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Citi Predicts Gold At $3400 In "The Next Two Years", Potential For Move As High As $6000

Tyler Durden's picture


Following today's margin call anticipating, liquidation-driven rout in gold, the weak hands are, as the saying goes, puking up blood. Which may not be a bad thing - after all, sometimes a catharsis is needed to get people away from potentially toxic paper exposure which very likely has been hypothecated repeatedly via the same channels we discussed last week when exposing the MF Global-HSBC "commingled gold" lawsuit. But what about the future? Well, nobody can ever predict it, but at least we can sometimes look at charts in an attempt to glean a pattern. Which is why we present the just released slide deck from Citi's FX Technicals group titled "The 12 Chart of Christmas" which has some blockbuster predictions about the coming year, chief among them is without doubt the firm's outlook on gold which they see at $2400 in the second half of 2012, and moving "toward $3400 over the next 2 years or so." So for those looking at today's price action, consider it an opportunity to roll out of paper exposure and into gold, because the more deflationary the environment gets, the more eager the central planning cabal will be to add a zero (which in our day and age of primarily electronic money can be done with the flip of a switch) to the end of every worthless piece of monetary equivalent paper in circulation. And that's a 100% certainty.

From Citi:

While we remain cautious on Gold in the near term and believe that we could correct lower towards $1,600 and possibly re-test the $1,550 area we continue to believe that the bull market remains intact. As with the Equity market we believe that 2012 may be reminiscent of 1978 when Gold rallied nearly 50% off the 1977 close. Such a move would likely put Gold in the $2,300-2,400 area in the 2nd half of 2012.


On a longer term basis we expect even higher levels and target a move towards $3,400 over the next 2 years or so. We are not yet on board with the idea of a move with the same magnitude as seen in 1970-1980 when the last spike in Dec 1979-Jan 1980 saw Gold almost double in price as Russia invaded Afghanistan. Such a dynamic would suggest a move above $6,000 but we prefer to take a more conservative stance and look for a move similar to that seen without that final event driven push at the high which was a “blowout top” in Jan. 1980.

Many more charts coming shortly....


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Wed, 12/14/2011 - 16:56 | 1980345 Smiddywesson
Smiddywesson's picture

I hate to say so MfN, but I agree.  I don't think the current monetary system has two years left in it either. 

1.  I'm wrong, they keep everything on an even keel and see a @20% increase in gold prices as has been the game plan of TPTB for years, or

2.  The system starts to collapse and TPTB shift into End Game.  That includes hitting gold with more than just the restrained attacks we saw today, because they are restrained, holding back just enough to prevent physical and paper from decoupling.  Before this is over, you are going to see everything thrown at gold, margin hikes, rumors, proposed law changes, you name it, because at that point, the game is over anyway and TPTB are going to shake as many out of their positions as possible.

I see version two in the next few months.  They can always print and forestall the collapse, but their willingness to print is in question because of Bernanke's stated game plan in his helicopter speech is to revalue gold, and THEN print.  Don't listen to me, listen to the Bernank:

"The devaluation (of gold) and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly."

So, now you know why they won't print prior to the revaluation of gold, and why the won't revaluate prior to them owning as much gold as possible.  Therefore you are not going to get the kind of price appreciation you crave before the Bernank and friends finish buying, and that buying is likely to continue up to the brink of a total systemic collapse.  The only printing you are going to see up until the point where they unveil the new system is the smallest amount possible to kick the can.

In fact, you are liable to get your heads bashed in as TPTB unleash a scorched earth policy in the PM markets immediately before announcing the revaluation of gold and super duper printing.  I have cash in hopes of scooping up deals at this point, but I have physical in hand because nobody can time it perfectly and there may be no gold available to buy.

Wed, 12/14/2011 - 17:02 | 1980395 mayhem_korner
mayhem_korner's picture



Well articulated, SW. 

Wed, 12/14/2011 - 22:29 | 1981719 Crisismode
Crisismode's picture

Well articulated indeed.


However, what provision have you made for Official Confiscation?


Think that could not possibly happen?


Think again.

Thu, 12/15/2011 - 16:50 | 1984690 Smiddywesson
Smiddywesson's picture

Yup, green for you.  Confiscation is possible, but my GUESS is it won't be necessary.  No act of perfidy would surprise me at this point, but my thinking is this:

  1. They are kicking the can so they DON'T have to confiscate.  If they wanted to confiscate, why wait while the gold bugs vacuum up physical? 
  2. There are no gold coins in circulation that need to be surrendered by the population like in the 30s.
  3. Small regional banks, the targets of confiscation in the 30s are not sitting on piles of gold.
  4. They can take your wealth through taxation as easily as through confiscation, so why promote a confrontation with people?  Steal it from them or their heirs.
  5. Rich connected people have gold, and they don't want it confiscated, however they can easily avoid tax laws, so confiscation isn't the preferred method to get the gold of the little people like us. 
  6. Small potatoes.  Most Americans don't have any physical at all.


Wed, 12/14/2011 - 17:05 | 1980415 trav7777
trav7777's picture

you were probably saying this 2 years ago...even Faber was

Wed, 12/14/2011 - 18:32 | 1980773 tmosley
tmosley's picture

I was saying "buy silver" THREE years ago.

As if any long term silver holder would sweat something like this, even if they thought the paper markets weren't going to decouple from physical.

Thu, 12/15/2011 - 00:07 | 1982055 trav7777
trav7777's picture

you were saying "buy silver" three WEEKS ago too, idiot.  And you cost anyone who listened to you a lot of money.

You are here in this echo chamber because it's the only place on the planet anyone will cheer what you have to say.  You're like a lot of the regulars here, looking for group affirmation.  That includes CogDis and a bunch of other people.

