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"Black Friday" - The Great Gold Crash...Of 1869

Tyler Durden's picture


When one thinks of gold crashes, one typically visualizes a trading floor from the 1980s onward, predicated by Nixon's nixing of Bretton Woods 40 years ago, which removed gold from the list of accepted currencies and converted it into a government-manipulated pariah, whose core function was to be suppressed in an ongoing (failed) attempt to make the dollar the undisputed reserve currency (something even China comprehends). Well, readers may be surprised to discover that one of the first, and probably biggest on a relative basis, documented gold crashes was not 3 weeks ago, nor back in October 2008, nor any time since the advent of Nixon, or even the Federal Reserve, but over 140 years ago, on September 24, 1869 when a massive gold price manipulation scandal created a financial panic. That day, also known as "Black Friday", was the culmination of an attempt to corner the gold market following the latest, however brief, termination of the gold standard, when during the reconstruction period following the US Civil War, the US dollar was backed not by gold, but simply by credit (sound familiar). The result was a surge, and then collapse in gold.

What is the take home, if any? Perhaps that any time the government attempts to interfere with gold's status as a natural safety currency, it is not only gold price discovery that suffers, but virtually every other asset class, as central planning once again tries to order capital flows, however inefficiently, always, and without fail, leading to financial catastrophe.

The chart below demonstrates the intraday swing from that long ago Friday 142 years ago:

For those curious to learn about one of the first record gold price manipulations... and crashes, can do so below, courtesy of Wikipedia.

Black Friday, September 24, 1869 also known as the Fisk/Gould scandal, was a financial panic in the United States caused by two speculators’ efforts to corner the gold market on the New York Gold Exchange. It was one of several scandals that rocked the presidency of Ulysses S. Grant. During the reconstruction era after the American Civil War, the United States government issued a large amount of money that was backed by nothing but credit. After the war ended, people commonly believed that the U.S. Government would buy back the “greenbacks” with gold. In 1869, a group of speculators, headed by James Fisk and Jay Gould, sought to profit off this by cornering the gold market. Gould and Fisk first recruited Grant’s brother-in-law, a financier named Abel Corbin. They used Corbin to get close to Grant in social situations, where they would argue against government sale of gold, and Corbin would support their arguments. Corbin convinced Grant to appoint General Daniel Butterfield as assistant Treasurer of the United States. Butterfield agreed to tip the men off when the government intended to sell gold.


In the late summer of 1869, Gould began buying large amounts of gold. This caused prices to rise and stocks to plummet. After Grant realized what had happened, the federal government sold $4 million in gold. On September 20, 1869, Gould and Fisk started hoarding gold, driving the price higher. On September 24 the premium on a gold Double Eagle (representing 0.9675 troy ounces (30.09 g) of gold bullion at $20) was 30 percent higher than when Grant took office. But when the government gold hit the market, the premium plummeted within minutes. Investors scrambled to sell their holdings, and many of them, including Corbin, were ruined. Fisk and Gould escaped significant financial harm.


Subsequent Congressional investigation was chaired by James A. Garfield. The investigation was alleged on the one hand to have been limited because Virginia Corbin and First Lady Julia Grant were not permitted to testify. Garfield's biographer, Alan Peskin, however, maintains the investigation was quite thorough. Butterfield resigned from the U.S. Treasury. Henry Adams, who believed that President Ulysses S. Grant had tolerated, encouraged, and perhaps even participated in corruption and swindles, attacked Grant in an 1870 article entitled The New York Gold Conspiracy.


Although Grant was not directly involved in the scandal, his personal association with Gould and Fisk gave clout to their attempt to manipulate the gold market. Also, Grant's order to release gold in response to gold's rising price was itself a manipulation of the market. Grant had personally declined to listen to Gould's ambitious plan to corner the gold market, since the scheme was not announced publicly, but he could not be trusted. Gould had promoted the plan to Grant as a means to help farmers sell a bountiful 1869 wheat crop to Europe.  


A highly fictionalized account of Fisk's life, culminating in a dramatic presentation of the gold corner, was shown in the 1937 film The Toast of New York.


h/t Nolsgrad


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Sat, 09/03/2011 - 23:38 | 1630635 caerus
caerus's picture


Sat, 09/03/2011 - 23:54 | 1630656 markmotive
markmotive's picture

Umm...if you want to identify the end of the gold bubble, you only need to look at one thing...

Sat, 09/03/2011 - 23:57 | 1630660 caerus
caerus's picture

i'm not looking for the end of anything...i am a student of market history, and i enjoy this corner i enjoy thales' corner...and vanderbilt's...

Sun, 09/04/2011 - 01:57 | 1630812 Ahmeexnal
Ahmeexnal's picture

France is about to demand payment from Libya for the "liberating costs". They are going to rape the Libyan people just like they raped Haiti:

Sarkozy wants to take Gadaffi's gold. Then stage a faux sale while everyone knows who the buyer will be.

Tank prices and buy at firesale prices at the same price is what NATO had in mind.

The problem is, the vaults were found empty.

Sun, 09/04/2011 - 07:07 | 1631095 Snidley Whipsnae
Snidley Whipsnae's picture

If Lybian gold is put on the market the Chinese soverign wealth fund will buy it instantly... Just as they tried to buy the 210 tons of IMF gold that was sold off a year or so ago to India.

Whatever amount of physical is brought to market now will be purchased instantly with Ts or FRNs that the East has accumulated in abundance.

Sun, 09/04/2011 - 08:14 | 1631147 French Frog
French Frog's picture

Am I seeing this properly?

A drop from $133.5/oz at 02.35pm to $34/oz at 02.36pm (a 75% drop in a minute when the US govt 'dumped' its gold holding)

Sun, 09/04/2011 - 08:28 | 1631157 max2205
max2205's picture

Crash? Open at 150 close 133 ?

30 or 40 trades. Talk about a thin market. Talk a out a pants full of balls risk on/off market those days were.

Lol. No HFT back then. Nice chaulk

Sun, 09/04/2011 - 08:43 | 1631163 MarketTruth
MarketTruth's picture

Remember: Eric Sprott tried to buy TONS of gold from the IMF for his gold fund and the IMF outright REFUSED to sell it to him. There are too many players in the market looking to buy bulk physical (not paper) when physical is available.

Sun, 09/04/2011 - 08:44 | 1631164 French Frog
French Frog's picture

I don't think that you are looking properly; from 2.36pm all the way to the close it quite clearly trades between $33 AND $34 (why would they not write the '1' before 33/34 on all those quotes when they have done so for the rest of the day)?

Sun, 09/04/2011 - 10:36 | 1631244 snowball777
snowball777's picture

To save time when re-re-re-re-re-writing it as the price dived.

You'll note that they only do the short-hand when the quotes are within minutes, but they take the time to write it out otherwise.

10 - 11:30a +8% (150 -> 162)

11:30a -> 4p -17% (162 -> 134)


Sun, 09/04/2011 - 10:58 | 1631167 Clay Hill
Clay Hill's picture


Oops, back to chart school for me.

