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In Case Of NEW QE, Gold To $1,900-$8,500 Says SocGen

Tyler Durden's picture


In a previous post we showed how, despite Goldman's best wishes, the market may have just priced itself out of a treat from the Fed tomorrow, and right into a trick. That said, in case the Fed has in fact succumbed to the pleadings of its superiors (read Primary Dealers) and does proceed with some seriously unsterilized dollar mauling, the next question is what is the best hedge. SocGen asked the same, and provided several strategies to take advantage of central planners exhibiting a rare case of Einstein's definition on insanity... over and over. Their "Strategy #1: Bolster Positions In Gold Ahead of QE3." Why? Because once the next round of the gold juggernaut is unleashed, gold may go to anywhere between $1900, just shy of the all time nominal high, and $8500... just a tad higher than the nominal high.

From SocGen:

  • USD 1900/Oz: To close the gap with the monetary base increase since July 2007, gold would have to rise to $1,900/oz, assuming full transmission from the monetary base increase to the gold price
  • USD 8500/Oz: If gold catches up with the increase in the monetary base
    since 1920 (as it did in the early 80s), its price would rise to USD 8500/Oz.

The latter scenario is the price only catching up with where it should be. Add another $700 billion - $1 trillion for a potential NEW QE, and you get a 5 digit (and increasingly more meaningless) number.


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Tue, 06/19/2012 - 18:33 | 2541055 dlmaniac
dlmaniac's picture

There will not be QE until the market screams, say, in dangerous of falling below 10,000 pts.

Tue, 06/19/2012 - 18:54 | 2541098 iDealMeat
iDealMeat's picture

Regardless of QE.

I think the Chinese interest in PMs will keep them manipulated in the range they are now through the JPM proxy.

Keep buying until O'bRomney gets elected and then watch them go FIAT parabolic. 

Question is: Would you ever sell anyway?


Tue, 06/19/2012 - 18:57 | 2541116 SHEEPFUKKER

Clearly, the Fed has boxed themselves into a corner with all of the manipulation of markets.  If they don't announce anything overt tomorrow, then won't they officially render themselves useless? Their self imposed dual mandate says price stability and full employment.  Uh, I'm pretty sure we are not at full employment....closer to full UN-employment....and prices are anything but stable. So the question is......What is the point of the Fed if they don't do anything overtly? I think they will answer that question on Wednesday.....i.e. there is no point to the Fed and they can go ahead and grab their ankles and kiss their asses and their fucking worthless FDR's least that is what should happen in a sane world. But alas, it is not. 

Tue, 06/19/2012 - 19:53 | 2541264 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Sell miners!  Gartman just went long!

Dennis Gartman - Major Shift in Gold Trade:

Tue, 06/19/2012 - 20:25 | 2541372 AnonymousCitizen
AnonymousCitizen's picture

$1900 - $8500??? As targets go, that's a fairly broad side of a large farm building.

Oh, hi all. First time posting here. How deep can you nest comments?

Tue, 06/19/2012 - 20:59 | 2541485 dbomb12
dbomb12's picture

How about $20,000  Great video from Mike maloney if you have an hour to kill its very accurate

Tue, 06/19/2012 - 21:11 | 2541525 smiler03
smiler03's picture

How about $2 trillion? How about getting a brain cell transplant.

Tue, 06/19/2012 - 23:23 | 2541865 iDealMeat
iDealMeat's picture

+1, It's all BS..

Tue, 06/19/2012 - 23:54 | 2541967 flacon
flacon's picture


Wed, 06/20/2012 - 00:57 | 2542090 SilverIsKing
SilverIsKing's picture

How is the US Treasury funding the $1+ trillion deficit each year?


QE never ends.

Tue, 06/19/2012 - 20:25 | 2541376 Bay of Pigs
Bay of Pigs's picture

Broken Clock Theory?

Tue, 06/19/2012 - 21:20 | 2541544 AllWorkedUp
AllWorkedUp's picture

 That really blows. He's always wrong. Crap

Tue, 06/19/2012 - 23:32 | 2541866 Lore
Lore's picture

Re: Gartman

Few weeks ago he announced that gold was in a bear market. 

Gartman seems to practice the "rhythm method" of forecasting: his position depends on time of month.

Leave us not forget the weather. And sponsorship?

At least he covers all the bases. If you flip-flop, you're right half the time.

Why the talking heads bother is a mystery.

Tue, 06/19/2012 - 22:38 | 2541746 jekyll island
jekyll island's picture

I may suggest a hedge if you want to sell the mining stocks:  buy the $52 call options on GDX, just in case Gartman is a blind squirrel who finally found a nut.  

Tue, 06/19/2012 - 23:14 | 2541839 cornflakesdisease
cornflakesdisease's picture

I've wained on Martan Armstrong's views over the years.  He's bitter and inflexible in his thinking. 

Wed, 06/20/2012 - 06:53 | 2542390 ParkAveFlasher
ParkAveFlasher's picture

sadly enough, i could believe he flinches anytime someone rattlestheir car keys.  how much time did he spend in prison again?

Tue, 06/19/2012 - 19:04 | 2541132 SHEEPFUKKER


Tue, 06/19/2012 - 19:19 | 2541175 UP Forester
UP Forester's picture

You won't take his FDR and raise him a JFK?

Tue, 06/19/2012 - 19:04 | 2541134 strannick
strannick's picture

QE to infinity and beyond!

Tue, 06/19/2012 - 19:11 | 2541154 Poor Grogman
Poor Grogman's picture

Is it worth running a sweepstakes that would allow ZHs to bet on the market trigger point for QE?

This would make the wait all that more exciting....

Tue, 06/19/2012 - 19:17 | 2541172 SHEEPFUKKER

ZH derivatives?? Brilliant!!

