum
Magnum's picture

I have been to coin shops consistently probably as much or more than anyone reading this, and there have never been a lot of buyers in US gold shops (aka LCS).  

The LCS make money when kids who inherit their deceased grandfather's coin collection.  The fools come in and sit down with boxes of beautifully-organized coins neatly collected over years, and give it all to the shop for a pittance.  Talk about a crime, it's so sad to see the old guy's collection get sold this way.  A single rare coin can fetch big money but those LCS just pay based on their "sheet" from Heritage or the liar Blue Book which shows on one had a coin is worth $80 yet the Red Book they use to sell the same coin shows it's worth $380.  

So these coin shops live and die by the amount of grandpa coin collection suckers that walk in the door.  That, and "We Buy Gold" scrap buys which involves more people SELLING gold not BUYING it.  

The number of buyers who walked into a gold shop in USA with $1280 today and bought an ounce of physical gold?  Very few.  In Asia of course, different story.

Mon, 01/06/2014 - 23:38 | 4306765 Tall Tom
Tall Tom's picture

My LCS Dealer Buys and Sells Coins using the Greysheet, the Coin Dealer Newletter. He is well respected and makes a margin using that. He does not rip off the public using large arbitrages off of the unwary.


He is so honest that his store has the name of UNDISPUTED TRUTH...AXIOM. That is one reason that I chose to do business with him. He is one of the best men I have ever met. It is an honor and a privelege to do business with him. (No he is not God but his character reflects that of God.)


He is extremely successful because he is a fair man to deal with. I do not watch people buying One Ounce Coins from his store. I have watched 50 to 100 Gold Ounce deals materialize in a single transaction. I am a very small time customer when compared to that.


If I were you I would shop for another LCS.

Tue, 01/07/2014 - 00:32 | 4306907 Magnum
Magnum's picture

As a buyer I am happy with my LCS. They make their money buying not selling. Many are really loaded from numismatic buys.

Mon, 01/06/2014 - 19:35 | 4305914 Papasmurf
Papasmurf's picture

The LCS here was filled with buyers last January.  They were all Indian and Asian.  The one white couple there was selling sofa findings to get along.

Mon, 01/06/2014 - 23:25 | 4306722 Tall Tom
Tall Tom's picture

My LCS Dealer is very busy. He is buying and selling all of the time. At times I will wait for many hours before we deal. One Half Dozen Customers is a Flood as he runs a One Man Show.


But he generally lacks that which I want...Fractionals. When they come through the door I scoop them up before someone else does.  That is not a common event. He just cannot keep the inventory as he moves his product with no problems. I am not into paying hefty premiums so I refuse that which is brand new. (He knows that.) That tells me that there IS DEMAND.


I do like Fractional Maples and Philharmonics. I will also add some of the US Fractional Eagles but do not like them because they are not as Fine. I have too many One Ounce coins and when the prices increase, and the Economy collapses into a Hyperinflationary Inferno, the Fractionals are going to be hard enough to barter with. That is why I like Coin Silver...Junk Bags.


I wish that he were slow and I was the only one there. But it is worth the wait as we are old friends. So I enjoy a beer and chat up a storm.


I am in San Diego. Where are you at? Maybe I need to take a trip...and Get Zee Gold.

Tue, 01/07/2014 - 00:23 | 4306883 Magnum
Magnum's picture

A few years ago there were tubes of 1/10 oz phils for 5% over. Great deal.  

I am personally an enthusiastic buyer. I don't sell.  

I wish people would not post bs about my comments on this topic, its just killing the messenger.  You know as well as I do that very, very, very few people in USA buy physical gold.  

I am not saying its hard to sell or buy the stuff. 

Mon, 01/06/2014 - 19:54 | 4305992 Sig
Sig's picture

I'd suggest you spend a little time looking at some actual statistics for physical demand.  Here is one of the best proxies - Sales of American Eagles.  I'm in the bullion business and I can tell you business is good.

Mon, 01/06/2014 - 20:13 | 4306049 Magnum
Magnum's picture

Underscoring my point -- for 2011 the mint sold only 857,000 1 oz eagles.  So for every 300 (THREE HUNDRED) people in USA less than one ounce of physical gold was sold in 2011.  Demand for gold bullion in USA is basically zero among individual consumers.

Mon, 01/06/2014 - 22:07 | 4306422 StillSilence
StillSilence's picture

You mean the hundreds of millions of broke, consume-it-all zombies havent decided to try and protect what little financial assets they have? Shocking.

