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Things That Make You Go Hmmm...Like Gold's Sudden Ignorance Of Geopolitical Risk

Tyler Durden's picture




 

Submitted by Grant Williams via Mauldin Economics,

For once this time really is different, notes Grant Williams in his latest letter, and the New Cold War is, as you can see from the chart below, apparently not even remotely troubling. In fact, gold is trading below where it was when the Russians first dipped their toes in Ukraine to test the water:

Curious.

So when it comes to gold, there are the thinkers, like Koos; there are the traders, like the millions day-trading GLD for a penny here and there; and then there are the holders. The question for all of them is the same: why?

Traders of gold don’t want anything to do with physical gold. They are happy trading pieces of paper — scrapping amongst each other for pennies (and in some cases making a lot of them), but the “gold” they buy and sell could just as easily be Microsoft shares or an ETF that tracks lumber. It’s all about the price — not the ownership.

Many investors who claim to “own” gold as an insurance policy do so through the ownership of ETFs such as GLD. That’s just not the same as owning metal, I’m afraid. Doing that, you’re simply one of the traders. You’re NOT a holder.

Individuals (and institutions) who buy physical gold and hold it, unencumbered, outside the banking system are true holders. They aren’t about to alter their position in any meaningful way just because the price moves a few percent against them (or, for that matter, for them). They own gold as an insurance policy, and until the reason for owning it is proven wrong, they hold onto it.

That just leaves the central banks.

One could make the case that, given their consistent selling over a 40-year period, they are anything but holders. One could also say that, given the sudden about-face they made in 2009, they are nothing but traders (though trading far bigger trendlines than most).

But the simple truth is that, just like the investing public, they too are split — though not into traders and holders but rather, it would seem, into holders and buyers.

Ask yourself these four questions:

The last time the world faced a meaningful threat of a large-scale conflict between East and West, the gold price soared. This time it hasn’t moved. Why?

 

With gold consistently pouring into Eastern Central Bank vaults in exchange for dollars, what happens if there is another sudden panic of some sort and investors (including central banks) suddenly decide to stampede into gold en masse like they did in 2009?

 

Why are the most rapacious buyers of physical gold a group of countries that last time we saw an exponential rise in the gold price had no meaningful currency reserves but that now amongst them own a staggering 46% of total global reserves?

 

If you had the power to create money out of thin air as, for example, the PBoC can, can you think of a reason why you might want to convert as much of it into gold as you possibly could?

Just like George Smiley, if you can come up with plausible answers to these questions, you might just be able to figure out the ending to a tale of intrigue that has captivated millions around the globe.

I know how I think the story ends...

Read the Full Grant Williams letter here...

TTMYGH_Aug_18_2014

 

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Tue, 08/19/2014 - 20:20 | 5117621 Long-John-Silver
Long-John-Silver's picture

Paper Gold is available in unlimited amounts to manipulate physical gold. That's what is different.

Tue, 08/19/2014 - 20:28 | 5117658 Bendromeda Strain
Bendromeda Strain's picture

If lizards like Jeff Christian are comfortable with 100x leverage during tranquil times, how much higher can convince themselves to jack it during "extenuating circumstances".

Tue, 08/19/2014 - 20:40 | 5117711 max2205
max2205's picture

Blythe where are you BITCH!

Tue, 08/19/2014 - 21:26 | 5117897 Stuart
Stuart's picture

US is engaged in financial warefare with Russia and to a lesser extent China.  They're buying real physical gold so the US cronies are using papergold as a weapon against them. 

Tue, 08/19/2014 - 22:21 | 5118097 Cacete de Ouro
Cacete de Ouro's picture

Grant Williams needs to highlight the fact that the website he is hosted on, namely Mauldin Econmics, activlely plugs Hard Assets Alliance as a way of gaining exposure to gold and receives affiliate fees from Hard Assets Alliance.

Hard Assets Alliance LLC which runs the so-called "Alliance" is owned by Olivier Garrett, David Galland and Doug Casey. Olivier Galland is CEO of Mauldin Economics and CEO of Hard Assets Alliance and CEO of Casey Research LLC as well as being a director of Mauldin Economics. David Galland is a director of Mauldin Economics and a partner in Casey Research LLC. Doug Casey, Galland and Garret also own GGC Publishing LLC which is a governing director of Maudlin Economics LLC.

So, what has Grant Williams got to say about that?

Tue, 08/19/2014 - 22:30 | 5118144 Squid-puppets a...
Squid-puppets a-go-go's picture

so he's talking his book. so bloody what? everyone who has anything has a book to talk

would you take advice  to buy gold from someone who owns no gold whatsoever?

 

Tue, 08/19/2014 - 22:36 | 5118181 Cacete de Ouro
Cacete de Ouro's picture

He's being disingenuous and misleading and not stating the connections between Mauldin Economics and Hard Assets Alliance LLC.

Hard Assets Alliance completely misleads potential customers about the fact that Casey and Co own the whole thing and that it's just a front for a white labelled version of the Gold Bullion International order routing platform.