So maybe you lie.  I don't know if you're stupid enough to believe that it was a good idea to buy at $49, but you sure said to and maybe that is because you're addicted to the up arrows you get from the people even dumber than you who "want to believe."

You're an interesting psychological study, but not a particularly exceptional one.  People who will sell their credibility for adulation are a dime a dozen.

Thu, 12/15/2011 - 00:34 | 1982119 tmosley
tmosley's picture

So?  I think it is going to be a lot more valuable in the future.  I have told people to cost average.

But you are too stupid to know what an "average" is, so I can see where your hosility comes from.  You think you can only buy once, and you have to sell whenever there is a dip.

I'm flattered by your imitation of me analyzing your psychology.  Too bad you know exactly shit about the subject.  It's like watching a four year old pretend to drive.

Wed, 12/14/2011 - 18:51 | 1980847 youngman
youngman's picture

"but I have physical in hand because nobody can time it perfectly and there may be no gold available to buy."

Exactly...I think it will be an overnight event.....and you will not be able to play in the game the next will have been played and you either you have it now at $1700 1800 1900 0r whatever...cause you will not be able to buy any at $5,000 10,000, 20,000

Wed, 12/14/2011 - 19:31 | 1980997 pakled
pakled's picture

"The devaluation (of gold) and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly."

I must respectfully disagree with you on this point smiddy. Ben is refering to history in that statement, not to his options today. With gold no longer being fixed to the USD they don't have the same means to devalue gold as back then. The USD is not backed by anything, so there is nothing it can be officially devalued against. Now, we 'print' to devalue. And I suspect that the recent knockdown in the PMs is mostly to do with forced liquidatons. They don't need to hurt gold as much as we may think... they need to water down the currency, and a drop in the price of gold in today's environment does not accomplish that. Make sense?

Thu, 12/15/2011 - 02:00 | 1982281 wee-weed up
wee-weed up's picture

Here's a different take:

Bernake's holding off on printing is also causing the stock market to go down, down, down. This doesn't help get his master, Obama, reelected. If Obama loses in 12 short months, Bernake may end up being like the baby who gets thrown out with the wash. He can't afford to wait to print later if there's a possibility he'll get fired first.

Wed, 12/14/2011 - 16:33 | 1980221 Hippocratic Oaf
Hippocratic Oaf's picture

Where's Robo?

Wed, 12/14/2011 - 17:49 | 1980615 akak
akak's picture

The same place he always is --- in his mother's basement.

Probably masturbating to his "I heart the Bernank" poster.

Wed, 12/14/2011 - 16:33 | 1980223 dark pools of soros
dark pools of soros's picture

1000% certainty  - and counting

Wed, 12/14/2011 - 16:37 | 1980227 Stax Edwards
Stax Edwards's picture

I smell onions.

I am impressed with the chart work also.  U should have used crayon for better effect IMO.

Wed, 12/14/2011 - 16:34 | 1980230 chinaboy
chinaboy's picture

This is shaping up to be an era when investors beat traders.

Wed, 12/14/2011 - 16:35 | 1980234 Bastiat009
Bastiat009's picture

Citi thought that subprime lending was a great idea. I don't know if I want to trust their forecast. If you have been bailed out, you are not trust worthy.

Wed, 12/14/2011 - 16:35 | 1980237 kralizec
kralizec's picture

What's the standard unit of measurement again?

Wed, 12/14/2011 - 16:37 | 1980247 Nate H
Nate H's picture

Tyler. Our paper money isn't worthless. It's just worth less. Too many claims on our natural resources and productive capital. But barring a disruptive event or social instability dollars do relate to some positive underlying value

Wed, 12/14/2011 - 17:02 | 1980398 Spitzer
Spitzer's picture

the bubble in western bond markets backstop the value of these currencies. When that bubble pops, western currencies will be living in the real world. The same world that the Jamaican dollar lives in. Is the Ja worth nothing ?  guess not but its just a transactional currency. Nobody saves in it, nobody will save in western money

Wed, 12/14/2011 - 16:37 | 1980248 silverserfer
silverserfer's picture

TD Ameritrade invest with confidence bitch. Start an account with $10000 and receive $10000 worh of golde* etfs that like gold but filled with delicious chocolate instead! 

Wed, 12/14/2011 - 16:37 | 1980249 clones2
clones2's picture

I heard a rumor for a move to Infinity....and Beyond!

Wed, 12/14/2011 - 16:38 | 1980250 kito
kito's picture

this just in, kito predicts C at $1.29 in two to three years..........

Wed, 12/14/2011 - 16:42 | 1980274 mayhem_korner
mayhem_korner's picture



In three years, Citi will trade at $500/share...but a loaf of bread will cost you twice that.  :D

Wed, 12/14/2011 - 18:34 | 1980779 tmosley
tmosley's picture

Nope, it will be "Govbank" and it won't trade.  You will be forced to buy shares with your Social Security Taxes.  But don't worry, "Govbank" shares can only go up!

Wed, 12/14/2011 - 16:43 | 1980276 WonderDawg
WonderDawg's picture

I'll be happy if they're below $20 by January. That would put some coin in my stocking.

Wed, 12/14/2011 - 16:44 | 1980290 mayhem_korner
mayhem_korner's picture



Yer don't have to wait to January to open yer stockin'!

Wed, 12/14/2011 - 17:13 | 1980462 WonderDawg
WonderDawg's picture

That would be great, I'd love to open my stocking tomorrow and see Citi at $20.

Wed, 12/14/2011 - 16:45 | 1980294 Pladizow
Pladizow's picture

Considering the prediction on gold came from Citi, it would be more appropriate if the prediction on Citi came from KITCO.

Wed, 12/14/2011 - 17:04 | 1980409 mayhem_korner
mayhem_korner's picture



I've been meanin' to say this for some time, now, but your new avatar leaves a lot to be desired.  That is all.

