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Dear Willem Buiter: If Gold Is A 6000-Year Bubble, Then What Is This?

Tyler Durden's picture




 

Citi claims gold is a 6000-year-old bubble, perhaps Mr. Buiter has not seen this chart?

 

 

...and funny how Mr. Buiter never wrote any extensive essays about the bubbleness of Citi at any point between 1995 and 2007?

*  *  *

“A friend asked me to choose one investment that I would want to leave to my great-great-grandchildren. I immediately answered that it would be gold coins. The reason I explained is as follows – corporations can disappear, stocks can collapse, governments can change and they can fall, booms and recessions come and go – but gold is intrinsic money, and no man or nation has ever doubted its value. And they never will.”

 

Richard Russell

 

"Remember what we're looking at. Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it."

 

Alan Greenspan

Source: The Burning Platform blog, and Bullion Management Group

 

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Thu, 12/04/2014 - 19:32 | 5518424 HedgeAccordingly
HedgeAccordingly's picture

Interesting graph... Gold is what the ages used for currency when they lent money for interest .. 

http://hedgeaccordingly.com/launch-real-time-charting

Thu, 12/04/2014 - 19:40 | 5518439 El Oregonian
El Oregonian's picture

The troubling solid bubble of righteous conviction.

Thu, 12/04/2014 - 19:49 | 5518473 Frolf
Frolf's picture

You are dumb. This is spam. Click on it.

 

https://www.youtube.com/watch?v=tOW5eljyjms

Thu, 12/04/2014 - 19:49 | 5518476 Frolf
Frolf's picture

What I'd like to know is, as Citi is a love-child of the U.S. government, why doesn't Mr Buiter dispense the same advice he gave to the Swiss and advise the U.S. government to sell their 8,000 odd tonnes of gold?

Thu, 12/04/2014 - 19:57 | 5518493 Pinto Currency
Pinto Currency's picture

 

 

re. Citi's bailout:

 

"...But our government’s bailout program was in the hands of the crony New York Fed, where Sandy Weill had served as a Director from 2001 through 2006, and the U.S. Treasury Department, run at that point by Hank Paulson, former CEO of Goldman Sachs.

Instead of nationalizing the bank to protect the taxpayer’s interests, the Wall Street cronies did the opposite; they doubled down to the tune of $326 billion. That’s almost one-third of a trillion dollar commitment to a bank that had $2 trillion on its balance sheet, $1.3 trillion off its balance sheet, zero confidence in the marketplace, a serial history of egregious market violations and a stock value of $20.5 billion.  And, at this point, the SEC knew Citigroup was lying about its exposure to subprime debt and likely shared that with the Fed and Treasury. (See Part One.) ..."

 

http://wallstreetonparade.com/2012/08/the-untold-story-of-the-bailout-of...

Thu, 12/04/2014 - 20:01 | 5518510 max2205
max2205's picture

Looks like my 2 shares of TVIX....fuck you Ben!

Thu, 12/04/2014 - 20:20 | 5518547 Stackers
Stackers's picture

Lets us also not forget that the merger of Travelers and Citibank into Citigroup was the reason the 1999 Financial Modernization Act was passed and created the TBTF bank.

Fuck you Willem

Thu, 12/04/2014 - 23:00 | 5519013 Publicus
Publicus's picture

This chart tells me that Citi outperforms gold by a LOT.

Thu, 12/04/2014 - 23:21 | 5519113 TheAnalOG
TheAnalOG's picture

We come and say that Bitcoin is lurking in the shadow.  Not dead.  Not bubbly.  If we go away you say ran away.  Not hid under like a true blue Zealotry.  Not to be but to come, you walk over each manhole and you wonder now?

Fri, 12/05/2014 - 00:09 | 5519239 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for Bitcoin poetry...

Who knew such a thing was possible?

EDIT:

And if the BTC:Au ratio ever drops back below, say, 2.0, you can always BUY gold with your Bitcoin.

Fri, 12/05/2014 - 03:11 | 5519593 ilion
ilion's picture

The pure idiocy of Buiter is just amazing:
https://soundcloud.com/olav-nurk-1/black-diamond 

Thu, 12/04/2014 - 23:55 | 5519210 Some Bloke
Some Bloke's picture

We bubbled some folks...

Thu, 12/04/2014 - 20:22 | 5518554 RaceToTheBottom
RaceToTheBottom's picture

Stop with the Greensppam quotes.  He is a scumbag that has been a willing director of the crash of the world.  One could argue that he is worse than the others cause HE KNEW MORE THAN THEM.

