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Physical Gold Shortage Goes Mainstream
While the topic of rehypothecation and the shortage of physical gold is well covered here at Zero Hedge (and the ever-changing COMEX gold vaults' inventories), it appears the concept of the exploding "leverage" or default risk of the COMEX has now hit the mainstream media. As BNN reports, veteran trader Tres Knippa, pointing to recent futures data, says "there may not be enough gold to go around if everyone with a futures contract insists on taking delivery of physical bullion." As he goes on to explain to a disquieted anchor, "the underlying story here is that the people acquiring physical gold continue to do that. And that’s what is important," noting large investors like hedge fund manager Kyle Bass are taking delivery of the gold they're buying. Knippa's parting advice, buy physical gold; avoid paper.
One of the problems...
That won't end well...
And the excellent summary from a veteran trader:
Knippa warns that if 1 entity asks for delivery of a position-limit-size long in gold, it will absorb 81% of COMEX's inventory... and if 2 entities were to do so... COMEX has a problem...
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Maybe Comex is TBTF? Doesn't the USA own 8,100+ tons of gold; the largest stockpile on the planet. You know, somewhere. Now there is a twist; big banks and insurers fail and 'poof!' print dollars. Gold exchange fails, and what, roll out the convoys of armored vehicles filled with gold coming to the rescue?
I'm sure Fort Knox is staked to the ceiling! /sarc
Yeah, right! It's easy for them to bail out there paper sychophants, but can they deliver real gold? /wink
Sadly, will they be put to the test?
"Krieger confirmed this in a letter to Durell of April 11, 1975:
“We analyzed, as agreed, the gold bar schedules for Fort Knox and found that fine gold in good delivery form (.995 or better) at Fort Knox totaled 24,411,140 ounces.” = 759.27 tonnes
[http://www.lewrockwell.com/2010/08/chris-weber/the-great-american-disast...]
ZH Joan Crawford says:
"No autoloading videos EVER!"
While I agree this is story that needs to be out there for everyone to hear.... when did the BNN become "mainstream"? To whom?
It's mainstream somewhere that is not the USSA...if it's not mainstream in 5% of the world (USSA) then it can't be mainstream right...you know like valuing gold...like the other 95% of the world does
here is the video link:
http://www.bnn.ca/News/2014/1/17/Buy-physical-gold-and-avoid-paper-CME-T...
surprised this was actually on tv. And especailly a guy that says those things was given a favorable opportunity to voice his opinions, and call out the COMEX like that. Some on here seem upset about how he sugests to trade it, making gains in one fiat currency or another, but guess what? you can use those gains in the fiat currency of your choice to buy more physical gold. I especially like at the end when he gets into what the japanese govt/ventral bank are doing " they are printing yen because they have to, they don't have a choice, not because they want to" welcome to the usa in a few years bitchez. He seems too smart not to be aware of that. why buy gold and short JPY might be the trend right now, but I buy gold/silver to be short USD for two very simple reasons- 17T in debt, which will double in a decade, and 220+ in unfunded liabilities.
Talking of gold and forecasting a financial disaster - there is something very strange to me.
If you're in a money trouble, if you have nothing to eat, would you like to acquire some gold? Perhaps no. So, why collect gold preparing to a financial disaster?
Gold is good if you have much extra money to freeze it for a very long time.
Finally, it may happen that governments monopolize gold supply, and you can buy @1000$/oz and sell @500$/oz official price, and if you want to trade differently it will be illegal.
Government Capital Controls usually fail.
Furthermore since the Top One Percent own both the US Government and own Gold I cannot forecast that the Government would do something against their owner's wishes.
Stop the bullshit. That argument is so old. I will cross that bridge if I ever get to it.
Perhaps I will work the Black Markets if it happens.
Two things: if one takes delivery someone else will as well, word gets around. So it's essentially one taking delivery.
And comex will default and pay you out in cash. Then there will be a reset and the flood will come back into the market. That after default event is when you sell.
exactly. Rabobank and Abn Amro defaulted on their gold contracts, and yet the gold market did not even move an inch.
I'm wondering how much longer this bifurcation can last. Eventually the comex etc. will price gold and gold futures, but it will be 100% cash settlement only. Which then would make people ask...
1. why am i paying for storage, security and transportation
2. how is this contract being valued (mark-to-myth)
3. fuck this. give me the gold.
it might stay irrational longer than we can stay solvent...
as long as the Government refuses to charge the defaulters with a crime then the system conitues on indefinitely. it's when "the good bank" abides by the contract that you have a problem. "what is the money priced in again?"
While confusion reigns and multiple disjointed stories try to explain what is happening, a lonely unpaid blogger has been analyzing this situation for 5 years. In December of 2012 he noted that the falling POG was a sign of upcoming further decrease and a portention of loss of physical from the system.
While it takes several days to read fofoa and probably a month to get caught up, those who invest the time read these articles just laugh.
Continue to scream 'manipulation', no doubt there is some. Continue to hold your breath and wait for a Comex failure, it can't happen. Comex could simply close and cash out all the losers. ditto for GLD 'here you are sir, you bought 5000 shares while gold was at 1250, unfortunately it has fallen to 1000 and we are closing shop. Here is a check for some dollars and no you cannot have any gold, we are certain you read the prospectus.'
