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Gold Shortage, Worst In 21st Century, Sends 1Y GOFO To Lowest Ever... And India Just Made It Worse
While we have covered the aberration that is a negative gold GOFO rate previously and in extensive detail in this post, an abridged version of what negative GOFO means comes courtesy of Deutsche Bank's recent discussion on what a successful Swiss gold referendum. To wit: "It is interesting to note that benchmark gold-dollar swap rates have recently traded negative, meaning investors are paying to borrow gold. This is unusual as gold is traditionally used as a source of collateral for cash financing.... [A] number of factors may play a role, such as excess dollar liquidity or an increased demand for collateral on the back of the global regulatory developments." In short a gold shortage at the institutional, read commercial and central bank, level. And not just a shortage but the biggest shortage in history, judging by today's latest plunge in the 1 Month GOFO which just dropped to -0.5% and , worse, 1 Year GOFO that just hit its lowest print in the 21st century, and is also about to go negative: something that has never happened before further suggesting the gold shortage could go on for a long, long time!
Negative GOFO
To be sure, GOFO has printed negative in the past, although the two most prominent historic plunges were due to acute events which promptly renormalized, and were not the result of what has now become a chronic gold collateral shortage via the swaps market.
The best known example of a complete collapse in the GOFO rate, is the September 1999 Washington Agreement on Gold, which was an imposed "cap" on gold sales (mostly European in the aftermath of Gordon Brown's idiotic sale of UK's gold) to the tune of 400 tons per year. The tangent of the Washington Agreement is quite interesting in its own right. Recall the words of Milling-Stanley from the 12th Nikkei Gold Conference:
"Central bank independence is enshrined in law in many countries, and central bankers tend to be independent thinkers. It is worth asking why such a large group of them decided to associate themselves with this highly unusual agreement...At the same time, through our close contacts with central banks, the Council has been aware that some of the biggest holders have for some time been concerned about the impact on the gold price—and thus on the value of their gold reserves—of unfounded rumours, and about the use of official gold for speculative purposes.
"Several of the central bankers involved had said repeatedly they had no intention of selling any of their gold, but they had been saying that as individuals—and no-one had taken any notice. I think that is what Mr. Duisenberg meant when he said they were making this statement to clarify their intentions."
Of course, this happened in a time long ago, when the primacy of Fractional reserve banking was sacrosanct, when the first Greenspan credit bubble (dot com) was yet to appear, and when barbarous relics were indeed a thing of the past, only to be proven oh so contemporary following not one, not two, but three subsequent cheap-credit bubbles which have vastly undermined the religious faith in fiath and central banking, sending the price of gold to all time highs as recently as 2011.
Another subsequent negative GOFO episode occurred in early 2001, which coincided with what has been rumored to be a speculative attack and reversal of the futures market. However, while pushing 1 month rates negative, 3 month rates remained well positive.
The only other time when both 1M and 3M GOFOs were both negative or almost so (3M touched on 0.05%) was in the aftermath of the AIG bailout following the Lehman collapse in November 2008, which reset the GOFO rate to just barely above 0% where it has traded for most of the time, at least until last summer when in a widely documented episode of negative GOFO rates, GOFO went negative in July of 2013 and remained in negative territory for over a month.
Which brings us to today, when not only is the 1 Month GOFO rate the most negative it has been since 2001, not only is 2 through 6 Month GOFO also negative, and in fact the 6 Month GOFO is now negative for the longest stretch in history clocking in at 11 consecutive days, but, strangest of all, the gold curve backwardation is about to become absolutely historic with 1 Year GOFO just a whisper away from hitting negative territory for the first time ever at 0.02667%.
But how is it possible that there is a shortage of gold when gold prices keep tumbling day after day, the skeptics will ask? Simple: the shortage involves gold "available" in the repo market, i.e., gold that already has been rehypothecated one ore more times. Keep in mind that central banks rarely if ever purchase gold outright in the open market, unlike Russia of course (and perhaps China), which has been engaging in an unprecedented gold buying spree over the past year. The rest of the commercial and central banks merely rely on shadow banking conduits and other repo channels to satisfy their gold needs, all of which merely demand the "presence" of synthetic, if not actual physical gold.