Tue, 06/19/2012 - 19:26 | 2541197 HD
HD's picture

...and if you lose - BAILOUT! Win-win.

Tue, 06/19/2012 - 19:33 | 2541211 Spastica Rex
Spastica Rex's picture

I'm in.

Tue, 06/19/2012 - 19:32 | 2541207 Peter Pan
Peter Pan's picture

They have us salivating like Pavlov's dog at the thought of $9000 gold. Don't be fooled. If anything, the mongrels in the central banks and JP Morgans of the world have enough magic shop tricks to hammer it down. If you have gold just sit back quietly like the guy who has the only parachute in a plane that has engine trouble. Gold is not about its short terms moves or even its great rise over the last decade. It's about what it will protect you from when the system goes off the tracks.

Tue, 06/19/2012 - 19:42 | 2541219 Gully Foyle
Gully Foyle's picture

Peter Pan

"It's about what it will protect you from when the system goes off the tracks."


Letter Re: The Bosnian Experience Wednesday, Dec 30, 2009

Mr. Rawles,
I want to thank you for having this site and presenting people with opportunity two obtain useful information that could save their lives one day. I have been dedicated reader of your blogs for some time and now think that is my time to contribute some information instead of just reading it. I have survived through collapse of former Yugoslavia and the years of war that followed after. I will try to cover as much of different topics that pertain to every day survival. No matter on how much the person is prepared, it might not be enough.

I was born and raised on farm in Western Bosnia and we always had enough food and supplies on the farm to survive at least one year without any contact with the outside world. We grew our own wheat and corn and always had enough flour for at least three years. We also had cows, chickens and sheep for dairy products, meat and eggs. The sugar and salt would be purchased in the 50 pound equivalent bags. Besides the motor vehicles we also had horses that could be used for farm work and transportation. We even made our own brandy and had at least three years supply of it. During the peaceful times, before the collapse, we only had one firearm, Yugo M57 Tokarev pistol, with about 50 rounds of ammo, but after the things started to go down the hill, are family arsenal improved. We added a Russian PPSH 41 [submachinegun], a Yugo M48 Mauser [bolt action rifle] and a Yugo SKS [semiautomatic] rifle to our arsenal, but we only had few hundred rounds for the each weapon. A lot of times it was really easy to obtain weapons but getting the decent amount of ammo was more challenging. My father was in the reserve status of Yugoslavian Army so he was issued a M48 Mauser but only got 40 rounds of ammunition with it.

When the things started to go bad, we were under impression that we would be okay; since we are on the farm and that we can just live there until everything was over. Boy, where we wrong. When the fighting broke out, the villages, small towns and farms were systematically cleared of people, looted and destroyed. You had a better chance of surviving if you lived in an apartment in the big city of if you lived in the farm that was further away from the front lines. It does not matter how good your house is built, it will not sustain few direct hits from the T-72 tank. Also, it does not matter how well you are armed, unless you have numbers on your side (number of armed people), and you dig in and try to protect your property, you will be over-run and destroyed. Yugoslavia had a fairly strict gun laws before the collapse, basically, you could own pistols, shotguns and bolt guns but after the collapse nearly everyone was equipped with selective fire battle rifles.

I would advise that you don’t keep everything that you have in one location. I was forced to leave my house and take off with just my backpack and weapon. If you can, keep a bug out bag [cached] a few miles away from your house so that you could go to it, if you are forced to abandon your residence. Be prepared to not return to your home for years and try to have another place to live in another part of the country or even some other country. I was not able to go back to my home until years later. Stash as much ammo in different locations as you can. I did not have enough ammo in the first place and whatever I had was used or traded within first month of me leaving my home. Ammo was good trading currency and could get you a meal at any time. Local paper currency was basically worthless but if you had foreign currency, then you were in better shape. At that time German Mark was most popular currency in Europe and could get you anything in former Yugoslavia during the war. The Gold and Silver were good to have but it was harder to find someone that would accept gold and silver as form of payment .

People that lived in big towns also had their share of problems. If they lived in apartment buildings, they were dependent on central heat and when the things started to go bad, there was no more fuel to heat these apartments. Not that many people had wood burning stoves and the winters in Eastern Europe can get really cold. I would advise that if you don’t have a wood burning stove, to get one and store it somewhere until you need it. You will need it not just for heat but also for cooking. The people that had stoves or were able to obtain them or make them then had another problem, getting the firewood. If you live inside of city that is surrounded and you can’t just go outside of city and cut some trees down, obtaining firewood can become your daily battle for survival. Burning your furniture, books, park benches, trees from the parks and every other tree that you can find will be normal. I would advise that if you are going to have a stove either store at least one winter supply of firewood (if you have a place to store it at) or have a plan where you get that firewood when you need it. Another issue that people from the cities faced was the shortage of water. Some people ended up digging wells in the courtyard of their apartment buildings but majority of people who tried this were unsuccessful since they were digging where there was not water or old city utilities were under the places where they tried to dig. Most of the people were forced to make daily runs to water points and bringing the water back to their families. Water points were favorite targets for snipers. Having extra water jugs will help you minimize your visits to water points.

Since this is my first post, I will not make it too long and will stop here until the next time. - A Bosnian Survivor

From a Sarajevo War Survivor

Jan 29 2012, 10:20 PM EST

From a Sarajevo War Survivor:
Experiencing horrible things that can happen in a war - death of parents and friends, hunger and malnutrition, endless freezing cold, fear, sniper attacks.