Mon, 01/06/2014 - 22:42 | 4306560 Magnum
Magnum's picture

For whatever reason, the demand for physical gold in USA is, basically, zero.  Want proof?  If you are in a huge American city like LA, SF, Denver, Dallas, Chicago, etc etc etc etc, just find out where the large reputable gold dealer (coin shop) is and walk in.  No buyers really.  All the talk about big physical demand for gold is complete nonsense.  Even in Asia, where I go on a regular basis, it's busy yes especially compared to elsewhere but it's obvious that supply is adequate to meet demand.  

Tue, 01/07/2014 - 23:26 | 4310328 MeelionDollerBogus
MeelionDollerBogus's picture

you are wrong but there is a good reason people would stop buying gold:
if they already got enough gold but don't have enough stored food, food inflation is more immediate & food need is more immediate.
I personally have bought much less gold now than in 2010 because I'm re-stocking food. For paper gains I'm chasing agq options & hvu shares.
I hope to stack again soon but wages being stagnant means I need to make a hard choice.
I can't live out to 4000/oz gold starved, so I must first stack canned food.
Gold & silver can come after I have enough.

Tue, 01/07/2014 - 23:25 | 4310319 MeelionDollerBogus
MeelionDollerBogus's picture drutter 2013 summary: US mint broke all time records of bullion sales

Mon, 01/06/2014 - 16:41 | 4305386 Frank N. Beans
Frank N. Beans's picture

Bold gitchez!!

Mon, 01/06/2014 - 16:40 | 4305394 Jack of All Trades
Jack of All Trades's picture

If you like your gold and want to keep it, have a boating accident. . . .

Mon, 01/06/2014 - 17:29 | 4305562 HardlyZero
HardlyZero's picture

or move to Canada.

Mon, 01/06/2014 - 23:44 | 4306785 Tall Tom
Tall Tom's picture

If you do move to Canada you had best take Maples. There is a hefty tariff on less than .999 Gold taken into Canada.

Mon, 01/06/2014 - 16:48 | 4305427 Magnum
Magnum's picture

You know at one point today gold was up 9 bucks and I was expecting ZeroHedge to pen an article about the soaring price...

Mon, 01/06/2014 - 16:56 | 4305447 fijisailor
fijisailor's picture

Instead we got your typical comment as expected.

Mon, 01/06/2014 - 20:22 | 4306081 satoshi101
satoshi101's picture

Articles today on ZH

gold .

Ron paul




Jimmy Rogers

Pee Wee Herman

Yellen, as old yeller ..


I stopped this morning on this first gold post, I did see there was a yelller, ... I'm hoping for my daily doss of Ron Paul, NEOCON lite in rePUGlican drag.


Gold is great stuff, too bad its non-existant in the USA, PHYS-GOLD that is, and nothing on the internet that calls itself GOLD is PHYS-GOLD, not even a virtual currency back by GOLD.

Asia is the model, and in the USA its never ever been the same, gold shops are always open, and you PAY CASH, no paper, no reciept, and no records, and nobody knows, that's how its done, as everybody accepts that your gold is your personal business.

In the west, they WANT TO KNOW who has the gold, ... people are watching,... IRS wants to know who is buying gold to see if that person is using non-reported 'income'.



Listening to ZH talk about GOLD daily is as boring as listening about BTC bullshit, but all I ever see here is ad's for GOLD-PAPER, and SCHIFF and all these other daily talking heads that are pimping paper-gold in various BTC like scams, ...

There is nothing to talk about GOLD TALKS and BULLSHIT WALKS. End of story.


Tue, 01/07/2014 - 00:53 | 4306947 Magnum
Magnum's picture

Physical gold is everything BUT nonexistent in USA. You may not live here.  Every city it seems has a coin shop, you can always find eagles or maples.  $60 over the spot price, give or take.

Nearly non existent are buyers of gold.

Tue, 01/07/2014 - 07:39 | 4307409 slvrizgold
slvrizgold's picture

You're a troll. Listen buddy, I've bought thousands of ozs of PMs over the years, but less than 1% was ever purchased at LCS. Who wants to pay sales tax when apmex will mail to you for $9.99 and tulving will sell for super low premiums?!?