Do not worry, if the bleed of GLD inventory continues at it's present rate AND no one panics AND the inventory is allowed to go to zero...well you have about 18 months. Could be tomorrow however. China and other major producers are no longer doing their savings with dollars, they want stuff, just like they delivered. If they can't have stuff they want gold. If they can't have gold....well we shall see what happens when they can't get gold. According to Ron Kirby that will be the end. It will also be the beginning ...of a new monetary system...if we are lucky...if not...got Mad Max?
Long and hard, but FOFOA is mandatory reading for anyone interested in gold. It helps if you start early on (I started reading in October, 2009), but it is not required to learn what he has to say.
http://fofoa.blogspot.com/
Notice how any and every MSM voice literally runs from the "conspiracy theory" label?
I'm happy to live in a world with no conspiracies. It's very comforting.
'We' have been well trained. Forward, puppies, forward.
The BUNDESBANK says;
Speichern Sie bitte einige für uns, Gott verdammt!!!!!!
That's odd because I see physical everywhere.
Grows on trees huh?
Not only that, but slimy shills and gullible Bubbas don't want to hear that the cheapest gold is already above ground... aka "Cash for Gold. Rev.2.0"
China Expands Gold Reserves to 2,710 Tons - Third Largest In The World
Now we have the confirmation from China IMF reporting to the previous report from Bloomberg. China is very serious in accumulation Gold and latest reports from Germany about the Gold price manipulation are coming now with the record leverage at COMEX with 112 owners per each ounce of Gold!
http://sufiy.blogspot.co.uk/2014/01/china-expands-gold-reserves-to-2710....
Arthur Cutten: COMEX Gold Potential Claims Per Deliverable Ounce Rises to Historical High 112 to 1 GLD, TNR.v, MUX, GDX
"After issuing his Buy Signal on Gold, Arthur reports the new historical all-time-high leverage at COMEX with 112 potential owners for each one ounce of Gold!"
China's gold imports in November fell 42% y-o-y, while holdings of USTs hit an all-time high of $1.3 trillion.
China's reported long march into gold and away from the dollar is not quite as relentless as many would lead you to believe.
who has audited those figures?
More obfuscation and misdirection from Chindit. *Sigh*
Your figures for Chinese gold imports may technically be true --- maybe --- but as you have posted egregiously erroneous and/or misleading data here in the past, I will NOT be taking your word for it. And anyway, even if that (cherry-picked) YoY datum is literally true, it takes nothing away from the undeniable RISING trend of Chinese gold imports over the past five years, as well as the undeniable FALLING trend of Chinese purchases of US Trashuries.
Chindit: another graduate of the Jon Nadler School of Pro-Status-Quo Propaganda.
With the COMEX leveraged 100:1, why is JMBullion selling w their smallest premium and free shipping?
Reminds me of...
https://www.youtube.com/watch?v=nLF1Erk1_rQ
Check out John Rubino on FS INSIDER he has some good perspectives.This story of his I believe is a good part of the reason why Germany wants the physical gold that it owns and I suspect that they will want it all eventually.(If they have a chance in hell of actually getting it out of the United States and permanently away from the hands of the Fed)http://www.financialsense.com/contributors/john-rubino/europe-s-really-bad-2014-in-two-charts
anyone have an alternate vid link?
nvm, found one.
Thanks, good watch!
The BUNDESBANK says;
Wer wird Merkel sagen, dass die US-Notenbank hat die Deutsche Gold gestohlen?
The BUNDESBANK says;
Wir haben ausgeraubt worden! ... jemand die Polizei rufen!
King World News: Maguire-China Moves To Crush The West In The Gold Market.
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/1/18_Maguire_-_China_Moves_To_Crush_The_West_In_The_Gold_Market.
HIV doesn't cause AIDS. Owning gold causes AIDS. Avoid gold at all cost!
Here's how it's happening and how it's playing out on the Fed's attempt to manipulate gold lower in order to keep the gold price lower.Why?QE of course and confidence in the Dollar is at stake.Dr. Paul Craig Roberts speaks out and used to be Assistant Secretary of the Treasury for Economic Policy.If he was playing darts he'd be throwing bulleyes.
http://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/
Another superb article by the Doctor.
I think we are seeing the beginning of the End. Venezuela was the first chink in the Fed's armor. Germany followed with a larger chink. Who's next? If Au is leveraged as high as reports indicate it is, only one or two more sovereigns demanding repatriation will collapse the system. Also, increasing Common Knowledge of the scheme is almost as bad as having to deliver physical product. Loss of Confidence is just as deadly as lack of physical supply.
I think it could happen in 2014 or 2015.
Get thee physical. Supply and premiums are now going lower and higher, respectively.