Sun, 09/04/2011 - 09:22 | 1631199 DeathCabfoKulaks
DeathCabfoKulaks's picture

I am not sure that they are using shorthand and dropping the handle.

Note in the morning that it goes from 150 to 50.


So is the actual crash from 160 go 130's?

Sun, 09/04/2011 - 09:41 | 1631217 MoneyWise
MoneyWise's picture

"If Lybian gold is put on the market the Chinese soverign wealth fund will buy it instantly... Just as they tried to buy the 210 tons of IMF gold that was sold off a year or so ago to India."

(India Bought it at about $1070)

At what price? $2000/oz are you kidding? Do you think they are


Check this out: "Gold mining in the People's Republic of China has recently made that country the world's largest gold producer. For the year 2007, gold output rose 12% from 2006 to 276 tonnes (or 9.7 million ounces) to become the world's largest for the first time -- overtaking South Africa, which produced 272 tonnes."

They are largest producer of Gold and they are Communists, basically

they can nationalize industry in the split second

If they need to, (but I'm sure they have a deal with Gold industry

to capture Gold at production + reasonable profit %)

and have all Gold

at production costs, Russia have lot's of Gold as well (They noway

paying Market price),

Only day

traders and speculators buying this at huge premium.

Sun, 09/04/2011 - 09:59 | 1631226 Manthong
Manthong's picture

Regardess of what they can get out of the ground, if you were a Chi-Com leader, and held 3,000 billion FRN dollars of US debt ($3T), wouldn't you be chomping at the bit to dump a lousy 135 of those billions for Moomars's Au?

Sun, 09/04/2011 - 10:06 | 1631238 tmosley
tmosley's picture

Not a reader, huh?

Might I suggest you read the sticky?  Price in dollars doesn't matter to an entity trying to DESTROY the dollar by buying gold.

Sun, 09/04/2011 - 10:39 | 1631274 snowball777
snowball777's picture

No, they are not dumb...unless you think protecting (if not speculatively inflating) the price of an asset that they can nationalize at will is dumb.

Sun, 09/04/2011 - 08:51 | 1631168 Léonard
Léonard's picture


France is about to demand payment from Libya for the "liberating costs".

Excuse me sir but you have to ajust your vocabulary. It's Sarkozy who demand payment, not France.

Sarkozy does not represent France. The French were never asked if they agreed with this war that they pay with heavy taxes and none of them will profit of the libyan gold. To tell the truth, if the Anglo-american cartel was not backing the dwarf, the French people would have kicked him out of the office a long time ago.

Sun, 09/04/2011 - 11:28 | 1631342 sun tzu
sun tzu's picture

What's stopping them from kicking him out? Are they afraid of being invaded?

Sun, 09/04/2011 - 15:52 | 1631885 destiny
destiny's picture

I second this thought ! the French since the Lisbon and the Maastricht Treaty CAN'T say a damn thing about anything anymore...until we get down in the streets, but that won't happen before people get hungry ! and angry

Mon, 09/05/2011 - 07:40 | 1633707 AnAnonymous
AnAnonymous's picture

Excuse me sir but you have to ajust your vocabulary. It's Sarkozy who demand payment, not France.

Sarkozy does not represent France. The French were never asked if they agreed with this war that they pay with heavy taxes and none of them will profit of the libyan gold.

Grossly stupid claims to make.

Sarkozy does represent the French. The French operate under the same political philosophy as US citizens.

Sarkozy is not an autocratic leader. He is empowered by the french popular will who have consented to deleguate their power in mattering questions to him.

Sarkozy as the french president has declared and waged war in Libya on the behalf of the French people. Sarkozy is just a civil servant working for the French people, doing what the French want and desire. The French people's responsibility is committed in the Libyan war.

So states the US political philosophy.

Sun, 09/04/2011 - 10:19 | 1631257 LasVegasDave
LasVegasDave's picture

Ahmeexnal is an agent of Sarkozy, who in turn is an agent of the international zionist consipracy that sent the jewish workers home on 9/11 before ramming two empty planes intothe towers while they stole the gold from ft. knox and replaced it with tungsten.

really, meexy, take the tin foil off your chimney and get out once in a while 


Sun, 09/04/2011 - 12:00 | 1631394 AdahPrice
AdahPrice's picture

Sounds like the Romans, who used to force vanquished peoples to pay the cost of the Roman armies which invaded and vanquished them.  That was usually part of the "treaty".  For instance, it was part of a treaty Rome imposed on Carthage, which was right next door to Libya.

Sun, 09/04/2011 - 12:07 | 1631402 disabledvet
disabledvet's picture

Tank prices? Tank prices?! Let's take a closer look and start bidding:
now who could have taken all that gold from the vaults?
Let's go find it! FOR LIBYA!

Sun, 09/04/2011 - 00:01 | 1630665 kito
kito's picture

thats the sign of a bubble in blue pill world.

Sun, 09/04/2011 - 00:31 | 1630697 LowProfile
LowProfile's picture

LULZ.  Clearly neither of you read the article.

Sun, 09/04/2011 - 00:34 | 1630698 caerus
caerus's picture

i posted a link under the china gold article 3 hours ago...thanks for playing

Sun, 09/04/2011 - 00:36 | 1630701 DoChenRollingBearing
DoChenRollingBearing's picture

@ kito

That would be my guess as well.  Things are very different than 1980 or 1869.

Besides, who sees high real interest rates coming?  Not for a long time.

You don't have to stay at the All Inn either.  Holding 10% in gold is better than 98% of Americans...  Holding 20% might make you RICH.

The end of the price rise of gold is far far away.  Get some while you can!

Sun, 09/04/2011 - 00:44 | 1630709 CompassionateFascist
CompassionateFascist's picture

When the dollar is no more and we go to Civil War II, gold will be "worth" whatever you can barter it for. Might be a lot. Might be almost nothing. One thing for sure, lead's going to be worth a whole hell of a lot more. W/o it, you will be dead.  

Sun, 09/04/2011 - 01:06 | 1630734 sun tzu
sun tzu's picture

What makes you think the end of the USD will result in Civil War II or a Mad Max scenario? 

Sun, 09/04/2011 - 02:46 | 1630964 lolmao500
lolmao500's picture

Because that'S what happens when people are ruined and believe they are still entitled to everything they were promised to... medicare, medicaid, social security, pensions... all of that will be GONE.

Entitled people who got cheated are mad dogs.

Sun, 09/04/2011 - 08:55 | 1631175 Léonard
Léonard's picture

The world runned during milleniums before the USA and will continue to do so after the US empire collapse.

Sun, 09/04/2011 - 15:53 | 1631892 MachoMan
MachoMan's picture

I've got some reservations about your use of the plural form, but I'll add a question...  How many world killing technologies had to be maintained at the time of the last destruction of the world's reserve currency?

Sun, 09/04/2011 - 09:44 | 1631222 Long-John-Silver
Long-John-Silver's picture

"Entitled people" have lived their lives sheltered and nestled without a care in the world. They are sheep, and will be consumed when they panic and run into the streets and start bleating loudly. They have no guns, bullets, or a backup supply. They will be shorn and sent to the butchers.

