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Japanese Prepare For "Abenomics Failure", Scramble To Buy Physical Gold

Tyler Durden's picture


As we reported yesterday, the world's most clueless prime minister, Japan's Shinzo Abe, has suddenly found himself in a "no way out" situation, with inflation for most items suddenly soaring (courtesy of exported deflation slamming Europe), without a matched increase in wages as reflected in the "surprising" tumble in household spending, which dropped 2.5% on expectations of a 0.1% increase in the month ahead of Japan's infamous sales tax hike. How does one explain this unwillingness by the public to buy worthless trinkets and non-durable goods and services ahead of an imminent price surge? Simple - while the government may have no options now, the same can not be said of its citizens who have lived next to China long enough to know precisely what to do when faced with runaway inflation, and enjoying the added benefit of a collapsing curency courtesy of Kuroda's "wealth effect." That something is to buy gold, of course, lots of it.

According to the FT, "Tanaka Kikinzoku Jewelry, a precious metals specialist, reported that sales of gold ingots across seven of its shops are up more than 500% this month. At the company’s flagship store in Ginza on Thursday, people queued for up to three hours to buy 500g bars worth about Y2.3m ($22,500). March has been the busiest month in Tanaka’s 120-year history."

Of course, while the Japanese consumers know what is the best defense against runaway inflation and purchasing power destruction, the government also knows that just like in India, where massive gold imports to satisfy local demand so skewed the current account deficit that India spent most of 2013 imposing gold capital controls, it simply needs to make gold purchases impossible in order to redirect spending into more Keynes-approved products and services.

However, for now Japan is happy just to crush its population's meager disposable income with soaring energy prices. Which also means the locals can allocate their personal capital in the most efficient way: one which discounts a very unpleasant future.

Investors are being drawn to the metal not just because of higher taxes, said Itsuo Toshima, an adviser to pension funds.“Slowly and steadily, people are preparing for the worst, which is the failure of Abenomics." “To protect the value of wealth, gold comes into play as an inflation hedge, and if the economy goes back to deflationary circumstances then, again, money seeking safe havens would flow into gold.”

Wait, did someone in Japan finally admit the inevitable, i.e., that Abenomics will crash and burn in a pyre of runaway inflation and a crashing economy? Well, good. The problem is that when that moment happens, the response to the government's "all in" bet to led its population into the slaughter will mean that one will need lead far more than gold.

But we'll cross that bridge when we get to it. For now, we eagerly look forward to yet another major buyer of gold emerging on the global landscape, alongside China, India, and all other countries not transfixed by the dulcet tunes of central-planning and nominal paper profits.

Japan’s hunger for gold bars is at odds with general sentiment towards the precious metal, the price of which fell 28 per cent last year, bring an end to a 12 year bull run. Yet Yuichi “Bruce” Ikemizu, head of commodities trading at Standard Bank in Tokyo, said retail buyers had been tempted into purchases by lower prices.


The Fruit of Gold ETF managed by Mitsubishi UFJ Trust and Banking, the country’s most popular bullion-backed investment vehicle, saw its assets rise from 5.6 tonnes, when Mr Abe assumed power in December 2012, to 6.9 tonnes now – even as the US dollar price of gold fell by more than a fifth over that period.


Individual investors in the fund numbered 15,243 in mid-January, a sharp increase from 9,849 a year earlier, said general manager Osamu Hoshi.


At Tanaka’s third-floor store in Ginza, one 33-year trader at a foreign-owned brokerage, who did not want to be named, said the tax increase represented a “good opportunity” to buy more gold as he was worried about holding too many yen-denominated assets.


“I plan to hold it for a long time until there is a good time to sell when the yen collapses or something,” he said.


Even a strong rise in Japanese gold purchases is unlikely to affect the global bullion market. Last year consumer demand in Japan was 21.3 tonnes, according to the World Gold Council, compared to 1,066 tonnes in China and 975 tonnes in India.

Unlikely? Really - lets see what happens when 100 million Japanese suddenly decie half a kilo of gold is precisely what the doctor ordered. Then again, this is the FT, the same media outlet that recently, and inexplicably, pulled an article discussing gold manipulation without any explanation.


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Fri, 03/28/2014 - 10:45 | 4602435 kliguy38
kliguy38's picture

So Sowwy.......door cwosed now......go away

Fri, 03/28/2014 - 10:55 | 4602485 Oh regional Indian
Oh regional Indian's picture

When all the Mrs. Watanabe's switch to gold, boom. And all the Mrs. W's are getting older...

Japan is a crazy basket case. Interesting, perhaps telling tid-bit, Japan before WW2, 74% agrarian, Japan now 25% agrarian....BOOM!


One more time, I'd like to share my TEDx talk, thanks to all the hedgers who left a comment there and here, gratifying/good fun to read...such a mix of perspectives...


Fri, 03/28/2014 - 10:58 | 4602505 Oquities
Oquities's picture

when the influx from the Mexican hordes brings down our social net, Americans will wish they had gotten gold too.

Fri, 03/28/2014 - 11:00 | 4602510 cifo
cifo's picture

These zombies are finally waking up.........

Fri, 03/28/2014 - 11:11 | 4602556 Pladizow
Pladizow's picture

"....busiest month in Tanaka’s 120-year history."


Fri, 03/28/2014 - 11:13 | 4602565 strannick
strannick's picture

These barbarians are choosing relics over government guarantees

Fri, 03/28/2014 - 11:51 | 4602678 Pinto Currency
Pinto Currency's picture



Turning Japanese

I think we're turning Japanese

I really think so.


Fri, 03/28/2014 - 12:16 | 4602769 somecallmetimmah
somecallmetimmah's picture


Fri, 03/28/2014 - 13:17 | 4602950 manofthenorth
manofthenorth's picture

OK so stop me at the part where I am way off;

It is all about market share right ? Lets suppose every man , woman and child wants some Gold and Silver this year and world productions stay the same as last year. For Silver there will be one appx. 1 ounce for every ten people. For Gold there will be appx. 1 ounce for every 100 people , for an entire year !!! There simply is not enough to go around once the herd shifts its focus from promisses to hard assets in hand. What would the wealthiest person in 10 pay an ounce of Silver ? What would the wealthiest person in 100 pay for an ounce of Gold ? There is an awful lot of FIAT floating around out there.

