JPM: "Things Have Gotten Out Of Control: People Have More Confidence In Gold Than In Paper Money"

Tyler Durden's picture


Following the biggest one-day surge in the price of gold since 2009, it is understandable that suddenly everyone who until recently was predicting the price of gold in the triple digits, or laughably explaining why "gold is doomed" wants to talk about the "pet rock." As we showed earlier, already Goldman and Bank of America have opined with new and upwardly mobile "price targets", while the scramble to obtain gold in a world drowning not only in negative rates but soon, cash bans, has already been unleashed.

And yet, nobody summarized the sentiment quite as well as the "Global CIO & Head, Global Fixed Income, Currency & Commodities Group" (did they forget to add something to that title) of JPMorgan Bob Michele, who earlier today was on CNBC and admitted the following stunner.

There is a serious credit contraction underway, I think [Yellen] should acknowledge that. I think she has to look at the capital base being wiped off the banks in this downdraft and equities: that's not supposed to be happening right now. They're supposed to be bulletproof, and oh, by the way, gold at $1,200 an ounce, what does that tell you? It tells you that in a flight to quality, in a safe haven, people have more confidence in gold than in bank deposits or paper money. I think things have gotten out of control."

"Stunning", because we have nothing at all to add.

Oh, and if Bob is confused why "things have gotten out of control" and suddenly everyone is rushing to gold, then this should explain it.


Full admission 30 seconds into the clip below.

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Thu, 02/11/2016 - 14:55 | 7172015 hedgeless_horseman
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Now, I am scared.

Thu, 02/11/2016 - 14:58 | 7172049 38BWD22
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Gold, bitchez.


(Someone had to say that)

Thu, 02/11/2016 - 14:59 | 7172060 Soul Glow
Soul Glow's picture

It's expected.


Thu, 02/11/2016 - 15:04 | 7172086 hedgeless_horseman
hedgeless_horseman's picture



Who do you really trust?

Paul Krugman?

Or Paul Kruger?

Thu, 02/11/2016 - 15:08 | 7172109 The Juggernaut
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“If you want to restrain government, you restrain the power to create money. And that’s what gold does. A lot of people think, “Well, that means you’re going to have to carry all that gold around in your pocket.” No. There’s nothing wrong with gold certificates. And it can be electronic gold. It’s just that it restrains the power of individuals, especially secret individuals that have no oversight from Congress to create this money. You would certainly not need a Federal Reserve if you have a gold standard.”  - Ron Paul

Thu, 02/11/2016 - 15:08 | 7172118 tc06rtw
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 …  It’s  BUSH’S  fault.

Thu, 02/11/2016 - 15:09 | 7172123 Soul Glow
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Stocks will collapse in March....

We've never see a global collapse like we are about to witness.  The central banks went full retard and have been buying stocks with both hands; in the case of the BoJ they have been a main buyer, same with the Swiss.  All stock indexes will collapse over 50% in March after continuing down for the next few weeks.  Trading will be halted and after a week or two it will be decided by the deciders that the dollar is too strong and an FDR like devaluation will ensue.

This will lead to a currency crisis in April....  

All currency is decreed by government in its value by how much there is and at what velocity it moves.  The underlying problem is this fiat standard - of decree - does not substantiate wealth and value.  Currency will be priced against one another in the last battle of the currency wars at which point they will all collapse versus gold.

This will lead to a bond bubble bust in May....

This will happen when people realzie bonds are only as good as the currency they are denominated in.  When the value of a currency falls by 50% then the value of the bond does as well, as do the payments.  These are not specie payments, they do not have gold backing, they are fiat and the value is such.  Rates will rise as all paper is dumped.

This will lead to an astronomical rise in the price of gold....

Gold is money.  It will be sought after in physical form after all paper claims be they stock, bond, land deed, and paper claims on gold go up in smoke.  No one knows the true value of any paper claim because the underlying paper asset, the reserve currency - the dollar - is also by decree.  This is circular reasoning, that is to say the dollar is by decree so such and such is as well.  

By mid summer the world will revalue paper to gold but only gold has revalued at what today would be $50k.  At that point who knows how many zeros will be behind it.

Until then, good luck trading!

Thu, 02/11/2016 - 15:14 | 7172162 gmak
gmak's picture

Or not. 

Thu, 02/11/2016 - 15:22 | 7172199 Silky Johnson
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Braveheart voice: FREEEEEDOM!!!!!!!



Of course minus the whole evisceration shit at the end, I hope.

Thu, 02/11/2016 - 15:24 | 7172220 froze25
froze25's picture

This Youtube clip says it all. You will laugh.

Thu, 02/11/2016 - 15:31 | 7172263 Bastiat
Bastiat's picture

"Out of control?  Out of control?"   Arrogant clown:  out of who's control?  Waking up from your delusions of omnipotence, you bankster swine?

Thu, 02/11/2016 - 15:37 | 7172304 Manthong
Manthong's picture

War on cash.. ZIRP.. NIRP,, a quad bucks in bets that can never be paid.. failing economies.. austerity…


Who’d a thunk it ???