Sun, 09/04/2011 - 10:50 | 1631267 dwdollar
dwdollar's picture

I envision two conflicts back to back.

The first will be the crazed 'entitled sheep' who take to the streets.and demand their bread and circuses. They will topple local governments (especially big cities) and the clueless politicians who run them. Eventually they will run out of easy and defenseless institutions to loot. The 'movement' will burn itself out as resources become increasingly scarce and they die off.

The second will be between the hardened federal government (now a martial law dictatorship) and the independent people who survive. These independent people are the those who still have resources and the ability to generate resources. The federal government will not tolerate anyone who doesn't willing surrender their resources for the 'rebuilding effort' which mainly is a war effort attacking independent people in order to preserve the failing federal power structure.

Sun, 09/04/2011 - 10:53 | 1631297 Manthong
Manthong's picture

Oh good. For a moment there I thought we were in trouble.


Sun, 09/04/2011 - 01:11 | 1630742 DoChenRollingBearing
DoChenRollingBearing's picture

@ Compassionate,

I have the Pb thing covered too.

Sun, 09/04/2011 - 01:19 | 1630754 X.inf.capt
X.inf.capt's picture

and I pray it doesnt come to that, for these are fellow americans, i just hope they wake up...

Sun, 09/04/2011 - 01:25 | 1630764 DoChenRollingBearing
DoChenRollingBearing's picture

Having gold and supplies will not be enough to make America a nice place if it comes to that.

But, not much is being talked about by our .gov that inspires any optimism or confidence.

Green for you X.inf.

Sun, 09/04/2011 - 01:30 | 1630770 X.inf.capt
X.inf.capt's picture

sad, but true, I dont think this story is going to end with "And we lived happily ever after" 


p.s. green back at you.

Sun, 09/04/2011 - 07:25 | 1631114 DumFarmer
DumFarmer's picture

I agree, just remember you can't eat Au, Ag, or Pb on brass....(I've got mine) if you can swing it, it doesn't take a huge farm to feed yourself. If we don't go Mad Max, fresh food is yummy. Iif you can't do that, develope a relationship with someone who has excess growing capacity. I want as many smart, prepared people around as we can. My dream would be to have some theif banker who horded a truckload of gold playing the game show up and aquire said gold for the scraps of my excess production.

An old farmer once told me: "In the end, mother nature has a way of exacting her own revenge." I've found no other insight to ring so true.

Hedge from all angles, my brothers.

Sun, 09/04/2011 - 10:25 | 1631262 Real Estate Geek
Real Estate Geek's picture

. . . it doesn't take a huge farm to feed yourself


Indeed.  I recommend "Square Foot Gardening" by Mel Bartholomew.

Sun, 09/04/2011 - 19:44 | 1632649 DCFusor
DCFusor's picture

Yeah, that's the book that got me started, lo, several decades ago when all I had was a backyard in suburbia.  Highly recommended.

My garden gets ruined regularly by weather "events", and sometimes varmints when we don't watch well enough (boxes and milk jugs over plants when we get a warning).  That's why you get extra seeds, make provision for watering (I haul from the creek), and plant extra seedlings in the starter/greenhouse to recover from that kind of thing.  Farming isn't easy, but it is possible.  You just have to accept that it's not automatic, and a re-do is required now and again.

One of the benefits of a rural lifestyle is that for example - I have next year's food, or most of it laid up as excess from the hobby farm.  I have next year's heat already stocked in the form of a mountain of firewood.  I don't depend on anything external for those.  Wheras when I was a city boy, I had none of that, and didn't get the heat bill (or the electric for the AC) until I'd already "spent" the resource, and was dependent totally on a possibly shaky income to keep playing the game.  Everything was completely dependent on the actions of other humans who didn't care if I lived or died, and society as a whole had to "work" for the electricity and gas to be available.

Now, all I need is the sun for the electricity.  And this isn't because I thought the sky was falling -- it's just a better lifestyle that feels better every day, whatever the rest of the dumb humans are up to.  I found city life to involve dealing with too many of the turds of humanity, here my neighbors are more or less at the other extreme.

Friends helping friends vs dog eat dog -- no contest, in my mind.  I'll never go back.

Sun, 09/04/2011 - 11:25 | 1631340 Hansel
Hansel's picture

The drought and hailstorm this year destroyed my garden.  What the hailstorm didn't kill in one day, the 2 months without any rain took care of.  Farming isn't easy.

Sun, 09/04/2011 - 09:08 | 1631190 Are you kidding
Are you kidding's picture

That's the problem...many...most?...are NOT "fellow Americans" and I'd prefer them gone.

Sun, 09/04/2011 - 01:25 | 1630763 Michael
Michael's picture

Last night I heard a CNBC World host asking a precious metals analyst;

Q: When do you know gold is in a bubble?

A: When you hear every CNBC guest is now recommending people buy gold.

Yeah, like that'll happen.

Sun, 09/04/2011 - 01:33 | 1630773 Michael
Michael's picture

You've got a situation in Greece where the entire history of their civilization is being taken over by bank robbers.

Sun, 09/04/2011 - 01:42 | 1630785 X.inf.capt
X.inf.capt's picture

well, at least the greeks have Luke, the riot dog. 

Sun, 09/04/2011 - 10:41 | 1631276 snowball777
snowball777's picture

We in the US must immediately address this riot dog gap.

Sun, 09/04/2011 - 01:51 | 1630799 Michael
Michael's picture

The way our planet came into being is not our fault.

You are not to blame.

Sun, 09/04/2011 - 02:29 | 1630888 X.inf.capt
X.inf.capt's picture

very true, mike. but that gives me very little comfort thinking about the PAIN, SUFFERING, and AUSTERITY ( i.e. to pay back a debt I didnt agree to incur), that the aveage american is dealing with, or will, very soon. It breaks my heart....and they will watch it collapse, and well be luckly to survive it. Its to the point that how one prepares now will determine how bad you suffer. But all will suffer. What did the average american do to deserve this? Theyre not sheeples, they are americans, who didnt deserve this....

Sun, 09/04/2011 - 03:13 | 1630957 Michael
Michael's picture

Thank you for that comment, xinfcapt.

It's so sad people are still so indept up to their eyeballs.

Sun, 09/04/2011 - 03:25 | 1631024 X.inf.capt
X.inf.capt's picture

they just need to turn off the boob tube, fire up the old computer and go to ZH to get a reality check...................BITCHEZ.

p.s. that was first bitchez.

p.s.s. green is incoming.....

Sun, 09/04/2011 - 10:46 | 1631283 snowball777
snowball777's picture

Yes, they absolutely are sheeple, and until they take responsibility for their own actions, will continue to be fleeced as such.


How many of those sheeple voted for:

- Reagan

- Bush I

- Clinton

- Bush II

- Obama (or even worse for McCain and Stupid)


How many of those sheeple:

- "Bought" a house they couldn't afford

- Took out equity lines

- Ran up credit card debt


How many of those sheeple:

- Have their money in a TBTF

- Handed their money over to "fund managers"

- Don't own any PMs



Sun, 09/04/2011 - 11:32 | 1631348 unununium
unununium's picture

Consider that the sheeple have been raised as such.  Not everyone can independently discover the financial laws of the universe in one lifetime.