Wed, 12/14/2011 - 16:39 | 1980252 campag
campag's picture

hope they have taken Paulsons belt and shoe laces away.

Its broken the 200 day ma - more down side almost certain.

Long and many will be now out the money get out

Wed, 12/14/2011 - 16:40 | 1980256 Piranhanoia
Piranhanoia's picture

I got it,  they are talking about the paper gold hypothecautionary.  Even better, they expect to be around in two years,  priceless.

Wed, 12/14/2011 - 16:45 | 1980292 FranSix
FranSix's picture

They used to call pharamicists hypothecaries.  But that was then.  This is now.

Wed, 12/14/2011 - 16:47 | 1980306 FranSix
Wed, 12/14/2011 - 17:05 | 1980418 mayhem_korner
mayhem_korner's picture



Apothecary = pharmacist; Hypothecary = street dealer

(I know it's weak, but be nice cuz I green-arrowed you for the mia culpa)  :D

Wed, 12/14/2011 - 16:40 | 1980259 prains
prains's picture

$6000 gold = indefinite detention

Wed, 12/14/2011 - 17:22 | 1980498 falak pema
falak pema's picture

If Gold reaches 6000 then Bernanke and the FED will die in a zombie tomb as it means the economy is dead. As BK said, the MArket today IS the economy; as the market is a ponzi, the economy is also a ponzi. Gold at 6000 means its a fact that the market recognises. SO, goodbye FED and goodbye fiat kingdom of greenback USD, realm of FED, become dodoland.

Wed, 12/14/2011 - 16:41 | 1980266 TheSilverJournal
TheSilverJournal's picture

The entire banking system is on the verge of there's a rush into paper.

The entire western world is on the verge of there's a rush into government debt.


My only conclusion is that the world is made up of a bunch of masochists. As for me, I like pleasure and not pain. I choose to make sure I'm protected when all of this craziness implodes.

Wed, 12/14/2011 - 16:55 | 1980350 Quinvarius
Quinvarius's picture

I think that for the most part, the system is incapable of preparing for an event that will end the system.

Wed, 12/14/2011 - 18:56 | 1980859 youngman
youngman's picture

CNBC just ran a ticker that USA Money Market funds dumped 260 billion of EU the last few who bought them?????

Wed, 12/14/2011 - 16:41 | 1980267 clones2
clones2's picture

Would be curious to see a chart of Gold Price versus money supply...   See if there's an obvious correlation.

Wed, 12/14/2011 - 16:46 | 1980298 Pladizow
Pladizow's picture

One and the same!

Wed, 12/14/2011 - 16:43 | 1980277 outamyeffinway
outamyeffinway's picture

Hide this from Roubini the weenie.

Wed, 12/14/2011 - 16:43 | 1980282 sabra1
sabra1's picture

those fema friendly family camps, are work camps, where, each family will have a daily quota of money printing! or else!!!

Wed, 12/14/2011 - 16:49 | 1980283 Strut
Strut's picture

We saw a 30% price drop during the 2008 near-collapse. I think we can easily see $1400 even if we don't have a default of a state or big bank. If we do see a default, I think $800-1000 is possible as everyone moves to cash, deflating EVERYTHING. Only once we deflate, and the presses take over, will we see prices shoot up again.


Don’t fret over fiat gold prices, think of it as a buying opportunity. Gold = wealth preservation.


Wed, 12/14/2011 - 16:44 | 1980289 Stax Edwards
Stax Edwards's picture

Vaseline futures catching a bid

Wed, 12/14/2011 - 16:45 | 1980291 clones2
clones2's picture

For a minute I though this was this "BAC 2x Inverse" etf...

Wed, 12/14/2011 - 16:51 | 1980301 earleflorida
earleflorida's picture

"Let's Get Physical",... yeah baby!


Wed, 12/14/2011 - 16:47 | 1980304 My Taint
My Taint's picture

Keep pumping you morons. Maybe gold can warm you on these cold winter nights. Oh wait, it doesn't burn either.

Wed, 12/14/2011 - 18:06 | 1980687 tmosley
tmosley's picture

Yes, gold is bad because it is eternal.  That's why the Pharaohs of Egypt buried themselves in paper-mache sarcophagi.

Wed, 12/14/2011 - 21:42 | 1981529 XenoFrog
XenoFrog's picture

You sure told us.

Wed, 12/14/2011 - 16:47 | 1980308 hannah
hannah's picture

remember that when you rob a jew. they carry a small bag of gold around their neck......they will try and give you a 'fake' bag of gold first...make sure you get the real bag of gold.

Wed, 12/14/2011 - 16:54 | 1980343 earleflorida
earleflorida's picture

a 'southpark' fan,... i see


Wed, 12/14/2011 - 16:47 | 1980309 AmazingLarry
AmazingLarry's picture

CRIMEX gold? You forgot a decimal point. $34.00. About the price of a gallon of gas when Benflation get some new toner cartrages. 

Wed, 12/14/2011 - 16:49 | 1980316 Zola
Zola's picture

I call BS and manipulation- the action in 2011 just doesnt make any sense. You can try to rationalize it all you want but fundamentals point to a rise in gold and fall in equities.

Wed, 12/14/2011 - 17:38 | 1980572 Strut
Strut's picture

Sorry, but “normal” fundamentals don’t apply in this type of market. In the world of nothing but IOUs leveraged 30, 50, 100x against inflated, near worthless assets, the only thing anyone can do is (fire)sell everything and get into cash safe havens. Values on everything will continue to fall until everyone finishes deleveraging.

Wed, 12/14/2011 - 16:50 | 1980320 Robslob
Robslob's picture

While all these prop desks are infinitely full of shit they probably make calls on gold like this so they might eventually get one right...