It is this synthetic "shadow" gold that is now actively disappearing from the system.Of course, if and when central banks were to tip their hand and reveal the unprecedented synthetic shortage to the physical market, the actual cleared market may well go bid only.
India shocks observers by scrapping gold import rule
One event that may stretch the already ridiculous disconnect between physical and swap-based gold, is the announcement earlier today by India which just scrapped a rule mandating traders to export 20 percent of all gold imported into the country, in a surprise move that could cut smuggling and raise legal shipments into the world's second-biggest consumer of the metal after China.
As Reuters reports, "along with a record duty of 10 percent, India introduced the so-called 80:20 import rule tying imports to exports of jewellery last year to bring down inbound shipments and narrow the current account deficit that had hit a record.
"It has been decided by the Government of India to withdraw the 20:80 scheme and restrictions placed on import of gold," the Reserve Bank of India (RBI) said on Friday, without giving a reason for the change in the rule.
The reason today's announcement was stunning is that only days ago there were talks between officials of the Mumbai-based central bank and the finance ministry in New Delhi to bring back curbs on some trading houses following a surge in imports over the past few months.
Traders said before the decision on Friday that India's gold imports could climb to around 100 tonnes for a third straight month in November as dealers bought heavily on fears of curbs on overseas purchases, especially as the wedding season picks up.
The government's latest move came as a surprise even to some officials.
A policymaker associated with India's gold import policy said the government instructed the RBI at 1830 local time on Friday to urgently change the rule. A notification was posted on the central bank's website two hours later.
"We were not informed about the reason for scrapping this rule. The restrictions on who all can import who can't are still valid," said the policymaker, declining to be named as he is not authorised to talk to media.
And while those in control are unhappy that India's relentless appetite for gold is about to return, and in the process slam the country's current account deficit, at least one group is happy: "the rule change was a relief to jewellers facing difficulties in sourcing gold during the key festival and wedding season that started in October."
Bachhraj Bamalwa, director of the All India Gems and Jewellery Trade Federation, said the 80:20 rule was not only encouraging smuggling but was also misused by many traders.
From getting human mules to swallow nuggets to hiding gold bars in dead cows, smugglers had raised their activity since the middle of last year after the import curbs.
Following the disbanding of the 80:20 rule, the government may place a monthly or yearly quota for traders, said Sudheesh Nambiath, a senior analyst at consultancy Thomson Reuters GFMS.
"Quota is a more logical and simple way of monitoring and limiting gold imports," Nambiath said.
Bottom line: one can again add India to the list of end-market where hundreds of tons of physical gold will end up, never to be heard from again.
And then there is of course the wildcard of the Swiss gold referendum on Sunday, where a "Yes" vote would lead to the immediate collapse of the gold price suppression mechanism as the swap-based gold shortage breaks through merely shadow conduits and finally makes its way to the real market. Which, of course, is why it will never be allowed to happen.
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Evidence? You didn't provide anything of the sort!
You believe that because they are still able to manipulate markets to some degree with "money" that they conjur up on a keyboard that they are "in control"?
Presumably you would argue that a drunk driver with a BAC of .500 is somehow "in control" until the moment that he crashes and dies. TPTB are no more in control than such a driver.
The salient question that everyone should be asking themselves is whether or not they are comfortable riding along in the same vehicle.
I am not a dealer or an any way an expert. I formed my opinon on the purity issue from what I heard about gold moving East. It is getting refined into a "4" 9 purity (.9999) recast into 1 kilo bars. (Of course, it needs assaying) The bigger more overlooked part, imo, is the change in measurment, English to Metric. Only two countries use the English system, to me it signals that regime change is immenent but, that's a different subject...
(purity, creates bias and a lot of pricing is subjective...)
Further, I heard an inteview with a dealer, he talked of the last "go around" with Silver. (80s) He said, the premiums for 90% silver were way lower than for higher purities due to the backlog at the refineries - 3 weeks ...due to price volatillity, he was not sure if it would remain high long enough for him to fetch a profit on the spur.
just my 2 cents ...er microgram of insight,
divergence from the official spot price (paper).
premiums in Asia are much higher, at least from what I saw in India on a recent trip. They sell by grams. It was cheaper to order product from the US.