Wed, 08/20/2014 - 01:26 | 5118667 Four chan
Four chan's picture

the rothschilds own the largest gold mines in the world, invest along with them and hold

physical, but don't be perplexed by their manipulation of the short term price, they play the long con.

Wed, 08/20/2014 - 02:42 | 5118753 saveandsound
saveandsound's picture

Grant Williams' has got his numbers wrong.

Gold price was about 250 US$ per unce and not about 500 US$ per unce in 2000. So I quit reading at page 5...

 

Wed, 08/20/2014 - 05:51 | 5118886 BrosephStiglitz
BrosephStiglitz's picture

I quit reading at the title:

"Things that make you go hmmm.. like Gold's sudden ignorance of geo-political risk."

Gold is a living, breathing and sentient entity now.  Apparently.

Bleh.. gold is a fucking market, like any other market.  It is a tool for protecting savings.  That. Is. All.  But this article would have you believe otherwise.

Still holding my PMs but fuck this guy. Like, seriously.

Tue, 08/19/2014 - 22:32 | 5118163 SilverIsMoney
SilverIsMoney's picture

So a bunch of gold bugs work together on different things and try to sell their stuff across a lot of spectrums. What's the point?

Wed, 08/20/2014 - 00:06 | 5118483 Cacete de Ouro
Cacete de Ouro's picture

Casey and Co are just marketeers, they'd sell their grandmothers in a financial newsletter if they could get away with it..

Tue, 08/19/2014 - 20:31 | 5117668 SilverIsKing
SilverIsKing's picture

The real reason that gold hasn't risen much in price the past few years has a lot to do with the fact that people have discovered that it's only a barbaric relic and you can't eat it. Before then, people didn't know these things.

Tue, 08/19/2014 - 20:43 | 5117714 swmnguy
swmnguy's picture

That's true.  In fact, I didn't know those utterly salient points until just now, when I read your comment.  So now I'm wondering what to do with all my physical gold and silver.  Or, rather, I would be wondering if it hadn't been for that most unfortunate boating accident.

Well, lucky for me I've still got plenty of iPads to eat.

Tue, 08/19/2014 - 20:57 | 5117789 TahoeBilly2012
TahoeBilly2012's picture

It hasn't moved because if it moves it ain't ever coming back.

Tue, 08/19/2014 - 23:13 | 5118321 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

It hasn't moved because investors know there is not a risk of a major war, this Ukraine-y stuff is just a setup. They want a continuous stream of hot little wars so they can continue to flow taxpayer dollars on all sides to defense contractors and spy agencies. Haven't you been paying attention? Oh, that and the fact that someone can rock up on a Sunday night with 25,000 sell gold futures contracts and nobody asks who they are, why they're there, and where/if they got the money...

Wed, 08/20/2014 - 06:11 | 5118897 BrosephStiglitz
BrosephStiglitz's picture

It hasn't moved because most individual investors are 5% of the grains of sand on a stretch of beach. 95% is tied up in businesses and within funds (hedge/pension/sovereign wealth etc.)

So gold and silver are reacting to what the big boys are doing.  It is literally that simple and right now they are most likely:

-Looking for a way to wind down their positions in some sov. debt markets.
-Looking for somewhere to park their liquidated assets from their wound down sovereign debt market positions.
-Unsure of what comes next?  Inflation or deflation with deflation being most likely in some instances (and globally), but hyperinflation looking likely in others based on geographical markets.

Until banks start going insolvent again gold and silver will not move up, and even then expect a time-lag as people liquidate to cover their revalued asset losses since a banking crisis will most likely follow on from a triggering debt crisis elsewhere.

Tue, 08/19/2014 - 23:37 | 5117906 BobPaulson
BobPaulson's picture

With that in mind, it looks like you are pretty much obliged to sell your hoard of physical gold. You might want to wait for an ideal Gordon Brown opportune moment to sell though.

Tue, 08/19/2014 - 22:19 | 5118095 LetThemEatRand
LetThemEatRand's picture

"it's only a barbaric relic and you can't eat it"

You can't eat it, but you can chew with it.

Tue, 08/19/2014 - 22:40 | 5118196 sessinpo
sessinpo's picture

 Long-John-Silver   Paper Gold is available in unlimited amounts to manipulate physical gold. That's what is different.

----

I wonder how you explain the Great Depression when PMs went down and there wasn't this paper gold to blame?

Wed, 08/20/2014 - 06:15 | 5118904 BrosephStiglitz
BrosephStiglitz's picture

+1.  Couldn't be because cash-strapped people/institutions who hoarded gold/silver were looking to liquidate their assets for cash to get by month on month could it?

Oh wait..

Wed, 08/20/2014 - 14:12 | 5121119 robertsgt40
robertsgt40's picture

I wish the author could have given a hat tip to silver.