AGEs are at the high end of theiir typical premium range vs. spot (from 24hgold.com, bottom of their home page). Typcally the premium runs 6% - 10%, now at 26% +. I have seen that before but rarely.
http://www.24hgold.com/english/home.aspx
It only means a little (an imperfect indicator), but it is worth watching, excuse bad formatting:
Click on coin for offers Metal value eBay prices and premium American Gold Eagle 1 Oz eBay $ 1,253.75 $ 1,588.50 +26.7%Isn't it interesting that gold and gold stocks were universally despised a month ago, and are now getting more favorable treatment in the financial press with articles like this. These are narratives from the boyz (such as the bullion banksters) are hints that the trap is being sprung on the slingers (see: Trapdoors Ready to be Pulled) . And now suddenly the lack of real gold in the Comex is going mainstream.
I feel a great big ' I FUCKING TOLD YOU SO! ' moment coming when it comes to the mainstream media .
Your have all the normal bullshit ' no one could of seen this coming etc etc '.
But GATA will have it's day in the spotlight, and there long time critics will not be able to flee the mainstream news studios fast enough.
quickly, raise the price of gold, so I can exit my losing long positions, then it can go to hell
I am holding on to my Gold. I actually want to see a major price DECLINE.
I hope that speculators as you are so burned that they will NEVER BUY GOLD AGAIN.
Then as the Currency System collapses I can laugh at you for being in the destitution which you deserve.
You got into the Market and helped elevate the price because you wanted a "Get Rich Quick" scheme.
You deserve your fucking lot. I have been in this market for decades. Speculators wrecked it.
FUCK THE SPECULATORS.
You ruin everything that you touch because of your something from nothing attitude. You are no better than the Central Bankers and are worthy of the same contempt. You produce nothing and are parasites upon vibrant economies.
Whether is is Houses, Gold, Tech Stocks, or anything else you can get your grubby, greedy hands upon, you bring it to ruin.
You do not produce. You consume. You destroy. You're as parasitical as a Welfare Recipient.
Gold IS MONEY. That is all that it is.
Go worship your Fiat Currency and the corrupt Government which issues it. That is just a mirror of your own personal emptiness, shallowness and corruption.
There is a difference between investing and speculating. Investors place their capital to where is PRODUCES. Speculators place their Capital where they care not to produce but to glean from the production of others...to the point of where they will kill the productive host if it benefits them in the short term.
They are the most destructive of society and need to be eliminated as they destroy others efforts to produce.
So you can go to hell.
Go to hell you demon, you got this from a one line of a comment? You must be retarded
He's just upset that he doesn't understand how to play the game and has no money to actually play the game either. He bought high and is underwater spiteful of the speculators who cost him what he couldn't afford to lose. But at least he has some shiny metal to show for it I guess. It's called diversification, pure and simple. If you can get a healthy percentage off an investment, fuck gold. Take your profits and buy it if you want, but if you are injecting your principle into physical beyond a small amount for SHTF insurance, you're a dumbass. I dropped my pile and cashed out in the 1700s, sure I had some that I lost on like an idiot, but I still came out ahead from the 900s, 1000s, 1200s and 1400s. In the last year, I could have just been still sitting on it all, but instead, I'm pulling about $50k a year off of it. Have about 250g of physical on me apart from coins worth more than scrap value.
Our living expenses for a month? About $500ish now. Factor in regular income and investment income, looking at about $300k a year at this point. What are we doing with it? Buying up property and developing our farm of course. Who cares if it goes down in value, it'll always rent with the potential to go up or serve as shitty little safe houses. Ditto with the farm. Anyways, what the mad max people fail to understand... in a world that goes to shit where gold might be seen as being the only thing worth trading with as money... is the same world that they are gonna die really fast in. You'll run outta gold before I run out of food. These fools honeslty desperately believe that someone is just going to flip a switch and suddenly make them rich, it'll never happen short of mad max. If it ever even happens, it'll be slow and gradual and they'll lose out on everything else first, slowy sapping that pitiful stack of gold. Watch for a repeat of FDR making privately owned gold illegal. Then what? hurr hurr hurr, wut gold? boating accident hurr hurr hurr. Good for you I guess, but with bounties being paid on reporting, it'll be like smuggled cigarettes in singapore, no one, literally no one will want to deal with you or even take it off your hands for free. Once again, paper is king, physical is for the central banks and international settlement. No need to bother with printing fiat to handle shit either, it's called wealth taxes via expiration dates on the paper and with FATCA/GATCA in place, you don't have anywhere to hide anymore.
What the hell, I'll indulge the idiot. Somehow a black swan comes flying by and everyone goes Fuck it, gold is money and fiat isn't. What percentage of the population owns any significant holdings in gold? We're talking single-digit here for the US, consequently the same place where guns are everywhere and drug addictions are rampant. So that 90%+ suddenly has nothing of value, oh shit, surely, they shall all roll over and say "good sirs you surely have put the egg on our face, what services may i render so as to feed my starving family or feed my addiction which has only become more severe in this world of shit I find myself in?", fuck that shit, guns are cheap and everywhere. What are you going to do? Hire security guards with your gold so as to protect your gold? I'm pretty sure they'll just rob and kill you for it. So you keep it at the bottom of that lake I guess and keep your fucking mouth shut until the day comes that someone hears tale of how you somehow are not starving to death and can buy things. Stand and Deliver! Your money or your life! Blam, there goes your oldest kid. Blam there goes your wife... hurry up, clock's ticking.... But no, that won't happen to you! You'll hunker down for the long haul in your underground bunker with your food stores and kilo or two of gold, and there you shall sit, paranoid and crazy in the middle of nowhere, but at least you have your gold!