Wed, 12/14/2011 - 16:51 | 1980325 junkyardjack
junkyardjack's picture

So this means that all the banks are now shorting gold right? Time to rip off clients again.

Wed, 12/14/2011 - 16:54 | 1980328 falak pema
falak pema's picture

citi should hire Roubini as consultant; they would make a pair...of financial quants and either end of apostle spectrum.

Wed, 12/14/2011 - 16:55 | 1980352 campag
campag's picture

when was Cramers bullish Gold call?   ---kiss of death

Wed, 12/14/2011 - 16:53 | 1980338 AldoHux_IV
AldoHux_IV's picture

In a dollar funded paper market, gold will never reach that price, especially with all the [re]hypothecation in the system-- a major flush needs to happen, re-writing of policy to ensure securities aren't 'double counted', position limits, multiple exchanges providing transparency of order flow, and central banks reporting their trading activities in order for the paper market to accurately reflect the proper price.

My guess is that we'll see in the spot/physical with dealer fees being where price is most accurately agreed upon.

Wed, 12/14/2011 - 16:55 | 1980346 pasttense
pasttense's picture

What about silver?

Wed, 12/14/2011 - 17:06 | 1980364 Black Forest
Black Forest's picture

Buy some physical. Much more than Gold.

Wed, 12/14/2011 - 16:55 | 1980347 Madcow
Madcow's picture

If citi and Goldman are saying $6,000 that means they are selling and the price is going to fall below $1000. Hyper- deflation is good for the bankers because they get to foreclose on 90% of the nations homes, businesses, family farms, city parks, etc.

Wed, 12/14/2011 - 17:09 | 1980441 geminiRX
geminiRX's picture

My thoughts are that gold price has nothing to do with inflation or deflation - it rises due to collapse in confidence, which is why is headed a lot higher in coming months.

Wed, 12/14/2011 - 17:19 | 1980488 Smiddywesson
Smiddywesson's picture

If it were a market, then that would be so.  However, it's not a market.  It rises because central banks are acquiring it to push the reset button.  Since they control this non market, you won't get any more price appreciation than the 20% per annum they seem to accept, that is, until the system collapses.  THEN the collapse in confidence really kicks in.

Wed, 12/14/2011 - 17:19 | 1980485 legal eagle
legal eagle's picture

As of October 1, 2011, in order for a bank to start the foreclosure process in Nevada, the bank officer must sign and file an affidavit [under penalty of perjury] stating who owns the note and that the bank is in possession of it.  In September 4000 notices of default, in October 688.  Other states should pass the same law to stop banks from foreclosing on notes they do not own.


Thu, 12/15/2011 - 00:10 | 1982065 trav7777
trav7777's picture

the bankers DON'T OWN THE NOTES, DUDE.

the bankers are LEVERED; everything is rehypothecated and pledged 50 times to 50 parties.

Deflation kills banks...people run them and they go BK overnight.

Wed, 12/14/2011 - 16:55 | 1980349 lolmao500
lolmao500's picture

And silver will get crushed to 5$.

Wed, 12/14/2011 - 17:14 | 1980465 slewie the pi-rat
slewie the pi-rat's picture

so, a green box for ~$2.5K?

nothing to do then but try to raise the $2.5K
...when there's no money around
...or haven't you experienced that one, yet?

if you had a green box, of course, you could always sell it and get $2.5K...

Wed, 12/14/2011 - 18:41 | 1980812 tmosley
tmosley's picture

Nope.  Paper silver will be crushed to zero.  Idiots like you and Trav will be laughing the whole way down.  Then you will wake up one morning homeless on the Continent your forefathers conquered, while those who own real money will increase their purchasing power to levels undreamed of, as the true deflation of a century of technological progress returns to gold and silver, while a century of reckless depletion will increase the vlaue of silver manyfold more for years to come, until the supply of silver can be rebalanced.

Thu, 12/15/2011 - 00:12 | 1982068 trav7777
trav7777's picture


If paper silver were going down, people would buy the paper futures and stand for delivery, you motherfucking idiot, and then cash-settle as a fuckin ATM.

You are so fucking stupid.

Thu, 12/15/2011 - 00:41 | 1982129 tmosley
tmosley's picture

Clearly connect the dots is above your grade level.

Ask Gerald Celente how buying futures and standing for delivery went for him.

Here's a hint:  they stole everything from him.

You are so stupid you can't even tell when the building you are in is collapsing, preferring to insult the guy who has been warning everyone about the structural unsoundness and inevitible collapse for YEARS.

Wed, 12/14/2011 - 21:44 | 1981541 XenoFrog
XenoFrog's picture

That would be a great point to quadruple my stack.

Wed, 12/14/2011 - 17:05 | 1980420 geminiRX
geminiRX's picture

Today looked like a really good entry point on gold. CEF was on the cheap and got in.  I keep looking at Kinross thinking this company can't go much I think Kinross's low in 2008 was 8.63 - gold is worth a hell of a lot more and this company has a hell of a lot more assets now. If Kinross goes into 11 dollar territory - I will load up on this one too.

Wed, 12/14/2011 - 17:07 | 1980434 punxsutawney phil
punxsutawney phil's picture

we are still 25% above long mutli year trendlines.  Yes can keep going way higher, but another leg down of 20% or so is well within reason even in gold's longer term run.


Wed, 12/14/2011 - 17:10 | 1980449 NEOSERF
NEOSERF's picture

And likely 20% higher on the Dow that we should be as well...we will overshoot if Europe collapses more quickly than the slow motion trainwreck we have been witnessing...3)% down to about 8500 I would guess...depends on contagion to US banks...