Hang them all

Thu, 12/04/2014 - 20:45 | 5518617 McCormick No. 9
McCormick No. 9's picture

So, according to this chart, Citi, which makes its money by issuing money from thin air and then charging interest, has performed EXACTLY as well as gold. That is IRONIC. So much for "intrinsic value".

SUCKAHS!

Thu, 12/04/2014 - 21:18 | 5518715 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

"6000-year bubble". Is there any other single, solitary statement, direct from the ivory tower of the nation's most respected economists, that demonstrates more succinctly the complete and utter madness, incompetence, and insanity of today's entire economics profession?

And the question that is completely unasked: would I rather invest in something that has sustained a 6,000-year bubble through all of man's wars and upheavals and crises and revolutions, or one that has only sustained a 7-year or 10-year or 30-year bubble based on bits of paper and fairy dust?

 

Fri, 12/05/2014 - 00:17 | 5519252 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

That is a great observation!

How can anything valued by man be in a bubble for 6000 years?  These guys are blowing smoke...

Fri, 12/05/2014 - 09:54 | 5520132 DriveByLurker
DriveByLurker's picture

The other long term bubbles are food and shelter.

Fri, 12/05/2014 - 04:34 | 5519664 MiTasol
MiTasol's picture

I thoroughly approve of your avatar. Dave.

Fri, 12/05/2014 - 06:16 | 5519732 Ghordius
Ghordius's picture

why not? a bubble can last 6 years, 60 years (many fiat currencies lasted that long), 600 years or 6'000 years

that gold has been so long a bubble is an excellent reason to expect it to last longer then our lifetimes

gold was "artificially introduced" in Asia Minor, probably/allegedly in Gordium, by King Midas, by the act of issuing the first gold coins

we know that when Athens started exploiting the Laurium silver mine, it "artificially introduced" silver coins, and one the first monetary wars started

we also know that Sparta was still using iron coins, and Spartans refused to switch to gold or silver, and Athenians laughed about this archaic stubborness, and noted a decline in Spartan trading activity, which led to an increasing trading isolation of Sparta

my theory is very simple: in between, the discovery of how to smelt iron ore "happened"

so the original money was meteoritic iron. very well suited for value storing, and for amazing, godlike weapons, too, with poems like Homer's remembering Achilles' imperviousness to arrows and blows

what Midas did was to back gold coins with... iron and/or a basket of whatever was available, possibly wheat, which comes from the region and was stored in great quantities. and of course he collected taxes and duties in his own gold coins

once launched, those gold coins became the first currency in the modern sense, and became money better suited to trade then sheep or salt, the other "great contenders"

--------

so, to recap:

1) money is a human invention. based on agreements. and has a function, that of price calculation. besides that of value storage (yet if in conflict, trading issues trump value storing issues)

2) a human tradition that is 6'000 years old has the best chances of going on for further 6'000 years

Fri, 12/05/2014 - 08:44 | 5519903 TheReplacement
TheReplacement's picture

So you don't believe the big banks will usher in a new 6,000 year reich?

Fri, 12/05/2014 - 10:07 | 5520183 venturen
venturen's picture

I believe Wall Street crooks will lead us to the promised land of opportunity creating well paying companies and won't be too greedy and destroy any company , person or government they touch. 

Oh Wait I think I just retched!

Fri, 12/05/2014 - 13:43 | 5521045 Frank N. Beans
Frank N. Beans's picture

great comment, which means that, by definition, gold is not, cannot, and will never be, in a bubble.

Gold is gold.

Fri, 12/05/2014 - 08:16 | 5519855 samcontrol
samcontrol's picture

lol max2205

I have two shares of uvxy for the exact same reasons as you.
What is that a 10k loss? mine is 20k. to $25 ...lol. might as well laugh.

if we had any balls 2015 will be the year to buy these rigged products. low percentage possibility but super high return casino chip!

My balls go as buying paper physicall phys . It, s all i can do to leave the system in some way. for now. Just cannot bring myself to losing 50% to these fuckers over the years and just give up. I cannot have the phys at home in what is left. So i keep on gambling with cardboard pms.

Thu, 12/04/2014 - 19:49 | 5518477 Frolf
Frolf's picture

What I'd like to know is, as Citi is a love-child of the U.S. government, why doesn't Mr Buiter dispense the same advice he gave to the Swiss and advise the U.S. government to sell their 8,000 odd tonnes of gold?