Tue, 08/19/2014 - 20:26 | 5117632 X.inf.capt
X.inf.capt's picture

i personally think that during wars, governments need currency and credit...and now, at least to goverments, dont look at gold and silver as money...the rules have changed...abit...

and on another note, the elite would rather fight wars with each other, than revoltutions in their own countries,,,wars are safer for them, but not their subjects...

Tue, 08/19/2014 - 22:46 | 5118223 sessinpo
sessinpo's picture

X.inf.capt    i personally think that during wars, governments need currency and credit...and now, at least to goverments, dont look at gold and silver as money...the rules have changed...abit...

and on another note, the elite would rather fight wars with each other, than revoltutions in their own countries,,,wars are safer for them, but not their subjects...

----

I gave you an up vote. What one needs to understand is that governments use its working population as gold. The governments credit is backed by the production of its citizens (taxes). When that fails, watch out. Default means its time to reduce the population. That is the SHTF that many expect.

Tue, 08/19/2014 - 23:42 | 5118425 X.inf.capt
X.inf.capt's picture

excellent point!

+1

over our working lives, we as tax payers generate alot of revenue to various entities...we are quite valuable (so much so that we have 'serial numbers' like good delivery bars)...when things look like civil unrest is about to HTF...then comes a big war...most everyone wins (banks make LOTS of money, like julius morgan did (father of j.p. morgan) financing both sides of the Crimean war (loser always pays), corporations make $$$ on defense contracts, unemployment falls (in 1944, the u.s. unemployment rate was at 1.4%, THATS one point four percent, record tax revenues, rationing, etc, etc,...just hope you dont have to fight it, or GET IN THE WAY!

Tue, 08/19/2014 - 20:23 | 5117637 GrinandBearit
GrinandBearit's picture

The fix is 100% electronic now... how convenient. 

TPTB are going to fix the PM prices until the very end.

One day everyone will want gold and it will sky. 

Until then extreme patience will be required.

Tue, 08/19/2014 - 20:39 | 5117702 Da Yooper
Da Yooper's picture

But

 

but

 

BUT

 

I was told the reason gold & silver were not moving was due to

 

"Market Forces at Work"

 

I guess the clown that told me this forgot to mention all the rigging & manipulation by the Fed & bullion banks - The Morgue & dont forget the US GOVERNMENT

 

& now we have another scam 100% eeeeelec-tronic price fixing

 

what a scam & they think we dont see it

 

Got Rope?

Wed, 08/20/2014 - 00:59 | 5118619 Timebandit-44
Timebandit-44's picture

I believe telling the truth has become illegal. The Department of Truth
will have your ass soon for that.

Tue, 08/19/2014 - 20:26 | 5117641 Dr. Engali
Dr. Engali's picture

The action of oil during all if these geopolitical 'crisis' is telling me that these risks aren't as bad as they are made out to be.

Tue, 08/19/2014 - 20:39 | 5117683 Uber Vandal
Uber Vandal's picture

Unless it is telling us the global economy is crashing, sort of like how oil went from $145 (July 2008) to about $37 (Feb 2009) per Barrel.

http://www.fedprimerate.com/crude-oil-price-history.htm

Another possibility is one of the last tools left in the tool box to try to hurt Putin, by cutting into his oil income.

Tue, 08/19/2014 - 20:44 | 5117729 swmnguy
swmnguy's picture

Perhaps it's all of the above?

Tue, 08/19/2014 - 20:48 | 5117751 Dr. Engali
Dr. Engali's picture

I don't buy the hurt Puti theory. Oil much lower than we are now kills shale oil. It is possible that oil's price action is telling us the global economy is crashing, but if these geopolitical risks were as severe as they say they are (think the flooding of Bagdad) then oil would be through the roof.

Tue, 08/19/2014 - 21:02 | 5117803 Winston Churchill
Winston Churchill's picture

I don't either Doc.

The roles have reversed since that brought down the soviet union.

Now the US is schlerotic,militarily over extended, and only exports paper.

Mind you, our ivy league geniuses don't seem capable of original thought,

prolly too much inbreeding, so they might be dumb enough to try it again.

It won't work if they are.

Tue, 08/19/2014 - 22:19 | 5118093 Greenskeeper_Carl
Greenskeeper_Carl's picture

i agree that it has nothing to do with hurting putin. It will also hurt the other countries, like saudi arabia, who we depend on to keep the petrodollar alive. I think its becuase the global economy is collapsing, so demand is down. The baltic dry index is way down as well, indicating that global trade is grinding to a halt, and we have those fields full of unsold brand new cars just sitting there.

Wed, 08/20/2014 - 23:27 | 5123855 malek
malek's picture

That is flawed thinking. Oil much lower pauses shale oil, yes, but from a resource standpoint that's OK as it would seem one could buy enough oil from other sources.

And with the exaustion rate of shale wells, the shale oil companies are running on hand-to-mouth ROI anyway, so they can handle "pauses" pretty good.