Wed, 12/14/2011 - 17:09 | 1980444 Bob Sacamano
Bob Sacamano's picture

Is Citi a highly regarded firm with which we should entrust our financial affairs or not??   This site is very confusing when it destroys banks (Citi, GS or any other bank) in one comment, then touts some of their research which supports the official ZH position in another comment. 

Are the banks evil and not to be trusted or are they purveyors of sound financial wisdom which should be followed?  I am not sure I care too much about which it is, but seems folks should pick one and stick with it.   Seems intellectually difficult to be both. 

Wed, 12/14/2011 - 17:28 | 1980527 A Lunatic
A Lunatic's picture

Doing your own thinking again I see...................

Wed, 12/14/2011 - 19:47 | 1981052 e-recep
e-recep's picture

ZH articles always line up with gold bugs. ZH crew quotes even the highly despised Citi if it is telling you to buy gold. :-/

Wed, 12/14/2011 - 17:10 | 1980447 Shizzmoney
Shizzmoney's picture

Well there's one thing I agree with Roubini - I've been calling Citi+Goldman hacks for years!

Wed, 12/14/2011 - 17:10 | 1980448 bob_dabolina
bob_dabolina's picture

Where's that dumbfuck BayOfPigs?

He said silver was supposed to be over $50 right now. you get it yet?

Wed, 12/14/2011 - 17:36 | 1980560 HeNateMe
HeNateMe's picture

Bob - Why do you have to be an asshole?  You did the same thing a few months back.  Honestly, I don't give a rat's ass about people who gloat and rub shit in other people's faces.  You can go to hell for all I am concerned. 

Have a Merry Fucking Christmas.


Wed, 12/14/2011 - 17:45 | 1980601 bob_dabolina
bob_dabolina's picture

You must have been one of the people listening to his advice. 

Have a Merry Christmas. 

Wed, 12/14/2011 - 17:48 | 1980619 HeNateMe
HeNateMe's picture

Nope.  I am just a man who noted how much of an asshole you just proved yourself to be. 


Wed, 12/14/2011 - 18:11 | 1980700 bob_dabolina
bob_dabolina's picture

I am an asshole can't disagree. 

But I'm an asshole that was right. 

BayOfPigs is an asshole as well...but he was wrong. 

The facts are the facts. 

Wed, 12/14/2011 - 18:14 | 1980717 HeNateMe
HeNateMe's picture

Right today, wrong tomorrow.  You've heard of relativity, correct?

However, relativity does not apply to assholes.  Once an asshole always an asshole.

Wed, 12/14/2011 - 18:17 | 1980736 tmosley
tmosley's picture

Really?  When did any of the physical longs say that the paper price can't go down?

You don't see the physical supply being withdrawn from the market by all these dealers?  Sure, it might be the small ones, but even APMEX is taking double their usual time to deliver with orders placed BEFORE today's paper plunge.

Thu, 12/15/2011 - 00:17 | 1982077 trav7777
trav7777's picture

You fucking MORON, there was a guy upthread talking about a dealer selling AT SPOT, just TODAY.

Shut the FUCK UP and just ADMIT that you were fucking WRONG.

Either you are a LIAR or you are a WHORE.

The people who TOLD YOU IDIOTS that silver was a sell at 49 (i was one of them) got junked off by you silverbagholders.  Now look at you people having lost 40% of your life savings and you wanna BITCH about people coming back and rubbing it in your face when YOU were the punk bitches who made all the beef in the first place?

My post on Ag at 49 was ENTIRELY TA in nature and it still was ROUNDLY disapproved by you idiots.  NOTHING negative and NOTHING against the orthodoxy will be tolerated.  You motherfuckers are your OWN MATRIX with this shit.  Total bluepill total MSM total echo chamber.

You are JUST LIKE the fucking neighbors you decry for not wanting to hear bad news about the economy.

Thu, 12/15/2011 - 00:43 | 1982134 tmosley
tmosley's picture

You're just mad because I am right and have been for a whole year, while you are wrong, and have been your whole life.

So sad :(

Tell me, does she even let you see the kids on weekends? No?


Wed, 12/14/2011 - 18:38 | 1980799 HeNateMe
HeNateMe's picture

And when you are wrong you won't see BayOfPigs on here rubbing it in your face.  Difference between Class and an Ass.


Wed, 12/14/2011 - 22:58 | 1981848 delacroix
delacroix's picture

bay of pigs? I think he's still at the coin shop, why do you ask?

Wed, 12/14/2011 - 17:11 | 1980451 dereksatkinson
dereksatkinson's picture

Gold miners getting killed today..  Who is going to step in?

Wed, 12/14/2011 - 17:15 | 1980470 geminiRX
geminiRX's picture

Usually when these questions are asked, it is an indicator of max fear - and a good time to enter.

Wed, 12/14/2011 - 22:52 | 1981815 dalkrin
dalkrin's picture

Seemed an excellent moment to BTFD for $100.  Done and done.

Wed, 12/14/2011 - 17:12 | 1980455 hungarianboy
hungarianboy's picture

6000 in Hungarian forints? :D

Wed, 12/14/2011 - 17:21 | 1980491 Black Forest
Black Forest's picture

Why not if USDHUF goes down to 1.


Wed, 12/14/2011 - 17:12 | 1980456 papaswamp
papaswamp's picture

Wow...that doesn't signal currency debasement...those levels would signal currency collapse. Is that what Citi thinks is coming without saying it out loud?

Wed, 12/14/2011 - 17:14 | 1980463 hungarianboy
hungarianboy's picture

I'm calling as low as $750 per ounce within 2 years for Gold.

Wed, 12/14/2011 - 17:26 | 1980517 Smiddywesson
Smiddywesson's picture

Me too, but only for a few minutes, then everything collapses, futures stop trading and they halt trading in the miners to halt "greedy speculators."  The next day, gold will be revalued and the printers will start, and this blob will contain a lot of happy gold bugs.