Lessons have been learned over millennia and the resultant knowledge is not widely disseminated.  Fathers and grandfathers have spent their lives working with so little to save, it made no sense in learning how to preserve wealth, and lessons never learned cannot be passed on.


Sun, 09/04/2011 - 12:13 | 1631408 disabledvet
disabledvet's picture

How many countries are saddled with Too Big to Bail Banks as well? It appears to be growing quite dramatically--and could quite possibly include the USA here soon. Indeed I have "advocated" such an approach in the sense that "if I were Jamie Dimon that is the pro-active approach I would use to deal with the current situation." It is certainly how he got the CEO job in the first place.

Sun, 09/04/2011 - 11:57 | 1631388 decon
decon's picture

"Deserves got nothing to do with it"

Sun, 09/04/2011 - 19:01 | 1632510 SilverDOG
SilverDOG's picture

@ Michael,  Greece has their own history to loose. USA has bank written and ridden history, already mortgaged.

Sun, 09/04/2011 - 04:58 | 1631065 Al Gorerhythm
Al Gorerhythm's picture

Q: When do you know gold is in a bubble?

A: Because gold values every other asset, gold will be in a bubble when every dollar backed asset is marked to market. At that time, gold will be fairly priced and financial assets will be cheap, comparitively. Gold will then be used by the wise as collateral or leverage to buy into fairly valued, yeild bearing assets. FASB rule changes of late dictate that that time is not yet realized but even that abortion of a ruling will be overturned by the demand for open and fair valuations.

To me, gold is never in a bubble, it is just my numeraire of valuations against every other asset by pricing those assets in ounces of gold.

Sun, 09/04/2011 - 06:18 | 1631075 Smiddywesson
Smiddywesson's picture

All wise and logical, but let's take that idea one step further.  Are the going market prices ever fair and logical, or do they orbit around attempts to manipulate them?  

What makes you think that gold will rise to a fair price when the very same people that are manipulating it downward today will be the people who hold it tomorrow?  I have little faith in the honesty of central banks.  They hold fiat today, so they push gold prices lower.  They are stacking gold against tomorrow, so we must all assume they will push prices higher tomorrow.  

You are not going to see "fair" gold prices.  You haven't seen them in your entire life's span, and you certainly won't see them under the new, gold related standard that is coming.

When wealth is measured in gold, everrything we own can be coaxed away from us by those who hold gold.  Once one accepts that the price of gold can be manipulated as high as need be, the move from fiat to gold looks like any other tax, central banks will instantly "own" a larger portion of the world without forcing you to physically surrender anything.  All that is necessary is for them to continue to spend worthless fiat to kick the can and buy up all the cheap gold.   

Sun, 09/04/2011 - 07:32 | 1631119 DumFarmer
DumFarmer's picture

Only if you care to buy material goods, and if you do, only in proportion to how much. We can make and trade for most anything we really need. As long as anyone chases items, they will be a slave on some level.  Everyone in this country has such backward priorites. They can't extort from you if you don't need anything they have. That's true security.

Sun, 09/04/2011 - 02:41 | 1630949 Alpha Monkey
Alpha Monkey's picture

I can't wait for the roving bands of motorcycle gangs! So, when the USD dies, does that mean everyone just starts murdering each other, or do we have to wait for some sort of whistle first?

Sun, 09/04/2011 - 03:05 | 1631012 X.inf.capt
X.inf.capt's picture

hopefully it wont come to that....

Sun, 09/04/2011 - 06:25 | 1631076 Smiddywesson
Smiddywesson's picture

I'm a little bit intimidated.  Will the other roving motorcycle gang members ridicule me because my mohawk ends at my bald spot?  

Does anyone have any recommendations for alternate hair styles during a post apocalypse rampage?

Sun, 09/04/2011 - 11:40 | 1631363 Amish Hacker
Amish Hacker's picture

I'm thinking Fright Wig. Go for the full Don King.

Sun, 09/04/2011 - 11:50 | 1631376 Ahmeexnal
Sun, 09/04/2011 - 13:55 | 1631623 Pure Evil
Pure Evil's picture

I hear the "Alfalfa" look from 'Our Gang' is making a come back.


Might need some 90w to keep the spike up while rampaging down the highway a full throttle.

Sun, 09/04/2011 - 18:01 | 1632300 Temporalist
Temporalist's picture

You don't want to have hair so you don't have to pick out the nits and lice.

Sun, 09/04/2011 - 07:35 | 1631123 DumFarmer
DumFarmer's picture

I'm more frightened by the prospect of all of the trained special op killers .gov has created waging war. They have no problem killing offensively, and are far better at it than I, not to mention my plot doesn't move, and they do.  

Sun, 09/04/2011 - 08:19 | 1631149 Bendromeda Strain
Bendromeda Strain's picture

So don't answer the door...

Sun, 09/04/2011 - 10:07 | 1631240 DumFarmer
DumFarmer's picture

I don't think they'll knock, and my real treasure is growing out back. How would you defend a garden? I'm asking in all seriousness....Take the food, feeds you for a bit. Get the jump on myself and my fam, then what? You really think these men who have been trained as SEALS or whatever have any heart in a survival situation? People need to put more thought into defending their wives, children etc than "I gots me a gun and gold, so I is safe" I think the answer lies in communities living or at least sleeping on the "high ground". Having a network of trusted, reliable friends and relatives may be the best bet. Safety in numbers.

But obviously this is just a mental exercise. I'm sure everything will be fine. Cheap food, endless credit and fat bellies arn't going anywhere. We live a totally sustainable lifestyle as a country.

Sun, 09/04/2011 - 11:35 | 1631351 unununium
unununium's picture

You probably have much more to fear from your less prepared neighbors than from Navy SEALs.

Sun, 09/04/2011 - 11:52 | 1631380 Ahmeexnal
Ahmeexnal's picture

Your garden should include a few APMs

Bouncing Betty is your friend.

Mon, 09/05/2011 - 14:57 | 1635377 Alpha Monkey
Alpha Monkey's picture

Excellent Idea, so when someone comes to steal a few ears of corn, I can simultaniously "defend" my crop by killing a starving person AND destroying my plants!  BRILLIANT!

Sun, 09/04/2011 - 11:37 | 1631356 sun tzu
sun tzu's picture

SEALs can't farm, so maybe you hire one or two as protection. Pay them with food.

Sun, 09/04/2011 - 19:59 | 1632698 DCFusor
DCFusor's picture

We dum farmers both outnumber them, and if sensible, are spread quite far apart.  It's too much work for them to come in after us.  They'll go after the factory-farms, not us.  Heck, where I live, it takes some darned complex directions to even find me and the last bunch of road miles aren't for big crowds.  Further, if they get one of us, the entire neighborhood (well prepared generally) will know fast -- and pick them off.  They'd be stupid to come in here -- there's basically not enough to support a lot of looting.

And the resistance they'd get here -- people who hunt for a living and go to the shooting range for sport (too hilliy for golf around here)...No sane person would walk into that.