1. Stockpiling helps. but you never no how long trouble will last, so locate near renewable food sources.
2. Living near a well with a manual pump is like being in Eden.
3. After awhile, even gold can lose its luster. But there is no luxury in war quite like toilet paper. Its surplus value is greater than gold's.
4. If you had to go without one utility, lose electricity - it's the easiest to do without (unless you're in a very nice climate with no need for heat.)
5. Canned foods are awesome, especially if their contents are tasty without heating. One of the best things to stockpile is canned gravy - it makes a lot of the dry unappetizing things you find to eat in war somewhat edible. Only needs enough heat to "warm", not to cook. It's cheap too, especially if you buy it in bulk.
6. Bring some books - escapist ones like romance or mysteries become more valuable as the war continues. Sure, it's great to have a lot of survival guides, but you'll figure most of that out on your own anyway - trust me, you'll have a lot of time on your hands.
7. The feeling that you're human can fade pretty fast. I can't tell you how many people I knew who would have traded a much needed meal for just a little bit of toothpaste, rouge, soap or cologne. Not much point in fighting if you have to lose your humanity. These things are morale-builders like nothing else.
8. Slow burning candles and matches, matches, matches

3 Reasons You Shouldn’t Stock Precious Metals

The myth that stocking gold and other precious metals as a survival tool is perpetuated by survival blogs and message boards. Common sense shows that’s not a good idea and your hard earned money is better spent on food and gear.

1. Long Term Use

First, let’s look at history. You can study any group in the history of the world and see that gold, or any other currency, was never used until well after there was a stable and functioning society, usually with some form of government. Before that there is simply no need. People trade.

In the aftermath of any situation the most valuable commodities are going to be food, water, clothing, other things that human beings need for their immediate survival.

Invest in something you can actually use or people will actually want.

2. Prepare In Order

Some people will say: “Sure, it may take a while, but eventually precious metals will be currency”

I agree, but my question is: How long will that take? Does that mean you already have EVERYTHING you need to survive in the YEARS until then? I sure don’t.

If I made massive list of everything I wanted to prepare and it was in order of importance, precious metals would near the very bottom, somewhere around “Plans to build a printing press” and a copy John Locke’s Treatise On Government (all useful in a budding society, not so much for survival).

Common sense says you should prepare for what you will need first.

3. Cash Still Works

Let’s be honest: The most likely survival situation you will find yourself in will be regional. A massive flood, hurricane, or earthquake. What does that mean?

The rest of the world still takes cash.

I wrote about this in detail here: 7 Reason to Have Money In Your Bug Out Bag.

Level of Reason

After writing this I found out there are some other common sense survivalists out there who agree:

The Suburban Survivalist thinks along the same lines: Precious Metals Post-TEOTWAWKI; I Don’t Buy It

Scott, from Bug Out Survival, also wrote on the need for cash money on hand.

Tue, 06/19/2012 - 19:56 | 2541270 Peter Pan
Peter Pan's picture

Dear Gully Foyle,

I read with great interest what you wrote. It certainly makes sense especially during the period of upheavel but when things DO get back to normal, those stocks of toilet paper, brandy and bullets lose a great deal of their emergency value. That's when your gold truly kicks in. Post apocalypse.

But thank you again on a very interesting insight on the Bosnian experience. It is sad though how bullets, toilet paper etc go up in value whilst humanity, values and morals are totally devalued in war by the evil that resides in us.

Tue, 06/19/2012 - 22:05 | 2541660 francis_sawyer
francis_sawyer's picture

toilet paper is overrated in that scenario... America has dollars...

Wed, 06/20/2012 - 15:00 | 2544595 akak
akak's picture

What GullyFoil and other disingenuous and/or ignorant naysayers of gold do not understand, or refuse to acknowledge, is that gold is not just a means of financial survival during a period of economic crisis and monetary collapse, but much more importantly, holding gold (and silver) is a means of preserving one's savings and transferring them through a period of economic upheaval and monetary collapse. 

Where is the wealth and savings today of those Bosnians who chose to hold their national fiat currency in 1991, versus those who chose to hold gold instead?

Enough with this idiotic notion that gold is worthless merely because it may not be of paramount importance during a transitory crisis.  Is all artwork worthless simply because it has no value in a lifeboat?

Tue, 06/19/2012 - 20:01 | 2541285 post turtle saver
post turtle saver's picture

Good stuff and things I've touched on already... told ya toilet paper, drugs, alcohol, tobacco etc are more useful when TSHTF.

Tue, 06/19/2012 - 20:20 | 2541361 CPL
CPL's picture

From a Sarajevo War Survivor, you are missing the rest of it.  It was originally called the SARAJEVO SURVIVAL GUIDE.  The bullet list that gets rehashed is from some forum and not truely the way of how things happened.  If you want to read the history from how the universe worked after Tito, here you go.

Gold and silver were VERY important, for OIL, can't run tanks with out it, and a basic commodity like oil determines the outcome in the cold war.  Not "money".  Arabs then wanted gold.  The early 90's Canada was about to go over the rails.  The US was in a recession started by Bush The Elder.  Where the US army went, so did the banks.  All of them.  The reserve currency of Yugoslavia is anything of value that kills people.

From the first story, it depends who your family was.  Pardon who your family worshiped.  If you were muslim in Western Yugoslavia, the house would have been looted, boarded up, flattened and everyone killed.  Don't confuse today with Yugoslavia at all either.  Tito ruled that country with an iron fist.  While The muslims and christains are all busy pointing each other out in war crimes, believe me, Tito made them look like school girls.  To rule that shithole, you had to out do people that wire four year olds with explosives.   That situation after Tito is only a minor scuffle.  However, the Yugoslavian people will get their wish for iron fisted rule in the fashion they like, I understand there is a real popular extreme insane wingnut that is the new Kiaser Soze in rising.

Tue, 06/19/2012 - 21:17 | 2541374 BlandJoe24
BlandJoe24's picture

Thanks for posting this.  Also see the "40 Ways to Lose Your Future" and "How to Build a Lifeboat" as well as more detailed discussions of practical preparation (including how gold is the "icing on the cake" of preparations, not the bulk of the cake):

Tue, 06/19/2012 - 19:56 | 2541272 RiverRoad
RiverRoad's picture

Just to be on the safe side they hedge their shenanigans with gold:  No one knows better than they do the scam they're running.