Thu, 12/15/2011 - 16:56 | 1984743 Smiddywesson
Smiddywesson's picture

In other words, if they push the price down too far, the whole system will collapse, and they will push it to the max when it all over anyways.  I would.

Wed, 12/14/2011 - 17:48 | 1980616 ohhhhhbaaaaahhh...
ohhhhhbaaaaahhhhhhhhhmaaaaaahhhhh's picture

Im calling $15000 worth of value on gold, silver at $1500, and the collapse of paper late next year. Mmkay? 


In Hungarian: Ne mondjál hülyeségeket ha nem magyarázod meg. Mmkay?

Wed, 12/14/2011 - 19:24 | 1980967 peekcrackers
peekcrackers's picture

so that would make bread 500.00  milk 340.00  shot gun 5000,00  bullets 3000.00

beer 7000.00 ?

Dose that come down 50% on black friday ?

Thu, 12/15/2011 - 05:17 | 1982430 ohhhhhbaaaaahhh...
ohhhhhbaaaaahhhhhhhhhmaaaaaahhhhh's picture

No, sorry i forgot to mention not in a inflationary scenario. Bread would be normal todays price. So yes your numbers are wrong.

Thu, 12/15/2011 - 17:00 | 1984762 Smiddywesson
Smiddywesson's picture

Im calling $15000 worth of value on gold, silver at $1500, and the collapse of paper late next year. Mmkay?

I'm calling a $750 to $15,000 turnaround in one night.  Nobody's getting on this train that isn't already aboard.  (just kidding about the exact numbers, both numbers are likely to be far too low).  And I would be very surprised if The Bernank waits until next Dec.

Wed, 12/14/2011 - 17:14 | 1980467 vegas
vegas's picture

I got only one question. Has Stolper moved over to Citi?

Wed, 12/14/2011 - 17:17 | 1980480 gwar5
gwar5's picture

Brodsky at QBAMCO says the shadow price of gold is already $9500 (based on amount of currency in circulation), so this is not a stretch by Citi. Tweeting teenie, weenie, chilibeanie.... Roubini!


Th Fed is the only lender of last resort now. Will they or won't they?  They'll need another MFG-like disaster for cover, coming soon.




Wed, 12/14/2011 - 17:22 | 1980499 hungarianboy
hungarianboy's picture

What in circulation? Damn we have a liquidity issue in the world and you guys talk still about to much money in circulation.

Wed, 12/14/2011 - 17:31 | 1980546 Smiddywesson
Smiddywesson's picture

(debt on banks balance sheet) - (amount of gold held as assets) x (price of gold under revaluation) = soon to be solvent banks. 

WaHoo!  Now fire up them printers and make us some insolvent peasants who don't hold gold. 

Wed, 12/14/2011 - 17:23 | 1980500 Zola
Zola's picture

These moron miners are quite annoying- why dont they put their div yield at 3% + - they have the cash flow to do this. This would neutralize these ridiculous selloffs.

Wed, 12/14/2011 - 17:25 | 1980509 DavidC
DavidC's picture

Just a thought but shouldn't all the problems around hypothecation etc be incredibly BULLISH for gold?


Wed, 12/14/2011 - 17:25 | 1980512 Johnk
Johnk's picture

The gold price in dollars matches the growth of the St. Louis Fed Source Base, the sum of currency in circulation, reserve balances with Federal Reserve Banks, and service-related adjustments to compensate for float.

In June 1968 the source base stood at $68.816 billion.

At present it's at $2.610 trillion, about 38x larger.

The average price for gold in 1968 was $39.31

38 x $39.31 = $1493.78. Spot gold at this second is $1574.48, only a 5% divergence.

Now for the $64 trillion dollar question: who thinks that the source base is going lower any time soon? 

Bueller?  Bueller?  Roubini?

Wed, 12/14/2011 - 17:30 | 1980538 hungarianboy
hungarianboy's picture

Gold is NOT a safe haven.

Price of gold is what one is giving for it.

Price of gold can't be determined by the amount being printed since it's stored at banks and have liquidity issues.

Wed, 12/14/2011 - 17:40 | 1980580 Black Forest
Black Forest's picture

Price of gold can't be determined by the amount being printed since it's stored at banks and have liquidity issues.

May I respectfully disagree, please. Neither I am a bank, nor I am facing any liquidity issues.


Wed, 12/14/2011 - 17:55 | 1980638 DavidC
DavidC's picture

I guess, from your comments today (some of them gloating) that you're not a fan of gold.

However, when you write "Price of gold can't be determined by the amount being printed since it's stored at banks and have liquidity issues", you seem to contradict everything you've been saying (including what would seem to be a contradiction within that very sentence). Please explain.


Wed, 12/14/2011 - 17:58 | 1980651 ohhhhhbaaaaahhh...
ohhhhhbaaaaahhhhhhhhhmaaaaaahhhhh's picture

Gold has been a safe haven since gold is gold. Forget about PRICE! Price in what? paper? Fuck that! Who needs paper when its value and rarity is like my shit wiper.

It's rare, can not be created by Shalom, can be eaten... what more do you want?

Paper is good for ass wiping.


You dont need to hate only because you play the paper game.

Wed, 12/14/2011 - 19:00 | 1980880 tmosley
tmosley's picture

I think about price all the time.  That is, the price of gold in any of the hundreds or thousands of failed currencies out there.

Wed, 12/14/2011 - 17:30 | 1980533 BLOTTO
BLOTTO's picture

The Illuminati love Gold. So us 'PM hoarders' are going to be just fine.

Go(l)d made gold - it cant be manipulated or perverted by evil - no matter how powerful they think they are.