Sun, 09/04/2011 - 12:16 | 1631412 disabledvet
disabledvet's picture

I'm waiting for the roving bands/banks of oil tycoons myself. Wait 'till we end up getting state sponsored armies "eyeballing that juicy piece of real estate called their neighbor's place."

Sun, 09/04/2011 - 14:28 | 1631682 X.inf.capt
X.inf.capt's picture

i remember right after we liberated kuwait, we were handing out m.r.e.'s  to a group of kuwaits and palestinian migrant workers (who got trapped by the invasion). the kuwaitis immediately started to steal the oniy thing the workers m.r.e. they were yelling at them, hitting them with sticks, and threatening them. we stopped it, so the kuwaitis started yelling at us, threating to get us in trouble,etc, of our guys told awoman who was SCREAMING in his face, 'lady, we lost men liberating you'. she yelled back 'i dont care, so shut up!' the kuwaitis were re-establishing the pecking order

you worried about seals, contractors, bikers, zombies, etc. worry about the 'rich', theyll have no problem taking what you!

Sun, 09/04/2011 - 12:06 | 1631400 trav7777
trav7777's picture

more stupid shit from an idiot who has never visited a collapsed economy

Sun, 09/04/2011 - 10:08 | 1631241 tmosley
tmosley's picture

It's NEVER different.

If they have the gold, they WILL dump it and reimpose a gold standard.

But I don't think they have the gold.  I think they used it all up trying to maintain the dollar standard.

Sun, 09/04/2011 - 00:52 | 1630716 HAL 9000
HAL 9000's picture

Watch the Dow/Gold ratio.  Gold bull markets end with this ratio less than 5.


Sun, 09/04/2011 - 02:44 | 1630955 ViewfromUnderth...
ViewfromUndertheBridge's picture

Thanks...but that provides us with a sample of just two instances...1932 and 1980...and both problematic in terms of the likelihood of the actions at the time being repeated.

1932 was a deflationary depression, when stocks dropped 90% and Bernanke has staked his career on avoiding a repeat of that.

1980 Gold/Dow got to 1:1...when gold's rise was curtailed by 20% interest rates to restore positive USD real rates... so, given the present constraints of US indebtedness (as opposed to world's largest creditor in 1980) I do not see that as likely either.

So, what will it be this time? The best case is a currency crisis that sees US gold reserves matched to US foreign USD debt, (per Jim Sinclair), that will see a measure of faith maintained, other than that a full blown currency crisis where currency revulsion sees the USD as worthless...and the Dow ratio then won't matter much.

This US Debt Crisis is historic. 

Sun, 09/04/2011 - 06:36 | 1631079 Smiddywesson
Smiddywesson's picture

So, what will it be this time? The best case is a currency crisis that sees US gold reserves matched to US foreign USD debt, (per Jim Sinclair), that will see a measure of faith maintained,

I agree that is what TPTB are TRYING to do, but there will be a fair amount of default involved for all Western nations too.  They will also have to do a fair amount of price inflation on the gold they successfully stack prior to the changeover.  After all, the debts are enormous.


Sun, 09/04/2011 - 07:19 | 1631105 Snidley Whipsnae
Snidley Whipsnae's picture

Correct observations, VFU... The problem is that even many 'gold bugs' see this run up in gold price as a 'bubble'...

This is not a gold bubble but a reset of the world's monetary system. The dollar, and all other unbacked fiat currencies are toast.

The only quesions yet to be answered are 'what will replace the fiats and how will it be accomplished'...

Sun, 09/04/2011 - 11:46 | 1631368 sun tzu
sun tzu's picture

One possible scenario:

It will be the Amero followed by a world currency. Private ownership of precious metals will be outlawed. Sure, you can keep your gold and silver, but what good will it do you in your safe or buried in your backyard? There will be rewards to turn in anyone attempting to trade using PMs as money. Once they catch you, they will throw you in jail and confiscate all your assets. Fear and hunger will drive the rest of the sheeple to turn in their PMs for pennies on the dollar.

Mon, 09/05/2011 - 09:59 | 1634124 Reven
Reven's picture

That's not exactly a confidence building approach if you wish to establish a new fiat currency. 

What made the Nixon fiat maneuver possible was the lifting of the laws banning the ownership of gold.  The obvious intention of this move was to give credibility to the new full-fiat system, by allowing people to buy gold as a hedge or investment.  But if the dollar collapses and they try to create a new currency, they will either need people to willingly turn in gold to back it fully or partially, OR, if they again go the fiat route (more likely), they must allow people to own gold.  But they can't ban gold and re-establish a fiat system.  Nobody will trust it, which is a requirement for such a system.  They can declare that seashells are money tomorrow, but I'm not selling any productive asset until that crazy system collapses.  One route is for all the central banks of the world to sell their gold into the market, then form a new fiat national currency and/or one world fiat currency. 

This would be the birth of a Freegold system, where the market guides monetary policy through gold price movements.  If interest rates are too low, the gold price will rise, and thereby put pressure on CBs to hike rates to defend the new fiat system.  Incumbant in this system is the repudiation of excessive debt accumulation, so future rate hikes are possible to implement and defend the currency (as was done in 1980).  That "defense" obviously won't and can't save the dollar this time though without bankrupting the US Govt and collapsing the debt pyramid.

Sun, 09/04/2011 - 04:47 | 1631061 papaswamp
papaswamp's picture

I'll be glad to buy your gold (if you have any) at $100 above the claimed production cost in that article...

Sun, 09/04/2011 - 02:33 | 1630922 Black Friday
Black Friday's picture

This thread has my name written all over it.

Sun, 09/04/2011 - 12:00 | 1631396 Ahmeexnal
Ahmeexnal's picture

And we all know Friday's god was Benamuckee. Sounds a lot like the master printer.

Sun, 09/04/2011 - 17:15 | 1632156 hbjork1
hbjork1's picture

The transcontinental railway was finished in 1869.  One of the Stephen Ambrose books (20+) was "Nothing Like it in the World".  Most of his material is about WWII (IE, "Band of Brothers") but this one is the story of the building of the transcontinental railway.  It was completed in 1869 with relative (to todays dollar value) expenditures large enough to have stunned even our current crop of financial wizards.  It is an interesting read. 

That money flow was very much reduced and a lot of people "laid off" when it finished.  On top of the civil war, it is no wonder they had a financial "correction". 

Sat, 09/03/2011 - 23:49 | 1630643 erg
erg's picture

Grimly latched to a golden anchor in a tempestuous sea of swans.

Sun, 09/04/2011 - 00:40 | 1630707 DoChenRollingBearing
DoChenRollingBearing's picture

Nice.  And who can say if any are Black Swans?

Sun, 09/04/2011 - 01:01 | 1630724 erg
erg's picture

Who can say indeed.

I like to think worse case scenario and go from there.

Sun, 09/04/2011 - 06:37 | 1631082 Smiddywesson
Smiddywesson's picture

Whoever holds all the gold when the music stops gets to say, that's who.

Sun, 09/04/2011 - 11:48 | 1631371 sun tzu
sun tzu's picture

He with enough guns can take all your gold. Nothing is yours unless you can prevent others from taking it away

Sun, 09/04/2011 - 13:06 | 1631501 Jonas Parker
Jonas Parker's picture

In the dark, ALL swans are black!