You see, here's the thing, gold works as money under 2 very distinct circumstances. One, there is law and order which recognizes it, and two, it is widely held. Gold currency was basically withdrawn in 1933 with the global situation being:
2 billion people, with
500m of them alone being basically slaves to the Brits
100m of them basically being slaves to the French
100m more to Japan
100m more to The Dutch and Italians
100m more to various remaining colonial empires (Portugal, US, Belgian, etc.)
The USSR was still in a bad place but had about 170m people to show for it.
China was in the middle of being picked apart and in a civil war with 500m people.
So, legit gold-holding peoples who were in a position to actually use gold as money (as they were not slaves or in the middle of civil wars), we're looking at around 450 million people, or less than 25% of the global population being supported by turmoil and slavery. But of those 450 million, ya gotta knock out South America as it was already America's playground. So knock out another 150million. Knock out the blacks in the US for the most part and knock out the poorest 10% (it was more, but let's just pretend). You're now left with about 300 or so odd million people, or a whopping 15% who gave much of a shit about gold as money. And in 1933 that system basically broke, only coming back with paper gold due to the US being the only developed nation left undestroyed by WW2. And of course, thanks to Nam spending (now that the rest of the world was finally starting to hit its stride again), that went out the fucking window.
So, to get that "gold as money" thing going again, you're either looking at mass death on a scale the world has never seen, a massive supply of new gold, or a return to global slavery and economic monopolies which quite simply do not allow the colonies to keep hard currency. Enjoy that tidbit I guess. Furthermore, there's a funny thing that tends to happen when society gets too out of whack on the inequality scale... the poor tend to kill the ever living shit out of the rich. The massively rich can basically get around it if they plan ahead, the petty rich? Yea, they fucked. So, if you happen to have the funding around to finance a war, you're probably ok. If not, in a power vacuum, you are target #1 as a nice public execution will help cement the loyalty of the poorest to those in power. It happens over and over and over again in history.
So you're either stacking for max mad, or you're hoping for a massive squeeze that sends gold flying. And if gold goes flying, I guarantee I'll come out much further ahead with a paper position that has leverage. Mad max, who the fuck really cares at that point anyways?
Sure, we can all make a living from gambling, no need for productivity and such. Or is that just for the smart ones to leach off of the muppets? The leaches will always justify their existence as they are needed to "purify the blood". Bullshit. Parasites, one and all.
Laomei, is correct. There is not enough gold to be tradable as a currency. Sugar, salt, cigarettes, liqour and such would become currency before gold. Gold as a nation medium of exchange is only valuable to the extent that other nations print dollars. China has boo coo U.S. dollars.
China doesn't enter into military conflict with the U.S. It has used those dollars to invest heavily in natural resources all over the world. It also understands nations tendency to nationalize/steal their resources when they have sold to much to foreign interests.
China buys massive quantities of gold with U.S. dollars. Putting massive amounts of U.S. dollars back on the market. U.S. threatens China with trade sanctions. In the meantime we have shut down our factories and shipped our production to china.
China builds alliances and exchanges with russia, Africa, Iran, Austraila, Brazil, Canada........
U.S. corporates establish off shore beach heads so they will have markets when U.S. citizens are totally drained.
The amount of gold privately held by the average U.S. citizen will be worthless when people would prefer to have food.
The black swan is military between China and U.S. Tghe U.S. has demonstrated, that unless you count Grenada, since vietnam it can not win a war.
Maybe if it goes nuclear. At which time go ahead and keep your gold.
Deny it if you will, just lke all have sat on their ass denying that the U.S. could ever have become the country it is today because to admit it would have led to a decision to either fight it or sit on ones ass and do nothing about it.
What has history taught us.
In the meantime, their are some miners out there whose paper could increse in value. Assuming of course your not already sitting on a ton of physical gold.
Loamei is partially correct. There is not enough gold to be used as currency at a fixed price. However, there is enough gold to be used as an independent currency float freely in the FX. Gold was used for international settlement until 1971.
we don't know this actually. the key is "convertibility"...in this case in the form of coin. if enough coins start circulating "value" (of all other things) will be established. it is true I do not see "pure" gold...or "pure" silver...coins "flooding the market." but sales sure are skyrocketing. Utah does accept gold as money for a transaction...setting the "price" is the "sticky point." if you don't have to worry about food...guns, batteries, solar cells...this is what you're "trading" for.
Setting the price of gold is not sticky at all if it were allowed to be flow freely in the Forex currency market.
Dollar vs. euro
Dollar vs. yen
And dollar vs. gold, ect.
US would likely have a healthier economy since we would no longer obligated to maintain trade deficits - Triffin dilemma. If we lose the global reserve currency status, we will no longer have the benefits of importing cheap oil and trinkets but we will have jobs.
