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Gold's Two Stories: Paper Markets Collapse... While The Retail Public Buys At A Record Pace

Tyler Durden's picture




 

Submitted by Mac Slavo via SHTFPlan.com,

We’ve seen some significant swings in precious metals over the last several years and if we are to believe the paper spot prices and recent value of mining shares, one would think that gold and silver are on their last leg. Last weekend precious metals took a massive hit to the downside, sending shock waves throughout the industry. But was the move really representative of what’s happening in precious metals markets around the world? Or, is there an effort by large financial institutions to keep prices suppressed? In an open letter to the Commodity Futures Trading Commission First Mining Finance CEO Keith Neumeyer argues that real producers and consumers don’t appear to be represented by the purported billion dollar moves on paper trading exchanges.

With China recently revealing that they have added some 600 tons of gold to their stockpiles and the U.S. mint having suspended sales of Silver Eagles due to extremely high demand in early July, how is it possible that prices are crashing?

As noted in Mike Gleason’s Weekly Market Wrap at Money Metals Exchange, while it appears that gold is currently one of the world’s most hated assets, the retail public continues to buy at a record pace:

The paper market is telling one story. But the actual physical bullion market is telling quite another.

 

The U.S. Mint has sold over 100,000 ounces of American Eagle gold coins so far in July. That’s the highest monthly demand volume registered since April 2013. And that’s just as of this week. There’s still another week left to go before the final sales tally for Gold Eagles comes in for the month of July. It could be one for the record books with 109,000 1-ounce Gold Eagles sold — with bargain hunters purchasing 6% of the U.S. Mint’s production from Money Metals Exchange.

 

As for Silver Eagles, the U.S. Mint has given up on trying to keep up with demand. After brisk sales during the first week of July, Mint officials suspended deliveries of Silver Eagles to dealers. Sales of the popular coins are set to resume next week. But we expect the Mint will be unable to get its act together and keep up with demand.

 

Listen: Full Interview With Chris Powell Of The Gold Anti-Trust Committee (GATA)

It’s not clear exactly who is suppressing precious metals or why, but it is quite apparent that prices on paper exchanges are completely disconnected from reality, as retail buyers are taking this opportunity to scoop up gold and silver at prices that are 50% or more off their highs.

But what happens next? That, of course, is anybody’s guess, but considering current prices and movements within the context of a broader economic crisis, there is a precedent for what we have seen in recent years.

We need only look back to the recession of the 1970’s.

gold-chart-1970s

You’ll notice that gold saw some significant price movements, not dissimilar to what we’re experiencing today. There were several down swings of 25% or more within the broader gold bull market. Most notably, take a look at what happened from 1975 to 1976. Gold shot up to nearly $200 an ounce, only to be pounded just twelve months later by 50% to a price of just over $100 an ounce.

As the crisis accelerated in severity into the late 1970’s, complete with gas shortages, job losses and geopolitical tensions, we saw gold explode in value to a high of $850 by January of 1980.

We’re not necessarily suggesting that gold will follow the exact same pattern. But history does rhyme, and the world again finds itself in serious financial, economic, and monetary crisis.

As we’ve noted before, gold is and always has been the historical asset of last resort for preserving wealth. Should the current crisis accelerate as we saw in the 1970’s, the value of gold will likely rise accordingly. We may not be looking at a 700% increase in price like we did from 1976 to 1980, but there is a distinct possibility that we will witness serious gains in real value as crisis and panic unfold.

You can’t eat gold and silver, of course. If crisis is coming we have always urged our readers to prepare themselves for disruption to credit-dependent commerce systems with reserves of food, emergency cash and other supplies. But having a physical asset with real monetary and barterable value in your possession is certainly an important strategic consideration going forward.

It’s been said that an ounce of gold could buy 350 loaves of bread in Biblical times. Today, an ounce of gold still buys about 350 loaves of bread. However you slice it, whether the system falls into a deflationary depression like the 1930’s or an inflationary recession like the 1970’s, gold will maintain its purchasing power.

Though past performance is not necessarily an indicator of future results, we have over 6,000 years of history backing gold’s legitimacy as a true mechanism of exchange.

 

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Sun, 07/26/2015 - 20:20 | 6357145 Supernova Born
Supernova Born's picture

Paper gold is as baseless as fiat.

Private possession of physical or you've got nothing but a claim which will invariably fail at the worst time.

Sun, 07/26/2015 - 20:22 | 6357166 realmoney2015
realmoney2015's picture

Exactly! The day when the physical prices diverge from the paper prices of gold and silver is approaching.  With prices so low, it is becoming harder to find physical silver. Why? Because not many want to sell at these prices. 

www.etsy.com/shop/ScentSavers 

Its better to get out of thefiat/digital/paper markets a few months or years early than 1 minute late. Capital controls, ATM lines, riots, and dumspter diving like in Greece is coming to our shores in the future. 

Sun, 07/26/2015 - 20:28 | 6357178 Publicus
Publicus's picture

You always sell more when things go on a discount, it doesn't mean that the price will rise.

 

The gold changers will be driven out of the temple.

Sun, 07/26/2015 - 20:31 | 6357185 realmoney2015
realmoney2015's picture

But prices are supposed to drop because people won't buy at a particular price. So when prices continue to fall with record sales (see the US mints record breaking silver sales in recent months/years), its obvious its not the physical demand driving the price. But yes, buy low sell high.

Sun, 07/26/2015 - 20:49 | 6357224 CognacAndMencken
CognacAndMencken's picture

No doubt about it, gold and silver are two of the worst investments available to you. Investing into an insurance policy that only pays if the entire financial system blows up seems ridiculous, which is what many here at ZH are banking on. Doomer goon investment strategy 101.