Sat, 09/03/2011 - 23:45 | 1630644 Joebloinvestor
Joebloinvestor's picture

One of the biggest gold manipulations and OUTRIGHT BULLSHIT is from the US government which counts the unmined gold on federal land as part of it's gold reserves.

Sun, 09/04/2011 - 08:16 | 1631148 DosZap
DosZap's picture

Joeblo @23:45,

IS this similar to not allowing OIL production, and reserves being opened that are known, and not allowing drilling where knownd eposits are?.

I think maybe ............YES?.

Sun, 09/04/2011 - 12:29 | 1631426 Joebloinvestor
Joebloinvestor's picture

Horse of a different color.

Oil "in reserve" is not counted in the mix.

The US is the only country that I know of that OUTRIGHT LIES about its' gold holdings.

It counts the un mined as part of the "in reserve" (whatever that means).

Imagine if Greece started (they probably will) the same shit.

What will happen next is they will start issuing mortgages/loans against the "gold bearing" land.

That will be the start of the next great money illusion.

Specimen based on un mined gold.

Sat, 09/03/2011 - 23:47 | 1630650 caerus
caerus's picture

still..gould was a coldblooded dude

Sun, 09/04/2011 - 00:03 | 1630670 Fish Gone Bad
Fish Gone Bad's picture

Grant was a brilliant hard drinking general.  Not a particularly great president.

Sun, 09/04/2011 - 00:47 | 1630714 CompassionateFascist
CompassionateFascist's picture

Except for Vicksburg, Grant was a bloody butcher.

Sun, 09/04/2011 - 00:58 | 1630723 caerus
caerus's picture

lee was a pretty good general

Sun, 09/04/2011 - 01:31 | 1630761 Econolingus
Econolingus's picture

Grant did what was necessary, as a general and as an American.

To read his right-hand man is understand both the policy and the strategy: "War is all Hell.  And the worse it is, the sooner it will be over."  --William T. Sherman

By the way, it worked.

Sun, 09/04/2011 - 01:59 | 1630820 caerus
caerus's picture

sherman was a fantastic general

Sun, 09/04/2011 - 02:53 | 1630991 caerus
caerus's picture

fair enough...scorched earth is brutal...but to deny that he was a great general is he could write

I confess, without shame, I am sick and tired of fighting—its glory is all moonshine; even success the most brilliant is over dead and mangled bodies, with the anguish and lamentations of distant families, appealing to me for sons, husbands and fathers ... tis only those who have never heard a shot, never heard the shriek and groans of the wounded and lacerated ... that cry aloud for more blood, more vengeance, more desolation.

Sun, 09/04/2011 - 07:25 | 1631113 Snidley Whipsnae
Snidley Whipsnae's picture

'By the way, it worked' ... Not in the long view. The Civil War went a long way toward destruction of states rights and turning the US Government into the monstrosity that it is today...usurping many rights that had resided within the individual states prior to the Civil War.

I say it was a failure... except for the freeing of slaves.

It's interesting to note that war was not declared until the Southern States stopped sending taxes to the federal government. It's all about the money...always! 

Sun, 09/04/2011 - 10:16 | 1631251 New_Meat
New_Meat's picture

I've mentioned before that it was decades before I understood "The War of Northern Aggression."

- Ned

Sun, 09/04/2011 - 11:51 | 1631379 sun tzu
sun tzu's picture

Grant was a tool. They named a shitty tank after him

Sun, 09/04/2011 - 06:55 | 1631089 Smiddywesson
Smiddywesson's picture

Untrue.  That's the MSM version of history.

Grant picked up the pieces from the disasterous Johnson administration.  Johnson allowed the post war raping of the South.  Grant came in and smashed the Klan, which had gone from just another group of vigilantes in a chaotic post war world to a group that terrorized the land so badly that one of their founders, Nathan Bedford Forest, quit.  Grant showed compassion and restraint during a time when restraint was critical to heal a broken nation.  So what I am saying is, being a "not a particularly great" president was what the job required at that point in time, and Grant was the kind of guy to do what was required, even if it was distasteful.  

Grant's downfall was his choice of friends.  If we were to judge him by that, all of the other polarizing figures of history would have gone down as having failed administrations too.  Did Bill Clinton surround himself with good people?  Did Reagan, or Bush?  How about Obama?  

Can we really say Teapot Dome holds a candle to the last several administrations?  Doesn't the banking crisis and the raping of America qualify Bush and Obama as the two worst presidents of all (don't forget FDR).

Should we continue to lionize FDR when his "achievements" of expanding the powers of the federal government have boomeranged on us and left us in a bankrupt, multicultural society with a constitution in tatters?  Are we better off today with the SEC, Social Security, and the arbitrary abomination that is anti trust law?  

In hindsight, we could use a Grant today.  I doubt very much he would be pleased with the bankers.  Jackson would be nice too.  Together, they would kick the banksters asses.

Sun, 09/04/2011 - 11:54 | 1631384 sun tzu
sun tzu's picture

Grant and Jackson wouldn't have a chance to be elected today. George Washington and Thomas Jefferson would be laughed at by the sheeple. 

Sun, 09/04/2011 - 08:10 | 1631144 DosZap
DosZap's picture

Fish @00:03

 Yeah and he was a hypocrite just like Lincoln.Grant owned slaves for 2yrs after the Civil War was over, and the Emancipation proclomation only applied to the South.

And the only reason for that was he feared entry of foreign money into the coffers of the South, and he knew the North would have lost the War.

Sun, 09/04/2011 - 00:11 | 1630677 Spitzer
Spitzer's picture

Did gold go to zero ?

Sun, 09/04/2011 - 01:27 | 1630766 navy62802
navy62802's picture

Gold will only "go to zero" when people stop agreeing that it is an effective currency. And if the last several millenia are any indication, it'll be a LONG time before that happens.

Sun, 09/04/2011 - 00:16 | 1630681 Jasper M
Jasper M's picture

I am guessing most ZH readers will only take away the first half of that historic move. 

Sun, 09/04/2011 - 00:20 | 1630685 hayesy316
hayesy316's picture


Sun, 09/04/2011 - 00:26 | 1630691 Tyler Durden
Tyler Durden's picture

Perhaps the reason for that is that the gold standard, after a brief hiatus, did return. For it to do the same now, gold would have to be pris-fixed at about $12,000/oz (and, if FDR is any indication, confiscated just beforehand).

Sun, 09/04/2011 - 00:47 | 1630713 Spitzer
Spitzer's picture

Gold could see a 2 to 3000% gain from here over the next 5 to 10 years. This will be the first ever fiat reserve currency crisis. The last crisis was a gold backed fiat reserve currency crisis and gold rose 2300%. The low interest rates and low inflation we have today is very similar to the late 60's environment. Gold was $35 an oz then. If today is similar to the 60's then its not a stretch to say $1000 gold is the new $35. So 2300% above $1000 is doable and considering this is the first ever fiat reserve crisis, you could add another 1000%.