Tue, 01/07/2014 - 14:25 | 4308670 Magnum
Magnum's picture

Most states have NO sales tax on gold & silver coins!  including most of the west coast eg MT, ID, WA, OR, UT, AZ, even CA if over a certain $amount.  Tens of millions of people.  If there is no sales tax, why bother with online sellers--you lose all privacy when buying online as Tulving requires a check or wire (he is a dealer's dealer anyway, the average guy is not going to buy a freaking TUBE of eagles from Tulving).  So you would open your eyes if you went to any of these states without sales tax and saw the reality of zero buyers inside coin shops.  What will it take to make you believe that??!  

Or just keep telling yourself that gold is really a popular purchase in America, everyone is buying it ONLINE -- LOL!!

Mon, 01/06/2014 - 16:55 | 4305438 fijisailor
fijisailor's picture

Picking time intervals for stock and PM value is an exercise in bias.  Pick your own bias and go for it.  Hopefully you'll live comfortably.  Possibly you'll get rich or lose money.  At least with PMs you won't go broke.

Mon, 01/06/2014 - 16:55 | 4305443 Sufiy
Sufiy's picture

Chart Gold Bottom in 1976 vs Today


Jesse: COMEX Gold Registered Inventory Potential Claims Still Historically High 80 to 1

 Jesse reports that COMEX is still leveraged at the record levels of 80 owners per one oz of Gold. Next week will be very important for Gold market. The move above $1260 will bring more short covering and will bring more confirmation on Double Bottom retested in 2013 at $1180 level.

Mon, 01/06/2014 - 16:57 | 4305451 LongBalls
LongBalls's picture

Bottom line. Gold will be the currency of the black market when all money in this beast goes digital.

Mon, 01/06/2014 - 16:57 | 4305459 Spungo
Spungo's picture

The debate should not be gold vs everything. It's really commodities vs equities. Jim Rogers said he's big on food right now, and he's probably right. Food, like gold, does very well during periods of inflation.

Tue, 01/07/2014 - 07:58 | 4307428 MeelionDollerBogus
MeelionDollerBogus's picture

he's been saying the same thing about sugar every damn year too.

I think Rogers is deliberately not saying that sources for sugar have increased while production costs in real energy terms have decreased PLUS some people don't buy sugar. I don't. I may buy the odd thing made with sugar but I actually buy honey. Honey is an entirely different situation: it has sugar in it but without caring for bees you won't get any down the line. On top of that honey has many enzymes good for metabolism & all the essential amino acids you actually need (probably not in good balance for a human diet but they are all accounted for) and sugar has... none.

Mon, 01/06/2014 - 17:02 | 4305468 fijisailor
fijisailor's picture

When a fat finger drives the price down it is pretty obvious who is motivated to do that.  When the price goes back up just as fast it would be interesting to know who did that.

Mon, 01/06/2014 - 18:18 | 4305674 Seeking Aphids
Seeking Aphids's picture

Indeed Fiji. I think that today could be a turning point...the day the smackdown of gold did not go as planned. Someone or some ones decided that they would call the (Fed, BIS, GS, fill in the blank here)'s bluff. It should be very interesting to see what happens this the first shot across the bows by the Chinese who are now ready to see gold go up and the $US go down? Now that they have accumulated enough gold and sold enough T's? Wouldn't that be a hoot! The Fed and WS totally screwed and unable to do anything about it. Of course the Chinese don't want the $ to go down too much but certainly enough to weaken the US and enrich those Chinese who invested in gold.....think of it as payback time for the way the US left China holding the bag from 2008 to now.......time will tell if this interpretation of the situation is the correct one........

Mon, 01/06/2014 - 17:02 | 4305476 thefirstabomb
thefirstabomb's picture

QE infinity, follow china and buy gold on the dips


Mon, 01/06/2014 - 17:08 | 4305493 Johnny Cocknballs
Johnny Cocknballs's picture

How about a chart of demand for physical - although I'm not sure how anyone could get a reliable snapshot given all the rampant fuckery.

I'd ask whether or not the US government actually has all the gold it claims to hold, but we can't even get a fuckin' pretend audit of the Fed's paper "assets."

I don't know if Paulson secretly transferred America's gold to BoA, or to "the Rothschilds" or to some sort of Lost-like secret island where he experiments on combining humans and animals, but relating gold valuation to interest rates on long term Ts only makes sense if you treat it as an "investment" versus a store of value-slash-hedge against a loss of purchasing power of the dollar.

