Don Coxe's Fascinating Take On Why The Time For The US To "LBO" The Gold Market Has Arrived

Tyler Durden's picture

A few short weeks ago we described the transition of America from a government "on behalf of the people" to one "in control of the people" catalyzed, as Bill Buckler, put it simply, by one simple event: the confiscation of America's gold, and the ushering in of the welfare (or "promise") state, the same welfare state that now is supported by a system that no matter how hard one denies, is nothing but a ponzi scheme. Today, we follow up that article, with a very thought-provoking observations by BMO's Don Coxe, in which he describes that just like in the time of FDR, for whom the creation of a "mild" inflation was a prime prerogative to offset the depressionary deflation gripping the land, the moment for a brazen gold revaluation by none other than the US government has arrived. Unfortunately, it likely also means that any scheme in which the government opens a buy/sell gold window at a substantially higher price point, will mean that very soon, either by guile or by force, the US government will once again be the prime and sole owner of all the gold. As Coxe says, "The gold bugs have long proclaimed their own version of the Golden Rule: “He who has the gold makes the rules." By that standard, Barack Obama could become the leader of the world overnight." And while it is described in much more succinct detail below, in summary, Coxe's point is that the time for a government "LBO" of the gold market, one in which every last ounce is extracted from the skittish public, in exchange for pseudo-equivalent assets such as gold-backed bonds, has arrived. The only question is what the acquisition price of the risk-free alternative to fiat would be, and hence how much higher will investors push the price in anticipation of the inevitable 25% take out premium. Once the public realizes that this is the endgame, and that the buyer of only resort will be none other than Uncle Sam... then look out above.

As for the context of Executive Order 6102.2, Coxe notes: "When nearly all OECD economies are running huge deficits at a time of near-zero interest rates, and nearly all governments are looking for ways to raise revenues without imposing economy-unfriendly taxes, why don't the big holders revalue their gold to, say, $2,200 an ounce and declare themselves willing sellers at that price—in bars or in bonds backed by gold—and willing buyers at, say, $2,000? Roosevelt revalued gold from $20.67 an ounce to $35 and declared that the US was a buyer and seller at that price. He also made it illegal for US citizens to own gold. By the end of the Depression, most of the world's visible gold reserves were in Fort Knox."

Most importantly, Coxe observes that "now is a good time to lock in the gold bull market by monetizing the  nation's holdings through various strategies and vehicles forty years after Nixon uncapped gold and 78 years after Roosevelt boosted it 70%. Why don't the governments bring out their gold and use it to back their bonds? Obama should, in our view, try to find one non-Keynesian economist who understands gold to advise him. We’re sure he could get an old-fashioned scholar from the University of Chicago to help him out if he made a few calls."

Must read.

Governments, Central Banks, and Gold

Perhaps the most enduring paradox in all finance is the way major governments and central banks treat their gold holdings: they ignore them.

When nearly all OECD economies are running huge deficits at a time of near-zero interest rates, and nearly all governments are looking for ways to raise revenues without imposing economy-unfriendly taxes, why don't the big holders revalue their gold to, say, $2,200 an ounce and declare themselves willing sellers at that price—in bars or in bonds backed by gold—and willing buyers at, say, $2,000?

Roosevelt revalued gold from $20.67 an ounce to $35 and declared that the US was a buyer and seller at that price. He also made it illegal for US citizens to own gold.

By the end of the Depression, most of the world's visible gold reserves were in Fort Knox.

Apart from all the jobs created in Nevada and other gold-mining states, this attempt to introduce controlled inflation at a time of surging deflation was at least mildly salutary. Having most of the world's gold also proved extremely useful in helping to finance the recoveries in war-torn Western Europe.

Gold's roaring run to $1800 must be a huge embarrassment to the central bankers. Why should investors be rushing out of government bonds into bullion? Don't they believe us when we tell them that printing all this money isn't going to debauch the currency?

The best way to take gold out of its newfound role as moral arbiter of governments' fiscal and monetary policies may be to cap it.

Yes, captious critics would say that this is the equivalent of buying a bathroom scale whose highest reading is three pounds above the buyer's current weight.

But desperate times call for desperate measures.

The gold bugs have long proclaimed their own version of the Golden Rule:

“He who has the gold makes the rules."

By that standard, Barack Obama could become the leader of the world overnight.

Proclaiming a cap on gold and making all the gold in Western central banks' vaults available for sale—or as backing for convertible bonds—would be a blow to speculators.