Sun, 09/04/2011 - 01:12 | 1630744 sun tzu
sun tzu's picture

You would have to start with gold prices back in the early 2000's when rates first headed towards zero and gold began its bull run at $250. 

That puts gold at $5000 to $7500

Sun, 09/04/2011 - 01:33 | 1630771 Spitzer
Spitzer's picture

No you wouldn't.

What about the inflation of real estate prices from 2000 on ? Did that happen in the 60's ?

Plus, Gordon Brown and the Euro CBs where dumping gold on the market in 2000, that didn't happen in the 60's either.

Sun, 09/04/2011 - 09:56 | 1631228 Transformer
Transformer's picture

Ohhh! the pain!!!!  This endless argument about how high gold will go in price.  IT'S MEANINGLESS!!!!   Gold is going up cause the dollar is going down.  Gold at $10,000, gold at $25,000..... it won't matter when you don't want dollars.  Before gold gets to some high, ridiculous figure, nobody will care.  At that point the dollar will be priced in gold, not gold priced in dollars.  The dollar is not some stable reference that will tell you how much gold is worth.  The value of gold will be measured against food, against a house, against a car.  It will go up in value against goods and services, the dollar will cease to be meaningful measure.

Sun, 09/04/2011 - 12:01 | 1631397 FranSix
FranSix's picture

Let's say the impending doom of complete collapse doesn't happen and that gold does not have some form of absolute value.

There's a subtle irony in the markets, where oil rose 14X off its lows in 1998, silver rose almost exactly the same amount off its lows in the early 1990's.  Assuming that yes, these were actually the top of the market in the respective commodities, and that they achieved a higher average price over the period of their bull markets once they blew out, then gold should rise by an equivalent amount, 14X.  ~$3500.

Is some way, there's actually been a monetary crisis extending back 20 years.  It hasn't been as extreme as some ppl. expect.  No sudden collapses of world currencies, only markets.  All that markets managed to accomplish after all is to move the declmal point over one to the right.


Sun, 09/04/2011 - 13:17 | 1631530 JW n FL
JW n FL's picture



ALL!!! of YOUZ!!! is WRONG!!!

Goldman (Nut)Sachs is going to continue to do God's Work!!! and QE-3 WILL!!! save us *ALL!!



(by "*ALL"I mean Wall Street Principles and the Higher Executives {common shares or worker bees will be taking one for the team, sorry} will be landing softly on Private islands stocked with Gold)

I will be in the Carribean with a team freeing ALL that Gold from them!

Sun, 09/04/2011 - 15:37 | 1631860 Spitzer
Spitzer's picture

Notice how you just priced all that shit in dollars ?

Notice too that government bonds where the premier store of value all through that time too ?

Lets not talk doom and gloom. Just ask yourself. Wo is going to win this format war for premier store of value over the next 5 to 10 years ? Gold or government bonds ?

Sun, 09/04/2011 - 03:08 | 1631013 ViewfromUnderth...
ViewfromUndertheBridge's picture

But that would be guessing....

Why not use the formula that worked in the last crisis...on May 26 this year Jim Sinclair published the formula he used in 1974 that then predicted $900 gold...Jan 21 1980 it touched $853 before Volcker restored value to the USD.

Jim says this formula reveals where gold wants to go in times of crisis:

Take the US foreign USD denominated debt (less forward sales...which he calculates as 50% for China and 10% for RoW) and then divide that by the US Treasury's gold reserves in Troy ounces. That's it.

One thing to note is that the UST web-site refers to "gold reserves and gold swaps" so the elephant in this room is whether those gold swaps can be unwound. Mind you, for those reeling at the thought of $13,000Toz gold price and not believing how it might get there...I think unwinding those swaps might just be one of the keys.


Sun, 09/04/2011 - 01:44 | 1630787 disabledvet
disabledvet's picture

Britain might beat us to it via HSBC and GLD. Anywho the USA doesn't have to "confiscate" anything--especially if the European Union implodes. Before the IMF will bail anyone out they will be asking for collateral. We all know what that means. If China which is up to it's eyeballs in going all in on Europe get's swallowed up in the collapse then it's game, set, match the "Anglo-Americans." Where it really get's interesting of course is "what happens with the war the US has been engaged in for the past ten years." I say there is much to gained with making peace with the Arab world myself and in particular Egypt. What say all of you?

Sun, 09/04/2011 - 02:51 | 1630979 X.inf.capt
X.inf.capt's picture

im still wondering why britain cut open 6717 safety deposit boxes and took everything, and made only 40 arrests, and why didnt it hit our news outlets.....HMMMM...

Sun, 09/04/2011 - 07:13 | 1631099 Smiddywesson
Smiddywesson's picture



I'm not sure all the gold naysayers understand that failure of price manipulation always happens in the direction opposite the manipulation.  When the haters of gold talk about a collapse, they don't seem to understand that the collapse will happen in the efforts to keep prices down, not up.

This is my take away from the article.  The crash of prices in 1869 was a crash in attempts to manufacture elevated prices, not an attempt at manipulating them down. The crash of silver prices back in the 70s was the result of the Hunt brothers failing in their attempts to manipulate prices UP, not DOWN.

The prices of gold and silver are suffering from decades long attempts to suppress them.  The failure of those efforts will lead to a catastrophic collapse, but just not in the direction that the gold haters anticipated.  They can see the trees, but not the forest, so they call gold a bubble and miss the greatest trade of several lifetimes.  

All markets are manipulated, on all time frames, all of the time.  Aside from a few tips here and there on trading mechanics, most trading books are worthless.  People who look for the manipulation and trade off it make money.  People who just trade fundamentals and technicals lose money.  Gold is not rising due to speculative sentiment and it is incredibly naive of these talking heads to view gold prices as just price action.  

We have been handed a nice measuring stick for gauging the worth of market analysts today.  Anyone calling gold a bubble is just a chattering magpie copying what everyone else is saying so that they earn the respect of their fellow idiots.  For the rest of my lifetime, anyone professing to be an expert on anything is going to be Googled to see what he said about gold. 

Sun, 09/04/2011 - 08:24 | 1631153 StychoKiller
StychoKiller's picture

Smiddywesson FTW!  Seriously, this is THE MOST RATIONAL post I've seen in a long time.

Sun, 09/04/2011 - 09:29 | 1631205 Motley Fool
Motley Fool's picture

"For the rest of my lifetime, anyone professing to be an expert on anything is going to be Googled to see what he said about gold." That's bit harsh but funny as hell.

Sun, 09/04/2011 - 08:35 | 1631159 Bendromeda Strain
Bendromeda Strain's picture

 For the rest of my lifetime, anyone professing to be an expert on anything is going to be Googled to see what he said about gold.

cough Roubini cough

+1 for the dude with the bald spot mohawk. Now, about those chaps...

Sun, 09/04/2011 - 12:32 | 1631430 Boxed Merlot
Boxed Merlot's picture

They can see the trees, but not the forest, so they call gold a bubble and miss the greatest trade of several lifetimes...