With all the "wealth" created the last 4 decades TRUE and hurried price discovery would be crazy.

Unfortunately we will probably see WW3 before we see "FREE MARKETS"

Time will tell, until then...just KEEP STACKING

Fri, 03/28/2014 - 15:20 | 4603414 TruthInSunshine
TruthInSunshine's picture

Do the opposite of whatever grips the mindset of the average Japanese during a "investment trend" in Japan.

I am not speaking to any other issues here (for instance I absolutely believe that Abenomics will fail miserably - it already has broken), But in all of recorded history, I can not think of a single better fade signal (at least as good as fading Tom Stolper's recommendations of Goldman Sachs infamy, and that is saying something) than what Japanese are doing en masse at any given "tradeable moment."

Sat, 03/29/2014 - 15:13 | 4605807 papaclop
papaclop's picture

Are you Chris?

Fri, 03/28/2014 - 13:19 | 4602958 John Bigboote
John Bigboote's picture

Sum ting wong?

Fri, 03/28/2014 - 13:48 | 4603092 sessinpo
sessinpo's picture

You confuse japanese with chinese.

Fri, 03/28/2014 - 15:47 | 4603521 BC6
BC6's picture

Sum ting rong?

Sat, 03/29/2014 - 12:27 | 4605468 Transformer
Transformer's picture

Wasn't he the pilot?

Fri, 03/28/2014 - 11:46 | 4602667 BandGap
BandGap's picture

We are living in the movie "The Sixth Sense".  We at ZH are the kid that sees dead people. The American public is Bruce Willis. Think about it, the realization of what is going on is slow, and will be painful. But it is happening rigt now.

Fri, 03/28/2014 - 11:53 | 4602689 Oquities
Oquities's picture

nice analogy.  the American public and Bruce Willis were busy fooling themselves about reality

Fri, 03/28/2014 - 12:01 | 4602718 BandGap
BandGap's picture

The fooling is being helped along by the greedy assholes trying to leave the ship with as much stolen money as possible.  The other problem, much like Bruce's, is we have been trained to believe that was has happened will continue to happen. And much like Bruce focussing on the kid having a problem in the movie, instead of seeing his part in the scenes, his realization happens slowly. Bruce saw the signs individually but didn't connect the dots till the end. People are now seeing the signs.

It will be rude awakening. Very few people younger than 40 have seen a different paradigm as far as the US, both in terms of the wroldview and he strength o the economy...

Fri, 03/28/2014 - 12:17 | 4602770 somecallmetimmah
somecallmetimmah's picture

Dude, greedy assholes are people, too.  Don't give in to H8.

Fri, 03/28/2014 - 12:38 | 4602836 mt paul
mt paul's picture

i see dead economies ....

Fri, 03/28/2014 - 13:28 | 4602996 SoilMyselfRotten
SoilMyselfRotten's picture

I see dead banksters

Fri, 03/28/2014 - 13:53 | 4603107 silverserfer
silverserfer's picture

does that make fonestar the naked retard boy who shoots bruce willis in the end?

Fri, 03/28/2014 - 12:41 | 4602845 SgtShaftoe
SgtShaftoe's picture

Beautiful story Vivek!  I'm trying to reinvent myself as a farmer.

Fri, 03/28/2014 - 12:59 | 4602887 Oh regional Indian
Oh regional Indian's picture

Thanks SgtS :-) That is on my near term to-do also, back in touch with the earth, planting....good luck, you will need to unperform to re-in-vent!


Fri, 03/28/2014 - 14:14 | 4603187 SgtShaftoe
SgtShaftoe's picture

Exactly!  Conventional agriculture is completely wrong in it's approach.  I've seen it exceed the level of absurdity since childhood on a farm.  I figure that if you make happy living soil, you have happy plants.  I've been getting into the work of Jean Pain:

Fri, 03/28/2014 - 14:22 | 4603232 Oh regional Indian
Oh regional Indian's picture

Too true, same with what shamelessly passes for Animal Husbandry...please see the work of Viktor Schauberger and other vortex water people to see how you can get good water to the plants, anumals and yourself.


Also see :

Permaculture is a deeply grounded, waste free way...

Fri, 03/28/2014 - 14:27 | 4603248 SgtShaftoe
SgtShaftoe's picture

Awesome!  Thanks!  A couple great books to add to my queue.

Fri, 03/28/2014 - 14:01 | 4603136 caShOnlY
caShOnlY's picture

I'd like to share my TEDx talk

very cool instrumental demonstrations.  But unfortunately you are overshadowed by Janet Yellen when she plays the famous FED instrument - FIAT.    


Fri, 03/28/2014 - 14:15 | 4603189 Oh regional Indian
Oh regional Indian's picture

The Fiat ViolinT???

Fri, 03/28/2014 - 14:27 | 4603250 New World Chaos
New World Chaos's picture

Nice.  Good to see a fellow ZHer getting out and infecting the rest of the brain trust.  These are the kind of people who might end up rebuilding.  You (and Orwell) are right about the puppetmasters' corruption of language, BTW.

Fri, 03/28/2014 - 15:01 | 4603358 Oh regional Indian
Oh regional Indian's picture

Languge is Key NWC, no doubt....

Fri, 03/28/2014 - 11:10 | 4602555 Pooper Popper
Pooper Popper's picture


dis Bigga provblem!

Fri, 03/28/2014 - 14:28 | 4603215 KnightTakesKing
KnightTakesKing's picture

Hey, if inflation is a problem, just take food out of the inflation calculation. Bingo, low inflation, problem solved.

You're welcome.

Fri, 03/28/2014 - 10:52 | 4602438 fonzannoon
fonzannoon's picture

Does anything out there symbolize America more than this guy?

Fri, 03/28/2014 - 11:16 | 4602573 centerline
centerline's picture

That was the funniest thing I have seen in awhile!

Fri, 03/28/2014 - 11:42 | 4602660 joego1
joego1's picture

I wonder if he had that big shit eating grin on his face while he was spinning out?

Fri, 03/28/2014 - 11:53 | 4602685 tarsubil
tarsubil's picture

What's with all the angry guys driving big shiny trucks? Saw a psycho do something like this the other day on the road when the guy in the left lane was trying to get over and out of the way. By the grace of God, an accident didn't occur. The moron almost got a bunch of people killed.