Please look at page 62 of the following link for the historical chart of gold and precious metals. Remember, there's no dividend and no coupon either.

https://www.jpmorganfunds.com/blobcontentheader/202/900/1158474868049_jp...

Now, please look at page 17, 41 and 54. Take you pick. You could have put your money into almost anything and be better off.

Sun, 07/26/2015 - 20:59 | 6357273 ILLILLILLI
ILLILLILLI's picture

People here aren't necessarily buying gold as an investment per se. They have other reasons for doing so...

Sun, 07/26/2015 - 21:08 | 6357294 HungryPorkChop
HungryPorkChop's picture

Just go look at Eb*y for 90% silver dime rolls via Buy It Now Auctions.  Heck, they are asking 30% and 40% premiums for circulated stuff.  Some want 50% over spot!! 

Houston, we have a problem...

Mon, 07/27/2015 - 08:02 | 6358337 bmr22
bmr22's picture

You got it. I am selling off a few of our old 90% and I am getting 50% over spot on a regular basis and these coins are nothing special just run of the mill circulated coins

Mon, 07/27/2015 - 15:32 | 6360013 Luc X. Ifer
Luc X. Ifer's picture

You got it right; this is why the paper gold collapses - people started to get it that it is paper as nominated and as good as the fiat so they just started to dump it.

Sun, 07/26/2015 - 21:16 | 6357311 SoilMyselfRotten
SoilMyselfRotten's picture

I love not only having the insurance but getting to keep the premium as well as pass it to my future generations

Sun, 07/26/2015 - 21:32 | 6357346 Divine Wind
Divine Wind's picture

 

 

 

It is impossible to have every investment class rising at the same time.

The price of gold will rise again.

Mon, 07/27/2015 - 07:14 | 6358240 N2OJoe
N2OJoe's picture

The (paper) price will go down till the FED loses control. Then it may be worth more than your condo.

Sun, 07/26/2015 - 20:59 | 6357274 boomki
boomki's picture

The problem is that your not looking at the bigger picture. The global economic meltdown is orchestrated. Why do you think all of these governments are borrowing from their central banks as fast as they can. They are fomenting the inevitable default and crash. That is why the smart money is on insurance hedging. We know what they plan, we just wait for when it kicks off.

Sun, 07/26/2015 - 22:08 | 6357439 rejected
rejected's picture

hmmm,,, borrowing from central banks that have no money in their accounts.

Hey,,, what could go wrong!

Sun, 07/26/2015 - 21:07 | 6357290 Squid-puppets a...
Squid-puppets a-go-go's picture

well, chump, i bought my gold with aussie dollars. tho gold is down 10%, the Aussie is down 30%.

nice try, but you just look like a trolls knobend

Sun, 07/26/2015 - 21:08 | 6357293 FIAT CON
FIAT CON's picture

well I had some gold, if I still had it, my purchasing power would have been protected as my countries Fiat has recently lost approx 12% of its value.

 

Sun, 07/26/2015 - 22:17 | 6357457 aurum4040
aurum4040's picture

LOl you are referencing JPMorgan, nuff said. Long gold/silver over debt ridden paper profits anyday. But hey, at least you will have paper to burn IF cash still exists when it all crumbles as I am pretty sure you are nowhere near prepared or knowledgeable enough to sustain yourself. 

Sun, 07/26/2015 - 23:35 | 6357660 lunaticfringe
lunaticfringe's picture

Does the FED have a blog you could read and comment on?

Mon, 07/27/2015 - 00:16 | 6357706 MrPalladium
MrPalladium's picture

Physical gold and silver are the only available secure investments for profiting from governmental incompetence - the only investments which the government cannot conveniently steal. I am beginning to acquire a position at these low prices.

Mon, 07/27/2015 - 10:13 | 6358789 BarkingCat
BarkingCat's picture

Not the only.

Anything that you can keep in you own hands works the same. 

This includes precious stones and artwork.

Mon, 07/27/2015 - 02:00 | 6357951 fukidontknow
fukidontknow's picture

@Cognac I'd rather watch my PMs lose 90% of their fiat value than put one cent into your evil beloved JPMorgan funds.

Mon, 07/27/2015 - 05:24 | 6358122 USisCorrupt
USisCorrupt's picture

CognacAndMencken we have an old saying that I am reminded of when I read your dribble, that saying is "You can't fix stupid".

Sun, 07/26/2015 - 20:46 | 6357233 p00k1e
p00k1e's picture

If record ‘sales’ means record ‘buyers’, by extension, record ‘sellers’ must be somewhere. 

Sun, 07/26/2015 - 21:15 | 6357308 Billy the Poet
Billy the Poet's picture

American Eagles are produced by law from American mined metals. The miners are the sellers. That's the business they are in.

Sun, 07/26/2015 - 22:22 | 6357370 daveO
daveO's picture

Physical supply needs to be shut down. Low interest rates have supported too much mine production.

https://upload.wikimedia.org/wikipedia/commons/thumb/1/1c/World_Gold_Pro...

http://marketrealist.com/2014/10/gold-mine-production-increasing-despite...

Sun, 07/26/2015 - 20:36 | 6357198 NoDebt
NoDebt's picture

I see the obvious and widening disconnect between paper gold and physical as proof of three things:

1.  Central banks and other powerful financial interests are well aware of the fiat ponzi they've created.  They are NOT BLIND TO IT as is sometimes assumed here and elsewhere.