Hey Janet and Bennie, GOFOyourself!
Not sure how the Swiss referendum will come out, but one thing I know for sure... if it's a "no" then the gold price will probably drop 100 bucks by end of next week. The gold pushers have been howling about this for well over a week, saying that a no-vote has already been priced into the market. They are wrong, and they will howl like stuck pigs if the no-vote wins and the price tanks.
BTW, I'm quite bullish on gold going into next year. I just think there's going to be one more final shakeout to kick as many speculators off this bull before it resumes it's move up.
No arguing with the Capiton,,, but I think this manipulation will continue as long as they can control it.
Captain Kirk, I will go on record (and a limb) agreeing with you. No way that "they" will let a "yes" vote pass. But "they" have been expending so much ammo to drive the price down to influence the vote (if the population sees the price of gold tanking, then they won't be so attached to a gold standard and more likely to vote no or so the theory goes) that maybe, just maybe, the price will have to bounce back up. All of this uncertainty made it so difficult to press the "complete the transaction" button today when purchasing some Maples. And again, bought around 1181 and come back a few hours and its down another 20! But what the hell, it's all about having a boating accident excuse and keeping money away from the banks.
I think it's already priced in based on polling data.
Gold and Silver are still available to purchase (no limit, all in stock) where I usually buy... JMB Kitco and others. Until I start seeing limits or not in stock then I'll believe there is a problem.
Agree with your unassailable logic and reasoning, but what percent does the small retail buyer (physical only) comprise the total physical market?- could not the governments be diverting minsicule amounts of the metal to the small investor/retailer purchaser to keep up the facade of "no physical shortage", while in reality, behind the scenes, the big central banks and sovereign countries are squirming to finagle their claimed reserves of thousands of tons?
The retail market is so insignificant that I agree with your premise.
It's a 2-tiered system. You have Gold for the big boys measured in metric tonnes, and you have gold for the serfs measured in troy ounces.
The serfs who think they can "win" at this rigged metal game are living in lala land. I know people personally who have been burned by this shit. They cashed out everything, thinking they were going to hit it big when gold hits $10,000 an ounce, not considering the fact that they would have to find a greater fool to buy their $10,000 gold in the bubble, when everyone else is broke and fighting over pantyhose on Black friday sales.
Like I was saying the other day, if you are doing business in China or India with the merchant class, then gold might be a good utility, but here in the States, it's some arcane trinket that only coin shops are interested in. Know your target demographic on the sell side before you mess with this.
The PTB are manipulating just about everything. If they are holding metals then they are in the same boat.
Personally I like the low prices, which means I can afford more. The more I have when/if the thing crashes the better I hopefully will be.
Plus I like just looking at them. Can't imagine why most prefer the ugly FRNS and corroding change.
Of course that was before the terrible boating accid....
Oil went on sale today along with PMs - but PMs are easier to stack!
Meanwhile, before the dust settles....
Gold Repatriation from US to Result in Higher Gold Prices, Weaker Dollar
Executive and research director of the world’s leading gold broker Gold Core Mark O’Byrne stated that as fears grow over huge debt levels in the US, Japan and the United Kingdom, European governments are repatriating their gold from the United States.
http://sputniknews.com/business/20141128/1015278439.html
I wonder how long the bottoming process around $1200 will take since my cycle model for gold sees around $2400 at the end of 2015.
Looks like there are 11524 contracts still open for delivery of December gold as of first delivery date - today. That's 1.15M ounces of gold. I thought Comex had less than 1m ounces of gold in their inventory. This appears to be a problem to me or are my facts and logic incorrect?
Latest CME gold stocks report.
There's still plenty of eligible gold in the warehouse (or so it is indicated.) So it could be moved to registered to cover the delivery if needed (in theory).
The mechanics are explained here.
Of course, "eligible" can mean anything to the CME it seems.
Makes sense. Thanks for sharing the links.