Tue, 08/19/2014 - 20:38 | 5117695 disabledvet
disabledvet's picture

In fact the crises are putting a bid into dollar denominated assets. "What's that you say?" Uhhhhh...oil, natural gas, refined products, chemicals, finished goods, industrial machinery, food, diapers....and on and on it goes!

Hence "even the dollar is starting to catch a bid here."

Tue, 08/19/2014 - 20:38 | 5117698 Winston Churchill
Winston Churchill's picture

Or the economy is really tanking hidden beneath the 'adjusted' Govt. stats.

We know the Q2 gdp print was bullshit, to be dropped after November.

BDI is dying.

Anybody checking electricity consumption ?

Tue, 08/19/2014 - 20:28 | 5117655 FieldingMellish
FieldingMellish's picture

Bullion banks exiting their short positions? Next COT (if believable) should be interesting.

Tue, 08/19/2014 - 20:28 | 5117659 WTFUD
WTFUD's picture

' Let's get Physical ' , let me hear your FIAT talk.

Tue, 08/19/2014 - 20:31 | 5117666 brushhog
brushhog's picture

Just means you can get gold at a government subsidized discount. Take advantage of it and get as much as you can while the fix is in and supply is still available.

Tue, 08/19/2014 - 20:33 | 5117673 disabledvet
disabledvet's picture

Meh. You do have bullion banks...all they do is buy gold...but heir asset base has been annihilated over the past year so certainly not a good form of banking.

They greatest cataclysm in World History (world war II) was about as gold bearish an event ever. By 1945 the USA was sitting on 50,000 tons!

We're still pulling a thousand plus tons of gold out of the ground a year...obviously "miner 49's" are net sellers as that is a HIGHLY capital intensive enterprise. And of course you have scrap dealers and your pawn shop folks...they gotta pay the rent and the utility bills. "They'll sell the gold to do that."

Good time to be an "assayer" of course. But you can still buy 99.999 percent fine minted by Governments around the world.

Once you start talking "let's fund NASA!" and I think you start to see the problem here. There are millions of tons of gold "out there"...let alone what's just floating around in the Earth's Oceans. What there isn't floating around out there these days is an economic recovery worthy of the name.

"The money is shitty and so are the trading strategies." The irony of course is that Main Street is booming...which is why CNBS's ratings are only going to get even worse from here and why Republicans looked to be poised to sweep to power come November.

Talk about "lame duck" if that happens. Besides Generalan Ost what do bob sides of the aisle agree on here?

Tue, 08/19/2014 - 20:34 | 5117678 Haole
Haole's picture

Dead money until a decision to the contrary is made for us and that could be next week or not in some of our lifetimes.

Tue, 08/19/2014 - 20:39 | 5117700 NOTaREALmerican
NOTaREALmerican's picture

Gold is a measure of people's lack of confidence in government and society.   However, most REAL American know - in their hearts - that, overall, the government and the financial institutions which made this country great, basically, want what we all want:  prosperity for this great and glorious nation, which - sure - has some challenges - I mean who doesn't have challenges at some point in their lives - but this is America (cue: slow motion eagle) and we've always risen to great challenges like this because (cue: slow motion flag) because America is about freedom and democracy, and about doing what it takes to get the job done, because winners never quit and American never quit which is what makes them, and their children, above-average winners.  (cue:  fighter jets over sports stadium).  

So, really, no wonder gold is worthless.   As somebody famous once said:   Never bet against America !

Tue, 08/19/2014 - 20:42 | 5117724 greatbeard
greatbeard's picture

I miss the slow motion Saturn rocket launch but I guess NASA in old news now.

 

 

Tue, 08/19/2014 - 20:45 | 5117743 NOTaREALmerican
NOTaREALmerican's picture

Yeah,  simplier times, I miss 'em.   The good guys and bad guys were clearly defined.   NASA in a race with the godless commies to get to moon.   Truly the golden age of the society (not counting the riots and wars and all that, of course). 

Wed, 08/20/2014 - 03:41 | 5118812 Otrader
Otrader's picture

I hope nothing happens to the bankers and financial institutions that made this country great. /s

Tue, 08/19/2014 - 20:43 | 5117720 DirkDiggler11
DirkDiggler11's picture

You know, last time I checked my gold count not go "Bankrupt", have a flash crash, or have its shares halted due to a "trading irregularity".
I think I feel very comfortable that my gold is exactly where I left it, and that it will ALWAYS have value. While it's on sale I plan to continue to buy more AGE's so my existing ones can have more friends. Enough said.

Tue, 08/19/2014 - 20:42 | 5117721 Wahooo
Wahooo's picture

I believe we have passed by the era of bullion, gold and silver. It is no longer a standard of wealth, it's just smelted ore. No more of value than necklaces of sea shells from the primitive days.

Tue, 08/19/2014 - 20:45 | 5117738 greatbeard
greatbeard's picture

>> we have passed by the era of bullion

I have to concur.  Proof would be that wise investor who keeps dumping a billion or so first thing in the morning.  He must have a lot of billions of gold and really know what he's doing.