Fact: A big shiny truck will not make you happy or your penis larger.

Fri, 03/28/2014 - 12:08 | 4602742 ParkAveFlasher
ParkAveFlasher's picture

His body as a physical organism can't digest all the hot pockets and fast food he consumes.  As a result, the physical organism goes into a hostility mode as it interprets the data that it receives from its gut as it is living in a starvation/pestilential environment. This will be exacerbated by underlying psychological weakness by constant infliction of impotence-via-mass-suggestion. 

Fri, 03/28/2014 - 12:42 | 4602850 Greenskeeper_Carl
Greenskeeper_Carl's picture

I wouldn't have acted like that, flipping her off and trying to speed off like a cool guy, but people creating a moving road black like that, right next to another car, in the passing lane, when she could have either slowed down or sped up for a couple sexonds and gotten over is pretty infuriating.

Fri, 03/28/2014 - 13:10 | 4602926 Deathrips
Deathrips's picture

Whats funny about that video is that the woman was brake checking the guy in the she was driving 50 mph in the fast lane. This short clip edits out the cuaise of the bird sighting. Now he is the bad guy...reminds me of MOPE.  What a Bitch . I hate people with bad driving etiquette.



Fri, 03/28/2014 - 13:15 | 4602943 fonzannoon
fonzannoon's picture

It's funny I saw the longer version and I was concerned that 2 mins was too long and everyone would lose interest before the fun part.

I'm not saying the driver was not partially at fault, and also a dumbass for taking video while driving. I'm just saying when I think of America I picture a meathead retard in a big pickup truck smirking and giving the world the finger and then driving into a ditch.

Fri, 03/28/2014 - 13:42 | 4603067 centerline
centerline's picture

That's what I thought made it so funny... the parallel to American society in general.  lol.

Fri, 03/28/2014 - 14:17 | 4603200 IronShield
IronShield's picture

Heck; great video.  After watching the following popped up:

Liked that one even better (chicks with the g; good lord).  Funny thing is, Neil Cadooffo was mocking the National Fitness Program being implemented by Russia.  Looks like they're well on their way.  Could use some of that for the Lardus Americanus.

Fri, 03/28/2014 - 17:44 | 4603573 caShOnlY
caShOnlY's picture

Does anything out there symbolize America more than this guy?

bet that "doodz" is in a heap of debt, aren't most bill-bobs in pickup trucks?. But he sure looks good behind the wheel of an F250 "SOOPER DOODY". 

Fri, 03/28/2014 - 10:46 | 4602440 NoDebt
NoDebt's picture

China buying TONS of the stuff didn't raise the price of physical, why would we think Japan buying it would?

Fri, 03/28/2014 - 10:50 | 4602460 LawsofPhysics
LawsofPhysics's picture

Yes, and if true, shouldn't the people who actually produce the stuff catch a fucking break?

Fri, 03/28/2014 - 10:52 | 4602472 ParkAveFlasher
ParkAveFlasher's picture

If you think all the Asian buying didn't bite the price, wait until all the Asian selling happens!

Fri, 03/28/2014 - 10:54 | 4602477 LawsofPhysics
LawsofPhysics's picture

Well, I certainly won't complain about a sale on PMs.

You really think that you will be able to take delivery if gold went back under $1,000 or $500 an ounce?

good luck...

Fri, 03/28/2014 - 11:39 | 4602644 kito
kito's picture

LOP, its groundhog day........back up the truck.........keep stacking........

Fri, 03/28/2014 - 12:09 | 4602747 ParkAveFlasher
ParkAveFlasher's picture

Junkers: I know it's not the meme du jour, but the same hand that manipulates downward, manipulates upward and sideward as well. 

Fri, 03/28/2014 - 12:29 | 4602813 kito
kito's picture

you flash people on park avenue and you are worried about down arrows?

for that i junk you. 

Fri, 03/28/2014 - 12:32 | 4602820 ParkAveFlasher
ParkAveFlasher's picture

You're right, to hell with the ironically-challenged. 

Fri, 03/28/2014 - 12:37 | 4602832 fonzannoon
fonzannoon's picture

Irony and sarcasm get missed too frequently on here. We need a refresher.

Fri, 03/28/2014 - 10:53 | 4602474 NoDebt
NoDebt's picture

Your devotion to the classical economic rules of supply and demand is admirable.  But it's also going to cost you a lot of money.

Fri, 03/28/2014 - 10:56 | 4602486 LawsofPhysics
LawsofPhysics's picture



"But it's also going to cost you a lot of money." - No, all of the mass is still present and accounted for.

Please, don't confuse fiat with real money or capital  big fucking differences.  My productive capital  is still very much intact.

Fri, 03/28/2014 - 11:00 | 4602511 NoDebt
NoDebt's picture

I just meant be careful with those mining stocks.

Fri, 03/28/2014 - 13:30 | 4603011 kito
kito's picture

miners bottomed end of last year

Fri, 03/28/2014 - 11:02 | 4602520 Al Huxley
Al Huxley's picture

The executives who run the producers are either short-bus types who couldn't make the grade that would have gotten them a job at a legit business, or blatant criminals and conmen, looking for a quick pump and dump.  Either way, they've already sold their souls and all their future production to the banks, to 'lock in a small loss'.  Dumbest, or crookedest, fuckers on the planet. 

Fri, 03/28/2014 - 11:09 | 4602546 Bangin7GramRocks
Bangin7GramRocks's picture

How did miners mine when it was $300? Really curious. I don't remember having any problems finding a 10k gold rope necklace 20 years ago. Gold was quite plentiful. It's like people bitching that if oil goes below $100, poor Exxon will need to start pawning off the Van Gogh's.

Fri, 03/28/2014 - 11:21 | 4602594 NotApplicable
NotApplicable's picture

They made a deal with the likes of JPM?

I think Jim Sinclair discusses it with the phrase, "Recourse vs. Non-Recourse financing."

Fri, 03/28/2014 - 11:52 | 4602677 LawsofPhysics
LawsofPhysics's picture

Why would the cost of energy go down when there is so much demand?  Energy, makes a high standard of living possible, and there are 7+ billion (and growing) all competing for or demanding that higher standard of living.


The answer to your question is simple, the cost of energy was cheaper then...

As far as exon goes, if they have to invest 1,000 calories to deliver 100 calories (in oil, gas, coal, or whatever), they and humanity are properly fucked.