2.  They're shitting themselves and are doing everything they can to protect this house of cards they've built.  

3.  Pre-market paper gold slam-downs and other such shenanigans could be EASILY traced to their roots if there was such an investigation.  No such investigation will take place.  It would be pointless because they already know who's doing it.  They are.

 

Sun, 07/26/2015 - 20:47 | 6357223 Supernova Born
Supernova Born's picture

No one is less interested in finding the real killer than the real killer.

Sun, 07/26/2015 - 21:24 | 6357326 SoilMyselfRotten
SoilMyselfRotten's picture

It was Bart Chilton in the Study with the silver candlestick!

Sun, 07/26/2015 - 21:42 | 6357371 Socratic Dog
Socratic Dog's picture

Yeah, that's why OJ Simpson said he was going to devote his life to tracking down the real killer.  Coz it wasn't him.....or something.

Sun, 07/26/2015 - 20:45 | 6357231 Latitude25
Latitude25's picture

Unless it's been the Chinese all along looking for bargain prices and motivation to get their population to buy.  After all they encourage their citizens to buy gold and by the way the Chinese own the JPM tower in NYC and by extension maybe JPM and the FED itself.  How this whole shit show all works out is anyone's guess.

Mon, 07/27/2015 - 07:45 | 6358297 Arnold
Arnold's picture

Get your population to buy and hold a commodity, then confiscate it.

Seems to me that I've heard that riff before.

Sun, 07/26/2015 - 21:48 | 6357386 Unknown Poster
Unknown Poster's picture

I agree, but a counterpoint is if you held paper gold,, a claim on something that might not exist, how fast can you get out. Not fast emough.

Sun, 07/26/2015 - 23:29 | 6357641 BeanusCountus
BeanusCountus's picture

Dont get me wrong, i am a big fan of physical gold and silver. But there is not as big a "disconnect" as people think. As the previous poster put it, all physical buyers have a seller on the other side. Lots of gold available at spot plus the usual 5% premium. And there's no shortage of it. Only sign pointing to "disconnect" seems to be in silver. Premiums are going up negating some of the decrease in paper price. Hoping this is a good sign. Im buying a little gold here and there.

Sun, 07/26/2015 - 20:35 | 6357195 gimme-gimme-gimme
gimme-gimme-gimme's picture

Heh, these articles crack me up.  In one sentence they say gold is manipulated down, then in the next sentence they pull out a chart to tell you how high it's going to go!  That's like navigating with a map written by a blind guy.  Good luck with that..

 

You can buy physical PM's at close to spot with reasonable premiums, in the West, so having the mint sell out just means they werent in on the monkey hammering and didn't know to make more silver eagle.

 

Anyhow, I buy phys cause I want to sell it all when the gold:silver:home price ratio gets back into line and buy as many homes as I can.  

 

But from the looks of things the Banks (central and retail) are hell bent on killing the paper market.  Should that occur, things will get super interesting!  I predict they will pull a China and do a bunch of funny stuff.

 

I think we are still far off before that happens though.  Gotta start seeing some of the major gold producers go bankrupt before we know physical/paper prices are about to go to seperate ways down that price fork in the road.

Sun, 07/26/2015 - 20:41 | 6357196 gimme-gimme-gimme
gimme-gimme-gimme's picture

Heh, these articles crack me up.  In one sentence they say gold is manipulated down, then in the next sentence they pull out a chart to tell you how high it's going to go!  That's like navigating with a map written by a blind guy.  Good luck with that..

 

You can buy physical PM's at close to spot with reasonable premiums, in the West, so having the mint sell out just means they werent in on the monkey hammering and didn't know to make more silver eagle.

 

Anyhow, I buy phys cause I want to sell it all when the gold:silver:home price ratio gets back into line and buy as many homes as I can.  

 

But from the looks of things the Banks (central and retail) are hell bent on killing the paper market.  Should that occur, things will get super interesting!  I predict they will pull a China and do a bunch of funny stuff.

 

I think we are still far off before that happens though.  Gotta start seeing some of the major gold producers go bankrupt before we know physical/paper prices are about to go to seperate ways down that fork in the road.

 

I'm still hoping whoever was stockpiling the physical silver at JPM will dump it on the open market and really hammer down the price of silver.  Seems like dumping future contracts isn't really giving them the same bang for the buck when they try to monkey hammer things down anymore. (Kinda like the reverse of dollar credit created to generate GDP being low)

Mon, 07/27/2015 - 03:03 | 6358013 Zero Point
Zero Point's picture

I've never understood people that even own unallocated, let alone "paper" gold. It negates the whole point of owning the stuff.

Mon, 07/27/2015 - 04:02 | 6358064 Debugas
Debugas's picture

Q: never understood people that even own unallocated

A: they are speculators. They do not intend to own the gold ( and handling physical is an additional hurdle ). They simply intend to speculate with it. As a result we do not even know the real demand for physical gold because "paper" speculation completely overwelmed the real physical demand

Mon, 07/27/2015 - 04:50 | 6358102 Zero Point
Zero Point's picture

Sheesh. I woulda thought speculating on stocks was more tempting? Seems idiotic to me. I consider my metals as savings.

Sun, 07/26/2015 - 20:16 | 6357147 Robinhood
Robinhood's picture

Fuck the money changers

 

Sun, 07/26/2015 - 20:24 | 6357170 realmoney2015
realmoney2015's picture

Yes , the money changers are really the only people that Jesus showed anger toward. 2000 years later and they are still ruining our world.

Sun, 07/26/2015 - 21:38 | 6357365 roisaber
roisaber's picture

Actually, there was one other particular group of hypocritical liars that Jesus despised and railed against day and night.