Tue, 08/19/2014 - 20:50 | 5117765 SWCroaker
SWCroaker's picture

If you are saying that we've entered into an era of idiocy, where electronic bits from anyone can be counted on to hold their value, and the creators of electronic bits are deemed trustworthy stewards who have the common good as their only goal, then maybe you have a point.

Luckily, idiocy tends to suk as a Darwinian survival trait, and your new era will expire shortly.

Tue, 08/19/2014 - 21:36 | 5117930 BobPaulson
BobPaulson's picture

Evolution does not mean the stupidest people die. It means the ones procreating and spreading the slowest get overwhelmed. Mass die off are the exception. Bummer.

Wed, 08/20/2014 - 08:19 | 5119072 shouldvekilledthem
shouldvekilledthem's picture

where electronic bits from anyone can be counted on to hold their value, and the creators of electronic bits are deemed trustworthy stewards who have the common good as their only goal, then maybe you have a point.

 

Not all "electronic bits" are equal, just like not every metal is valuable.

Tue, 08/19/2014 - 23:22 | 5118352 Godisanhftbot
Godisanhftbot's picture

 you got it right bro. these fetishistas are just whistling in the graveyard of their wealth

Wed, 08/20/2014 - 00:24 | 5118536 therevolutionwas
therevolutionwas's picture

Only if you live in Idiocracy.

Tue, 08/19/2014 - 20:45 | 5117723 Atomizer
Atomizer's picture

Just back up the truck and buy the low physical biding. 

Tue, 08/19/2014 - 20:59 | 5117796 Son of Captain Nemo
Son of Captain Nemo's picture

Why???

Talk to this "smoke and mirrors" dick for breath (15:00 min in) -he'll tell you "why"!

To Marc Chandler,

The PR ain't gonna work much longer brotha.  You either stop telling tall tales and come clean or find a new profession, my guess is you're very close to leaving the "reservation"!!!!

Tue, 08/19/2014 - 21:14 | 5117856 zeronero
zeronero's picture

Listen up soldiers of fooldum,

Gold is useless in the electronic age. If you want safety buy Swiss francs. If you want an inflation hedge buy apartments producing income in big cities. You can wire a billion across the ocean from your iPad. Holding gold is probably a liability in the end. The only value is as jewelry and it's closely tied to cost of production.

Tue, 08/19/2014 - 21:37 | 5117940 BobPaulson
BobPaulson's picture

For now, you're right. I think most gold hoarders are assuming something dramatic is going to change. My hoard is a fraction of what I own and can tolerate being off the table of opportunity cost in the event of such a shock. Hope I don't need it.

Tue, 08/19/2014 - 22:54 | 5118257 angel_of_joy
angel_of_joy's picture

Gold is the perfect storage of value and the perfect vehicle for savings, but only in its physical form. The Swiss franc is tied to the Euro. Apartments represent a risk due to local authorities, and could easily become a liability. Besides, they are kind of hard to take with you. Now then, if you want to troll for the powers to be, you can find other much easier places. Unless you are paid big money to write this garbage here, you're wasting your time.

Get lost, and don't look back !

Wed, 08/20/2014 - 08:21 | 5119076 shouldvekilledthem
shouldvekilledthem's picture

Have you ever had the need to convert some of your physical stash? :D 

Wed, 08/20/2014 - 13:44 | 5120944 angel_of_joy
angel_of_joy's picture

No. I'm not is such a bad shape as to have to spend my savings...

Wed, 08/20/2014 - 08:13 | 5119059 Squid-puppets a...
Squid-puppets a-go-go's picture

there's about 3 billion chinese and indians who think you're a bit of an idiot, let alone us ZHers

Tue, 08/19/2014 - 21:19 | 5117866 andrewp111
andrewp111's picture

Now, why should geopolitical risk make gold go up? Think about this for a moment. Imagine that you are a member of a group that is most at risk (like Saudi princes). You know the IS Caliphate could take over your country at any moment. If you buy physical gold, you have to consider how much you can load onto your private plane before you can no longer take off.  Not that much, I'm afraid. Your better bet is buying US T-bills through Treasury Direct over the internet. Now, redo the analysis for rich people on any country on Earth that might have geopolitical risk. It is hard to argue that very many of them will be stuffing everything into gold. The biggest reason to buy Au today is if you are an EU citizen who fears bank failure and consequent loss of deposits - a la Cyprus.

There is only one way that geopolitical risk makes Au go up - if the USA itself is at risk of defeat or collapse.

Tue, 08/19/2014 - 21:39 | 5117946 BobPaulson
BobPaulson's picture

I agree. The collapse of the US will be in slow motion, with many frogs not noticing the change in temperature.

Wed, 08/20/2014 - 10:54 | 5119894 Vooter
Vooter's picture

"If you buy physical gold, you have to consider how much you can load onto your private plane before you can no longer take off.  Not that much, I'm afraid."

Well, you could take off in a 737 with about $1 billion (50,000 pounds, or 800,000 oz.) in gold...