"money" is a human concept, if you have calories, you can actually do shit, the laws of nature and physics care very little for man-made horseshit.

hedge accordingly.

Fri, 03/28/2014 - 13:52 | 4603104 centerline
centerline's picture

+1 LOP.  No matter what, this is what it boils down to in the end.  Hypertiger refers to it as something like a "hierarchial food powered make work enterprise."  At the lowest level it is just calories.  Steps up from there through energy and on into the bullshit layers above.

The bullshit gets stripped away when something REAL underneath asserts itself.  A limit state, beit social complexity, resource scarcity, EROEI, etc.

Fri, 03/28/2014 - 12:25 | 4602802 HungryPorkChop
HungryPorkChop's picture

@Banging Rocks: You're asking the wrong questions.   Why was wheat $100 in 2000 but now near $300.  It would seem they could produce wheat again for $100 so i'm going to complain to my local grocery store about cereal prices.  Also, I don't remember having any problems back in 2000 finding Cheerios. 


We could ask the same question about sugar that was at $8 in 2000 but now upwards of $27.  Surely they can produce sugar again for $8.  I don't remember having any problems at the grocery store find 5 lbs of sugar back in 2000. 


Maybe we should look at coffee but assuming you're caught on by now??  Hopefully?


Fri, 03/28/2014 - 12:37 | 4602834 ParkAveFlasher
ParkAveFlasher's picture

Funny?  Cheerios are a wheat hedge.

Fri, 03/28/2014 - 12:56 | 4602880 oddjob
oddjob's picture

Cheerios, dont forget to include MSDS sheets will every bowl.

Fri, 03/28/2014 - 13:43 | 4603063 ParkAveFlasher
ParkAveFlasher's picture

That's a riot ... I think one day the disclaimer will read, "NOT FOR USE AS FOOD".  Lawsuits won't hold because they will successfully contend that the target market for their product are people who like to pour milk into bowls full of inedible material and listen to the faint gurgling of said material dissolving in said bowl.  The dairy farmers will lobby hard to support their defence, because with all that milk being purchased just to dump into bowls of soggy decor, all the funds tied into the success of cheap manure are insured by the committment of consumers to GROWTH. 

I'm putting this out there to see just how far the living ironies will manifest according to my sickest calculations of naturally extending current trends to their logical ends.

Fri, 03/28/2014 - 11:35 | 4602629 KickIce
KickIce's picture

I would imagine, true to form, the Rothschilds are reimbursing top execs with extra FRNs via addional pay raisea and/or bonuses.

Fri, 03/28/2014 - 12:47 | 4602857 Greenskeeper_Carl
Greenskeeper_Carl's picture

I used to be pretty frustrated with my mining stocks just sitting there going no where, and was really hoping for and expecting a decent move this year, but I've changed my mind lately. I'm happy to have them sit there and trade sideways for a while so I can keep acquiring the real deal at these prices. The producers will have their day to shine, but I don't mind if it takes a while.

Fri, 03/28/2014 - 14:23 | 4603237 gonetogalt
gonetogalt's picture

Roger that, I love small Exploration co's that just keep quietly drilling out and expanding their reserves...not mining an ounce...yet.  Why those stocks don't move on drill results I don't get, but it's a gift from God...

Fri, 03/28/2014 - 13:51 | 4603099 sessinpo
sessinpo's picture

LawsofPhysics        Yes, and if true, shouldn't the people who actually produce the stuff catch a fucking break?


History my friend. Just about every commodity sank during the Great Depression including PMs. However, the mining stocks did well.

Fri, 03/28/2014 - 10:46 | 4602441 Not My Real Name
Not My Real Name's picture

Please, do not worry.

Fri, 03/28/2014 - 10:47 | 4602443 the 300000000th...
the 300000000th percent's picture

Shocker, Kyle Bass nails it again!

Fri, 03/28/2014 - 10:50 | 4602461 fonzannoon
fonzannoon's picture

Kyle bass nailed it with GM and JCP? Or when  UT sold 1/3 of their gold last year?

Fri, 03/28/2014 - 10:53 | 4602475 the 300000000th...
the 300000000th percent's picture

No one knows the exact avenues the cartels's will take to kick the can's can's can's can down the road to hell. But yes, he will go down in history as one of those I told you so guys

Fri, 03/28/2014 - 10:57 | 4602499 john39
john39's picture

only if the cartel fails.  otherwise, anyone who believes in economic reality will be forever ridiculed as luddite flat earthers...

Fri, 03/28/2014 - 11:02 | 4602519 fonzannoon
fonzannoon's picture

and best case scenario is we go fuckin nuts.

Fri, 03/28/2014 - 11:17 | 4602579 centerline
centerline's picture

future tense?  we might already be there - lol.

Fri, 03/28/2014 - 13:12 | 4602932 N57Mike
N57Mike's picture

What is the Japanese expression that it that Kyle Bass said ..... "it cannot be helped"

Fri, 03/28/2014 - 10:48 | 4602445 disabledvet
disabledvet's picture

Usually it's a scramble to buy any and all hard assets...and soft commodities, and name it. "Your yen is now worthless."

Fri, 03/28/2014 - 10:52 | 4602471 Carl Popper
Carl Popper's picture

Only with expectations of future inflation. 


Not with a deflation. 

Fri, 03/28/2014 - 11:27 | 4602612 ilion
ilion's picture

Even retail Forex brokers are now pressured by traders to introduce Russian ruble and Chinese yuan as the US dollar's hegemony slowly fades. Just recently Armada Markets and IC Markets have introduced USDCNH and USDRUB currency pairs. The fact that Japanese are now buying gold instead of trading in financial markets explains also why volumes in retail FX markets have lately been declining.

Fri, 03/28/2014 - 10:48 | 4602448 FieldingMellish
FieldingMellish's picture

I wondered when they would join the party. What would Mrs Watanabe want to hold? JGBs becoming ever more worthless in a worthless currency or gold, the money of kings and rulers?

Fri, 03/28/2014 - 10:48 | 4602450 tarsubil
tarsubil's picture

Ten years from now someone will ask the USSA how it went bankrupt. It will reply, "At first slowly, then suddenly."

Fri, 03/28/2014 - 11:14 | 4602567 Hongcha
Hongcha's picture

'How did you go bankrupt?' Bill asked.