The religious.

Sun, 07/26/2015 - 22:46 | 6357531 booboo
booboo's picture

Leaders, religious leaders.

Sun, 07/26/2015 - 22:53 | 6357553 roisaber
roisaber's picture

Was it the religious leaders out in the streets to stone an adulteress on a hot, dusty afternoon? Or was it a mob of self-righteous, faith-driven bigots who valued dumb shit their ancestors wrote down in an ancient book more than a human being's life?

Sun, 07/26/2015 - 23:39 | 6357674 iinthesky
iinthesky's picture

You are utterly clueless!

Sun, 07/26/2015 - 23:59 | 6357724 MrPalladium
MrPalladium's picture

Matthew 23!!! My favorite chapter of my favorite book of the Bible.

 

Mon, 07/27/2015 - 04:39 | 6358093 Squid-puppets a...
Squid-puppets a-go-go's picture

Many clergymen prefer Lolita 12

Mon, 07/27/2015 - 01:52 | 6357943 OldPhart
OldPhart's picture

Since we're changing fiat for physical does that make us money-changers?  *oh shit!*

Sun, 07/26/2015 - 20:17 | 6357148 localsavage
localsavage's picture

Gold, Silver, Housing etc. all detached from reality...when does the shit show begin?

Sun, 07/26/2015 - 20:28 | 6357183 realmoney2015
realmoney2015's picture

I'm guessing it starts to turn this fall and takes a few years to hit bottom. But I don't have the printing presses, so when is just an estimate.

Sun, 07/26/2015 - 20:21 | 6357160 Ignorance is bliss
Ignorance is bliss's picture

Shhhh. Don't tell anyone that physical gold is more valuable then,..wait for it ... Gold. Buy the rock and wait for the revaluation of unpayable debt and the following print fest. It's obvious...just like the housing crises. If you're too stupid to pay attention then fuck you. Maybe your genetics should not be part of the future...Darwinism at work. Don't they teach that anymore?

Mon, 07/27/2015 - 01:54 | 6357947 OldPhart
OldPhart's picture

Zimbabwe Super Hyper Inflation brings gold based market

https://www.youtube.com/watch?v=Jt15F21jpN8

Sun, 07/26/2015 - 20:25 | 6357169 JustObserving
JustObserving's picture

All the silver bullion available in this world is less tha a billion ounces.  That is only worth $14.7 billion.  US debt and unfunded liabilities have risen from $60 trillion in 2003 to $210 trillion in 2014.  That's an average rise of $37.4 billion a day.

All the gold bullion available in world today is not more than 2 billion ounces.  That is worth only $2.2 trillion dollars - peanuts compared to the recent rise in US debt and liabilities.

Kotlikoff goes on to illustrate that the fiscal gap is increasing at an alarming rate and that delay makes our problem much worse. In 2003, just a little more than a decade ago, the fiscal gap was $60 trillion. But by last year it had catapulted to $210 trillion. The fiscal gap may not continue increasing as rapidly as it has over the past decade, but with each passing year - as Congress and the President do their best to avoid action - our hole grows deeper by substantial amounts.

http://www.brookings.edu/research/opinions/2015/04/08-federal-debt-worse...

Sun, 07/26/2015 - 20:27 | 6357176 Supernova Born
Supernova Born's picture

You're using math.

Banksters aren't burdened by such hokey religions.

Sun, 07/26/2015 - 21:03 | 6357284 nmewn
nmewn's picture

Well personally I don't believe a loaf of bread costs (or should cost) what it does in fiat, "the price" (and all fiat pricing) are examples of the devaluation of fiat, not the value. I have a feeling when the rubber hits the road the $210 trillion figure will come back into line with "the value" of the product or service being offered.

For example, I think minimum wage (though I'm against ANY minimum wage as a law as it plays into the hands of Keynesian quackery & central banking) should be fifty cents an hour and a loaf of bread should be ten cents.

Pricing things in fiat works the same way going in the opposite direction, its not theoretical, pull up any currency exchange rate and compare & contrast ;-)

Sun, 07/26/2015 - 21:21 | 6357320 Billy the Poet
Billy the Poet's picture

Fresh baked loaves of French and Italian bread sell for $1 at the Wal-Mart.

Sun, 07/26/2015 - 21:32 | 6357341 nmewn
nmewn's picture

It clearly says French & Italian bread right on the wrappers, so it must be true ;-)

Sun, 07/26/2015 - 21:47 | 6357379 Billy the Poet
Billy the Poet's picture

Do you doubt that the Waltons could indenture a tiny little Frenchman and a tiny little Italian and force them to bake loaves of bread in the Wal-Mart bakery for starvation wages?

But seriously, folks, I like the Wal-Mart.

Mon, 07/27/2015 - 07:51 | 6358313 Arnold
Arnold's picture

A Baguette doesn't go as far as it used to.

Sun, 07/26/2015 - 20:28 | 6357180 Soul Glow
Soul Glow's picture

Anyone that doesn't understand that gold has two completely seperate market prices doesn't understand gold.

Sun, 07/26/2015 - 21:14 | 6357304 max2205
max2205's picture

1 oz  of silver could buy a carton of cigs in 1978.... only 2 packs today

 

So much for the hedge 

Sun, 07/26/2015 - 21:23 | 6357325 Billy the Poet
Billy the Poet's picture

You didn't account for the much higher percentage tax on cigarettes today.

Sun, 07/26/2015 - 23:55 | 6357713 flyingcaveman
flyingcaveman's picture

Are you from Chicago?