Tue, 06/19/2012 - 18:59 | 2541122 DoChenRollingBearing
DoChenRollingBearing's picture

@ iDeal

+ 1

That's what FOFOA says will happen.  People will want the physical, and there will be no sellers.  BOOM!

Tue, 06/19/2012 - 19:05 | 2541138 LowProfile
LowProfile's picture

We are some time away from that yet IMO.

First, the last of the weak hands must be shaken out.  Perhaps several times.

BTW, IMO no QE means AU takes it right in the nutz, and will present the last best entry near these price levels.

Tue, 06/19/2012 - 19:21 | 2541182 LowProfile
LowProfile's picture

Wish there was a way to delete accidental duplicate posts...

Tue, 06/19/2012 - 20:01 | 2541283 RiverRoad
RiverRoad's picture

It's deja vu.

Tue, 06/19/2012 - 19:10 | 2541156 DrunkenPleb
DrunkenPleb's picture

Question is: Would you ever sell anyway?


Absolutely: gold is just a form of money. When other assets are crashing and gold soaring, exchange gold for other tangible things you want. Personally I do not yet own property, and I plan to exchange at least some portion of my gold holdings for property at some point in the future.

Tue, 06/19/2012 - 19:14 | 2541163 dlmaniac
dlmaniac's picture

The question is how much gain government will allow you to keep when you sell your gold. You can bet they won't sit there letting you collect it easy.

Wed, 06/20/2012 - 00:42 | 2542063 DrunkenPleb
DrunkenPleb's picture

Good thing I don't live in the US - in my jurisdiction the government still has a healthy respect for property rights.

Wed, 06/20/2012 - 08:28 | 2542561 ATM
ATM's picture

For now. That means your conditions are even more dangerous. They are leading you to a very false sense of security. Be skeptical.

Wed, 06/20/2012 - 01:52 | 2542158 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

Perhaps the seller just might give you an 80% discount on the price?  After all, you retributed with such a nice shiny gift.  

Wed, 06/20/2012 - 03:51 | 2542279 EmileLargo
EmileLargo's picture

I just bought more at $1635. The way I see it, they have to monetise. What it gets called is irrelevant.

Tue, 06/19/2012 - 18:51 | 2541099 Dr. Richard Head
Dr. Richard Head's picture

Nominally we are hovering near 13k, but in real inflation adjusted terms or using gold as a measuring stick we would see a 10k in my book. This bitch of a market has indeed fleeced "investors" through a scam of a facade.

Tue, 06/19/2012 - 19:20 | 2541179 CPL
CPL's picture

In terms of inflation adjustment if using physical asset classes, the dow is at 7000 and S&P is at 650.


The numbers really don't mean a hell of a lot anymore.


Tue, 06/19/2012 - 19:36 | 2541221 Spastica Rex
Spastica Rex's picture

Their Jedi mind tricks didn't work on you.

Tue, 06/19/2012 - 20:27 | 2541383 CPL
CPL's picture

These are not the bagholders you are looking for.  Move along.

Tue, 06/19/2012 - 19:45 | 2541242 El Oregonian
El Oregonian's picture

Crap! When has SocGen been right lately? There goes PM paper... Fortunately, Physicals are still physicals and STILL weigh the same regardless. I hold them as long term investments against inflation.

Tue, 06/19/2012 - 21:42 | 2541601 vast-dom
vast-dom's picture

flip a coin. no one knows anything anymore. if we would eliminate central planning we would have something like free markets again and a fuckload more rhyme and reason as barometer for sound investing.

shifting capital around to facilitate and foster productivity and legitimate econ growth is something that does not compute for Bernank and Co. 

Tue, 06/19/2012 - 18:34 | 2541057 Global Hunter
Global Hunter's picture

Any guesses on where oil goes in usd terms if gold goes to 8500?

Tue, 06/19/2012 - 18:45 | 2541088 Levadiakos
Levadiakos's picture


Tue, 06/19/2012 - 19:04 | 2541133 Pladizow
Pladizow's picture

Historical ratio - 18:1 - I think? -

Tue, 06/19/2012 - 19:02 | 2541127 Abraxas
Abraxas's picture

$607 per barrel (or 14:1)

Tue, 06/19/2012 - 19:31 | 2541206 Global Hunter
Global Hunter's picture

TY Abraxas and Plazidow above.  At those prices demand will be curtailed lol

Tue, 06/19/2012 - 19:40 | 2541227 Pladizow
Pladizow's picture

And the sky is blue!

Tue, 06/19/2012 - 19:48 | 2541249 El Oregonian
El Oregonian's picture

Not after the Chem-trailing...

Tue, 06/19/2012 - 23:20 | 2541849 Abraxas
Abraxas's picture

Global Hunter, with Au @ $8500 I assume huge inflation. $607/barrel might be optimistic.

Tue, 06/19/2012 - 19:33 | 2541215 Mr. Lucky
Mr. Lucky's picture

$8500 gold = $8.50 loaf of bread.

Tue, 06/19/2012 - 20:06 | 2541302 A82EBA
A82EBA's picture

and $35 min wage?

Tue, 06/19/2012 - 20:30 | 2541401 CPL
CPL's picture

and the 200k in mortgage payments paid off in a year if pushing it.


But of course inflation is self reenforcing, money supply must go through the roof first.

Tue, 06/19/2012 - 21:45 | 2541605 vast-dom
vast-dom's picture

hey in nyc you can easily buy a loaf of bread for that much! but it certainly wouldn't be Wonder Bread.


oil at $130 would be a fair price today. 

Tue, 06/19/2012 - 23:48 | 2541923 Mr. Lucky
Mr. Lucky's picture

That's was one of the reasons why I moved out of NYC a long time ago.   