Come to think of it, if we don't have trade deficits, we don't need gold. In that case, gold price probably will not rise much in the US or any country which has a lot of natural resources or productive capability.
Correct me if I am wrong, but I believe that the US "productive capability" will take years to recover.
The factories, tools and supply lines have all been shut down down. That will take a while to get resurrected.
As such, there will be a great lag in jobs before production resumes again.
There is also a question of adequate capital supply which has not been eaten by taxes.
different shit needs to "start up", it's that US actually trained and implicitly promised the wrong MIX of labor due to erroneous price signals (due to govt intervention, regulation, manipulation).
oh, and China will not exchange it's gold. "they'll threaten their neighbors" instead. the USA wants trade to flow freely...keep "liquidity" in the form of goods flowing freely without tax or penalty...continuing. that's why to me Columbia stopping coal exports...Austrailia doing the same thing...that's a big deal. China is just trying to extort gold.
incorrect, completely.
There's always enough gold even if only 1 ounce served the entire planet.
It's merely a matter of what weight = what service or good.
e.g. 0.1 grams = 1 loaf of bread. Doesn't matter the price, the price will move up to adjust.
That's one scenario.
If your income is indeed $300K a year and your monthly expense is $500, just in case you are wrong, does owning $100K worth of physical really matter that much?
My annual income is over $100K and my monthly expenses is around $2K. I have more than I ever spend unless I decide to own a private jet. I'm more than comfortable owning physical regardless of the price.
Same here. I just don't look at my physical as part of a diversified portfolio and the current yield like other investments. I think of it more as insurance and an alternate to FRNs.
One thing I ask when people talk about gold/silver is for them to ask themselves why they are or want to buy it. The answer is very important.
You may or may not be right about the futility of holding gold but in a collapse your situation is no better. Land is immovable and they can tax you out of it or declare emminent domain. If your produce doesn't get stolen, it can be confiscated by the gov't to feed the starving people.
or something as simple as a new global monetary policy could come to pass. best of luck with your paper positions then.
Neither is true in Zimbabwe yet it is gold that's money there now.
Condition #3: there is no law, there is no reliable government money, and anyone (even a tiny minority) who have gold thrive.
There's nothing to the conditions requiring that everyone have gold, that it be widely held. The opposite is likely: a nation collapses because wealth is not widely held in any form: food, water, gold, medicine, etc.
The nation is SUPPOSED TO COLLAPSE. THAT IS NORMAL. To escape the collapse is optimal & that's where gold fits in.
Speculators bring prices back to reality when crime isn't involved.
Speculators go broke when they are wrong.
Criminals in government don't go broke because they print money & defraud opposing parties.
Producers who are speculators, and not stupid, drive down the cost of business. That's why farmers sell contracts for wheat, pork, corn, instead of just selling the product on the spot only.
Been saying it over and over again, and yet, these silly little articles keep popping up.
Here's what's been going on. Here's what to watch for, and here's how to make easy money (don't fight powers with more money than you!).
The whole "shadow banking" thing going on in China works thusly: There's a thing called "licai" which is a way for normal people to invest and claim lots more interest than normal. Normal interest is about 0.5% at any decent bank, a time deposit will pay out around 1.25ish. Licai on the other hand is in the 5~6 range for anything decent. Previously, all this shadow banking was based on the notion that companies couldn't get easy loans without connections, so a large company with assets would borrow money, the cash would be loaned out to the smaller company and to make it all legal, it would go through this licai vehicle. Most are short term, under 3 months in duration, and getting rolled over isn't too out of the ordinary. The small company gets funding, the large company gets free profit, the bank takes their commission, the insurer gets a premium and the banking customer gets a nice amount of interest. Well, there was a crackdown on it to a degree and small businesses are able to borrow easier now.
What's that go to do with the price of gold?
A new player has risen up with an amazing model. An investment agency puts out a contract for a few billion RMB, typically allowing anyone with more than 50,000 to participate in steps of 10,000. Fairly short term, 40-some days or so, never more than 2 months. They take this cash, buy things like t-bills and use them to obtain an even larger leveraged position. The licai is partially insured, typically by US or UK insurers. They take a massive SHORT position and smack the fuck out of the market. As long as gold stays under $1350 on average, the pay out is 6.x%. If it for whatever reason goes over, insurance kicks in and the payout is a meager 1.3% or so... basically the interest on the bonds they bought to underlie the leverage. Well, more and more are doing this now, and they are coordinating on the buy-in dates and the settlement dates. We're talking some epic amounts of money. What do the managers do with their profits that are retained? Well, they buy physical gold of course. Go to just about any Chinese gold trading forum and they are figuring it out and just playing the same exact game. You can use just about any major bank account to trade gold/silver/oil/etc. It's tax free too, which is just great, and the banks make profit on the spread. Playing with futures is a bit risky, so most just note when the big jumps are coming and short/buy accordingly, then take that profit and either go another round or make it physical. Because hey, free gold.
So, what would destroy this? Either a coordinated effort to smack it down (will never happen as long as US/UK insurers are on the line), or a black swan event, which would basically trigger another 2009 crisis as insurers would come up short and require bailouts (again). In the meantime, China's busy emptying the fuck out of physical vaults while depressing the price with the west's silly own paper. Personally, I find it hilarious. It's easy money to play along, and doing so only further increases the profits for the big boys which means they buy even more physical.