And the data is accurate because . . .
http://www.theguardian.com/business/2014/nov/26/ron-paul-switzerland-gol...
Swiss voters are likely to reject a November 30 referendum to force the Swiss National Bank to hold 20% of its reserves in gold, but you can’t crush a gold bug.
I have never, ever heard Main Stream Media give Gold an upbeat outlook.
Tyler I just spent over an hour studying GOFO and gold leasing. You need to explain the process better.
Gold is generally used as collateral for cash loans. The amount lended is usually between 50-70 of the spot value of gold.
If I'm correct, you're saying that the borrowers are becoming lenders, because they can lease the metal with a larger net return than borrowing against it, for lending purposes.
It's the Middle Man aspect that I find confusing. I understand hedging paper gold or silver on the front or back end to cover physical positions. Forward or backward hedges, to maintain price stability *manipulation*.
Here's the text that I've been so confused over.
To wit: "It is interesting to note that benchmark gold-dollar swap rates have recently traded negative, meaning investors are paying to borrow gold. This is unusual as gold is traditionally used as a source of collateral for cash financing.... [A] number of factors may play a role, such as excess dollar liquidity or an increased demand for collateral on the back of the global regulatory developments."
A Historic Inversion: Gold GOFO Rates Turn Negative For The First Time Since Lehman | Zero Hedge
yen X,
i've been waiting for the answer either from tyler or others. i don't understand fully why your utterly reasonable question hasn't been addressed. so i'm assuming it's entirely obvious to everyone but me...in that case please would some kind trader/wizard explain the altogether obvious to me.
"It is this synthetic "shadow" gold that is now actively disappearing from the system."
How many manipulations can they manage around gold? Gold paper and now "synthetic shadow gold"? None of that is gold, and gold there is only one: physical gold. The rest is yet more fiat, bogus money like the dollar, the euro, the bitcoin and hot air. They really can't give it a rest, can they? It's bubble of nothing upon bubble of nothing.
This is going pretty much to the script - declining currencies with commensurate rises in the dollar.,declining bond yields (Japan now negative) with tight liquidity and new highs in the stock market. Next is the blow off stage in the dollar as manipulation of PM's reaches unsustainable extremes. Then some left field event and the whole thing blows.
FOFOA thinks the actual price of physical gold in size is much, much higher than what's seen in the market today. Great read.
From 'Like a Giant 3':
"You'll have to bear with me because this will take a while to explain. What I'm conjecturing is that gold *IN SIZE* has been trading at multiples of its known price since probably as far back as this chart goes:"
http://fofoa.blogspot.com/2012/10/think-like-giant.html
http://fofoa.blogspot.com/2013/02/think-like-giant-2.html
http://fofoa.blogspot.com/2014/02/think-like-giant-3.html
There is a gold shortage that is exactly like the diamond shortage.
I have been reading about metals shortages for about 30 years now. According to those trying to scam us, the world is always imminently on the verge of running out of gold, silver, rare earth metals ... whatever. And yet, somehow those scamming doomsayers get it absolutely wrong every single time ... go figure.
How can the world run out of commodity that has very little practical use and is never actually consumed? Inventories may shift from large catches to distributed amongst individuals (who buy the scam), but there is always an inventory that can be freed up for the right amount of money.
The scammers want to convince you there is a shortage so they can get you to buy their stash ... most likely before the price goes down further.
No thanks.
It is equally unique that large depositors at banks are not receiving interest, and in some locales are paying for the privilege to loan to banks. This is but the natural flipside of the fiat - gold relationship.
No, it should read, "It is equally unique that large investors - who used to be considered depositors - are not receiving interest . . ."
In fact, scrap that 'large' part and insert 'all' investors.
There are a lot of investments that pay a decent and sometimes large return. It is just banks that to not pay interest. They really do not want depositors.