'Two ways,' Mike said. 'Gradually and then suddenly.'

-- Ernest Hemingway, The Sun Also Rises

Fri, 03/28/2014 - 10:49 | 4602452 fooshorter
fooshorter's picture

How about that useless barbaric relic now ... BITCH 

Fri, 03/28/2014 - 12:18 | 4602775 somecallmetimmah
somecallmetimmah's picture


Fri, 03/28/2014 - 13:54 | 4603117 sessinpo
sessinpo's picture

fooshorter       How about that useless barbaric relic now ... BITCH


Yes, how about it. PMs declined during the Great Depression. Mining stocks faired well.

I always find it funny hearing radio advertisements from PM dealers. The dealer say gold and silver are going to double or more.

Then why the hell are they selling it to me. Wouldn't they want to hold it for themselves?

Fri, 03/28/2014 - 14:06 | 4603155 Greenskeeper_Carl
Greenskeeper_Carl's picture

"Why wouldn't the want to hold it for themselves?"
That's because most of them are shysters that sell numismatics to unsuspecting people who don't know any better, telling them gold is going through the roof, and these numi coins won't be confiscated next time the govt outlaws gold ownership, since they are antique collectors items. So you end up shelling out 2000 for an ounce of gold, just because it is an allegedly rare coin. They make a shit load of money selling numismatics, since it will take a LONG time for them to appreciate to the point where you can sell it for more than those places charge you. This means that you may pay 2000 for this coin when gold is at 1300, and then try to sell it when gold has risen to 1600 and oz, then find out that even with that increase in price, a dealer still won't even give you what you paid for it. A legitimate dealer makes money on the spread, and is able to profit even if the price per ounce drops some. Most I know use this cash they generate for operating expenses, taxes, buy new supply, etc, but are also gold/silver bugs, and save much of their actual net worth in physical. Look up consumer reports for any of those places, that's the typical complaints they get.

Fri, 03/28/2014 - 14:55 | 4603320 HungryPorkChop
HungryPorkChop's picture

@fooshorter: O.K. Einstein, where did you get your facts because they are WRONG.. During the Great Depression, the dollar was pegged to the price of gold which was the currency.  This explains why gold was steady to the dollar and didn't apprecaite.  Duh?!  You might also note that gold was revalued in 1933 and apprecaited by about 40% overnight during a Banking Holiday.  So gold did increase in value during the Great Depression by roughly 40% versus the dollar. While I'm no Great Depression stock expert, my guess it was after the Gold Revaluation in 1933 that the mining stocks did really good. 

Fri, 03/28/2014 - 10:49 | 4602455 Smiley
Smiley's picture

Prediction:  another territorial dispute with China to brew up real soon.

Fri, 03/28/2014 - 11:10 | 4602548 Rakshas
Rakshas's picture

OT abit and Because You Mentioned war and China - MH370 -


Interesting... they are now searchig "one of the roughest sections of the ocean" along the edge of of an abyss...... is it possible that someone is reading a Tom Clancy novel ..... maybe if we jump to the ending chapters   we could find the plane ..... or waldo 

Fri, 03/28/2014 - 11:22 | 4602596 NotApplicable
NotApplicable's picture

My money's on Waldo.

Fri, 03/28/2014 - 11:12 | 4602561 Max Cynical
Max Cynical's picture

I think a takeover of Taiwan is higher on the list.

Fri, 03/28/2014 - 10:49 | 4602457 Sleepless Knight
Sleepless Knight's picture

Have a plan that you think works for you. Stick to it ignoring all the bullshit going on. What matters is you feel comfortable with your decisions and actions. Trust your first instinct and guts.

Fri, 03/28/2014 - 10:50 | 4602459 Carl Popper
Carl Popper's picture

People grossly misunderstand gold during a sustained contraction of credit or money supply. 


When gold was fixed in price to currency then revaluing gold upward was an ancient form of quantitative easing as FDR did. 


Gold is no longer currency nor sold at a fixed price to currency. Gold will go down in a deflation if the definition of deflation is a contraction in the supply of money and credit. 

Fri, 03/28/2014 - 10:51 | 4602465 LawsofPhysics
LawsofPhysics's picture

You think the money supply is contracting?



Fri, 03/28/2014 - 10:58 | 4602479 Carl Popper
Carl Popper's picture

I don't know what will be happening in china japan or the USA in five years. Just saying gold will not protect you during deflations.


I love gold.  It is useful in lots of situations but not sustained contractions. 


I used to own a lot but like many other ZH ers my boat driving skills have proven to be terrible. 

Fri, 03/28/2014 - 10:59 | 4602509 Bill of Rights
Bill of Rights's picture

Lol...Yet during the great depression people we're hoarding it...Ill insert a Yawn in here.

Fri, 03/28/2014 - 11:00 | 4602513 LawsofPhysics
LawsofPhysics's picture

Please, there are 7+ billion people on the planet, all competing for a better standard of living and all the commodities, energy, and natural resources that make that possible.  There is no chance of a "deflation" occuring in assets of real value or productive capital anytime soon.

Sure, I expect "deflation" to occur in all kinds of other things that you don't need for survival (like plastic crap from china) or financial "products" of mass destruction...



Fri, 03/28/2014 - 11:16 | 4602574 FieldingMellish
FieldingMellish's picture

iPads! They can deflate to zero and I will be a happy man! (just don't be holding any AAPL)

Fri, 03/28/2014 - 11:16 | 4602575 Max Cynical
Max Cynical's picture

More likely deflation in the things you want (big homes Escalades, boats, etc...) and inflation in the things you need (food, energy, commodities, etc...).

Fri, 03/28/2014 - 11:30 | 4602616 Haus-Targaryen
Haus-Targaryen's picture

This is also very very very credited.  Its why I don't mind Au and Ag getting habitually monkey slammed.  It gives us an opportunity to buy things cheaper. 

We all know a global revaluation is coming.  When the hyper inflation hits for things you need, while simultaneously deflation hits the things you don't, those of us who Ag and Au ready to go can start to come out of the woodwork.  I have my eye on my apartment building.


I disagree with the thesis that gold will deflate as opposed to inflate.  In times of extreme inflation, gold and silver take on properties of a currency, and not a fixed asset.  It becomes a measure of trade measured against the inflating currency. 