Wed, 12/14/2011 - 17:35 | 1980553 sschu
sschu's picture

I have heard/read that the Arabs price their black gold in ounces of AU.  Hence if WTI is $200 in 1 year and well over $300 sometime in the future, gas is $8 / gal and then $16.

Sorry gold bugs, if this is so, forget about anything else, the US and world economy is wrecked.  Life as we now live it changes dramatically. 

This is Bennie's conundrum, he cannot print like he wants because the lifeblood of the world economy, oil, will not let him.  Not sure how this ends, but however it does, the pain will make the 1930s look tame.


Wed, 12/14/2011 - 17:56 | 1980646 ParkAveFlasher
ParkAveFlasher's picture

I copied your text and pasted into google, it spit out lots of results from 2008. 

Don't mind me, I'm too dull to follow daily/weekly trends besides I have a day job and my PM stash is modest.  My humble observation is that gold is down but only where it was six months ago when it dawned on me to start buying.  Silver was what, 50-ish then but I didn't buy until halfway down the last big downer. 

In any case my feeling is that spot price will keep bouncing off that real, physical gold floor and the harder the chop, the higher the bounce.

Wed, 12/14/2011 - 18:02 | 1980666 DavidC
DavidC's picture

Read Mish's piece today about how gold performs in deflation.

The move today started at just about the open and gold got hammered. It'll be interesting to see what happens when the Far East opens.

My take - the US and western CBs want the price of gold low so push it down on the opens. If Russia/Far East really want to win this war with the West all they have to do is keep buying gold - the West will bankrupt itself completely trying to keep a lid on the price of gold.

If the Arabs price Oil in gold it's because they know the value of it.

If today's move had been in the stock markets (gold down over 3%) we would have seen some form of intervention.


Wed, 12/14/2011 - 20:18 | 1981172 sschu
sschu's picture

I would rather hold gold/silver than fiat of course.  But it is foolish to think that these guys are just going to start printing like VonHavenstein (sp) and drive the price up by a factor of 4.  

It makes sense that gold will retain its value in a deflationary environment better than fiat.

My point is if gold reaches $3,000+ our problems are very serious.  It is unrealistic to expect the world to be as it is now and have gold at 2.5 times its present price.

Good stuff.


Wed, 12/14/2011 - 17:35 | 1980554 gdfghfdg
gdfghfdg's picture

All debt in the world is in US dollars and when the credit crunch accelrates than people will be forced to sell their gold.

So there will be more selloff befor the metal sky rokets

Noone know how low it will go.

Maybe 250 an ounce who knows

Thu, 12/15/2011 - 17:07 | 1984796 Smiddywesson
Smiddywesson's picture

I don't think the system is healthy enough to survive gold dropping to $250, there'd be a collapse before that happened.  Still, your reasoning is sound.  Ben and company will continue to try and keep gold down and the markets up, but the pressure for a sell off continues, and sooner or later they have to push the reset button with the gold they have on hand.  The next day, gold will be very, very valuable.

Wed, 12/14/2011 - 17:36 | 1980557 TheSheepWolf
TheSheepWolf's picture

20yr cycle is obvious... Who cares about price of gold in dollars in 2020 anyways? 

Wed, 12/14/2011 - 17:36 | 1980559 Silversinner
Silversinner's picture

Monsterboxes for sale.

Discount bitchez.

Catching the falling knive again

and increasing my real wealth

again and again.Learned to get

exited when prices crash.



Wed, 12/14/2011 - 17:36 | 1980561 JustObserving
JustObserving's picture

All the gold mined in human history is 5.3 billion ounces.  Maybe 2 billion ounces is available as gold bullion worth $3.15 trillion today.

That number is tiny compared to US debt of $15.115 trillion, unfunded liabilities of 116.81 trillion and a yearly growth rate of debt and unfunded liabilities of $8.7 trillion a year ( The US is not alone.  Europe and Japan have similar massive debts and unfunded liabilities. So we are looking at $50 trillion in debt and $200 trillion in unfunded liabilities in US, Japan and Europe.

Yet gold keeps falling and is down $84 today. When real estate iin China and Hong Kong is easily worth north of $150 trillion, why are the Chinese not buying like crazy?  Why are the Europeans who are withdrawing money from banks in record numbers not buying gold and other precious metals? Something does not compute here.


Wed, 12/14/2011 - 17:52 | 1980612 Black Forest
Black Forest's picture

This system behaves non-linearly both in temporal and behavioral respect. Any short term drop (or surge) of something will turn out to be neglectable in the long run.

Buy physical and "sustainable" shares.


Wed, 12/14/2011 - 17:43 | 1980589 devo
devo's picture

What would you guys suggest as the best strategy for someone holding physical but who wants to short gld for protection? I realize buying puts, but do I wait until vix drops? I feel if I buy a put now there's too much IV and I'll lose on both the physical and the put if gold goes down (assuming the Vix remains the same or lowers).

Wed, 12/14/2011 - 19:34 | 1981005 TheFourthStooge-ing
TheFourthStooge-ing's picture

If you're holding physical, the only protection you need is physical. If you fuck around with paper, you're going to get burned.

So gold dropped a little bit - so what? In 2008 it dropped from around $1000 to a little above $700. The Henny-Pennys panicked and sold. I laughed and bought a little more, and was happy that I got it for less than the $800 I last bought at.

If you have physical gold, you don't need financial protection. This isn't about trading, it's about investing. You'll be fine as long as you don't puss out.


Thu, 12/15/2011 - 03:53 | 1982374 devo
devo's picture

Okay. But I got in pretty high (1700). I'm already taking it on the chin. It would be nice to offset it with options. Buying puts rarely works out, though, due to IV. Just wondering what ideas people had...