Mon, 07/27/2015 - 00:07 | 6357737 Billy the Poet
Billy the Poet's picture

No. Cartons cost about $65 in PA.

But you can make cigarettes from "pipe cut" tobacco and filtered tubes at a total cost of about $11 per cartoon. There's the added benefit that unlike commercial packs of cigarettes the tubes do not contain the federally mandated fire retardant added in 2010.

Sun, 07/26/2015 - 21:30 | 6357343 Latitude25
Latitude25's picture

Whoever was smoking the cartons in 1978 is probably dead.  What a hedge!!!

Sun, 07/26/2015 - 21:48 | 6357387 Billy the Poet
Billy the Poet's picture

I don't feel dead.

Sun, 07/26/2015 - 22:02 | 6357423 Unknown Poster
Unknown Poster's picture

Give it a few more decades. ;)

Sun, 07/26/2015 - 23:53 | 6357695 Billy the Poet
Billy the Poet's picture

By then my smoking will have added almost ten years onto an average lifespan. Maybe they should mention that in the in the warning message.

Mon, 07/27/2015 - 02:07 | 6357960 Soul Glow
Soul Glow's picture

You're still alive but you smell like shit Billy.

Mon, 07/27/2015 - 06:15 | 6358168 nmewn
nmewn's picture

I've always puzzled over the paradox of people wanting to ban something or tax something that someone else enjoys doing. 

First they came for...

Sun, 07/26/2015 - 20:32 | 6357188 PermaBug
PermaBug's picture

Every single time PM's have dropped in price over the last 2 years (and that's a lot of times!) this same story is trotted out. The mints are sold out!! (until next week) There's no supply anywhere! (yet a few months later it turns out everyone wanting and gold or silver could easily obtain it).

Adding to my string of near perfect predictions I predict we'll hear this exact same story, when gold hits $1,000, $900, $800, $700 and $600.

I plan on buying some at $860, dumping it at $960 (paper version of course, I'm not stupid enough to pay 5% premiums to anyone for anything) then I might buy some actual phyzz at $650, and I'll add slowly down to $450.

Then I'll sit back and wait 10 or 15 years for it to be a profitable trade.

 

Sun, 07/26/2015 - 20:37 | 6357202 Latitude25
Latitude25's picture

OK now you've come out with predictions that not even the Jesus Christ of financial analysts would dare to say.  Please your highness, can you put dates on these incredible predictions?

Sun, 07/26/2015 - 21:19 | 6357316 Soul Glow
Soul Glow's picture

Permabug expects gold to crater 50%.  We got the invoice.  Now please crawl under whatever rock you live in.

Sun, 07/26/2015 - 21:22 | 6357323 Canadian Dirtlump
Canadian Dirtlump's picture

Paper bwah... Paper gold.. LMAO.

Sun, 07/26/2015 - 20:40 | 6357216 Cloud9.5
Cloud9.5's picture

Sitting here with a silver eagle in my hand.  No matter what happens it will still be an oz of silver twenty years from now.

Sun, 07/26/2015 - 20:52 | 6357251 CPL
CPL's picture

Ounce of silver in the 1920 = a steak dinner

Ounce of silver in 2015 = a steak dinner

That's what it was worth then, that's what it's worth today.

Sun, 07/26/2015 - 20:57 | 6357265 Latitude25
Latitude25's picture

So using your logic silver is fairly priced now?

Sun, 07/26/2015 - 21:21 | 6357322 Canadian Dirtlump
Canadian Dirtlump's picture

I think the point is he doesn't mind steak that has the consistency of a high school shop teacher's utility belt and that is cooked on a converted barrel with a mesh grate over it in the parking lot of a supercenter.

Sun, 07/26/2015 - 21:28 | 6357335 HungryPorkChop
HungryPorkChop's picture

T-bone at a grocery store is now $14.99/lb.  At least double that for a decent quality restuarant and that won't include tax or tip. 

Sun, 07/26/2015 - 21:18 | 6357314 Canadian Dirtlump
Canadian Dirtlump's picture

what kind of mongoloid steakhouse do you go to which would see you get dinner for under 20 dollars?

 

I guess you can use a real steakhouse in the 1920s measurement, and use the lunch special for a steak sandwich ( a boiled leather boot ) at a strip club to prove your point, but it's wrong either way.

Sun, 07/26/2015 - 22:50 | 6357543 Not My Real Name
Not My Real Name's picture

In 1923 at De Croes’ French Restaurant, Indianapolis, a t-bone steak. French fried potatoes, salad, hot biscuits and syrup, tea or coffee, sold for for 40 cents.

Four mercury dimes minted in 1923 contain a total of 0.29 troy ounces of silver.

Assuming the price of silver is $15 per troy ounce, tell me where you can get a t-bone steak dinner with all the trimmings today for $4.35. You can't even do that at Sizzler.

Source: http://restaurant-ingthroughhistory.com/restaurant-prices/

 

Mon, 07/27/2015 - 04:48 | 6358100 Squid-puppets a...
Squid-puppets a-go-go's picture

40 oz of silver was a roman-empire annual salary of the middle class. So by that reckoning one ounce would be around 80% of an average weekly wage (52 weeks / 40 oz)

By that comparison silver would be around $800 an ounce !

Sun, 07/26/2015 - 21:04 | 6357286 lickspitler
lickspitler's picture

Sitting here with a silver eagle in one hand and dick in the other.  No matter what happens it will still be an oz of silver and a dick twenty years from now.

 

At least pet rocks have novelty value.