Tue, 08/19/2014 - 21:48 | 5117970 lasvegaspersona
lasvegaspersona's picture

The amount of gold traded on the Forex every day dwarfs the amount of physical moved by so much that the movement of physical gold is completely irrelevant....COMPLETELY!!! Central bank sales of a few hundred tons are purely for show (back when they were doing them.)

In 1997 it was revealed that the volume of 'gold' traded (LBMA) in a year was as much as was known to exist or more.

Ignore the gold price. It will be what paper traders think it should be. Only when it counts will physical be important.

Tue, 08/19/2014 - 23:41 | 5118419 BobPaulson
BobPaulson's picture

I have trouble ignoring the paper price when that is what it costs. The looming spread between physical and paper gold sales has failed to materialize so far. Not saying it won't, but one has to take one's prognostications with a grain of salt. If the big split between the price of physical and paper gold is coming in the year 2100, I think I can ignore that. I know they should be different, but "Should" and $5 will get you a coffee at Starbucks.

Tue, 08/19/2014 - 22:14 | 5118072 Ignorance is bliss
Ignorance is bliss's picture

This is the biggest bull market of all time. Did you really think it would be easy to ride?

Tue, 08/19/2014 - 22:24 | 5118118 AgeOfJefferson
AgeOfJefferson's picture

In a snap of a finger the Chinese could end this paper game. But they still got a trillion greenbacks to convert into gold or other currencies. Meanwhile they are stacking at a discount. But western supply is getting scarcer by the day. Who really knows the date of the turning point. But when it does, gold & silver will take off.

Tue, 08/19/2014 - 22:26 | 5118128 El Hosel
El Hosel's picture

Rigged. I said.

Wed, 08/20/2014 - 00:19 | 5118528 therevolutionwas
therevolutionwas's picture

When it's not available is when it happens.

Wed, 08/20/2014 - 00:29 | 5118545 BobPaulson
BobPaulson's picture

I believe that is called a supply problem. Keep in mind, there was a lot of Gold in the US reserves at one time, and a lot of people happy to take a raincheque on their gold. Deliveries are still a miniscule portion of the market.

Tue, 08/19/2014 - 22:30 | 5118148 himaroid
himaroid's picture

One more big dip and my souped up dump truck will be hauling ass to the precious store. You guys had better tune it up. 

Tue, 08/19/2014 - 22:34 | 5118165 lunaticfringe
lunaticfringe's picture

Ya know, I don't know if any of you have noticed this or not- but at 1300 bucks an oz. they are not exactly gving this stuff away. I had 10 oz that I paid 14k for which I lost when I forgot to replace the drain plug in my fishing vessel.

Tue, 08/19/2014 - 22:39 | 5118194 q99x2
q99x2's picture

Entities with the ability to print fiat can and do manipulate all aspects of financial markets. They are bankers. That's what bankers do.

Fortunately we don't have bankers on Q99X2 otherwise we would all be doomed.

Tue, 08/19/2014 - 22:58 | 5118273 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

I hear day in and day out about central banks and asian countries buying Gold.  I have a dumb question.  Who in the hell is selling Gold?!  Don't tell me they are buying current production because that only increases about 1.3% per year.

Tuco

Tue, 08/19/2014 - 23:22 | 5118356 Godisanhftbot
Godisanhftbot's picture

 same folks that have always sold gold. the smart ones

Tue, 08/19/2014 - 22:57 | 5118269 Moe Howard
Moe Howard's picture

You knew the jig was up when Murbarak's son was caught smuggling gold out of Egypt.

 

Not Tbills.

 

Gold.

Tue, 08/19/2014 - 23:05 | 5118295 Joe Tierney
Joe Tierney's picture

If PMs are relics, then why are the central banks of the east gobbling it all up? What would be the point?

 

Don't they know fiat currencies are headed for the ashbin? Don't we all know that? I don't think there is any question about where the petrodollar is going to end up, and it ain't good. And when that does happen, fundamental confidence in virtually all fiat currencies is going to take a huge hit. Under such circumstances, PMs are extremely likely to take on unprecedented value on a global basis.

 

Now, if you don't buy into the prediction that financial/monetary/economic/geopolitical crises of gargantuan proportions are just ahead of us (few years, perhaps a decade) then you won't see the real risk in your paper assets.

 

But I think 2014 has demonstrated quite well that the feces is already starting to hit the rotating air screw. More mess to come. Much more. And the ongoing global consolidation of the rivals of the U.S. into an anti-dollar axis also demonstrates that we're definitely headed for fiat currency trouble of grand proportions.