Historic gofo=historic bear trap for paper chasers; if not cash settlement at low shadow bankstering synthetic paper pulp fiction gold/silver rigged pricing. Hedges get bear assed naked and beat to a bloody pulp in the street for following the paper metal turd herd into the fake pricing abyss. Doubt we can have a run on physical gold or silver lest there's some dark corner of dust not swept up in CB bullion vaults. I won't say how much I've taken out of the market since '08 but it's never coming back to the paper shuffling bullion banksters. It goes stealthily to kindred and has for years and the only way it comes back into circulation is 50K gold and 5k USDinker dollar silver. This shit house of paper debt based illusion of wealth is getting bulldozed over the cliff this weekend by the swiss and if not, it won't be long before another sovereign cries foul my gold is gone and the fed fuds have stole it. The 50K & 5k USDinker dollar price will squeeze out an ounce or possibly two but the rest held hostage for generations who have been trained to protect what is theirs at the threshold of their constitutional doors. Live free or die! Real money gold and silver for power to the people forever! Tyrannic lil scamBO regime just another hiss and bye word for those who honor God and keep His laws. Sure it's 100% possession is the law among the lawless bankstering lil scamBO regime. Wouldn't have it any other way as the great pretending guardians of representative government are mere pontificating porkin gas bagging pig men. The USDinker dollar as worthless as these pigmen in a packed burning bacon slaughter house.
i've always been some what pessimistic, but the last 7yrs. have made me a full-on contrarian.
we were told by the most powerful people in americas govt., our financial system was going down, in reality, a very few BIS banks and a few co.'s, (ie. gm was going down, in fact they'd been going down for over a decade), had a debt problem, we were told by the same people, you can keep your ins. policy, and your doctor, and also the same people telling us 5-10 million more eligible workers is just what the economy needs, this just doesn't even make common-sense, let alone economic sense.
in 2008 the BIS, in full collusion with americas govt. defrauded generations of americans of their rightful assets, and future financial freedom, and it continues unabated.
i want 2 things, repeal the federal reserve act, then file suit, the unconstitutional, (that people toke oaths to protect), collusion of americas govt., and the BIS for decades have schemed to redistritute americans personal wealth, while enriching themselves.
now we hear, from the most powerful people in the dutch govt., the netherlands got their gold back, there might of been a few hundred in on the physical moving of something heavy, but i'll bet there was no more than a handful of powerful govt. officials knew what it was, and gold dips in price.
the way things are going a swiss, yes vote should bring gold down 15%-20%.
the real value of gold may not be known for hundreds of years, but within 5 yrs. were going to know what currencies are worth.
americas has lost americans trust, and the worlds morale policy of trust.
if it weren't for americas msm things would be exponentially better.
THe fact you hang out on this website shouts your pessimism from the roof tops. Tell us something we don't know.
Yes we read that the Dutch have gotten their gold back, but have they really?
Funny, but I can go on Apmex and buy anythng I want.
Those of us who buy to hedge are a small market; our needs can easily be supplied. The Crunch is going on at the CB level.
I recently toured several sites. Large bars=50 oz or more of Ag are in short supply.
Yes, MASSIVE shortage driving prices... down.
Gold down over 2 1/2 percent today. Silver down over 6 1/2 percent today.
Up is down. Black is white. Economics no longer works...
Makes perfect free market sense to me.
Or, more likely, the assumptions people are using are wrong.
Before a major move down (final blowout )or up , like in gold ,but than down is a sign of a trend change..
The FED/GS and Co can manipulated ,but only for a limited period markets against fundamentals...
Gold up up and away next week/month/year.
The USA has two guns at its head.... low oil prices and gold..... It can manipulate gold down through the paper market....but control of OPEC (Saudi Arabia)?
If the USD petrodollar is at risk through too low oil prices.......you can predict big trouble in Saudi Arabia. As this is about global hegemony of the USA which they will die trying to save, big trouble in Saudi in one form or another in order to boost oil. AND who to blame.....the list of suspects, those with motives is long.
Who murdered Saudi Arabia...
Venezuala with a candlestick in the dining room?
USA with knife in the parlour?
Russia with a rope in the bedroom?
FOFOA describes exactly this.