Thu, 02/11/2016 - 15:44 | 7172366 DownWithYogaPants
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Could somebody explain why some people are claiming March is the magic month for stock market crash?  Google has failed me on this one.

Thu, 02/11/2016 - 15:47 | 7172395 Tarzan
Tarzan's picture

When the "smartest guy in the room" states the obvious and it's described as "Stunning", you know we've arrived "In a time of universal deceit" where "telling the truth is a revolutionary act."

Thu, 02/11/2016 - 17:22 | 7172444 Save_America1st
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us "gold bugs" have more confidence in silver and gold than in fiat.

But then there are the 100's of millions of sheep-tards like these idiots who would rather have a chocolate bar than a free 10oz bar of silver

Thu, 02/11/2016 - 17:29 | 7172974 Dolar in a vortex
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If it was anybody other than Dice, I would have said it was staged.

Fri, 02/12/2016 - 00:43 | 7175006 CheapBastard
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We saw how gold reacted the last crisis as it soared up to about $2,000/oz.


the next crisis will be much worse as mentioned above and most financial people I know predict gold will rise to $3,000 or higher.


Common sense it seems.

Thu, 02/11/2016 - 15:50 | 7172421 Twee Surgeon
Twee Surgeon's picture

Check out this 700 year old 'Silver coin' from the Danish civil war that was part of a recent hoard dicovery,

It really tell's the old story in a nutshell, particularly the Civil War part.

Thu, 02/11/2016 - 16:51 | 7172765 Osmium
Osmium's picture

Sounds kinda like when people were claiming it would crash last September.  You know, the smegma year and all that nonsense.

Thu, 02/11/2016 - 17:13 | 7172898 williambanzai7
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Jump you fuckers!

Thu, 02/11/2016 - 15:31 | 7172264 rpboxster
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"But gold isnt' backed by anything!"  TBT

Thu, 02/11/2016 - 17:01 | 7172818 Squid-puppets a...
Squid-puppets a-go-go's picture

lol i think exeters pyramid landed on her head

Thu, 02/11/2016 - 19:59 | 7173705 RaceToTheBottom
RaceToTheBottom's picture

Wait what about 654$ gold?  Some guys were touting that.  Is this just a sheep sheering exercise?

Thu, 02/11/2016 - 15:56 | 7172465 RamzaBehoulve
RamzaBehoulve's picture

Hahaha, very fun doom cycle there. Except it's extremely unlikely to happen that fast. Maybe over 3-5 years.

Thu, 02/11/2016 - 22:34 | 7174530 oooBooo
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Under the debt based system as the bubble collapses the value of currency will increase (because money is being extinguished by margin calls paying off debt and bad loans collapsing) until some lag after the central banks start printing like crazy to fix the money going 'poof'. 



Fri, 02/12/2016 - 02:17 | 7175213 BarkingCat
BarkingCat's picture

This shit show has been going on a lot longer than I have imagined it would.

Your final outcome could be correct but you timeline could be off by years or even decades. I know, I know, it sounds impossible but who amongst us here thought that Obama would be able to finish 2 terms without the wheels completely coming off before he is done.

Thu, 02/11/2016 - 15:09 | 7172120 Soul Glow
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It's Clinton's fault.

Thu, 02/11/2016 - 15:14 | 7172163 El Oregonian
El Oregonian's picture

WHAT! You are in CONTROL if you HAVE GOLD!!!

Thu, 02/11/2016 - 15:37 | 7172305 Crash Overide
Crash Overide's picture

It's simple really...

How long has gold been around?

How long has JPM and Federal Reserve Notes been around?



Thu, 02/11/2016 - 15:07 | 7172115 NoDebt
NoDebt's picture

My hat is off to all the ZH gold bugs.  You guys have had to endure the slings and arrows of outrageous fortune (not to mention manipulation) for YEARS to hear the words you just heard in that clip.

I think we can consider all of you vindicated.  No matter how hard CBs slam gold back below $1200 tomorrow.


Thu, 02/11/2016 - 15:38 | 7172132 Soul Glow
Soul Glow's picture

lol so are you going to short?

Thu, 02/11/2016 - 17:01 | 7172819 Bizaro World
Bizaro World's picture

@No Debt....Gold at $1,200, I hardly feel vindicated. Gold at $4,000 would be vindication....and closer to its real value in USD.

Thu, 02/11/2016 - 17:01 | 7172821 Bizaro World
Bizaro World's picture

@No Debt....Gold at $1,200, I hardly feel vindicated. Gold at $4,000 would be vindication....and closer to its real value in USD.

Thu, 02/11/2016 - 15:22 | 7172205 Peak Finance
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 No matter how hard CBs slam gold back below $1200 tomorrow.

Well, that's the big question, right?

Heres our pluses:

The market has to run out of "legitimate" paper to short at some point.