A lot of very smart people are looking for deflation...  I just can't see this happening, banks and corporations are sitting on trillions in brand new money.  Velocity has fallen? Yeah - and guess what, inflation has been creeping, steadily, upwards.  Ask anyone who does grocery shopping.  Costs are up all around, margins are thin... looking for deflation seems to me to ignore the real world.  I may of course be wrong.

But I'm not wrong.

Anyway, two years ago I did not think the markets, etc. were so corrupt that paper gold would and could be used to drive down the price of 'gold' even as demand skyrocketed, esp. in Asia, and I certainly would have been amazed that, by and large, the financial press would act as if it made perfect sense for prices to fall in a 'real' commodity that saw increasing demand as the Fed printed more currency into existence in record numbers - but now, now I understand.

And if they can engage in this level of fuckery with the true price of gold, they can certainly do it with equities.  I'm not sure it makes any sense at all to pay attention to what the most heavily traded stocks are doing. Sure it may go up for quite a while, but you have to be confident that there is no giant plug in the bathtub and that it won't be pulled when you least expect it.


What's my point?  The markets are rigged, they will come for your gold if they can, they will get a ME war going one way or another, they will sign the TPP, Fuku is worse than they're letting on and ultimately this will affect American exports too  {already started actually} and Warren Buffett is a disinfo agent.  He and the Gates and Zuckerburgs of the world are real world Raskolnikovs, and they will have to kill you before they can find redemption.


Mon, 01/06/2014 - 18:35 | 4305714 forwardho
forwardho's picture

That Sir, is a outstanding comment!

Well done.

Mon, 01/06/2014 - 20:13 | 4306051 satoshi101
satoshi101's picture

The problem here is american-centric,

American's are fucking broke, the gold-shops in the USA are one way, a fool walks into a shop and SELLS his gold for wholesale prices , and the shop owner turns around and sells that same gold for full retail on ebay, or to some INDIAN who will pay premium.


There is no habit to buy gold in the USA, while in ASIA its on every womens mind that I have ever met here,... there is no other thought in an Asian womens mind than 'gold', that's why so often women run the family budget. Women got the gold, women keep the gold, they wear the gold.


The deal here is PIMPS sold ETF/ETN GOLD post 1999, and the price went ASTRO which slowed down BUYING in asia, when the paper-scam in the west bubble popped at $1900 and fell back to $1100 then ASIAN's went crazy last few years buying gold for cheap again,

But remember ASIANS don't BUY paper GOLD, never did, and never will.

The west ain't got physical gold other than their teeth, or maybe a wedding ring here or there, the number of guys with serious gold at home is NIL to rare. Certainly kids under 25 years in the USA ain't got no gold,...

Totally different in ASIA, if you have gold, show gold; then you get unlimited pussy.

In the USA women screw for fun, in Asia the women screw with a plan.

Just saying that he that has the GOLD in Asia gets the pussy, and in the west you don't need gold to get pussy.


Cocknballs, your pussy ain't what I'm talking about.


Mon, 01/06/2014 - 20:51 | 4306165 Big Johnson
Big Johnson's picture

And all along, I thought that the Asian woman was having sex with me because she secretly liked my bald spot and beer belly.

Tue, 01/07/2014 - 01:03 | 4306969 Magnum
Magnum's picture

Show gold in Asia and get your ass robbed.

White guy in Asia does NOT need to show gold to get fine silken tight aromatic feminine pussy.

Mon, 01/06/2014 - 21:00 | 4306189 Exponere Mendaces
Exponere Mendaces's picture

In response to your statement ".. they will come for your gold if they can".

Spot-on, I fully expect a door-to-door search of all gold holders just like the Boston Marathon debacle. For the goldbugs that don't think it can happen, just watch what a government does when it is truly desperate to control its populace.

Best of luck, but it isn't going to get better out there, not for a while.

Tue, 01/07/2014 - 07:54 | 4307423 MeelionDollerBogus
MeelionDollerBogus's picture

the first step will be to shut down all power to stop all bitcoins.
Look, if you grew up in the era of phrack & phreaking and how cops would indeed turn off all the power just to get people for copyright, you ought to know better.
But you didn't grow up in that era.
I did.
Encryption protected the content of files in that era when it was used but it will not protect your bitcoins.
You can't USE THEM until you HAVE A GRID. You won't see the grid ever again when that day comes but gold DOESN'T NEED ONE.
Smart people will be elsewhere with their gold & may go where no grid has yet been put.
For the purpose of safety & survival.