From the second link below:
"Here is what the USG worried about back in 1973. It's from Foreign Relations of the United States, 1969-1976, V. XXXVI, The Energy Crisis, 1969-1974:
http://fofoa.blogspot.com/2012/10/think-like-giant.html
http://fofoa.blogspot.com/2013/02/think-like-giant-2.html
http://fofoa.blogspot.com/2014/02/think-like-giant-3.html
For years now I have read about the desire, the need to have the gold held by the Fed audited and the stonewalling by TPTB to resist the audit.
Even if a congressional mandate is passed requiring an audit, how would it be enforced?
Who are TPTB, I mean, besides some etherial, ghostly, unidentified almighty power?
Who is the person that should be pressured to conduct the audit?
Who is ultimately responsible for prohibiting the audit of the gold?
Is there a single person or entity that can be identified and pressured to perform an audit?
Are we doomed to a life without an official gold audit until there is a failure to deliver that last ounce of physical gold, at which time the audit will be complete by default?
Too much is happening with gold in a short period of time recently. Something big is about to happen. Not necessarily something centered on gold or precious metals themselves, but something that requires a 180-degree attitude change on gold.
I can think of too many possibilities to make a list worthwhile.
Talk is cheap, hope springs eternal, make a short list just to show yer not full of bullshit. Please.
Gold will soon be make illegal to hold again.
Central banks decide they need to buy more gold.
Running out of physical to deliver to keep manipulation.
Switzerland yes vote wins even after propadanda campaign.
Russia will sell oil cheaper than SA, but will demand payment in gold or silver.
Lots more central banks will decide they need to repatriate most of their gold.
Just getting warmed up!
Been waitin 6 years for ANYTHING visible to joe sixpack, anything so obvious it doesnt need MSM reporting.
Don't worry sovereign wealth funds will save the day and buy all da gold.
Check out how big they are them sovereign wealth funds
http://www.swfinstitute.org/fund-rankings/
Here's the way out of the US Dollar system and SWIFT for Russia.Question is,when will it happen?They might be ready to go soon says Alasdair Macleod.Ihope they choose the route that he's talking about because a big move up in gold would happen very quickly...
http://news.goldseek.com/GoldSeek/1417186800.php
Someone here recently queried, how can we buy anything with gold in a world where central banking and fiat have finally crashed? Possession will be criminalized, to say nothing of its actual use. And how much is "enough" when most of us are just bush league players, anyway?
I wonder if it will be like a mentor of mine said: the TBTJ faction will die to protect their fiat system, or we will die fighting them and their paradigm.
Stuff I wonder about, but have no solid answer for...
A Yes vote puts immediate pressure on the physical market since the SNB will have to source approximately 400 tons a year for the next five years. The front running for physical ahead of such built in demand will be considerable. However, a No vote will also stress the physical market because paper traders will use such an outcome as an excuse to sell paper with even more abandon. Another ten to twenty percent off the paper price will put a lot of miners out of business. And since mining outut plus scrap makes up the flow-and it's all about the flow- there will be a very big problem when many hundreds, perhaps thousands of tons, are removed from the yearly flow. A slower burn, but one nonetheless. Unlike in 1999 when Brown's Bottom occurred, no CB is going to feed physical into the $IMFS to save it. Why? Because there's another currency regime around that can take over the reigns. A MOE which, by virtue of its "structure", can keep key global producers in the game. #Eurocheckmate
For the last couple of years I have been explaining to whoever will listen, about how money is created.
They are all ok with it!
Then I explain to them that when they go to the bank and borrow money, the bank doesn't have the money, they just create it and charge you interest for it. and there ok with that too.
I tell them that inflation is robbing them blind, there ok with that too.
Obviously if there was something wrong with this system, the Gov would protect them from this. No? /sarc
I sure hope the Swiss are a little smarter than this!
I get the same results.
The only thing greater than the crookedness of our 'leaders' is the stupidity of the ones being led.
Eyes glaze over in these parts. Hurts their heads. And of course, the government would never screw them. Same old same old. I don't even bother anymore. Eventually, they'll figure it out.
I tell people that they don't understand how money is created, until they understand - yet don't believe what I say is possible. The moment that they can't possibly believe the process, is the moment of understanding. What they do from there is their business.
The more hoarding of the physical goes on, the lower goes the price of the paper gold.