Tue, 06/19/2012 - 20:01 | 2541280 kindape
kindape's picture

Any guesses on where oil goes in usd terms if gold goes to 8500?


$20-$30. Whatever caused gold to go to $8500 destroyed global economy and there is (temporarily, until depletion sets in) a glut of oil.

Tue, 06/19/2012 - 18:34 | 2541059 francis_sawyer
francis_sawyer's picture

francis_sawyer predicts that with QE3 there will be a 50-50 chance that gold will either go up or down...

I want to get that on record...

Tue, 06/19/2012 - 18:56 | 2541110 El
El's picture

Finally! A prediction I can really believe in! Thank you for that.

Tue, 06/19/2012 - 19:01 | 2541125 francis_sawyer
francis_sawyer's picture

That's why they pay me the big bucks... If you want to know which crow is going to fly off the fence next, just let me know...

Tue, 06/19/2012 - 23:32 | 2541903 Hulk
Hulk's picture

we need a timeline on that prediction Francis...

Tue, 06/19/2012 - 19:10 | 2541136 Abraxas
Abraxas's picture

There's 30% chance it will go sideways and 0.001% that there will be no market at all

Tue, 06/19/2012 - 19:21 | 2541184 muppet investor
muppet investor's picture

I also predict that if it rains water will fall from the sky...

Tue, 06/19/2012 - 18:34 | 2541060 fonzannoon
fonzannoon's picture

no fn way. Not tomorrow anyway.

Tue, 06/19/2012 - 18:37 | 2541063 Boilermaker
Boilermaker's picture

Wow, that's quite the spread.  All the way from $1,900 to almost $9 large.

Golly.  Thanks.

Tue, 06/19/2012 - 19:22 | 2541157 ThirdWorldDude
ThirdWorldDude's picture
If the ratio remains 55:1 as it is now, AG should be at $150+ 

That's a good start.

Tue, 06/19/2012 - 19:41 | 2541229 Boilermaker
Boilermaker's picture

Should or will?

Tue, 06/19/2012 - 23:57 | 2541976 flacon
flacon's picture

Do you really want me to buy up all the rest of those millions of fake silver ounces at the COMEX? Ok. Done deal. ;)

Tue, 06/19/2012 - 18:37 | 2541064 VonManstein
VonManstein's picture

long canoes

Tue, 06/19/2012 - 18:44 | 2541078 francis_sawyer
francis_sawyer's picture

at $8,500 an ounce, even a canoe would be pretty safe from most ZHers proclivity for boating mishaps unless it became a ballast issue...

Tue, 06/19/2012 - 19:06 | 2541139 A82EBA
A82EBA's picture

I cant figure out what it is with the PMs and boating accidents..please esplain

Tue, 06/19/2012 - 19:24 | 2541191 A Nanny Moose
A Nanny Moose's picture

Flotsam vs. Jetsam.

Tue, 06/19/2012 - 19:53 | 2541265 Think for yourself
Think for yourself's picture

I, for one, would never let my gold unguarded in my basement while I go on a weekend rafting expedition. Much better to bring it with me.

Tue, 06/19/2012 - 20:04 | 2541295 A82EBA
A82EBA's picture

im tryin but im just not there yet..its like plaus. deniab. of ownershp in case of FDR-like confisc...bury in earth seems easier

Tue, 06/19/2012 - 18:38 | 2541066 Yen Cross
Yen Cross's picture

 Are you sure the " BoJ /MoF" of Japan isn't floating that rumor? /sarc

Tue, 06/19/2012 - 18:37 | 2541067 K_I_T_T_Y
K_I_T_T_Y's picture

What scares me most about gold, is that now everyone is positive and bullish....

Long term uptrend channel broken, sideways movement that looks like a pullback.

Fasten seatbelt please!

Tue, 06/19/2012 - 18:39 | 2541072 VonManstein
VonManstein's picture

but they dont own it.. how bullish is someone that isnt buying?

no one owns gold

Tue, 06/19/2012 - 18:44 | 2541089 knukles
knukles's picture

Including the Treasury, BoE, Ft. Knox, GLD, all the LBMA members, LME dealers, COMEX warehouse (well, under owned) JP Morgan (or is that silver, bitchez) Bear Stearns (Opppps!) and China.  India wants more, China wants lots more and Hugo took his in Physical.

What could go wrong?

Tue, 06/19/2012 - 18:48 | 2541097 K_I_T_T_Y
K_I_T_T_Y's picture

Hedge fund that sees the weakness and start to sell futures big time?

Many chinese have kept buying gold over years, they now have 100% profit, maybe the want to cash it in?


Tue, 06/19/2012 - 18:56 | 2541108 francis_sawyer
francis_sawyer's picture

 "Maybe they want to CASH IT IN" 

are you fucking kidding me? Are you a retard, or do you just play one on TV?

Tue, 06/19/2012 - 19:35 | 2541220 Ness.
Ness.'s picture

Hey Kitty - don't call him Francis!

Wed, 06/20/2012 - 00:53 | 2542085 SilverIsKing
SilverIsKing's picture


Tue, 06/19/2012 - 19:38 | 2541223 nmewn
nmewn's picture

Any sane Chinese is not going to bet the farm on the

Mainly because they don't hold title to a farm to make a bet with ;-)

Tue, 06/19/2012 - 20:03 | 2541293 Quisat_Sadarak
Quisat_Sadarak's picture

All true...
But the ChiComs could just flip a switch and confiscate all the PRoCs peasant holdings if they felt the need... similar to executive order 6102 which happened here in the USA. And those familiar with the French and English banks history (a few hundred years ago) forcing people to accept fiat-paper as the same value as gold on pain of death should also remind that tyranny can happen anywhere.