Tue, 01/07/2014 - 07:52 | 4307420 MeelionDollerBogus
MeelionDollerBogus's picture

demand vs price, 'drutter divergence' mentioned even by Mike Maloney.

from drutter, also on paltalk, bullionbugs chat room.

"Anyway, two years ago I did not think the markets, etc. were so corrupt that paper gold would and could be used to drive down the price of 'gold' even as demand skyrocketed"

no? I figured it out in 2009. I finally bought gold in 2010. BECAUSE it's manipulated.

The lower the price goes the more I can buy. Once the end-game is clear, it's not paper currency & the higher the price the harder it is to get gold. Which is bad.

If someone was auctioning off life boats & I knew I needed one the last thing I'd want is a bidding war putting the price up out of my reach.

Mon, 01/06/2014 - 17:15 | 4305512 Fix It Again Timmy
Fix It Again Timmy's picture

What's wrong with a track record of 5,000 years?  How can you possibly overlook or ignore that?.....

Mon, 01/06/2014 - 17:23 | 4305547 Debugas
Debugas's picture

gold is still 40% up on a 5 year horizon

Mon, 01/06/2014 - 17:39 | 4305577 topspinslicer
topspinslicer's picture

But what happens if interest rates go back to sky high levels and the Treasury is not considered the risk free investment of days of yore? Got Gold? Got Guns?

Mon, 01/06/2014 - 18:54 | 4305777 Calmyourself
Calmyourself's picture

Here is where my limited knowledge keeps me from processing the chain..  How do interest rise to a level causing collapse when the central banks control the entire financial system, the one part they cannot control are interest rates, not buying it.. 

Tue, 01/07/2014 - 07:48 | 4307417 MeelionDollerBogus
MeelionDollerBogus's picture

the Fed doesn't control the part of the financial system requiring input from Asia, Russia or the Middle East, much less South America or Africa.
These do matter. I doubt we'll ever know precisely how much each matters but they matter.
the Fed would collapse the entire American empire by becoming the only buyer of Treasuries, for example, so it can't do that.

Doing that one horrifying thing is the only way to keep interest rates down, however, once the rest of the world doesn't want UST's at the current rates.

There's no way out of it. The entire debt bubble of the WORLD is collapsing, it's not just the USA. Insolvency is getting harder to cover up with duct tape & Hope-bama posters, the glorius tiger-hunter Putin & his allies the Dear Leader, whoever the current blobbing up President is & of course the humble opthamologist in Syria. etc., etc., etc.

Someone dared demand hands be shown & the time for bluffing is microseconds from no longer being the mattering thing.

Mon, 01/06/2014 - 18:20 | 4305687 fijisailor
fijisailor's picture

I'm not fighting the FED.  I'm allying with Asia and much of the rest of the world.

Mon, 01/06/2014 - 18:35 | 4305718 fijisailor
fijisailor's picture

So does anyone out there have an ounce of gold that they would sell for bitcoin(s)?  If so how many bitcoins would you accept for your ounce?  Also if you have bitcoins how many would you pay for an ounce of Au?  Forget other currencies and just quote in ounces or bitcoins.

Mon, 01/06/2014 - 20:05 | 4306025 satoshi101
satoshi101's picture

Just the other day the BTC pimps were promoting that the USA have shops where kids could bring in Grand-Pa's gold teeth ( steal them while he's sleeping ), and turn them into the shop, in return for BTC's,

The reality of course is this criminal gig is already in the run, thus the BTC criminals are going to have to look for another way to turn their FREE BTC's into something tangible.

"TRADE MY CAR FOR BTC", now that would be more american, have a lot of junk cars' and kid walks in with a pink-slip  an the lot gets the car and the kid gets BTC's, and then the auto goes to auction.

The problem is for the BTC criminals is turning BTC's into something real, but what does USA kids have? A phone, a car, and maybe a computer.

So about the only shops would be sell you phone for BTC's, or you computer, ... car.


You could get the kids to steal the family silverware from their parents homes and take it to silver shops for BTC?

There's got to be a way to turn BTC into real value?

Mon, 01/06/2014 - 21:05 | 4306202 Exponere Mendaces
Exponere Mendaces's picture


Oh my.

Here we go again, you have your double-spaced alternate capital rant engine fired up. BTC criminals? What the everloving fuck are you talking about? Stealing grandpas teeth to turn in? Are you in Colorado smoking a spliff?