Just wait until paper is $200/oz. Physical will be whatever is in your brain.
Yep Gold is such a worthless relic that Kissinger agreed to go to extraordinary lengths to demonetize it and supress it and control the physical holdings.
It is such a worthless thing that TPTB have for ages gone to extreme obvious illegal lengths to keep the price down....
Obviously TPTB see gold as the only legitimate and dangerous alternative to the USD ... and Know it will go crazy to the upside if allowed to valued and measured in USD.
Not surprising TPTB doing all the can to trash its reputation. But can never cease the manipulation, and every time have to spend more and more effort to achieve the same results....AND they know the moment they let go....gold will ram so hard that it will dissapear out of their reach to leash again.
Gold will be the first item that will reveal the real worthlessness of current fiats.
remember back in the good old daze when it was around 1600/oz?
there was a reason it sold that high. confidence in the banking system was ebbing.
it stands to reason there would be a need to devalue by paper contracts.
If there is a spike in price after the Swiss referendum, be prepared to SELL gold. It will be a unique opportunity not to miss, get ready !
I would like to welcome our latest psyop troll incarnation of 5 weeks and change!
A hearty FUCK YOU from us all.....
SnP trading 26 times forward ernings (as a result of stock buybacks fueled by debt) v. a substitute for fiat that is evident that EVERYONE WANTS. COMEX can crush the fiat price all it wants because it still costs me the same as it ever did to get it in my hand. While your nominal SnP trades to the moon - its real value will continue to decline and the nominal value is clearly not without risk - the measure of which I don't beleive for a second - you have any idea of. Because if you did, you wouldn't be so fucking arrogant and stupid all in one sentence.
Russia is buying up all the gold and seeks payment in gold for energy resources sold to the West (oil,gas) but will accept US$ as an intermediate payment which he immediately purchases artificially devalued gold with the artificially propped up dollar.
Russia is having big funding problems in $ right now. they are on their knees with the drop in the price of oil. buying a few tons of golds is any way ridiculous compared to the size of their problem and the way it is going on, they will again have to default soon with dear consequences on the ruble.
whats the difference between a ruble and a dollar ? a dollar
What is the difference between "VERY" minimal Russian national dept, compared to trillions upon trillions of of US national debt?, answer " A LOT OF FUCKING DOLLARS" .Your days are numbered!!!!!!!!
A producing well is currency. Gold is a savings. The more the better so long as you have the means to defend yourself from bandits and degenerates.
Who needs a part of the limited valuable physical when you can buy infinite paper?
…wait a sec….
The basic mechanism of price discovery (based on demand and supply for actual use) of anything traded on an exchange has been terminally infected by speculators having access to unlimited funds and super fast computers for trading leading to volatile price swings. This has been made worse by the launch of ETFs for anything and everything under the sun by the financial community.
The problem today is that the price of any commodity is not derived by it's physical demand or supply but more by the speculative positions standing long or short on the commodity exchange like any other traded bond, stock or currency.
http://www.marketoracle.co.uk/Article40231.html
I thought the gold price was going down because I'm so invested in it and the miners.
what is the disaster plan for those who tried to buy gold to the limit before the Swiss Referendum when it crashes to 1000$ shortly afterwards ?
I'll buy all the PMs you want to sell Chat! The manipulation game is in it's final days.
you don't have to buy from me. Call your friend Goldcore, theres a few tons of offer at 1180$
what is the disaster plan for those who are overleveraged long on gold and bought on the advice of Goldcore & co from 1900$ down to 1300$ ?
while S&P just returned double digits every year ???
Rick Perry
Rick James, BITCH.
"That QE is a helluva drug."
OK, enough of this nonsense (mind you, I'm in the middle of a wicked battle with BofA, my two siblings, and three lawyers - none of which are retained by me - over a five-and-a-half year-old foreclosure on my dad's (RIP) former home, so I am quite literally angrier than a wounded bear).
Here's what I'm doing:
Buying as much physical silver at current price plus premia as I can reasonably afford.
Valuing my silver at 15:1 the price of gold, whatever the market (and whatever that market may be) determines the correct price of gold to be.