But gold still exchanges at 1900. frn per oz.  Given the vast majority of people in the US still live "paycheck to paycheck" (or 1st and 15th thanks to JPM's Dept of Ag arrangement), squeezing this kind of frns from a household budget is as difficult as "collecting" dimes in the 50's on $2. an hour.


"Investing" in gold will theoretically preserve the ability to barter in a future time when our collective faith and trust in each other, our systems, infrastructures and government's ability to protect us decomposes.  I personally take no delight in seeing it, but reality bites sometimes. 


1 oz Gold at 25K frns?   When it happens, it won't look pretty. imo.

Sun, 09/04/2011 - 15:45 | 1631875 Spitzer
Spitzer's picture

Those people can continue to live paycheck to paycheck. Fiat workd fine for a short term meduim of exchange.

There already is fine sheets of gold out there.They just take a cheeze slicer to an oz of gold and put it in a plastic case

Sun, 09/04/2011 - 08:20 | 1631150 DosZap
DosZap's picture

TD @00:26,


Except the sheep won't play that game this trip around, they have taken the mindset, and will follow the lead of their crooked leaders.

You screwed me, and you want me to WHAT?.

Yep, count on that happening.

Sun, 09/04/2011 - 01:31 | 1630740 navy62802
navy62802's picture

So you think the Federal Reserve is going to release some of its gold into the market to drive gold prices down like Grant did in 1869? I doubt it. Central banks are stocking up on gold in preparation for the future. The rate at which central banks have been hording gold in recent years is indicative of where they think things are heading. Nations want to maintain their economic power in the event of a global monetary collapse. Otherwise, they'd be selling their gold to raise some cashola. But this is all moot because we will never return to a gold standard under the current US economic leadership. Grant knew the US would eventually switch back to a gold-backed currency, and that knowledge was his motivation in 1869 to deflate gold prices before the nation eventually reverted to gold. It seems he didn't want his citizens to get screwed by someone else's greed ... which is yet another reason that we will not have an 1869 style gold implosion.

Sun, 09/04/2011 - 01:58 | 1630816 Doña K
Doña K's picture

Can someone tell us who is selling gold at this time? I undestand the concept of a two way trade and everyone has his/her price.

But... who are actually the big sellers in physical?

Sun, 09/04/2011 - 08:26 | 1631154 StychoKiller
StychoKiller's picture

The fools that "think" that gold can ever be in a bubble, that's who! :>D

Sun, 09/04/2011 - 08:37 | 1631160 Bendromeda Strain
Bendromeda Strain's picture

lol, why GLD of course. Why do you think they created it?

Sun, 09/04/2011 - 10:03 | 1631234 Transformer
Transformer's picture

They created it to divert money from the real market, you know, bullion, mining shares, etc..  If not for these ETF's gold and silver would be in the stratosphere already.

Sun, 09/04/2011 - 12:01 | 1631395 Boxed Merlot
Boxed Merlot's picture

who are actually the big sellers in physical?

"Selling" gold historically is only something done by miners. Others only use(d) it for "trade". This may sound like a difference without a distinction, but it's actually the crux of the matter, imo.

In the US, miners would take their gatherins, (dore, dust, nuggets), to the assayer who would determine purity and weight in exchange for a "document" that would be taken to the mint in exchange for government issued coin relative o the weight and measure turned in, (less mintage fees of course.)

The gathrins would then find their way to the mint to keep the cycle going. As the supply dried up and people gave more credence to these fold-able documents, voila, assayers went the way of the buggy whip and mints began "marketing" collectibles.

Sun, 09/04/2011 - 00:19 | 1630683 tony bonn
tony bonn's picture

the banksters - rothschilds et. al. - were attempting to coerce central planning via central banking even during the civil war which is one reason why they murdered lincoln.....yes, lincoln was murdered by european bankster interests.....and no, i am not crazy....

Sun, 09/04/2011 - 00:21 | 1630686 hayesy316
hayesy316's picture

Crazy people usually don't realise they are.

Sun, 09/04/2011 - 01:34 | 1630774 IQ 145
IQ 145's picture

And Tony Bonn is no exception to the rule. Imagine being crazy enough to believe what he just typed here; people are amazing.

Sun, 09/04/2011 - 02:10 | 1630835 Doña K
Doña K's picture

There is a saying that "we learn the truth from the children and the crazy ones. That's why we teach our children to lie (Mommy told me to say that she is not here.) and we institutionalize the crazy.

The difference of a genious and a conventional madman is 2 IQ points. Therefore, think about what people may think about you. 

Sun, 09/04/2011 - 07:22 | 1631110 Smiddywesson
Smiddywesson's picture

I don't know anything about the Lincoln assassination.  What I do know is that anything is possible in the world of money.  If you want a recent example, just look at what happened to one of the world's most powerful men, DSK.

19 out of 20 conspiracy theories are bullshit, but 19 out of 20 conspiracy theories about money are entirely true.

This is because in a world of rational markets, it is too difficult to make a buck without forming a conspiracy.  That's why you will never see a rational market, or prices that are not manipulated.

I thought you would understand this already with your big 145 IQ, but I guess you were too busy talking down to your lesser beings to think for yourself.

I suggest Yahoo Finance, they will be really impressed with you.


Sun, 09/04/2011 - 08:50 | 1631171 Bendromeda Strain
Bendromeda Strain's picture

Nice. Maybe we can get FightingWeight 145 to expound on the attempted assassination of Old Hickory since he's got his pipe lit.

Sun, 09/04/2011 - 10:06 | 1631237 Transformer
Transformer's picture

You know, I think 135-145 is probably about average, maybe low, for this group here at Zero Hedge.  Else, why would the 145 guy say such inane things.

Sun, 09/04/2011 - 11:58 | 1631392 Amish Hacker
Amish Hacker's picture

For anyone looking for conspiracy theory material, note that James Garfield chaired the Congressional investigation of the gold scam and was later elected President and assassinated.

Sun, 09/04/2011 - 00:57 | 1630720 Whalley World
Whalley World's picture

Kennedy too.  Creature From Jekyl Island, G.E. Griffin - a classic

PS Bankers were hung on Wall Street for trying to pay fiat at 20 bucks (gold face value) instead of the gold demanded by those seeking to pull their gold from the banks

Sun, 09/04/2011 - 00:22 | 1630688 tickhound
tickhound's picture



Dear US Citizen,

Thank you for your continued support of our Let's Keep America Going Campaign.  We remind you that participation is free, and the lone requirement being that you continue to pretend gold isn't money.

(insert) Bless America,

Uncle Sam


Sun, 09/04/2011 - 00:26 | 1630689 disabledvet
disabledvet's picture

Grew up right next to the Buttetfield House...named for said Butterfield. There are no tip off's this time...just as there are so few Charles Francis Adams left to speak truth to power that what passes for government today borders on the ridiculous. Power corrupts and absolute power corrpts absolutlely. Take a deep breath because when the corruption is exposed on this boondoggle the scales will drop from your eyes. The fools of course are those who stand in the way of American justice and fairness while our boys die in a war of no one's choosing save those that wish us harm. We have two systems of justice now--amd one of those deals not only with war criminals but with the history of what we do with them. Go ahead: be the latter.

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