Wed, 12/14/2011 - 17:43 | 1980592 jmcadg
jmcadg's picture

Waiting for JP Morgue to predict $100 silver

Wed, 12/14/2011 - 17:44 | 1980599 gdfghfdg
gdfghfdg's picture


It is a vicious game and you can loose you shirt.

The game is rigged and the house takes it all.

Wed, 12/14/2011 - 17:46 | 1980600 devo
devo's picture

I knew gold and silver were in for trouble when JP Morgan purchased MF Globals stake in metals. I wrote about it in the comment area but nobody said anything. It would be nice if ZH could tell us more about that.

Thu, 12/15/2011 - 17:13 | 1984839 Smiddywesson
Smiddywesson's picture

If you believe that the system cannot be saved and that the petro dollar/debt based system of global trade is coming to an end, you don't have to hedge your physical. 

If you think the central bankers of the world can somehow pull off a miracle and service the debt we have run up, AND untangle the $707 trillion worth of derivative, the leverage, and the hypothecation problems, as well as the aging of the population in a growth based economic world, then you should hedge.

My money is on the former and I'm willing to risk wearing a rain barrel for clothes based on my disbelief they can fix this.  No way.

Wed, 12/14/2011 - 17:45 | 1980604 warezdog
warezdog's picture

The paperbugs will keep buying until they're burned so badly they have no paper left in which to buy paper. People can give me shit all they want about silver tanking and laugh at me for buying @ $33 last week. I however just laugh to myself knowing most of mine was bought @ $17 and tell them to go fuck a duck.

Unlike paper PM you don't lose on precious PM unless you're dumb enough to sell for a loss whereas paper PM may FORCE you to take it in the ass whether you want to or not and in the meantime I'm happy to buy the dips below $40 because sooner ALL paper money becomes worthless.

Wed, 12/14/2011 - 17:49 | 1980621 BLOTTO
BLOTTO's picture

It really truly sucks being ruled by sun-worshipping fags. The illuminated ones - royal bloodline. They think its their Divine right to rule over us.

Wed, 12/14/2011 - 17:52 | 1980633 chump666
chump666's picture

Citi is kicking ass at the moment with their client notes.  Very impressed.  Seems like the bank got smart after the 2008 ass kicking.

Wed, 12/14/2011 - 17:56 | 1980645 guns and gold
guns and gold's picture

With regards to TD's comment about rolling from paper to physical - would it behoove one to move from GLD to PHYS? 

Wed, 12/14/2011 - 20:46 | 1981318 TheFourthStooge-ing
TheFourthStooge-ing's picture

 If, for some reason, you absolutely must keep it in paper, leaving it in GLD would be fucking your own face in the ass.

Didn't you see the the article on Friday about HSBC suing MFuckers Global over who actually owns a few gold bricks (and some silver ones as well)? Did you read the GLD prospectus, the one that names HSBC as the custodian and tells you that HSBC may farm out this role to sub-custodians, the same HSBC that is now suing to get back the gold bricks they left in the custody of MFuckers Global?


Look, if you didn't read Friday's article, go do it now:

While owning PHYS is not the same as holding gold metal in your hand, I think it is less likely than GLD to result in a financial ass rape with a fence post.


Wed, 12/14/2011 - 18:00 | 1980656 1929agin
1929agin's picture



Was that NEGATIVE -3400 ? Simply look at Oil, commodities across the board confirm DE FLATION crash...............


Give it four to five years to bottom...


Deflationary credit crash begins...


Wed, 12/14/2011 - 18:01 | 1980663 topcallingtroll
topcallingtroll's picture

Pretty weak speculation.

"We think it will do like the 70's"

My 11 year old uses that kind of logic.
I guess he is qualified to be a citi analyst.

Wed, 12/14/2011 - 18:05 | 1980683 KickIce
KickIce's picture

I think it's pretty easy.  if they print then obviously commodities increase.

If they don't print the system collapses and commodities will be needed for trade.  PMs maybe ok but food is best in my opinion.

Side note.  You can bet that central banks will start buying gold when it bottoms.  (And they do know when to buy because they will know when Ben will start printing).  They also might be doing this hoping that enough people will sell to save the Comex.

Wed, 12/14/2011 - 18:05 | 1980684 navy62802
navy62802's picture

Another way to restate the Citi prediction is that they expect the US dollar to be worth approximately 50% of what it's worth now within the next 2 years. Which means that they expect MASSIVE money printing and continued rounds of QE. I think that's actually a pretty reasonable prediction based on the past actions of the Fed.

Wed, 12/14/2011 - 18:13 | 1980710 navy62802
navy62802's picture

Oh, and when major world banks begin to go bankrupt and experience forced liquidations, all of that excess capital that the central banks have been "injecting" into bank balance sheets will finally be unleashed into the real world ... the consumer market. And all this talk about deflation will go out the window. We will instead be hit with instantaneous hyperinflation like a brick falling from the sky.

Wed, 12/14/2011 - 18:14 | 1980720 KickIce
KickIce's picture

Agree, they're just waiting for their next Lehman moment (Greece) that will cause the people to beg for additional money printing.

Wed, 12/14/2011 - 18:14 | 1980716 iLoveMisesToPieces
iLoveMisesToPieces's picture

Do you like to pay more or less for things?  Central banks are no different.  Suppress the price with fiat and buy the physical at a discount.  They're in no rush and could care less about the day to day price swings.

Wed, 12/14/2011 - 18:17 | 1980733 americanspirit
americanspirit's picture

Key phrase "We are not yet on board with the idea of a move with the same magnitude as seen in 1970-1980 when the last spike in Dec 1979-Jan 1980 saw Gold almost double in price as Russia invaded Afghanistan."

So Citi is not yet on board with the idea of a regional war somewhere in the next two years? Cockeyed optimists, what?

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