Tue, 06/19/2012 - 22:07 | 2541665 francis_sawyer
francis_sawyer's picture

good luck with that... If that's the case, I'm long shovels...

Wed, 06/20/2012 - 05:37 | 2542343 K_I_T_T_Y
K_I_T_T_Y's picture

No not kidding you.

Ever heard of leverage? Bought gold against credit... believe me, some chinese are very "sporty" investors.

And BTW, not all chinese live in China..

Tue, 06/19/2012 - 19:14 | 2541129 knukles
knukles's picture

Generally the Asian and Indian communities have held gold as a long term store of value and have tended to be accumulators.  I'd not worry about personal sales out of that universe.

Hedge funds? 
You betcha.  Once the margin calls arrive, they'll sell whatever might be at a profit to keep afloat.  The old Adverse Selection By Somebody Else's Choice Routine... now that's as given as the sun rising and setting... gonna happen again and again.

But keep in mind, that's usually amidst the panic environments when everybody else starts looking for the any safety factor in the storm will do, thank you.... cash and precious metals.

If there's an asset class that's outperformed everything and anything which nobody (but a few folks like me) have spoken of owning, its longer term bonds; both treasuries and munis.  That's where the gains have been amassed that would provide fertile cash for margin calls.  And again, right when everybody else will be looking to lock in stable levels of income, etc.

Bonds, bullion and cash, bitchez


OH and a Big PS
Under the new Basel Accord discussions and not having received much of any press, gold is being considered to be moved up into the least capital haircut tier of assets for banks... That's right... no haircut....
The big banks (especially the LME, COMEX, LBMA types, will absolutely LOVE that!  As will the rest of em.  Also, keep in mind that banks under most regulatory per-views world wide are exempted from all sorts of restrictions and reporting requirements on PM positions, derivatives related thereto, etc.  At their own behest.
Wonder why?
Go figure....

Tue, 06/19/2012 - 19:03 | 2541130 WhiteNight123129
WhiteNight123129's picture

Yes but cash in what? SGD ok. HKD ok. Tobacco ok. Plantations ok. But then what buy British pounds?

There are two things which break the back of Gold and commodities (high interest rates like 1921 and 1981) or contraction of currency in 1866 (Mc Culloch) and demonetization of Silver (very greenback bullish). Or you have Bretton woods which is putting back gold in teh middle. As long as you do not see a contraction or interest rates at 8% on the short term, you can not break the back of Gold. Sometimes paper is better but they are plenty of post signs that tells that paper is better. If tomorrow the Fed was announcing a currenncy contraction like McCulloch I would sell my Gold. But in the current environment I think that would starve about 20% of the US population or more to do a currency contraction. We are debating QE or not QE to figure out the short term movement of Gold. Check for contraction of monetary base, and real positive interest rates, aside from that go back watching the daily movement of Gold as pass-time and do not move.

Now if we have liquidity crunch, Gold could go down, but that is not the same as McCulloch retiring the US gov debt of the civil war by repaying it, not rolling-over. That was a voluntary deflation, contraction move. ARE WE IN A VOLUNTARY CONTRACTION OF THE CURRENCY RIGHT NOW, ARE THE RATES AT 8% LIKE THEY SHOULD BE?


Tue, 06/19/2012 - 23:33 | 2541907 Hulk
Hulk's picture

Comex 40 to 1 leverage, thats what will go wrong...

Tue, 06/19/2012 - 18:45 | 2541090 K_I_T_T_Y
K_I_T_T_Y's picture

oh yes they do. Here in EU in the past 1 year almost every bank has started to add an allocation to gold and to buy for clients.

Physical is available here at no problem and there are even investment funds that entitle to get the physical bars at anytime.

Unfortunately not available for US clients (Sec rules).

Tue, 06/19/2012 - 18:50 | 2541096 Bay of Pigs
Bay of Pigs's picture

'almost every bank'?

First I've heard of that.

Tue, 06/19/2012 - 19:18 | 2541173 francis_sawyer
francis_sawyer's picture

Yeah ~ There are also banks that say "We have ATM's... You can get your cash out whenever you want"...

So what could possibly go wrong?

Wed, 06/20/2012 - 05:33 | 2542341 K_I_T_T_Y
K_I_T_T_Y's picture

well if they have to have on storage the same quantity of gold issued in funds then no problem.

And that's the case..

Tue, 06/19/2012 - 19:24 | 2541189 nmewn
nmewn's picture

"...and there are even investment funds that entitle to get the physical bars at anytime."

How very gracious of title (force of law...or the lack & change thereof) to something to be held by someone else, instead of just holding it yourself personally, to have when that time comes.

"Unfortunately not available for US clients (Sec rules)."

Guffaw!!!..."clients"...dead giveaway...thanks for playing.

Tue, 06/19/2012 - 18:46 | 2541092 Bay of Pigs
Bay of Pigs's picture

Not only that, overall sentiment for PM's has only been this low 2 or 3 times in the last 11 years that I know of.

Look at the miners, they've been crushed. Gold/XAU has rarely been this out of whack, and GSR is absurdly high too.

Tue, 06/19/2012 - 18:51 | 2541102 yabyum
yabyum's picture

Bay, Miners have been skull fucked, that said, there are some bargains out there for some real quaility.

Tue, 06/19/2012 - 19:21 | 2541183 francis_sawyer
francis_sawyer's picture

It's no mystery to me that miners regularly get skull fucked...

It's either:

- They get shorted to oblivion by large banks or institutions who, someday, just want to acquire the assets on the cheap


- fear of eventual nationalization (all your gold mines are belong to us)...

Tue, 06/19/2012 - 18:41 | 2541073 Richard Head
Richard Head's picture

Yet anyone that owns physical is still derided as a nut case.  The idiot "man on the street", shoe shiners, etc. still have next to none.  We are nowhere near a "bubble" in gold.