Tue, 08/19/2014 - 23:12 | 5118325 Jungle Jim
Jungle Jim's picture

o/` anyday, now... it's gonna start - my real life.
and anyday, now: everything is gonna be all right...
anyday, now: life's gonna get real good.
and somehow: life'll be like i sed it would

anyday, now - mark my word!
anyday, now - i will be heard!
anyday, now - my ship will finally come in...
anyday, now: i'm gonna jump right in.

and anyday, now: my destiny will begin.
and until then i'll just be here
wasting my time...
but, don't you worry,
i'll be just fine:

anyday, now - mark my word!
anyday, now - i will be heard!
anyday, now - my ship will
finally come in... o/`

-- Bif Naked, "An Day Now" (1999?)

Tue, 08/19/2014 - 23:13 | 5118326 jomama
jomama's picture

'this time it's different'.  uh huh.  sure.

Tue, 08/19/2014 - 23:20 | 5118346 Godisanhftbot
Godisanhftbot's picture

 Same as they caught on with hula hoops, beanie babies, and other faux valuables, soon bitcon, the world has realized gold is only a fetish and a cumbersome one at that.

 

 Better sell now before its worth even less of the only true store of value, the AMERICAN PESO

Wed, 08/20/2014 - 00:15 | 5118510 therevolutionwas
therevolutionwas's picture

.....forgot the Sarc.   or not?

Wed, 08/20/2014 - 00:42 | 5118582 Dragon HAwk
Dragon HAwk's picture

When the Alien Space Ship shows up.. Gold is my ticket off this ball of Rock...     /humor

Wed, 08/20/2014 - 01:07 | 5118639 talisman
talisman's picture

I remember hearing Felix Rohatyn once say that
the only "real" monetary wealth that had any meaning
to him was the gold coin that his family concealed
in a toothpaste tube and used to bribe their way
out of Nazi-occupied France in 1940

Wed, 08/20/2014 - 02:28 | 5118737 goldenbuddha454
goldenbuddha454's picture

IMO gold/silver fluxuations have alot more to do with the state of the economy and oil prices than with geopolitical surprises.  If the economy tanks then so does gold/sil.  If the economy explodes then gold and silver will exponentially explode.  JMHO

Wed, 08/20/2014 - 02:37 | 5118747 ncdirtdigger
ncdirtdigger's picture

I am still having trouble understanding why the US guards the gold at Ft Knox. You can't eat the shit, it's a relilc.. Give some away with every EBT card and save the storage cost.

Wed, 08/20/2014 - 08:24 | 5119081 Vooter
Vooter's picture

WHAT gold at Ft. Knox?

Wed, 08/20/2014 - 03:12 | 5118770 londoncalling
londoncalling's picture

gold is valued in dollars, in the main. dollars are likely to become more scarce when qe ends (some says it isn't really ending but the point is the fed wants it to be seen to be ending so the result is the same) so the dollar is increasing in value right now. which means relative to the dollar a lot of things; oil, gold, pounds, euros are losing relative value. you now get more of "x" for your dollar.

might not fit the end of the world narritve but it's the reality of the situation right now

Wed, 08/20/2014 - 06:26 | 5118913 brushhog
brushhog's picture

They are still printing tens of billions every month so the money supply is expanding. They might be reducing the amount of increase, but dont confuse that with reducing the money supply. Money supply is expanding at a slightly lower rate then before. So the deflationary scenario doesnt jive. Gold price is being suppressed, that has pretty much been proven. Prices for daily items have gone up steadily.

Wed, 08/20/2014 - 03:11 | 5118771 londoncalling
londoncalling's picture

sorry double post

Wed, 08/20/2014 - 04:09 | 5118821 crowd
crowd's picture

Anyone want to buy some magical special gold contracts? Of course, there isn't any gold but that doesn't seem to bother anyone.

Wed, 08/20/2014 - 04:27 | 5118832 OhNo
OhNo's picture

Well Gold must be worth something too someone,Im a jumbo miner{underground}they werent paying me 230 grand clear in Africa Mali to mine Fairy floss.Still had trouble getting that accross to my mining comrads

Wed, 08/20/2014 - 05:20 | 5118863 Quinvarius
Quinvarius's picture

The gold longs have been right about everything in the economy and politics for the last 10 years.  They have been scary right.  It is only natural for the pretenders in charge of politics and banking to be pissed at having their every move and reaction predicted years in advance.  Look at how they ridicule Shiff for telling them the effects of their mistakes.  If they think beating up on paper futures will help them, I am fine with that.  But it was also predicted they would break the markets completely in doing so, and not just the ones they are targeting.  Gold is the world's real savings  and collateral.  It is the real reserve asset of the banking system and governments.  I can't think of a faster way to tank the economy than playing with it.  And that is why, since 2011, the world has once again dived into the abyss.  But hey, I can do math.  I know gold is cheaper now than at any time in history vs money supplies and debt.  I am not going to complain about some bankers and politicians dropping the soap in my shower.  The last time I got this lucky was in 2009.  

Wed, 08/20/2014 - 06:37 | 5118929 GreatUncle
GreatUncle's picture

Paper gold because they rehypothecated it so much controls the gold price. Bet you can't buy any real though and hold it in your hand.