Thu, 12/04/2014 - 20:06 | 5518521 Pool Shark
Pool Shark's picture

 

 

Well, everyone knows that the US Dollar is backed by the Federal Reserve, whereas Gold isn't backed by anything:

https://www.youtube.com/watch?v=k8Htfcjk_JA

 

 

Thu, 12/04/2014 - 20:52 | 5518637 zerohedgejjxxzz12
zerohedgejjxxzz12's picture

"everyone knows that the US Dollar is backed by the Federal Reserve"

 

I guess through the back door you can say that, but it's purchasing power isn't backed by anything!

 

Fri, 12/05/2014 - 05:19 | 5519692 meatworm
meatworm's picture

"Well, everyone knows that the US Dollar is backed by the Federal Reserve, whereas Gold isn't backed by anything:

 

"Well, everyone knows that the US Dollar is backed by man, whereas Gold is backed by nature."

"Well, everyone knows that the US Dollar is backed by somebody, whereas Gold is backed by everybody."

Thu, 12/04/2014 - 19:51 | 5518482 CrazyCooter
CrazyCooter's picture

The stalker must have gotten to him ...

http://www.zerohedge.com/news/2013-07-03/meet-willem-buiters-sexy-dement...

Buiter had a PDF which got published on ZH a long time ago, which I liked.

I think the unfortunate reality for any economist in professional employment of anything remotely connected to banking is they slob knobs when they are told, data be damned. Some sell their souls, some move on because they know that old saying is true; don't dip your data in crazy!

Regards,

Cooter

Thu, 12/04/2014 - 19:51 | 5518484 unrulian
unrulian's picture

I clicked on it, it was spam, I am dumb

Thu, 12/04/2014 - 19:41 | 5518448 Impoverished Ps...
Impoverished Psychologist's picture

Good chart, very good chart indeed.

Thu, 12/04/2014 - 23:06 | 5519043 williambanzai7
williambanzai7's picture

Fri, 12/05/2014 - 01:04 | 5519426 gramps
gramps's picture

Please ban this guy.

Thu, 12/04/2014 - 19:34 | 5518430 Truther
Truther's picture

His ass is a bubble. Hate to mess with that shit. Pin his ass already.

Thu, 12/04/2014 - 19:36 | 5518435 new game
new game's picture

wow, gold is fucking "golden"; now just shut the fuck up about gold. go get some and stay shut the fuck up...

Thu, 12/04/2014 - 20:17 | 5518540 SilverIsMoney
SilverIsMoney's picture

Draghi?

Fri, 12/05/2014 - 03:25 | 5519608 Jaspergers
Jaspergers's picture

You could go to a blog that often posts about gold, click on an article about gold, log in and leave an angry comment about gold OR you could GTFO and EABOD. Pretty funny that you choose the first option >.<

Thu, 12/04/2014 - 19:36 | 5518438 Racer
Racer's picture

Banksters = Snake oil salesmen

Thu, 12/04/2014 - 23:35 | 5519157 disabledvet
disabledvet's picture

No such thing as an energy bubble or a refining bubble either.

Used vehilces are selling big where I'm at. Hold on to your "junker." Or "Junker" as the case may be...

Fri, 12/05/2014 - 00:12 | 5519258 DoChenRollingBearing
DoChenRollingBearing's picture

 

 

Especially Toyota Corollas and Hyundais...

Thu, 12/04/2014 - 19:38 | 5518441 ListenToTISM
ListenToTISM's picture

Don't forget that Citi bought $45b worth of subprime loans after they had started going bad.

And oddly enough, they received $45b worth of taxpayer money in the bailout. Weird coincidence, aye?

https://www.youtube.com/watch?v=bz4cLwVVu9w

Thu, 12/04/2014 - 19:57 | 5518497 SHEEPFUKKER
SHEEPFUKKER's picture

And if they didn't get taxpayer bailout $$$, wouldn't Citi "investors" have lost 100% of their money, not 97.7%? lol And is the reverse split factored in as well? lolololol

Sun, 12/07/2014 - 06:46 | 5525461 Ctrl_P
Ctrl_P's picture

I would click on your link, but I'm only interested in apathy.

Thu, 12/04/2014 - 22:45 | 5518443 gswifty
gswifty's picture

Touche! I don't think we'll be hearing from Mr Buiter anytime soon. Exposed as a hypocrite and a tool.

Thu, 12/04/2014 - 19:42 | 5518444 lasvegaspersona
lasvegaspersona's picture

I'm not sure what Greenspan means. Clearly gold is not a currency now. It is a great asset, a store of value and I believe soon to be come the number one reserve. I like gold, I own gold. I say buy gold, lots of it and soon.

But gold is not and I do not believe and fervently hope will never be a currency. Letting governments declare the value of gold by setting the price is just allowing them to manage it lower one more time.