So although all prices would be going skyward, and quickly, Ag and Au will be appreciating materially faster than things like real estate.  Why?  So when you compare the purchasing power of the currency to real estate, you will still have very aggressive "appreciation" however, when you compare Ozs to purchase before and after "inflationary" effects, when comparing real estate prices in gold and silver you will experience severe deflation.   

Fri, 03/28/2014 - 11:37 | 4602637 Herd Redirectio...
Herd Redirection Committee's picture

I.E. deflation in purchases requiring credit.

Inflation in purchases not requiring credit.

Fri, 03/28/2014 - 12:39 | 4602840 ParkAveFlasher
ParkAveFlasher's picture

That comment is 10 flavors of awesome.

Fri, 03/28/2014 - 13:54 | 4603113's picture

And hyperinflation from inflationary "currencies" into "deflationary currencies". (quoted terms = used loosely)

ie: Rush from fiat into Ag, Au (wealth preservation) and cryptocurrencies (transactionary currency). 

Fri, 03/28/2014 - 11:36 | 4602632 UggSmash
UggSmash's picture

LOP: I follow you here, about competition over necessities. 

But I also wonder if what Popper's trying to say has some merit. 

Now, maybe it was super manipulated, but for your statement about commidities having "no chance of a 'deflation'' occurring", what about the last crash, where oil bottomed at like $42? Sounds like deflation to me.

I'm not saying you're wrong, LOP. But I DO think some serious deflation might happen, IF the ocean of fiat is allowed by TPTB, to contract, via bankruptcies, company/bank failures, etc.. 

Tyler(s) has been reporting recently on exactly that in China, yeah? Some company has an "asset" on its books, that says "someone owes me $500 million", then the next day that borrower defaults, and that asset gets erased, i.e. future purchasing power evaporates - poof. 

Fri, 03/28/2014 - 13:16 | 4602946 tarsubil
tarsubil's picture

Credit will implode at some point but it can and will always be papered over by the people in charge. Papering over will get worse until people wake up and realize paper is a con game.

Credit is great before the implosion. Cash is great during the implosion. Gold is great after people wake up.

Gold and silver really are going long. I think they will have the biggest reward for those that are the most patient and do not sell in a panic.

Fri, 03/28/2014 - 11:07 | 4602533 layman_please
layman_please's picture

Jim Rickards is suggesting the possibilty of devaluing dollar against gold.

Fri, 03/28/2014 - 13:57 | 4603131 sessinpo
sessinpo's picture

LawsofPhysics        You think the money supply is contracting? LMFAO!!!


So your print $17 trillion in debt, but have over $100 trillion in liabilities and you think money supply is expanding. LMAO!!!!!

Fri, 03/28/2014 - 14:40 | 4603296 CouldBeWorse
CouldBeWorse's picture

You are confusing terms.   Money supply is what's in circulation in the economy.  Debt is what you owe today,  while liabilities is debt plus future obligations to pay that haven't come due.   All debts are liabilities but not all liabilities are fiscal debt. (They can be moral debt however.)    What we owe future generations in social security or veteran benefits down the road has nothing to do with what's in circulation in the money supply today because the Fed doesn't accrue money.    Now let's say the Fed started to accrue payroll taxes to pay for the future obligations.   If the money being set aside were in banks and available for banks to make loans against, then the money supply would grow due to the multiple effect.  ( see  and  an interesting article on the Fed's balance sheet and money supply:


If people and companies started taking on debt like they once did,  you would see the money supply shoot through the roof.

Fri, 03/28/2014 - 10:54 | 4602478 Seasmoke
Seasmoke's picture

I think you have that backwards, in an upside down world. 

Fri, 03/28/2014 - 11:01 | 4602514 lasvegaspersona
lasvegaspersona's picture


you would be right but the response to deflation is   what will make gold far more valuable.

Fri, 03/28/2014 - 13:55 | 4602593 Hongcha
Hongcha's picture

I agree Carlpopper; they'll kill gold in a deflation.  Except there is not going to be a deflation.

Fri, 03/28/2014 - 11:27 | 4602610 MeMongo
MeMongo's picture

Hey Pooper! Mongo is tardo and yet your comment seems really stoopid to me.

Fri, 03/28/2014 - 14:01 | 4603139 CouldBeWorse
CouldBeWorse's picture

Carl - I don't think you understand how gold functions in the market place.   You are equating the value of gold to the value of the currency which is an easy mistake because fiat currency is how we normally transact business.   However, if you let both the fiat currency and gold float against something tangible like a car or house you will get a better idea how gold operates over longer periods (decades, not months, quarters or years).


Example:   Let's say its 1934 and you have $850 cash currency.   You could do one of three things with your money:  Buy gold,  buy a car or put it in the mattress.   If you could buy gold in '34 at the going rate was $35 you would get you 24.28 ounces.   If you went to a car dealer in '34,  $850 would buy you a brand new car.   Let's say you didn't need a car and you were worried about Fed confiscating your gold so you put the $850 cash currency in the mattress.


Fast forward to 2014.  Your grand kids find your hidden stash of $850 cash currency.   $850 won't buy a new car these days because the Fed has been devaluing the currency for the last 100 years.  No car, but $850 would buy a very nice mountain bicycle!   Obviously you made a bad decision.


Rewind - instead of putting $850 cash currency in the mattress you said screw the Fed and put 24.28 ounces of gold in the mattress.  Now fast forward to 2014.  Again your grand kids find the gold.  They convert it back to dollars at today's rate of $1300/ounce.   24.28* $1300= $31,571.    Wow!  with that much money you can still buy a nice new car.  Gold held its value with respect to buying power, while the fiat currency failed to hold buying power.


That's how gold works.  It's not an investment, It is a long play value holder.   The example I gave was in an inflationary environment, but the value proposition of gold still holds with deflation, although holding gold makes less practical sense.  With deflation and time everything adjusts in value.  Today's $31k car would eventually drop in dollars to say $25k because the dollar buys more (or it takes fewer dollars to buy the same value thing).   Yes, gold's price in dollars would drop too,  but over time 24 ounces of gold would still buy a new car.   Again, don't equate gold to dollars.  Equate it to buying power.