 

Sun, 07/26/2015 - 21:35 | 6357354 Canadian Dirtlump
Canadian Dirtlump's picture

I guess  should put my dick away, make a phonecall, grab 2 maples, and take some skunk out for a steak dinner. That way I can have a different hand on my rig.. Is Golden Corral open late on Sundays?

Mon, 07/27/2015 - 02:04 | 6357953 OldPhart
OldPhart's picture

Unless you're the former Bruce Jenner...

Sun, 07/26/2015 - 20:50 | 6357246 chubbyjjfong
chubbyjjfong's picture

Congratulations! You're the fucking man!  Yeah!

Sun, 07/26/2015 - 21:16 | 6357310 Seasmoke
Seasmoke's picture

So then you are stupid enough to pay 5% premium, not even 5 words from when you just said you wouldn't. ....... Smart. 

Mon, 07/27/2015 - 02:35 | 6357983 Pareto
Pareto's picture

+1 - thats when you know you're reading bullshit from an asshat.

Sun, 07/26/2015 - 20:34 | 6357193 Cloud9.5
Cloud9.5's picture

If I recall in ancient Egypt silver had more value that gold.  If the above numbers are correct.  Silver is way under priced. 

Sun, 07/26/2015 - 20:39 | 6357208 realmoney2015
realmoney2015's picture

Havent heard of the Egypt thing, but yes silver is the way to go. It's super under valued. The gold:silver ratio is 1:70. Historically its around 1:16-20. Buy silver until gold drops in terms of silver.

Sun, 07/26/2015 - 20:42 | 6357214 Supernova Born
Supernova Born's picture

They didn't have tomatoes either. Then Europeans arrived in the New World and tomato sauce and gold (relative value) took off.

(differentially huge silver deposits were found in the New World)

Sun, 07/26/2015 - 21:00 | 6357276 CPL
CPL's picture

Quick question, who makes up these ratio's that are supposed to drive silver and gold prices?  Is there a hat that they get drawn from yearly?  A magical unicorn that points to a dart board of ratios that determines this?  How?  Because if it's measured next to what's actually been mined those ratios don't make any sense.  If looking at all the gold and silver ever mined it's 1:7...not 1:70.

http://www.zerohedge.com/news/2013-03-01/visualizing-all-silver-world

 

Sun, 07/26/2015 - 21:33 | 6357353 Latitude25
Latitude25's picture

God.  It's the ratio as it exists in the earth.

Sun, 07/26/2015 - 20:46 | 6357232 turtle
turtle's picture

Around 70:1 would seem so http://www.macrotrends.net/1441/gold-to-silver-ratio-historical-chart

That "2008" in the ZH chart should be "2011" ...

 

Sun, 07/26/2015 - 20:41 | 6357219 ClassicCommodity
ClassicCommodity's picture

Ohh.. So the manipulators are going to suddenly let gold go higher because it did in the 70's? Pul-lease. We won't be seeing nothing like that until the paper and phyz markets are completely decoupled and unassociated with each other. Then bulliom goes higher but not until then.

Sun, 07/26/2015 - 20:43 | 6357221 p00k1e
p00k1e's picture

It’s tricky.

Sun, 07/26/2015 - 20:51 | 6357247 luna_man
luna_man's picture

 

 

You might try to compare today to the 70's...Nothing of the sorts!

 

unchartered waters today...if you were around then

Sun, 07/26/2015 - 20:55 | 6357256 kchrisc
kchrisc's picture

Gold is cheap, unless you're actually buying some.

Liberty is a demand. Tyranny is submission.

Sun, 07/26/2015 - 20:58 | 6357267 Bill of Rights
Bill of Rights's picture

Its amazing how these articles managed to suck in the anti gold loud mouths. You don't like gold that fine go buy your fucking bonds instead  after all that area of the market is manipulation free right?....

 

Full faith and credit...

Sun, 07/26/2015 - 21:12 | 6357301 FIAT CON
FIAT CON's picture

If you research the "London Gold Pool" TPTB had stated that they could not lose control of the gold price, and 8 countries sold gold into the market to keep the price of gold below $35/oz every time it rose above.

 They have done this before!

 What is so hard to believe that TPTB want to protect FIAT by driving the price of gold down!

We all must buy phys until they cannot deliver, then we will bust their game.

 

Sun, 07/26/2015 - 21:19 | 6357317 Yen Cross
Yen Cross's picture

 I'm not sure what planet everyone lives on. I parked the " Millennnium falcon", at my coin dealer this weekend.

 Gold is RIPE for the picking.

 

 

Sun, 07/26/2015 - 22:06 | 6357436 MollyHacker
MollyHacker's picture

It's not etched in stone that the worlds dollars (fiat) can't go the way of the Weimar dollar or others have gone, so hedge as you see best and good luck when & if the hyperinflation to infinity for however it happens to happen.

Sun, 07/26/2015 - 22:14 | 6357453 kuro_neko
kuro_neko's picture

6 years of brain-washing by malentioned gold brokers on this site has resulted quite a few ZH readers stuck with gold bought at very wrong prices (but still profits for those brokers. think GoldCore and his friends)

There is NO shortage of physical gold, and has NEVER been any such shortage. [you can say the same about silver]

what is your evidence for it ??? there may be a shortage of gold in a small town in Kentucky but thats about it.

In the (very) big city where I live, you can buy more gold than you 95% of you can imagine or afford, in 99.99% certified and numbered bars, people do it every day, without notice. they come in or out with bags full of several KILOS of gold bars. im saying BARS, not a few COINS. If you want the address i can give it to anyone (its not in the US though)

so your favourite coin is maybe out of stock in your small internet site dealer, because you live in a small town in the US and can't even afford an airplane ticket to fly you to a big city, but thats because you're talking to the wrong person.