Manipulators, banks, governments can kiss my ass. Each ounce of my silver is worth 1/15th the price of an ounce of gold and it doesn't leave my possession until I get my price. Period.
In other words, paraphrasing our choomer-in-chief, "If you like your silver at 1/15th the price of gold, you can keep your silver at 1/15th the price of gold. Period."
Honestly, I think I am being completely fair and rational, based upon centuries of gold-silver trading at a ratio of between 12:1 and 16:1.
So, as of today, my silver is worth $77.90 US$ per ounce.
Any questions?
I trust in the Bank of Adam Smith and Austrian Economics. More people should do the same. Create a REAL market for silver, between individuals, not an artificial one like exists today which has silver at a 73:1 ratio to gold. That's a travesty.
If banks and governments and dealers want to hold and trade silver at the absurd valuations of today, let them. I'll be a buyer. For individuals seeking preservation of wealth, the 15:1 ratio should be the standard and we're not selling until our price is met.
Choices: Devalue gold lower; revalue silver higher. May be coming sooner than anyone can imagine.
You'll know how "short" it is when a World War III exchange gets underway!....
Oh wait a minute???... Somone forgot to tell John Kerry and Joe Biden not yet!
Some fuel to add to the fire in order to expedite things...
Sure hope Riyadh and Tel Aviv enjoy their new glass pond(s)!!!!
Who run Bartertown? Jamie Dimon run Bartertown.
Gold is the greatest enemy of the dollar, so of course it must be demonized
Like many of you, I am trying to figure out the practical meaning of GOFO.
However, a few observations:
Saudis are putting oil on firesale prices. This should result in selling a lot of oil. Suppose they are buying Au from China with the quick cash? China and Saudi are meeting regularly concerning oil and currencies...if I had a boatload of USTs I might be thinking about augmenting my stash with PMs. Anyone like me who has lived or worked there knows how much the Arabs like the fizz.
The fire sale also knocks Vlad on his behind and crimps the shale competition.
With these national gold repatriation schemes, it seems there is also a run on gold on the Big Boy level. There is too much paper money being printed. Some of these sovereigns are getting nervous. Did the bullion banks loan out the same stack of bars to 10 different guys? Who has first claim?
Something weird is happening here in the last few months, and it is building up.
Too many USDs printed. Yen going to zero. This will not make the Pacific rim nations happy.
Something is going to happen.
The fire sale also knocks Vlad on his behind and crimps the shale competition.
lc
Unless the Saudis and their Western banker partners have more of each that we don't know about or have some alchemy in the process for creating more of both at a cheaper cost of production that puts them in the black, it certainly won't give the Saudis what they most want including a pipeline and a new government in Syria! "Half price oil" in Saudi Arabia is like putting one barrel of a two-barrel shotgun in your mouth which inevitably achieves the same results! One barrel works just as good as two!!! They've had a very long successful run for 45 years but now that sun has set!
Just remember that Eastern philosophy errs on the side of long term thinking which is never wrong. And this is where Russia comes into the picture!
Great observations!
The Swiss have to know their CB has mortgaged the country buying up Euros with printed money to the tune of 1.5X their GDP. If that doesn't get them off their asses to vote "yes", there is probably no hope for western civilization
Gold is in medium-term rally and will do quite well for a while. anyway.
http://www.globaldeflationnews.com/gold-elliott-waves-forecast-a-multi-m...
Rally ??? Apparently you did not buy any gold / silver in 2012 & 2013. My holdings are now worth 50% of purchase price. So much for the gold snakeoil salesmans preaching of gold shortages and massive inflation over the past three years. If gold / silver ever comes back to anyway near the 2012/13 price, I will sell it all and buy red beet futures or stock in a pinwheel manufacturing company. I'll certainly fare better than owning PM.
Gold to preserve wealth is just a pile of BS.
Arable land, clean water, seeds, antibiotics, power generators, ham radios, weapons and ammunition are all going to be worth more than gold if things really collapse.
If things really don't collapse, and government and the banks can function, gold's value will never go through the roof. You'd need hyperinflation for that, and during hyperinflation - people will want food, water and ammo more than pieces of metal.