Either that China pollution is getting to you, or you've got some serious mental issues coming to the fore. You can use Bitcoin for a multitude of things, even DoChenRolling Bearing has been blogging about turning BTC into Gold - if you so wish.

I don't know what planet you come from, but it certainly isn't one that uses rational logic.

Tue, 01/07/2014 - 07:43 | 4307412 MeelionDollerBogus
MeelionDollerBogus's picture

I think it's called trolling.
After all the fonestar coredumps we've tolerated on a finance blog I think you bitcoin l33t d00dz have earned a little payback.

Wed, 01/08/2014 - 14:11 | 4307411 MeelionDollerBogus
MeelionDollerBogus's picture

BTC's for clunkers, I think you're onto something!

Before ya know it, it will be btc's for carbon-credits...

I can haz Obamakare pr3m1um paid in bitcoynz?

(I just, I'm Canadian, I have real healthcare, NOT health insurance)

Tue, 01/07/2014 - 07:33 | 4307407 MeelionDollerBogus
MeelionDollerBogus's picture

dude, I'd have to be senile and on LSD before I'd be dumb enough to part with actual gold troy ounces, .9999 fine, for fucking electrons. Holy shit.

I don't want digital dollars either but if I'm forced to use them then I'm forced to seek them.

Last time I unloaded a gold troy ounce it was paper cash. Better than electrons but it was all non-digital and for good reason. It's no one's business to track dates, times, amounts of cash and/or gold. no one because I SAY so and my say is ultimate.

I can't enforce that with bitcoin, that stupid leger aka blockchain exposes everything.

Major weakness, as well as packets, as well as exposed NSA snooping you better BELIEVE some banksters have some inside information on, as well as the fact I actually want physical things. Gold is precious. What I get for it better be too. It's a giant risk in the middle holding electrons, less so with paper but still a risk I don't like. I'd rather pay for rent directly in gold bars or silver coins and be done with it.

Mon, 01/06/2014 - 19:53 | 4305985 Sig
Sig's picture


Mon, 01/06/2014 - 19:59 | 4306008 satoshi101
satoshi101's picture

The number of buyers who walked into a gold shop in USA with $1280 today and bought an ounce of physical gold?  Very few.  In Asia of course, different story.




Yep, I have been saying this all along here, the guy in the West has no money, hell $1280 is a months rent ...

But here in ASIA the gold-shops are always full of people coming and going, any time someone has some loot they run to the gold shop to buy gold, ... knowing that paper is not money.

One other trend that keeps the shops full, is that women are constantly upgrading their jewelry for very little they can take in a one year old broken necklace and get a new one for very little, as 'work' in the gold is cheap, while the gold content is what your paying for.

When people need 'paper money' they can place their gold in HOLD,

So gold shops are everywhere, and busy, very busy.

I think like someone said here, in the USA they're really not gold shops, they are COIN-SHOPS, and the gig is to rip off some kid selling grandpa's coin collection.

No COMPARISON to GOLD shops in ASIA and PAWN shops in the WEST.

GOLD-SHOP are more common than STARBUCKS in ASIA, gold shop's mean just that, only sell pure gold, in form of bar or jewelry, ... I prefer BAR myself, as not pay the premium for 'work'.

Lastly, when you go to sell your jewelry, they only pay for  the conent weight of the gold, so if you were to buy jewlery today, and sell it back tomorrow you would lose the difference in the 'work' ( to make it beautiful jewelry ), its not much but still a loss.

In the WEST you have this criminal premium for 'coin' gold, and collectible 'coin gold', which of course is BULLSHIT, ... again when you go to SELL its gold they're buying and not COIN,...



Most gold trade in the west is paper on computers, because people are lazy, ... and they can play gold virtually for very little, ... just like BTC.

Getting harder than HELL in CHINA/ASIA to get money out of BTC, ... more and more like HOTEL-CALIF everyday, you can get into BTC, but you can never leave.


Tue, 01/07/2014 - 07:30 | 4307405 MeelionDollerBogus
MeelionDollerBogus's picture

You think the West premium for bullion or coin is bad, look at retail jewelry. It's garbage. You'll easily pay 3x to 30x what the diamonds, silver + gold are worth. On youtube, Greg in Arizona formerly youtube channel ScrapGoldBusiness (shut off for false copyright violation, there were none) made it clear he threw out diamonds. Often they were too small & too common to sell. They could stay on the ring if the ring would sell, bracelet, etc., otherwise they go in the bin & the gold goes to the melt.