The truth is, theres plenty of physical gold for sale. the very same physical gold which was bought to back up ETFs such like GLD when GLD was bought by investors and drove the price on the way up to 1800$ is being sold down here. 

End of story. 

Sun, 07/26/2015 - 22:39 | 6357517 Death By Cold S...
Death By Cold Steel Report's picture

Let me tell you why I believe your post reeks of fear.  It’s because you fear the percentage of people whom have given up on the current monetary system. Remember your words fall on deaf ears, and your key strokes are numb. Gold isn't to be priced in paper value like the system would have you believe. 

We value gold on historic value; which no paper capable of matching.  Now go back to the rock you climbed out from under, and tell all those who will hear. The day of reckoning is coming!

Sun, 07/26/2015 - 23:23 | 6357624 kuro_neko
kuro_neko's picture

yes gold isn't priced in $ . an ounce of useless gold is useless gold. its just a piece of shining metal... you can't even wipe your ass with it.

at least with paper $ i can wipe my ass with it.

have sweet dreams with your ever-depreciating piece of shining metal..

soon it will be so cheap, even the golden apple Iwatch will sell for 10$.

 

Mon, 07/27/2015 - 01:13 | 6357867 no1ninja
no1ninja's picture

Another sap that did not pay attention in history class. 

 

 

It's not beign bought as an investment, but as protection against the failing economic system of the world.   While you are wiping your ass with your paper, those who bought gold will have physical in their possesion.

 

The banks can wipe out your position, from the touch of a single button, even if you have piles of it.   There is not much they can do to the physical.... and trust me when the derivitive market fails, your accounts, your stocks, your house will all be fair game. 

Mon, 07/27/2015 - 01:16 | 6357877 Death By Cold S...
Death By Cold Steel Report's picture

@no1ninja It caught his attention because there is a strange thing about truth. When you hear it, you know it to be true. 

Mon, 07/27/2015 - 01:13 | 6357873 Death By Cold S...
Death By Cold Steel Report's picture

Let me tell you why I believe your post reeks of fear.  It’s because you fear the percentage of people whom have given up on the current monetary system. Remember your words fall on deaf ears, and your key strokes are numb. Gold isn't to be priced in paper value like the system would have you believe. 

We value gold on historic value; which no paper is capable of matching.  Now go back to the rock you climbed out from under, and tell all those who will hear. The day of reckoning is coming!

Sun, 07/26/2015 - 22:27 | 6357482 kuro_neko
kuro_neko's picture

There has never been a disconnection between physical and paper prices. Comex futures are deliverable. if physical gold price is too cheap, dealers buy physical gold, sell futures, and lock in an instant profit. 

There's a few dealers watching both prices every millisecond for you, and ensuring there can't be any disconnection else they hit a button and they make instant free and riskless dollars. 

people who say the contrary are just IGNORANT of how futures market works. Just read the excellent posts from Keith Weiner on ZH.

 

END OF STORY

Sun, 07/26/2015 - 23:06 | 6357595 luna_man
luna_man's picture

 

 

Kuro_neko, NO MAS...too funny!

Sun, 07/26/2015 - 23:09 | 6357600 The Duke of New...
The Duke of New York A No.1's picture

All you people who got cuaght up in the 2011 Silver frenzy who paid in the $30's to $40's ... here's your chance to redeem yourselves and average way down ..... buy everyhting you can below $15 .... and just use cash - don't go into debt doing it.

Sun, 07/26/2015 - 23:29 | 6357640 kuro_neko
kuro_neko's picture

what is it that is funny ?

no-one want silver eagle dollars... apart from the few dozens looney people on this site.

silver eagle sales represent a few tens of millions $ of sale per month. 

the broader market for silver is more like 100 times this amount. it justs take a few weeks to mint a few extra coins for the stupid guys like you while the whole market is selling tons and tons of silver to whoever is stupid to buy it here at 15$ while its obvious its going to crash to single digits.

if you were more clever, and not total morons, you'd have a real job, earn more real $, and instead of buying a few coins, you'd be informed what the market is like when you buy bars (kgs) or tons... you're just self-centered, a micro-market, the greater fools the other players dump their unwanted stuff to.

Theres no shortage of physical silver. theres a shortage of ZHers to buy silver at 20$ or 50$ . now they have all bought, and full to their limit, the price is 15$ and headed lower.

Sun, 07/26/2015 - 23:33 | 6357655 Jungle Jim
Jungle Jim's picture

WHY is it not clear who is suppressing metal prices? How hard can it be to find out who? Is anyone even trying?

Mon, 07/27/2015 - 00:41 | 6357815 kuro_neko
kuro_neko's picture

no one is suppressing prices. if you're not happy with the current price. just buy. 

else shut up

Mon, 07/27/2015 - 01:39 | 6357919 Global Observer
Global Observer's picture

Does it really matter who is suppressing the price of gold? I would assume those who want to buy gold at all prices until there is a steep increase would be the ones interested in suppressing the price of gold. China would be the prime suspect.

Sun, 07/26/2015 - 23:58 | 6357719 Spungo
Spungo's picture

What a bullshit graph. It ends at 1980 right at the peak. It was in a bear market for the 20 years afterward.

Mon, 07/27/2015 - 00:44 | 6357826 kuro_neko
kuro_neko's picture

the current bear market is 3 years old. only 17 more years to wait

Mon, 07/27/2015 - 01:18 | 6357882 g'kar
g'kar's picture

This chart shows where the paper gold selling is coming from: The FED through it's intermediaries. Notice the obvious divergence point.