Tue, 06/19/2012 - 19:23 | 2541185 Peter Pan
Peter Pan's picture

The $9000 price predictions remind me of Max Keiser predicting $500 silver. Neither is going to happen and I am saying this as a gold bug. The reasons why I say this are as follows:

1. It would be insanity to have an asset priced so far ahead of anything else in relative terms.

2. People would live in fear of even wearing a simple wedding band.

3. Gold ownership is not evenly distributed across nations. Can anyone imagine what it would do to Indian and Turkish societies?

The best bet for a controlled rise is for governments to basically offer a very good tax free price to individuals so that gold could then be used to recapitalise government finances by giving gold one more revaluation.

At the end of the day it's not just national debts that need to be wiped off but also a great deal of personal debt. Gold spiking like crazy will not solve personal indebtedness.

Then again, I have lived long enough to see things that were not in the economic text books of my student days.

Tue, 06/19/2012 - 19:30 | 2541201 francis_sawyer
francis_sawyer's picture

Apply all your logic to the NASDAQ bubble, or the housing bubble... Then, recalibrate the efficacy or lunacy...

Tue, 06/19/2012 - 19:34 | 2541217 Bay of Pigs
Bay of Pigs's picture


that's perfect...

Tue, 06/19/2012 - 21:25 | 2541559 smiler03
smiler03's picture

Gold @ beating inflation for the next 10 years is the fantasy of delusional ZH/Tyler followers. $1900? Good bloody luck.

I'm all in cash at the moment. I'd rather invest in wheat than gold or silver. I fucked up buying silver at $34. 

$8500 for gold? Report back when the mighty $$$$ has devalued by 1000%.


Wed, 06/20/2012 - 01:53 | 2542160 Bay of Pigs
Bay of Pigs's picture

A free education on gold at 12:10 my friend. Wheat isnt going to cut it.

Tue, 06/19/2012 - 18:48 | 2541095 junkyardjack
junkyardjack's picture

Gold is a bubble, its been steadily deflating as the momos have jumped in.  If you buy some make sure you have stops.  

Straight from ZeroHedge, if this doesn't scream bubble I don't know what does...

"Tony Robbins (Anthony Robbins), one of the world's leading performance coaches and motivational speakers  has recently warned about the risk of dollar devaluation and spoke about the opportunities in gold which is "exploding" and "is in a bull market"."

Tue, 06/19/2012 - 18:55 | 2541109 Bay of Pigs
Bay of Pigs's picture

What kind of an idiot are you anyway? Spalding, is that you?

Tue, 06/19/2012 - 19:04 | 2541131 francis_sawyer
francis_sawyer's picture

He does kinda look like he's picking his nose...

Tue, 06/19/2012 - 19:29 | 2541150 knukles
knukles's picture

Watch out, its a bull market!

Relies on his personal trainer and motivational speaker who lives in a trailer down by the river for investment advice.

Tue, 06/19/2012 - 19:14 | 2541164 Likstane
Likstane's picture

My only 'stops' in au and ag are when my FRN's are depleted...or when they hit the bottom of the lake. 

Tue, 06/19/2012 - 19:52 | 2541153 XitSam
XitSam's picture

Gold deflating?  I just checked, my gold weighs the same as it always did. Besides, you're looking at it backwards, gold is the reference against which fiat currencies deflate.

Edit: added "against"

Tue, 06/19/2012 - 19:19 | 2541176 kalasend
kalasend's picture

Can I have stops if I own physical?

Tue, 06/19/2012 - 19:23 | 2541188 junkyardjack
junkyardjack's picture

Yes short futures

Tue, 06/19/2012 - 19:33 | 2541214 A Nanny Moose
A Nanny Moose's picture

Yes. Stop by the coin shop.

Tue, 06/19/2012 - 22:12 | 2541676 francis_sawyer
francis_sawyer's picture


Every fucking time I stop by the coin shop there's a queue of people trading in their 'unwanted' gold for CASH...

I'm like... YES!


Tue, 06/19/2012 - 21:09 | 2541519 Red Heeler
Red Heeler's picture

"If you buy some make sure you have stops."

I have stops. Door stops, if you know what I mean.

Tue, 06/19/2012 - 23:02 | 2541807 Stuart
Stuart's picture

bullish?  Rarely has sentiment in the sector been so depressed.  

Tue, 06/19/2012 - 18:38 | 2541070 radocracy
radocracy's picture

I think specific "QE" only comes if interest rates start to rise. Otherwise, I expect a continuation of Twist with perhaps a statement extending the ZIRP end-date.

Tue, 06/19/2012 - 18:43 | 2541080 Yen Cross
Yen Cross's picture

radocracy would you consider that priced in?

Tue, 06/19/2012 - 18:39 | 2541071 Alpo for Granny
Alpo for Granny's picture

Gonna head to the fabric store for some needles and thread...


Tue, 06/19/2012 - 20:23 | 2541366 Quisat_Sadarak
Quisat_Sadarak's picture

+10 Alpo

My grandparents used to feed their dog Alpo. Fond memories. They never had to eat any of their dog food because they retired on a little piece of land where they had an orchard of fruit trees and a garden of veggies. Of course they didn't really need it because they were frugal and saved enough to live on, both lived to 98, and left their kids the remaining cash which was not too much, but impressive to be able to live that long and be responsible for themselves until the bitter end. I hope I can do the same for my family -- pay my own way.

Tue, 06/19/2012 - 23:42 | 2541932 Alpo for Granny
Alpo for Granny's picture

Amen to that brother. I think it is still doable like your grandparents today, but the only difference is to save in phyzz and not dollars. I try to live my life like my parents (like your grandparents) by living frugal in hopes of retiring before 80 like all of my friends are set to do. However, I think people are going to be FORCED into frugality and it won't bode well for those who have never lived that way. Best of luck to you man and thanks for the green.