1350 doesn't matter, nor does 1500 or 1700 or whatever, because the game can be played over and over and over again as long as there is paper, futures, easy insurance and Chinese with money. Pretty awesome eh? I sure as fuck think so, it's been the easiest money I've ever made. Toss about $150k at the 6.x%, toss another $100k at the physical on the trade dates, sometimes more if things are interesting enough with lots of dates coinciding.
Well I hope you're in a winning position when the whole house of cards collapses. In centuries gone by high rollers like you jumped out of high rise windows when it did.
I'm not overleveraged and anything lost would basically be an "oh well, that's annoying" bad day rather than "welp, time to go kill myself" sorta thing.
"but $1000 leveraged 100x will get ya 80 of highly liquid paper"
lol So you're not overleveraged?
I really have no reason to be. Anything I do on leverage is such small pitiful amounts it's really nothing, and even then, it's only for the big days. Toss $5k in at 100x leverage prior to the vesting. Short 400 ounces, watch it drop $30 as if by magic, cash out, done. Toss it into the bank and add on another $60 a month in interest I guess, or shift it over to stocks for the next obvious thing. As long as we have $500 a month to spend for expenses, I really don't care. Not caring is how you make profit btw. Caring too much is what muppets do and it's why they fuck themselves over and over and over again. Could I go BIG? Sure, I guess I could toss like $100k at a thing, but it's not like I need it and being wrong for whatever reason would kinda suck a lot more than $5k.
so much shit, You are obummer and I claim my $5
Black Swam event -- like your beloved China dusting off the silkworms and blowing a couple of hapless Filipino patrol ships away, perhaps?
That's hardly a black swan event, I believe that's called an eviction. Go ahead, try to sanction China, see what happens to you.
China plans to evict the US navy?
It's just evicting the flip squatters.
So that's your brilliant gambling style. Thinking that the Philipinos are not backed up by the US Navy.
Don't forget who our 'commander in chief' is.
When Muppet's run things bad things happen.
We have a commander in chief?
I'd say "buy I-phones instead." the batteries alone are worth more than the device...get enough of them with solar naceles and a converter and now you're a net energy producer. I mean all a Tesla Model S is is a 100,000 dollar skateboard.
Wouldn't it be cheaper just to get fuel cells & power them with home-made methanol?
Honestly you could write covered calls with GLD & get way more cash and sooner.
Even if you didn't use margin but you could, of course, use margin.
Finally someone opening his eyes...
And how can you own gold in yen. Owning gold is owning gold. Unless you borrow yen to buy gold that is.
Well you have to buy it with something, and that's the basis. As long as fiat is what's in, only a fool sits on a pile of gold and buries it waiting for mad max fantasies. The smart play is to use that fiat and gold to build that pile of gold ever larger. $1000 won't even buy an ounce, but $1000 leveraged 100x will get ya 80 of highly liquid paper. Paper moves up by $50, you walk away with $5000. Congrats, you now have profits of 3 ounces which you can go ahead and lock in as physical and the original $1000 to play the game again.
And if paper moves down $100 like it did last year?
That's why you have stops in place to minimize losses.... or you're willing to lose the entire $1000 in the first place.
So it's nothing more than casino style gambling unless you happen to KNOW what the market makers are doing.
Hasn't it always? Either you're an insider with a position to be a market maker. You are in the loop of market makers. You have some damned good intel to take advantage of market maker positions... or you are a fucking muppet.
Yes, that's the point of all markets in all history. You take your bets & take your profits - or suffer losses. If you don't like that you should grow your own food, not trade.
For eternity trading can only be this.
Turn the question around & ask yourself if it makes sense:
if you had NO idea where a price was moving, if you had NO idea about a market at all, WHY WOULD YOU TRADE IT?
Sense of adventure? Feel like losing money?
Then use options rather than margin: the $ down move won't be nearly as big as the $ up move so you're fairly protected, with one consequence: an expiry date.
Just move COMEX over to Shanghai, all problems solved.
//BASS Said the same thing on Dec. 17, 2011
Kyle Bass of Hayman Capital gives his thoughts on why he requested delivery of his fund’s COMEX gold futures.
“My opinion is very simple as a fiduciary… to the extent that you own gold and you are going to own it a long time –it’s not a trade. It costs us about 90 basis points a year to roll it through financial futures contracts,” he said.
//“And then we went and looked at the COMEX. The COMEX at the time they had about $80 billion in open interest between futures and futures options. In the warehouse they had $2.7 billion of deliverables. So $80 billion in open interest — $2.7 billion in deliverables. We’re gonna own it a long time. You’re on the board, as a fiduciary, what do you do? That’s an easy one. You go get it.
So you go take a billion of $2.7 billion and you let them worry about the rest.”
“When I talked to the head of deliveries at COMEX NYMEX, I was like, ‘What if 4% of the people want deliveries?’ He said, ‘Oh Kyle, that never happens. We rarely ever get a 1% delivery.’ And I asked, ‘Well what if it does happen?’ And he said, ‘Price will solve everything’ And I said, ‘Thanks, give me the gold.’”