 

Fed Balance Sheet vs. Gold Price:

http://www.macrotrends.net/1448/fed-balance-sheet-vs-gold-price

Mon, 07/27/2015 - 02:17 | 6357969 kuro_neko
kuro_neko's picture

you stupid idiot

the paper selling of gold comes from those paper buyers of gold cutting their losses...

some people do have stop losses. they lick their wounds and go to the next trade, and shut up.

some don't. for example idiots listening to manipulation stories and long from very high levels. they prefer to die with their (worthless by the day) gold and take it to hell

Mon, 07/27/2015 - 02:41 | 6357996 g'kar
g'kar's picture

You've been here 1 day and 16 hours and already fired off "idiot", "end of story" and "shut up" on your various 7 posts. You have a bright future here. I'm going back to reading/lurking, I posted what I had to say.

Mon, 07/27/2015 - 01:27 | 6357896 onmail
onmail's picture

Pirate Captain America's Policy

---------------

Keep your head($) high

So sell the Gold

let them buy it

Dont worry Let them buy all the gold

Why ?

Becuz when we have none left

We will attack them

and loot all the gold back to west

As usual

So we who are rich will remain rich

& the poor countries

let them work & sell to us

we will give them money

to buy gold

----

& repeat 

Mon, 07/27/2015 - 01:29 | 6357904 Global Observer
Global Observer's picture

Beating down the price of gold can have only objective: to move the gold from the weak hands to the strong hands. People who bought gold to preserve the value of their wealth, the strong hands, will continue to hold it and perhaps buy more if they can when the price falls. People who bought gold as a short term investment, the weak hands, will panic when the price falls and sell their holdings. This game can go on only so long as there is gold left in the weak hands. Once all the gold has moved from the weak hands to the strong, the prices will sky rocket. How much gold is still left in the weak hands? No one really knows, but it can't be much.

Mon, 07/27/2015 - 01:49 | 6357937 Jungle Jim
Jungle Jim's picture

I never sold one single gram of gold or silver because I "panicked when the price fell." No, I listened to the people who told me to *never* sell, to just hold on, until it went back up. Which of course it never did, just the opposite.

Every bit of silver or gold I ever sold, I sold to pay bills (medical, utility, etc.) *after* I had already sold everything else I had that anyone would buy (for pennies on the dollar, of course), after every other source of cash was exhausted.

I wish I *had* been one of the "weak hands" who "panicked and sold" way back when the price first started *going* down. If I'd sold then I wouldn't have lost over $100,000. I wouldn't now be bankrupt and impoverished and dwelling in a squalid hovel on  skid row, and soon to be evicted from that.

Please stop saying it's only panicky weak hands who are selling their stacks to stay alive, or to keep someone else alive.

 

Mon, 07/27/2015 - 02:05 | 6357958 OneTinTrooper
OneTinTrooper's picture

You invested a quarter million at the peak?  Holy crap.  Dude I feel bad for you.

Mon, 07/27/2015 - 02:19 | 6357974 OldPhart
OldPhart's picture

Sold a pile of silver back in November/December when wife became suddenly ill and ObamaCare fucked up insurance.  I think the sale was a total of 150 ounces or so at sub-$20 prices.  Fortunately I bought a shit ton in 2000-2004 when prices were around $4.  I've bought all along except for the last two years.

Mon, 07/27/2015 - 04:28 | 6358080 ginsu2k666
ginsu2k666's picture

Seriously? You conveniently missed out on all the upside, ONLY to invest at the PEAK and ride the 2-3 years down, and now you've realized you should've sold some? Anyway, you still lost AT MOST 40% on your investment. I won't cry for that fool. Be wiser next time.

Mon, 07/27/2015 - 09:00 | 6358510 Toolshed
Toolshed's picture

Selling physical PMs before the S truly HTF is a major error. I would default on all my credit, except my mortgage, and start robbing liquor stores before I would sell a single gram. But, please, feel free to listen to whomever you wish. It is, or was, a free country after all. So feel free to screw yourself all you want. We all do it at some point and in some way. It's human nature.

Mon, 07/27/2015 - 02:40 | 6357995 Arthur Schopenhauer
Arthur Schopenhauer's picture

From an investment standpoint, precious metals are only to be used for emergencies.

Mon, 07/27/2015 - 08:55 | 6358487 Toolshed
Toolshed's picture

"From an insurance standpoint, precious metals are only to be used for emergencies."

 

FIFY

Mon, 07/27/2015 - 04:00 | 6358062 Debugas
Debugas's picture

can anybody remind me - what is the cost of extraction ? $600 an ounce ?

Mon, 07/27/2015 - 07:34 | 6358274 Latitude25
Latitude25's picture

$0

Mon, 07/27/2015 - 04:27 | 6358078 White Mountains
White Mountains's picture

Metals of almost any type will always be worth something, as long as you have actual possession.  One great thing about silver and gold is that if you cannot sell it, you can at least cast it into bullets.  Bullets = value.  Paper fiat?  Eventually goes to zero value, except perhaps on cold winter nights to help start the wood stove..  Electronic fiat?  Fail.

Mon, 07/27/2015 - 22:09 | 6361440 Gold is money -...
Gold is money - and bullets if your out of lead's picture

yep :)

 

full user name   

Gold is money - and bullets if your out of lead
Mon, 07/27/2015 - 09:22 | 6358594 Bopper09
Bopper09's picture

Gold and silver are on sale, it is a gift to us. Sorry if you had to sell as a last resort, but this next couple months will be an absolute gift for us, having the ability to turn computer digits into refined gold or silver.

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