Fri, 03/28/2014 - 10:50 | 4602462 dogismycopilot
dogismycopilot's picture

the japanese are trying to break into the Iraqi and African markets on a very aggressive approach. in Iraq they are throwing everything they have to win deals but the challenge they have is that 1) the chinese are cheaper 2) the turks are cheaper 3) the Iraqis are slow and 4) the Russians are controlling the oil.

even when they win deals (Hitachi won some big water plant deals) their operating costs are so high (security namely) that they are really hard pressed to make their margins.

really, the Japanese are the canary in the coal mine for Americans...if this is true...that people are waiting 3 hours to buy gold...than that would mean we can expect the same in the US.

Fri, 03/28/2014 - 11:20 | 4602538 Hongcha
Hongcha's picture

dog; I am afraid not enough people in the United States have the cash and/or acumen to wait in line to buy something of value.  When was the last time you saw that happen?

Miley tickets, yes.  Bacon-wrapped hoglegs at tractor pulls, yes.

What a debased race of slaves, my people!

Fri, 03/28/2014 - 11:24 | 4602598 NotApplicable
NotApplicable's picture

Brought to you by Visa.

The only time the coin shop ever has a line is when there's lots of sellers with handfuls of junk jewelry.

Fri, 03/28/2014 - 11:34 | 4602624 cro_maat
cro_maat's picture

Don't forget full body scans with TSA and deep fried sticks of butter at County Fair!

Fri, 03/28/2014 - 10:52 | 4602464 _ConanTheLibert...
_ConanTheLibertarian_'s picture


Fri, 03/28/2014 - 10:52 | 4602469 Kaiser Sousa
Kaiser Sousa's picture

dont even have to know on a day to day basis what the new horrid economic data is...

all u need to know is that no matter what the Fraud Markets r going up...and the only 2 forms of real money paper prices r going down or sideways at best...

until they dont...and there aint no more physical to b had...i tend to beleive that day is close as the manipulation has become so fucking obvious it reeks of desperation and not confuse power with fear..

the MoneyChangers no matter what they would have u believe have lost control of their debt based currency paradigm...hold fast to ur Physical Gold & Silver aka

REAL MONEY.......................keep stackin.

Fri, 03/28/2014 - 10:52 | 4602470 Seasmoke
Seasmoke's picture

They are very lucky. No matter how much Gold they buy this year, the price will somehow go down lower, so they can buy even more with their Abe Bucks

Fri, 03/28/2014 - 10:56 | 4602488 youngman
youngman's picture

When the Chinese find out the Japanese are buying gold..that will piss them off...and start the war over the islands...China wants all the gold...and they cant let the Japanese get any.....I would also say....the Japanese are 20 years late to the game....

Fri, 03/28/2014 - 13:06 | 4602916 CouldBeWorse
CouldBeWorse's picture

If that were true, China would have pounced on India which represents a far larger threat in the gold hording game than tiny Japan.   I agree that China wants as much gold as it can safely absorb without jerking prices higher.

Fri, 03/28/2014 - 10:57 | 4602494 Bill of Rights
Bill of Rights's picture

Keep holding back miners the supply crunch is coming... :) cause and effect...

Fri, 03/28/2014 - 10:57 | 4602495 Al Huxley
Al Huxley's picture

Those fuckers are pretty patriotic, I doubt they're buying gold.  I mean, they've silently taken it on the chin, buying up shitty JGB debt with their hard earned savings for 20 years, they just 'shut-the-fuck-up and died like good citizens' when TECPO destroyed their country, I doubt they'll do anything as treasonous as squander funds that could be spent propping up their pathetic incompetent leadership by buying gold.

Fri, 03/28/2014 - 10:57 | 4602498 the 300000000th...
the 300000000th percent's picture

Where the hell has MDB been???????? Was he one of those guys that jumped off of the roof??????

Fri, 03/28/2014 - 11:02 | 4602522 q99x2
q99x2's picture

 lead far more than gold.

That is right. unless everyone else has lead too. Then you can be civilized and use barter or gold and silver for a means of exchange.


Fri, 03/28/2014 - 11:18 | 4602524 Hongcha
Hongcha's picture

Sold my USLV small profit.  The bounce is too weak imvho.  Fact is I am uneasy with these triple leveraged.

Fri, 03/28/2014 - 11:48 | 4602671 Herd Redirectio...
Herd Redirection Committee's picture

Sideways movement I.E. churn, will destroy you if you are in a triple leveraged 'fund'.

Fri, 03/28/2014 - 11:54 | 4602691 Hongcha
Hongcha's picture

yes but you don't hold them for long.  In & out.

Fri, 03/28/2014 - 11:04 | 4602528 Fips_OnTheSpot
Fips_OnTheSpot's picture

Please note that there's a tax hike from 5% to 8% by April, 1st in Japan.

Fri, 03/28/2014 - 11:06 | 4602536 GERxit
GERxit's picture

March has been the busiest month in Tanaka’s 120-year history....


Fri, 03/28/2014 - 11:08 | 4602544 Spungo
Spungo's picture

This is retarded. Why would a government impose gold controls? Keynes literally said the government could bury money and let people find it. That sort of sounds like..... mining gold.

Fri, 03/28/2014 - 12:35 | 4602825 CouldBeWorse
CouldBeWorse's picture

Spungo - very clever twist on Keynes.  I liked the visual.   Joking aside,  for government's gold is not considered money so I don't think Keynes would approve of the gov't burying "worthless" metal like gold.  In the Keynesian world, what would the finders do with it?   Second, not every country and especially mineral poor Japan have gold mines within their sovereignty so there's no mining to do.  When citizens of such countries buy gold,  sovereign fiat currency leaves the country impacting balance of trade and the monetary base.


Fiat currency is only as valuable as people's faith in its value.  Wealth flowing out of a fiat currency into another instrument like gold is a no confidence vote in the fiat currency.

Fri, 03/28/2014 - 11:11 | 4602557 GrinandBearit
GrinandBearit's picture

So now EVERYONE is buying gold...

BUT the price still goes down.


Fri, 03/28/2014 - 11:25 | 4602605 NotApplicable
NotApplicable's picture

"Every day I'm shufflin'."

Fri, 03/28/2014 - 11:33 | 4602625 Dr. Bonzo
Dr. Bonzo's picture

Serious question. Just about every week I read some story about how legions of Arabs and Indians and Chinese are emptying global gold vaults all around the world. Having been in PM market now for close to ten years, I also keep reading reports on the reported total gold supply. To "emphasize" just how little gold there is in the world some cute graphics will be added alleging all the gold in the world could fit into a tennis court or some such bullshit.