Unfortunately in my youth I never looked towards the future until it was too late, wish I had bought Apple at $3.00, that said - 'Thanks, give me the gold'
Look at silver instead, still cheap
I'm heavier silver over gold in holdings, and I ackowledge that just about everything is manipulated, but still haven't convinced myself (this is short term short term....I think it is all cheap long term in US dollars) if silver is cheap or if gold is high. If the historical 15:1 ratio is even close accurate, should silver be @ $75 or should gold be @ 300?
There is no real historical ratio (of price), only of supply. Of price there were manipulations forming the 15:1 ratio you speak of - fiat declarations - no more valid than the isuance of fiat paper currency.
A more accurate equation uses the natural logarithm.
For now ln(silver) = gold x 3/2635 + 19/12 and I've seen that vary in the last year or so from 18 to 19.5 over 12.
On a multi-year chart this helps: http://flic.kr/p/f5bHkJ
"It costs us about 90 basis points a year to roll it through financial futures contracts,”
Does that mean that he buys Leaps of gold and constantly rotates them by selling and buying further out ones?
TIA
The reason certain things (meat, sugar) will NEVER rise is due to the fact that people will only buy what they are WILLING and ABLE to pay for. Have you seen what happens to meat that sits in the grocery for 4 days? It gets its price chopped and it gets sold. People WANT it.
Gold. Gold will not rise no matter what because, simply, NO ONE CARES. IF anyone cared, IF it was important, IF it was about supply and demand, IF it was about economic uncertainty, IF it was about 'inflation', IF it was about debt to gdp ratios, etc, until im nauseus .. IF ........ THEN gold WOULD ALREADY BE $5,000/OZ or $10,000/OZ. But its not. And it never will be. Get used to it bitchezz
Very short-sighted.
In 1968 gold was $35/oz.
History shows that gold eventually does an accounting of debased fiat in circulation and deficit spending. It always does. Greece, Rome, Weinmar, Zimbabwe, etc...
Get used to it bitch-ezz.
so wait, prices for goods won't fluctuate because people can't afford it? are you trolling or something?
Perhaps you have "Idiocracy" confused with the real world.
iMPOSSIBRU!
But really, honestly, those prices have risen steadily so saying they never do is denial of fact.
Proven, visible fact.
There's enough people with enough money supporting the higher prices. They use credit where cash isn't sufficient because they don't want to starve.
One day that will end as more people do starve, do with less, do with no meat, feel ill all the time, can't handle even waking up.
I guarantee that several holders of contracts are asking for delivery as we speak. If only because they will be offered huge cash premiums to settle in cash instead.
I would love to hear one of these conversations.
People would have to be morons to be involved with anything JP Morgan has a hand in.
How did they survive this long. Can they raise a spoon to their mouth.
I would not even tell these fools to get out because they may live even longer if they do.
These "markets" exist for only one reason, to make money. So if you are in the markets you will either be profiting or losing as they produce nothing, only redistribute what already exists. The world is prosperous when it is producing and these markets produce nothing....while everyone wonders why our prosperity suffers. In a real market place, one that supports a prosperous society, there are few losers as we are trading one good or service for another. Financial markets are casinos, where for one person to win, another must lose. But people seem to live for the idea of something for nothing. This is why societies have tried to suppress these tendencies. Laws against theft and gambling as well as drugs that simulate something for nothing by creating non-real alternate realities, have always existed because intelligent people understand human weaknesses towards self destruction. We all understand this in our gut, but still persist in holding onto the rationalization that this time its different or WE are different, or the mainstay...everyone else is doing it. All is sacrificed for the most immediate reward for the least amount of effort. What is so sad is that it is such an unfulling reward that never lasts. Like any addiction it requires more and more to maintain the high, until we self destruct. It always starts with something for nothing.
Sad:
"as they produce nothing, only redistribute what already exists."
Redistributing already existing knowledge into condensed prices is the product:
-Speculation anticipates future price changes; its economic function consists in evening out price differences between different places and different points in time and, through the pressure which prices exert on production and consumption, in adapting stocks and demands to each other.-Speculation in the capitalist system performs a function which must be performed in any economic system however organized: it provides for the adjustment of supply and demand over time and space.
-Speculation is the link that binds isolated economic action to the economic activity of society as a whole.
-The influence of speculation cannot alter the average level of prices over a given period; what it can do is to diminish the gap between the highest and the lowest prices. Price fluctuations are reduced by speculation, not aggravated, as the popular legend has it.
Is Keynes more up your alley? Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism.
Hazlitt's reply:
This tirade, which treats speculation as merely a synonym for gambling, reflects the prejudices of the man in the street. The difference between gambling and speculation is clear: in gambling, the risks are arbitrarily invented or created; in speculation, the risks already exist, and somebody has to bear them.
In gambling one man wins $1,000 and another loses it, depending on whether a ball falls into an odd or even number on a roulette wheel or on which horse comes in first on a race track. But the wheel could be spun and the race could be run without the betting, without either losses or gains. The world would probably be richer rather than poorer if gambling casinos and race tracks did not exist at all.