Wed, 08/20/2014 - 06:53 | 5118949 Irishcyclist
Irishcyclist's picture

Gold, the physical stuff, has retained it's allure for millenia.

Other metals and other commodities come and go in terms of their allure.

Salt was once a highly prized commodity. Coal too. 

Gold, the physical stuff, has always managed to retain it's allure.

Wed, 08/20/2014 - 07:18 | 5118978 zeronero
zeronero's picture

Go away? In one form or another I've been here longer than you've been poor.

Store of value? Ha. My apartments yield cash every month. They appreciate and let me buy more apartments. This has been going on for decades.

Just where exactly are you heading with your shiny bricks in a hurry? Think you'll just board a flight to Peru and live like a royal? And your bricks are a safer store of value than a Swiss bank account?

You.

Dumb.

Poor.

Sucker.

Wed, 08/20/2014 - 08:14 | 5119056 Quinvarius
Quinvarius's picture

Gold is money, not a business venture.  And yeah.  It is really portable and liquid.  A million dollars in gold takes up a lot less space than a million dollars in fiat--Even using 100 dollar bills.  I am not even going to ask you how you plan to put all your buildings on a plane.

Wed, 08/20/2014 - 08:31 | 5119102 Boris D Blade
Boris D Blade's picture

You.

Are.

Part.

of.

The.

Problem.

 

Enjoy  it while it lasts :)

Wed, 08/20/2014 - 09:28 | 5119376 Toolshed
Toolshed's picture

Your stupidity is simply breathtaking. However, you appear to be wise enough to choose an appropriate screen name at least.

Wed, 08/20/2014 - 10:16 | 5119668 Ban KKiller
Ban KKiller's picture

Said the people in Cyprus, Argentina, Mexico, Greece, etc. Oh, Lebanon, Syria, Ukraine...

Wed, 08/20/2014 - 13:50 | 5120988 angel_of_joy
angel_of_joy's picture

I'll keep my bricks to buy those appartments from you, when you'll be too broke to live by... Stupid troll...

Wed, 08/20/2014 - 08:37 | 5119096 Hannibal
Hannibal's picture

Grant Williams is wroung,...

There was no "Russian incursion in Ukraine", there was however an American backed Kiev coup.

Wed, 08/20/2014 - 16:32 | 5121810 RMolineaux
RMolineaux's picture

This item and its links are not very far away from mainstream opinion - not much originality.  The US started the Ukraine violence by its long standing interference in the internal affairs of that nation - subsidizing hoodlums and brow beating the Europeans into joining their sore-looser sanctions.  Europe will move away from the US as well it should,  Imagine - playing the leasing casino with someone else's gold!  Incidently, Yugoslavia was never a member of the Warsaw Pact. 

Thu, 08/21/2014 - 04:06 | 5124188 HYPERTlGER
HYPERTlGER's picture

The markets globally have been transformed into electonic digital computer games the past 43 years...

“The technotronic era involves the gradual appearance of a more controlled society. Such a society would be dominated by an elite, unrestrained by traditional values. Soon it will be possible to assert almost continuous surveillance over every citizen and maintain up-to-date complete files containing even the most personal information about the citizen. These files will be subject to instantaneous retrieval by the authorities. ”--Zbigniew Brzezinski...Between Two Ages: The Technetronic Era, 1971.

1941 to 1971 = Spring or 3

1971 to 2001 = Summer or 6

2001 to 2031 = fall or 9

"If you only knew the magnificence of the 3, 6 and 9, then you would have a key to the universe."— Nikola Tesla

2001 to 2008 = Indian summer.

"An Indian summer is a heat wave that occurs in the autumn. It refers to a period of above-normal temperatures, accompanied by dry and hazy conditions, usually after there has been a killing frost."

1971 the world trade centers rose up and the Nasdaq was turned on...

The Nasdaq hit the singularity Y2K and collapsed down into 2001 along with the trade centers on 911.

That was the killing frost.

from the false flag of peral harbor Dec 7 1941 to the controlled demolition of lehmans on September 15 2008.

Was roughly 66.6 years.

Or 66 years 9 months 1 week and 1 day...or 911.

That was the period of global waming or spring and summer of inflation into the climate change of the fall down to the global cooling of deflationary winter.

"This global crash, caused by the policies and actions of banks which finally completely bankrupted themselves, has been blamed by historians ever since on a king—poor Edward III of England. Edward revolted against the seizure and looting of his kingdom by the Bardi and Peruzzi banks, by defaulting on their loans, starting in 1342. But King Edward’s national budget was dwarfed by that of either the Bardi or Peruzzi; in fact, by 1342, his national budget had become a sub-department of theirs. Their internal memos in Florence spoke of him contemptuously as “Messer Edward”; “we shall be fortunate to recover even a part” of his debts, they sniffed in 1339."

1342 + 666 = 2008.

2008 is where the USA under the globalist 1944 bretton woods trade systsem reached it's maximum potential inflation and the USA along with the rest of the world has been in a controlled collapse ever since.

Yes it is different this time.

 

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