Naked Shorters have to be in full on panic right now or at some point

Several Market interventions over the last two weeks have failed

Negitive Interest Rates WILL get the sheeples attention and that wil at least make people think about gold

AND whatever the fuck else is going on that we don't know about


Thu, 02/11/2016 - 15:33 | 7172277 F0ster
F0ster's picture

So true, and now if you'll excuse me I have get back to loading my boat with monster boxes.

Thu, 02/11/2016 - 15:39 | 7172313 Crash Overide
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You can almost feel the Friday smack down already but...

What if it goes up another $50 instead?

Thu, 02/11/2016 - 16:21 | 7172641 PirateOfBaltimore
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It's delivery day tomorrow.  This could get fun.


Thu, 02/11/2016 - 18:16 | 7173207 flyingcaveman
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So you're down for a most epic Friday slam down ever?

Thu, 02/11/2016 - 15:59 | 7172488 ForWhomTheTollBuilds
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"I think we can consider all of you vindicated."


The problem now, is of course "all the rest of the stuff that the gold bugs predicted" coming true next, including the targeting of gold holders as "the ones who caused the meltdown".


Todays interview clip might play into that a bit.  A lot of time has been spent cultivating the view that owning *any* amount of gold was a symptom of accute mental illness.  In fact as a person who advocated owning *some* gold on mainstream message boards I received more ridicule than the people demanding in all caps that you need to go all-in on gold.   My view that you could continue living in the system that exists but insure yourself by pulling out just a little seemed to really enrage people in a way that more extreme viewpoints about gold didn't.

One Canadian commentator who I won't name becuae he doesn't deserve the attention actually said that while there was no room for gold in any portfolio, those who insist on it need to buy mining stocks and ETFs and never EVER take posession of physical metal.


Anyway, be it established in the mainstream that gold buyers are insane, then our policy makers wouldnt be very good stewards if they let the crazies win now would they?  Those who hold gold will always be better off then those who don't but I for one am keeping my damned mouth shut about the subject now in my real life.



Thu, 02/11/2016 - 18:40 | 7173317 swmnguy
swmnguy's picture

You're quite right.  It's been OK to talk about it while nobody takes it seriously.  And I also have noticed that taking a measured position, putting a certain percentage of one's wealth into physical PMs, has been angering people a lot more than advocating selling everything and putting it all into phyzz.  Probably because a moderate position might  actually change somebody's mind.

As the crisis in paper finance gets worse, it will become more and more dangerous to let people know you have physical PMs.  And if you have lots of food, toilet paper, canned coffee, hand tools, etc.; might  be wise to be discrete about that, too.

Fri, 02/12/2016 - 04:06 | 7175365 Ghordius
Ghordius's picture

+1 ForWhomTheTollBuilds:

"A lot of time has been spent cultivating the view that owning *any* amount of gold was a symptom of accute mental illness.  In fact as a person who advocated owning *some* gold on mainstream message boards I received more ridicule than the people demanding in all caps that you need to go all-in on gold."  /stuart

"I for one am keeping my damned mouth shut about the subject now in my real life" wise, wise words  /kevin

Thu, 02/11/2016 - 17:59 | 7173117 Reichstag Fire Dept.
Reichstag Fire Dept.'s picture

Thanks, NoDebt! 

I'm all in on gold since August of last year. I can't be more delighted with the price action today. And, you are right, it will be slapped down hard and soon! 

This really IS vindication because for over 48 hours now gold has been responding to business news like gold SHOULD respond to busiest news. I'm curious to see how and when they beat it back'ly the same old shit. 

Nevertheless, when they do it, it will prove beyond a shadow of a doubt that gold is being if we need more proof. 

Thu, 02/11/2016 - 19:05 | 7173416 True Blue
True Blue's picture

Lol, think the talking heads will suggest to BTFD if it does?

Thu, 02/11/2016 - 15:53 | 7172446 Schwetty Shorts
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We trust in longbeard!!

Thu, 02/11/2016 - 17:02 | 7172831 Geronimo66
Geronimo66's picture

Wont rand you for this one.

Thu, 02/11/2016 - 17:49 | 7173064 J Jason Djfmam
J Jason Djfmam's picture


Thu, 02/11/2016 - 17:50 | 7173069 Reichstag Fire Dept.
Reichstag Fire Dept.'s picture

Irony!!! LOL

Thu, 02/11/2016 - 19:24 | 7173491 Kirk2NCC1701
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"Who do you really trust?  Krugman or Kruger?"

A:  The Paul who is loved by the Tribe more than the other, and has a longer track record of Reliability and untarnished Confidence.

As for the other Paul... "No rose for you!", bachelor.

p.s. Anyone pick up on the punny use of 'untarnished'?

Thu, 02/11/2016 - 20:02 | 7173727 RaceToTheBottom
RaceToTheBottom's picture

For this to be anything more than a Monkey Hammer opportunity, the discussion must expand into a Keynesian VS Austrian debate....


Krugman needs a wedgie....

Thu, 02/11/2016 - 14:59 | 7172054 kliguy38
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They know their fraud has run its they'll CONfess the truth since they're LONG the gold trade now

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