Thu, 12/04/2014 - 19:47 | 5518470 Crisismode
Crisismode's picture

FOFOA,

Is that you???

Or did you morph into FOA hisself?

Or maybe, maybe you

are Another in the flesh . . .clarify?

 

 

Thu, 12/04/2014 - 20:29 | 5518572 Bay of Pigs
Bay of Pigs's picture

Good question. He said some really strange shit today about Draghi, the ECB and gold.

Thu, 12/04/2014 - 21:05 | 5518676 zerohedgejjxxzz12
zerohedgejjxxzz12's picture

Gov's that don't have much will say it's worthless, Gov's that have lots will say the opposite.

 Gov's like fony paper currency, because they can print it.

If you or I had a printing press it would print non stop until the currency became worthless.

 Just like now! 

I sure hope the brics/Russia or China gold back their currency.

 

 

Thu, 12/04/2014 - 19:40 | 5518451 highly debtful
highly debtful's picture

If banks are indeed doing God's work, I would like to apply for the position of atheist. With my monthly wage to be paid in Maple Leafs.  

Thu, 12/04/2014 - 20:39 | 5518604 oddjob
oddjob's picture

As an atheist, there is no group of sheeple to pay you to abuse them.

Thu, 12/04/2014 - 19:42 | 5518452 thegekko
thegekko's picture

Look, anybody with common sense knows that the piece by Willem Buiter is complete rubbish & without foundation.

But what I'd like to know is, as Citi is a love-child of the U.S. government, why doesn't Mr Buiter dispense the same advice he gave to the Swiss and advise the U.S. government to sell their 8,000 odd tonnes of gold?

If he is so right and gold is "worthless" then surely it makes no sense for America to hold their reserves!

Thu, 12/04/2014 - 19:51 | 5518478 Crisismode
Crisismode's picture

Buiter is a well-known whore

for the Fed, the NWO, and the Oligarchs.

Nothing to see here folks,

move along.

 

 

Thu, 12/04/2014 - 21:00 | 5518667 red1chief
red1chief's picture

I don't believe the government has that much gold, they never let anyone see it. And we know how dishonest they are.

Thu, 12/04/2014 - 19:42 | 5518457 Z_End
Z_End's picture

Buiter... Is that French for Ass Hat?

Thu, 12/04/2014 - 19:46 | 5518463 Buckaroo Banzai
Buckaroo Banzai's picture

Sir, it is no such thing. I believe in fact it is Dutch for ass hat.

Thu, 12/04/2014 - 20:00 | 5518503 Z_End
Z_End's picture

Thank you for the clarification Dr Banzai...

Thu, 12/04/2014 - 19:47 | 5518469 monopoly
monopoly's picture

Perfect, just perfect. Love this site.

Thu, 12/04/2014 - 19:51 | 5518481 netpounder
netpounder's picture

Want a safe investment?  Buy what bankers don't sell.

Thu, 12/04/2014 - 19:57 | 5518501 disgruntled hou...
disgruntled housewife's picture

Central bankers do not want to be bound by gold. They have total control of the money system. Total control with no checks and balances is never good. Gold is discovered at about 2.5% increase over current supply- about equal to population growth. If gold were once again pegged to the dollar or other instrument of exchange Central Bankers would be forced to treat capital as precious and not create complex structured financial vehicles that essentially line the financial industry's pockets and screw us. They do not take their responsibility seriously or there would never be sub prime anything. The financial industry is addicted to money- their pay beyond what any one individual is worth. They are the enemy- they are psychopaths- they will never be satisfied and cannot even see that they are killing the very system they profitted from. It won't end until the ability of Central Banks to create money from thin air is bound to something. They are spoiled children who need limits- they are not adult enough to know when enough is enough.

Thu, 12/04/2014 - 21:00 | 5518659 Clowns on Acid
Clowns on Acid's picture

Could you please expand "Central bankers" to neo Bolsheviks? That would increase the veracity of your statement. 

Thu, 12/04/2014 - 20:07 | 5518514 Yen Cross
Yen Cross's picture

  Those cocksuckers at C should quit buying watches, cufflinks, and other such jewelry made from gold and put their $ where their mouths are by insisting all their shit is made from tungsten.

 Give out some tungsten watches and matching pen sets at your Holiday party as bonuses, and see how that goes over you fucking clowns.

Thu, 12/04/2014 - 20:34 | 5518581 Bay of Pigs
Bay of Pigs's picture

Yeah, and get Tommy (Joe Pesci) from Goodfellas to "hand the pens out" to them.