Here we are, ten years later.... and somehow all that finite gold just keeps on keeping. You guys report on gold runs on Hong Kong shops... sure enough... literally every jewelry shop in Hong Kong got raided by these mainland idiots... and then 2 weeks later they're all fully stocked again.

So riddle me this Fightclub boys.... when is the last gold rush. When does the gold actually run out.

Fri, 03/28/2014 - 12:12 | 4602754 James T. Kirk
James T. Kirk's picture

You are asking the wrong question. With paper leverage in the gold market being well north of 100:1, the "gold" is ALREADY essentially 99% gone. Therefore, the REAL question should be "how long can government MIND CONTROL continue until the delusion pops?"

Fri, 03/28/2014 - 12:41 | 4602839 Dr. Bonzo
Dr. Bonzo's picture

Nah Jimmie, serous question. At some point I'm going to walk into Kitco offices here and they're going to say, one week wait, two week wait... called our Toronto offices and no supply available... that sort of stuff.

I'd like a member of the analysis tribe to take a serious shot at addressing the physical consumption question and throwing some random darts at the board. Best guesstimate kind of thing. No hysteria. No biases. Just numbers.

By my math... all those gold-filled tennis courts have long since been bought-up all the banks and quadrillionairs and legions of Chinee peasant geniuses. But there I go ambling down Nathan Road, and low and behold... stil more gold miraculously available. Not the paper stuff. The fizz.

Call it "Peak Gold" speculation if you will.

Fri, 03/28/2014 - 17:45 | 4603888 Acidtest Dummy
Acidtest Dummy's picture

I'll bite Dr. B. Au ("the fizz") will be available as long as mankind persists. At what price is the ONLY question. Au is inert, it is not going to rust away. Promises, paper and even power are far more transitory than element #79. There may be and likely are places to make your fiat currencies appreciate faster than parking it in Au today (or ever,) but there is a long history and tradition of using gold as money. (Money may be the most liquid commodity, but on the road a friend is worth more, and in the dessert a canteen full of water is worth more; there are many circumstance that some thing is worth more than any gold.) And I suppose it is likely that Kitco will survive you. But if you survive a devalued dollar wouldn't you have preferred to convert more fiats into Au? If you want the exact date of the devaluation subscibe to my newsletter. ;)

Fri, 03/28/2014 - 12:50 | 4602865 GrinandBearit
GrinandBearit's picture

"how long can government MIND CONTROL continue until the delusion pops?"

IMO?... years.


Fri, 03/28/2014 - 13:00 | 4602893 CouldBeWorse
CouldBeWorse's picture

I don't have a "cute graphic" of a tennis court filled with gold.  However,  I do a simple visual before I get to my point.  A Rubic's Cube of gold would weight about 18.8 lbs and at current rates be worth $392K.  It would make a nice, yet barely noticeable paper weight or door stop for your office.


Your question "when does gold actually run out?" is somewhat pointless because you are implying until it runs out it won't have a "collectors" value.  De Beers learned a long time ago that the market price of diamonds is set by the supply getting to market,  not total aggregate supply theoretically possible.  The Arab oil cartel's learned this lesson in the 1970's with oil and every cocaine dealer on the planet knows that price is determined by the supply getting to market and not the aggregate number of coca leaves.   Same goes with gold.  For prices to rise,  demand only needs to out strip the supply getting to market.   In the near term it really doesn't matter how much gold remains to be mined.

Fri, 03/28/2014 - 11:21 | 4602591 Quinvarius
Quinvarius's picture

Goldman ASSURED there would be no surprise in Asian gold demand.  None.  The 20 something guy who writes their research also ASSURED the Russian crisis was completely overwith.

Fri, 03/28/2014 - 11:26 | 4602608 NotApplicable
NotApplicable's picture

I'm not surprised. You?

Fri, 03/28/2014 - 11:23 | 4602599 homiegot
homiegot's picture

I see bag holders.

Fri, 03/28/2014 - 11:25 | 4602604 Dr. Bonzo
Dr. Bonzo's picture

Sorry, this report is just incomplete. All along the Yamanote line are a series of gold vending machines. They look like large photo booths that dispense soft drinks but they pop out gold coins. So you're saying all those vending machienes are being tapped?

Ginza is the 5th Avenue of Japan. It's not representative of the country or the average Japanese household. Then this is just another gold porn story for the appetite of the permagoldbugs. I'm a huge PM fan too, but if prices are going to be realistically knocked down a few hundred bucks because the Chinese need to liquidate to cover bad bets, that's something we need to know.

Not the frivolous behavior of Japanese aristocracy. These are the same dumbasses who drove up Ginza dirt patches to prices valued at more than the entire state of California. Absurd.

So pardon me if I don't buy into another fawning piece drooling over the prescient genius of those mysterious Asian millionaires. Most of them are 3rd generation trustfund babies who never ran a business in their lives and don't have a fucking clue. I actually live in Asia, so the Tiger Mom genius bullshit might work on the natives in Appalachia, but Asia has its fair share of complete and utterly clueless moron motherfuckers, and a lot of them are filthy rich because great great granddad happen to own the rice patch called Ginza 200 years ago and it's still paying dividends.

I bet if I walked up to the gold vending machine @ Shinjuku Station I could get gold from it. No queue. No nothing.


Fri, 03/28/2014 - 11:27 | 4602613 Quinvarius
Quinvarius's picture

Sales up 500% across the chain.  2 hr lines.  You are right.  Nothing to see here.

Fri, 03/28/2014 - 11:48 | 4602675 Dr. Bonzo
Dr. Bonzo's picture

Here we go again. When silver was trading @ $30 I pointed out I'd been to shops in Sai Yin Pun that told me they could meet any order I put in, up to several tons. You ZH permabull fan boys promptly stacked on with your uberbull bullshit and junked me, and 3 weeks later silver cratered to $26 on its way down to $18. But you go ahead, you keep buying at premium because markets always go up.


So what are you seeing from your Appalachian shack that I'm not seeing standing here @ Shinagawa Station genius?

You'll do very well as a trader only trading on stories that confirm your biases. Me, I prefer to buy low and sell high, irrespective of what I believe.

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