People are shocked to learn they will get $20 for something they paid $1500 for, or get $200 for something they paid $2000 or $3000 for. They overpaid from the start. Had they any idea, ANY idea, what the metal weight was & value of it before buying they'd realize how hard they're getting ripped. Retail customers are meant to feel rude or ignorant for even checking.

In Asia I'm sure it's precisely the opposite: rather than normal & accepted it would be rude or highly suspect if the value of gems, jade or gold were misrepresented, say, refusing to cough up the real weight, or perhaps pretending a gem was much more rare than it really is. Not only would it feel like fraud, it wouldn't likely work because the customers are all really fucking awake and won't fall for it.

I remember also once chatting online with a girl from Egypt. She got the run-down at first for wanting jewelry but us westerners didn't realize there too it's by weight and every single piece of gold jewelry she had, and sought more of, was 24k. Period. And priced by weight, obviously with a little for the work which has some value but not the nasty, insane, damn near fraudulent rip-offs by western jewelry outlets.

Mon, 01/06/2014 - 21:01 | 4306193 Que Sara Sara
Que Sara Sara's picture

Hi Fellow Zh'ers,

I rarely post but I am a lil bit curious, I haven't asked this particular question before,

IF the TPTB can print whatever they want, why bother to supress gold Physical ?

Ok I heard some answers for that none satifactory so far ( Control and to show they are Incharge and all that stuff)

Really I owned some good phy gold and then kept it in bank to loan money for family emergency, anyways is this just obsession with conspiracy  theory that we all seem to be so obsessed with?

I am from a asian country living and wkg in us for 10 yrs now, and i like this country so much u wouldn't believe

90% of you haven't seen any place out of usa or have no knowledge of how these countries are (Sorry don't mean any isnult)

Maybe we should all know what bad life is to appreciate the good life, coz I am used to this good life and it took me 5y rs to go back to the S hole that I came from to see what I am getting here, Maybe I may anger amny of us ppl here but, defineitely this place is still a paradise for all the rest fo the world, I have seen a lot of my colleagues who came form UK and europe to work here in last 3 yrs!


Mon, 01/06/2014 - 21:01 | 4306194 Que Sara Sara
Que Sara Sara's picture

Hi Fellow Zh'ers,

I rarely post but I am a lil bit curious, I haven't asked this particular question before,

IF the TPTB can print whatever they want, why bother to supress gold Physical ?

Ok I heard some answers for that none satifactory so far ( Control and to show they are Incharge and all that stuff)

Really I owned some good phy gold and then kept it in bank to loan money for family emergency, anyways is this just obsession with conspiracy  theory that we all seem to be so obsessed with?

I am from a asian country living and wkg in us for 10 yrs now, and i like this country so much u wouldn't believe

90% of you haven't seen any place out of usa or have no knowledge of how these countries are (Sorry don't mean any isnult)

Maybe we should all know what bad life is to appreciate the good life, coz I am used to this good life and it took me 5y rs to go back to the S hole that I came from to see what I am getting here, Maybe I may anger amny of us ppl here but, defineitely this place is still a paradise for all the rest fo the world, I have seen a lot of my colleagues who came form UK and europe to work here in last 3 yrs!


Tue, 01/07/2014 - 00:16 | 4306865 jomama
jomama's picture

i seriously doubt 90% of posters here have never been out of the country.  probably the reverse.

and besides, the grass is always greener on the other side.  the tide is turning, which is why most posters here are upest.  

i hope you didn't give up your citizenship.

Tue, 01/07/2014 - 06:34 | 4307371 MeelionDollerBogus
MeelionDollerBogus's picture

every method possible to sustain the fiat currency system is required.
Suppression of gold, oil, copper, wheat, then suppression of reporting actual inflation, all is needed.
Without this the central banks collapse. They need time to prepare.
This just gives them time.
Once they are ready they will have fully fascist police-states on every major continent & every person who is not an elite or their minion will be bankrupt & homeless.
That's why 2 key factors are how much debt people owe & can't escape (factor 1), and how many babies they make (more babies = more debt to raise more serfs aka slaves for the next generation).

You think you see nice things here now. Just imagine how it was 2 generations ago with a ton more purchasing power & job security as well as no challengers on other shores.

Just think about that. An empire has already started to crumble & what you will see is North America could descend to be just like what you left. It may take 2 generations more to get all the way there but no matter how slowly a mountain crumbles, it falls down, not up.