Thu, 12/04/2014 - 20:09 | 5518527 Ray1968
Ray1968's picture

Thanks for the little shot of gold porn. Time to clean up

Thu, 12/04/2014 - 20:35 | 5518591 paint it red ca...
paint it red call it hell's picture

The biggest bubble of all is the 100 yr bubble blown in the collective ass of the American people.

Little to nothing is as we were told, taught or led to believe.......

Thu, 12/04/2014 - 20:46 | 5518618 SavingsTherapist
SavingsTherapist's picture

"no man or nation has ever doubted its value. And they never will".

 

So they said about stone axes, too.

Thu, 12/04/2014 - 23:19 | 5519103 Bemused Observer
Bemused Observer's picture

It's all relative. A stone ax may indeed be the most valuable thing to own under certain circumstances. The same can be said for guns, butter, fiat, bitcoins or virgin daughters.

The reason I own gold and silver is because of its proven track record in segueing between economic systems. Since I smell the end of the current system, I look for something that has a pretty good chance of being convertible into whatever is being used as currency in the coming system.

Thu, 12/04/2014 - 20:52 | 5518636 Cacete de Ouro
Cacete de Ouro's picture

SHITTYBANK - the Shitty never sleeps

Thu, 12/04/2014 - 20:53 | 5518640 oddjob
oddjob's picture

Equity holders were wiped out. Being under that umbrella must have sucked.

Thu, 12/04/2014 - 22:33 | 5518909 centerline
centerline's picture

Dumbass click bait.  Typical of the new and improved ZH.  Waste of my time.  Assholes.

Thu, 12/04/2014 - 23:13 | 5519077 bitterwolf
bitterwolf's picture

If that supposition was even remotely true...... how is it ALL nations in the 21st century are NOT using gold currency....waiting

Fri, 12/05/2014 - 11:24 | 5520521 AE911Truth
AE911Truth's picture

Many nations (including the USA) have already accepted the offer, over the objections of the bankers.

http://www.frank-webb.com/karen-hudes---updates.html

https://s3.amazonaws.com/khudes/ltokyoembassiesoutoftokyo.pdf

 

Thu, 12/04/2014 - 23:18 | 5519097 cynicalskeptic
cynicalskeptic's picture

All that Penn Central stock my grandparents bought must be worth a fortune by now....     me.... I prefer more 'modern' companies like Xerox and Kodak

 

Thu, 12/04/2014 - 23:31 | 5519145 Youri Carma
Youri Carma's picture
I don't see a Willem Buiter, I see a damn fool.
Thu, 12/04/2014 - 23:46 | 5519191 Ghostdog
Ghostdog's picture

What's citigroup?

Fri, 12/05/2014 - 00:56 | 5519399 Kina
Kina's picture

Buiter is just another self-sucking shill

Fri, 12/05/2014 - 02:15 | 5519534 robnume
robnume's picture

Willem Buiter is a total tool. A real sellout.

Fri, 12/05/2014 - 04:07 | 5519649 maneco
maneco's picture

He did work for the Bank of England so no surprise then!

Fri, 12/05/2014 - 05:19 | 5519691 KashNCarry
KashNCarry's picture

Know any good penny stocks Mr. Willem Buiter??

Fri, 12/05/2014 - 07:04 | 5519766 pcrs
pcrs's picture

Checking up on Buiter. Interesting to see when power feminist Mees had an affair with him. City credit card definitely wins from feminist principles.

Fri, 12/05/2014 - 07:17 | 5519778 medium giraffe
Fri, 12/05/2014 - 07:39 | 5519799 22winmag
22winmag's picture

Brought to you primarily by *mechanized* farming, production, and food distribution... for now.

Fri, 12/05/2014 - 08:07 | 5519834 therover
therover's picture

The sun is in a 4 billion year bubble. It's got only a couple more billion to go. 

The soap bubble that came out of my dish detergent bottle blew up in 1 second.

The term bubble is a total sham, since it can be defined within any length of time. 

Fri, 12/05/2014 - 08:08 | 5519835 ArtOfLife
ArtOfLife's picture

If you factor in dividends, C actually outperformed Gold since 1986.

Fri, 12/05/2014 - 08:11 | 5519842 GoldSilverBitcoinBug
GoldSilverBitcoinBug's picture

Gold (but not only him) will worth nothing when:

We will have machine that than create energy out of nothing.

We will have machine that can transmute any matter into gold.

We will have the posibility to create matter out of nothing.

In short, it's not for tomorrow.

Do NOT follow this link or you will be banned from the site!