But it is not so with the great organized exchanges, either for commodities or for securities. If these did not exist, the farmer who raises wheat would have to speculate on the future price of wheat. But as they do exist, the farmer or miller who does not wish to assume this risk can ''hedge," so passing the risk onto a professional speculator. Similarly, a corporation manager who knows how to make air conditioners, but does not wish personally to assume all the financial risks involved from the vicissitudes of competition and of changing market conditions for air conditioners, may offer stock on the market and let investors and professional speculators assume those financial risks. Thus each job is done by a specialist in that job, and is therefore likely to be better done than if either the producer or the speculator tried to do both jobs.
The market, consisting of human beings, unable to fore- see the future with certainty, will make mistakes—and some of them in retrospect will look like incredible mistakes. Yet Wall Street, notwithstanding its academic and political de- tractors, can be claimed as one of the outstanding triumphs of "laissez-faire" capitalism. The results speak for themselves. The United States has achieved the greatest volume of investment, the greatest capitalistic development, the greatest volume of production, the greatest economy of manpower, the highest standard of living that the world has ever known. And it has been able to do this in an important degree precisely because of the help rendered by the marvelous financial organization centered in Wall Street and not in spite of it. Surely it should have struck Keynes and his followers as worthy of notice that the country with the greatest "gambling casinos" and the greatest "liquidity" was also the country with the world's greatest capital development and the highest average standard of living!
Good morning. Tres Knippa here. Thanks for all the comments on my BNN interview. Following the gold supplies and the physical delivery against COMEX was born out of a trade idea I have been developing over the last year. Believe it or not, there may be a better way to trade this situation than just buying or selling gold. I am happy to share exactly what I am doing and my hypothesis on gold deliveries in a non-public forum. Please feel free to email me directly and I will be happy to explain what I am doing in the gold market.
Tres
Reggie?
tres,
I remember this tale you told from 1980. This is a re-run.
The Hunts demanded their silver after years of trading beans and sugar to build the position.
We were all watching on a Saturday morning when the exchange said, effectively :
"Sorry, guys, delivery is too much of a hardship for our members, but they'll give you very nice premium for settlement in cash and no one will be worse for wear.' There was no other option offered.
And that is what they did---and we all felt cheated---we cursed, broke things, swore we would never trade on that exchange again---------------- but you know what?
On Monday morning, we were back trading for clients----------
Except for me. I stopped trading commodities and switched into munis
And I was a hero for the rest of the time I was in the business, because most people with most of their money like tax-free returns of 13% guaranteed by strong municipalities------and they all own gold, too----in the form of physical.
They are probably---the smart guys---taking delivery of some gold now their bonds are redeemed; in those days, every goldbug owned a portfolio of munis----they hedged with gold----very sensible people except for the fringies.
But, they are not waiting for any squeeze on gold-----it is a child's play, but good luck to you anyway.
The fundamental weaknesses and goals of the central bankstering are becoming more and more known:
Fractional reserving of both currencies and PMs.
Manipulation for the goals member banks.
Reliance of the Free Lunch
etc
PS, apparently the auto-start videos for this page need a new filter. Very irritating.
It's called noscript. Adblock helps too but I don't know which one is filtering because I use them both. Firefox.
http://www.bnn.ca/News/2014/1/17/The-US-governments-bitcoin-bonanza-How-where-and-when-to-sell.aspx
EASY: before bitcoin, crashes sell it NAO.
http://www.gotgoldreport.com/2014/01/john-williams-currency-panic-hyperinflation-arrives-in-2014.html#more
"Loaded with conspiracy theories". What a dumb bitch. People acquiring the underlying asset that they have a futures contract on, is not a fucking conspiracy theory.
Why do they hire these know-nothing gashes for financial shows?
I agree with Kyle Bass and the Chinese. If you sit on PMs for 10 years you'll do fine.
The rest is a minefield of savings confiscations and asset popularity contest. The reset in the future is guaranteed to include gold because of the Chinese. Since the Group of 30 don't include me in their meetings I'm playing it safe and my life until things change and the moneychangers decide how the new system is going to be rolled out.
Hedges? HEDGES? We don need no stinkin hedges. Give me the Gold!
what is hedge against losing gold position?
There's two bulls standing on top of a mountain. The younger one says to the older one: "Hey pop, let's say we run down there and fuck one of them cows". The older one says: "No son. Lets walk down and fuck 'em all".
Gold is the natural money, has a monetary history of at least 5000 years. Nixon severed the last link to gold which was an already gigantically watered down situation at that time.
Gold is most, most under owned these days and therefore most undervalued. This will change. You can't play with natures laws for very long. Many people have become conditioned into the fantasy that paper money, electronic money, huge debts and all kinds of derivatives are the reasonable and natural situation. It's not. This WW $ based ponzi scheme will simply go down the drain.
I'd hardly call one guest on BNN, a Canadian investment info channel, being allowed to talk about the COMEX shortage, gold going "mainstream".
Just as there isn't enough cash to go around if everyone wants to cash out.