Mon, 01/06/2014 - 22:45 | 4306568 Cumulus Nimbus
Cumulus Nimbus's picture

Que Sara Sara
Gold price manipulation is not a conspiracy theory but a conspiracy fact. The purpose is of course to discourage investors from buying gold as a safe haven from dollar depreciation.

I would say however that the manipulation only seems to have begun after the 2011 debt ceiling crisis and the subsequent US credit rating downgrade. This was when the price of gold spiked to over 1900 dollars and it actually made the evening tv news.

I think this was the moment the fed panicked and decided they had to act before they lost control. Can't have Joe public waking up and realising that the dollar may not be the safest place to keep your savings.

Up until this time they seem to have been ok with the gold price rising each year for ten years. Perhaps they didn't feel it was a threat as long as public did not notice.

They do seem to be making up for it now though, as this mornings slam down would indicate.

Tue, 01/07/2014 - 01:49 | 4307061 Magnum
Magnum's picture

People who fall for the gold manipulation crap are ignorant.  If anything the manipulation is to get prices UP to make suckers pay too much so the insiders can sell.  Check the hucksters at Kingworld News. No matter what they say buy buy buy.  Aside from Sinclair, many of them are likely getting money to pump gold.

You can not in the longterm manipulate the price of such a small market, for gold, to decrease its price. The lunacy of otherwise intelligent people does not cease to amaze.

Tue, 01/07/2014 - 06:30 | 4307369 MeelionDollerBogus
MeelionDollerBogus's picture

Are you retarded?
More gold is sold short than can be delivered, which is fraud, and somehow what would be immense losses are covered.
Which is from money laundering.
Gold & everything else trades with margin, if you like, and that margin is rapidly contracted & expanded at the will of the CME.

If you think none of that is manipulation you are dumb.
If you think it's not happening then you're blind.
400 tons gold sold in 15 minutes. Was it delivered? Not that I have ever seen.
Did you see it? That was back in April.

Of course gold is manipulated UP and down but the question is when, why & how much, and by what method? Is it selling contracts that won't, can't be delivered, or is it dropping margin to bring in suckerz & then rapidly raising margin requirements? Is it pretending gold is for sale by the IMF then not actually selling it for a year? What is it?

All have happened so the real question is mapping which move, by which player, when & what is the motive.

Never go full retard.

Tue, 01/07/2014 - 11:30 | 4308012 Magnum
Magnum's picture

YOU DollerBoogus are inexperienced in the world of finance and have come under the spell of the "full retard" gold-is-manipulated cult on ZH.  

Rationally looking at this, the seller in a manipulation will actually hurt themselves because they are not achieving the best possible price. Manipulation in metals drives the price UP, then spinning the story of shortages to get the people to buy as they sell into every high and then the market crashes. You would not short a market here in this manner to make money. This is more indicative of liquidation based upon price action without regard to liquidity.


In 2013 September & October the gold trade was stopped automatically because no more liquidity was available in the entire market. Typically, the five to ten seconds for the trading is stopped preventing price movements that are excessive.

The gold promoters always claim it is manipulation and somehow not real, yet the price continues to decline slowly spiraling down. There is no “manipulation” organized to force the price down. This is simply a bear market and there has been steady liquidation of commodities in general.


Tue, 01/07/2014 - 23:35 | 4310360 MeelionDollerBogus
MeelionDollerBogus's picture

The seller, JP Morgan, can't be hurt. Every loss is backstopped immediately by the Federal Reserve. Jamie Dimon is on the BOARD OF DIRECTORS of the Federal Reserve. All losses are immediately reversed.

Tue, 01/07/2014 - 03:24 | 4307194 Ryan7
Ryan7's picture

does anyone here can read or write in Chinese?

i decide to make comments in Chinese.



Tue, 01/07/2014 - 04:36 | 4307278 Kina
Kina's picture

.People who fall for the gold manipulation crap are ignornat


It was already a plan in 1969 on global lets corner all the gold in world and have it in the IMF plan ...because it was a risk to the USD global power.

Anybody who can now deny that gold and silver come under heavy and most regular downward manipulation is particularly dishonest. It is no longer a contestable theory, but an gloablly accepted fact.


So MSM hack... your take on gold is simply MSM cock sucking.

Tue, 01/07/2014 - 06:26 | 4307367 MeelionDollerBogus
MeelionDollerBogus's picture

Gold PLUNGED to 1237.
Is it funny yet?

i can haz my own hedlyne?

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