And for the record..Alpo tastes terrible but with the chairsatan raping me while I am on fixed income, it is all I can afford....

Tue, 06/19/2012 - 18:44 | 2541079 americanspirit
americanspirit's picture

The Hong Kong Bourse just bought the London Metals Exchange. Perhaps on a whim? Ya think? Or - maybe, just maybe, they have little Benny by the short hairs and they are about to yank, hard, unless he makes it happen for them.

Tue, 06/19/2012 - 18:44 | 2541086 Yen Cross
Yen Cross's picture

 More metals demand in Asia/ concerns over regulation and transaction taxes.

Tue, 06/19/2012 - 19:12 | 2541158 knukles
knukles's picture

Maybe, just maybe, to take advantage of that Infinite Re-Hypothecation Thinamajigie Deal they's gots in the City of London.

(whistling whistfully with hands in pockets, strolling along, enjoying day)

Tue, 06/19/2012 - 18:43 | 2541082 Mordan I
Mordan I's picture

Does not matter much, up or down. Soon no human will be buying or selling anything.

Tue, 06/19/2012 - 19:06 | 2541141 francis_sawyer
francis_sawyer's picture

au contraire...

Methinks the black market will be quite lively... 

Tue, 06/19/2012 - 18:45 | 2541084 Bam_Man
Bam_Man's picture

The Gold price is being suppressed mercilessly right now and will continue to be suppressed until the debtor nations have pledged their Gold reserves as collateral for future bail-outs. Then and only then will the suppression cease (once the creditor nations have a claim on those reserves). At that point, yes - we could easily be looking at $3,000+ per ounce. What the Fed or the ECB does in the meantime will have little to no impact.

Tue, 06/19/2012 - 19:14 | 2541121 Bay of Pigs
Bay of Pigs's picture

Hey friend, long time no see. How's the view on gold over at Mish's joint these days?

Tue, 06/19/2012 - 20:12 | 2541323 RiverRoad
RiverRoad's picture

They also like to suppress it while they buy.

Tue, 06/19/2012 - 18:44 | 2541087 junkyardjack
junkyardjack's picture

In case of QE gold to $1670....

Tue, 06/19/2012 - 19:16 | 2541170 Likstane
Likstane's picture

...a gram.

Tue, 06/19/2012 - 18:51 | 2541101 Itch
Itch's picture

The day it hits $8000 you have about a week to live.

Tue, 06/19/2012 - 18:56 | 2541111 yabyum
yabyum's picture

Itch, Gold @ 8k means the wheels have indeed fallen off. It bodes of crazy times ahead.

Tue, 06/19/2012 - 19:07 | 2541145 francis_sawyer
francis_sawyer's picture

So... It's gonna hit $8,000 on December 14th?

Tue, 06/19/2012 - 19:13 | 2541159 knukles
knukles's picture

Dec 21....
When the Mayan Printer Runs Out of Paper

Tue, 06/19/2012 - 18:58 | 2541119 Mark123
Mark123's picture

Funny how that logic does not apply to ramped stocks like Apple.  Or even better Linkedin.


Of course, I don't disagree that the world will be a risky place with gold at $ get my point.

Tue, 06/19/2012 - 18:54 | 2541107 Mordan I
Mordan I's picture

When it hits $1 you will never die.

Tue, 06/19/2012 - 18:57 | 2541114 kito
kito's picture

when imaginary qe3 happens, gold will get to imaginary 2000. never ever before..................

i suggest that tyler begin posting all waste of space, cant see past their nose bank analyst opinions in a different section of zh, perhaps under fiction, or maybe comedy, or perhaps tragedy....this way the newcomers dont confuse goldman sachs predictions for qe, or citifeds 14 different euro scenarios, or socgens predictions of 8000 gold AS SOMETHING NOTEWORTHY OR LEGITIMATE...............


Tue, 06/19/2012 - 19:21 | 2541168 midgetrannyporn
midgetrannyporn's picture

the list of those who would be excluded is way longer than that.









btw, your comments are much improved since day 1. kudos kito.

Tue, 06/19/2012 - 18:57 | 2541115 Justaman
Justaman's picture

Unfortunately, as long as the PDs own the gold market and control free money, the price of PMs will not break out.  Its QE 100 at this point, just not under "QE".  Our money is all overseas bailing out the Europeeans.  JPM had to sell assets to cover their stupid derivative loss.  Once the PDs lose the ability to borrow at 0%, gold will go higher.  Until then,price suppression is the name of the game.   


Tue, 06/19/2012 - 18:58 | 2541118 Curt W
Curt W's picture

I give a 100% chance that Gold will be between $0 and $10,000 one year from today.

About as good of a prediction as SocGen

Tue, 06/19/2012 - 18:58 | 2541120 marginview
marginview's picture

every day ZH says gold is going up with ever more articles from the chancer from Goldcore or articles from the never right accept in hindsight constantin gurdgiev but it hasn't budged above 1650 for an age. May be one day the clock will be right and hold over 1900 for more than one second.

Tue, 06/19/2012 - 19:00 | 2541124 alfred b.
alfred b.'s picture


     ....and to what would that bring silver at??



Tue, 06/19/2012 - 19:02 | 2541128 Mark123
Mark123's picture

I think a better way to say it is "how worthless is the fiat currency?"....try pricing other real stuff in Gold (like the Dow). 


For Gold to get to $ are talking about loss of faith in the currency....NOT a solid currency AND gold at $8000.  Even noe, with gold around $1600 it is flashing a warning sign about the currency, yet the average Joe is just not aware of it since he can still trade $'s for cheap food and entertainment.

Tue, 06/19/2012 - 19:09 | 2541152 francis_sawyer
francis_sawyer's picture

So what happened in 1980 then?

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