Ironically, it would be good news for most gold mining stocks.

And wonderful news for gold mine prospects that are barely more than a hole in the ground.

Why?

Back in the 1930s, gold mining stocks were stock market darlings. Who else could sell everything they produced to the government at a guaranteed price?

Roosevelt was a hero to miners, prospectors and stock pushers.

It was the golden age for penny gold stocks. Anyone could take a flutter on them. There were no lotteries, and the only legal gambling was church basement bingo games. Anybody with a dream and a drill hole was able to peddle his shares, and securities regulation ranged from lax to nonexistent.

A story about an unexpected side effect of all the prospecting in that speculative era.

Management of Gunnar Gold, one of the numerous speculative stocks of the early 1940s, thought it had a promising gold deposit in the Yukon. There was some funny impurity in the ore, but it didn't seem to worry management.

Suddenly, the Canadian government nationalized the company—paying the stock market price, which was less than $2 a share. Only after the war was over did the surprised shareholders learn that Gunnar's ore was radioactive.

The uranium it contained went to a hush-hush US government operation in Los Alamos and some of it ended up in the bomb bay of Enola Gay to be dropped on Japan.

Without the guaranteed price for gold, that mine might never have been discovered.

We believe a new era in which gold was back into the very centre of central banks' operations would be a great time for gold prospecting and gold mine development.

As for the strong, well-financed producing gold mines with huge, politically-secure reserves—the Goldcorps, Barricks, Newmonts and their brethren— they would no longer be white chips: they'd be blue chips, paying secure dividends which, at a time of low-low interest rates, would be prized.

The upward revaluation would permit some of the better-endowed PIIGS to issue gold-backed bonds at minuscule interest rates. As for the US, which has more gold than anybody else, and doesn't seem to have the faintest idea why it has it—or what to do with it—Obama could apply net sales proceeds directly to the deficits.

The cap on gold would take a major bearish investment medium out of the stock market—gold bullion. For months, on the days stocks have gone down, gold has gone up.

If gold were capped and governments combined their willingness to sell gold with a ban on naked short-selling of bank shares, and on naked Collateralized Debt Swaps, governments and banks might get a breathing spell.

Why ban naked Collateralized Debt Swaps?

Because they violate the centuries-old rule for insurance products—an insurable interest. When life insurance was first created in England, companies let anyone buy a life insurance policy on anyone else. Then they found that those lives insured by people who weren’t personally related to the life insured tended to die violently. So the concept of insurable interest developed—just as the fire insurers had never let people buy insurance on dwellings in which they had no ownership interest.

AIG would never have gone down (at a cost to taxpayers of more than $100 billion), if it hadn't violated its insurance principles by going gung-ho into Collateralized Debt Swaps.

As the eminent Paul Volcker has said so often, why should economies and taxpayers be at risk for banks that get deeply into newfangled financial products? Western economies grew satisfactorily in the decades before all these monstrosities were developed, and the bank failures that happened were easily managed.

Today's announcement that UBS has apparently blown $2 billion in its trading operations is a perfect case in point: UBS had to be bailed out by Swiss taxpayers because it was levered more than 40 to one and had monstrous holdings of putrescent US mortgage paper. A great bank that had survived for more than a century as a pillar of Swiss prudence and rectitude had tried to become Goldman Swiss—and it lacked both the smarts and the capital for that remake. Less than three years later, it's due to report a quarterly loss it blames on a rogue trader. Axel Weber of Bundesbank fame is due to take charge next year of this organization whose financial structure in recent years seems to have been modeled on Swiss cheese.

As the chart shows, he's needed now.

Why do we devote so much space to making political proposals?

Because we are deeply worried that another financial crisis is coming, at a time when governments' bailut budgets are seriously constrained.

President Obama's long-awaited speech about his great plans for creating jobs was greeted with reactions ranging from boredom to disdain. It was a highly-energized and well-delivered rouser. However, all he could do is promote a new batch of "shovel-ready" projects and jobs for teachers that would be financed by higher taxes on the rich. He is seen as someone who spent $800 billion on stimulus that didn't work, and he's now largely devoid of both ideas and money.

Obama and his European counterparts look at the performance of shares of the big banks and must feel that, (as we put it in Basic Points), Naught's  Had, All's Spent.

The government-owned gold that could provide such support to the leaders in the US and Europe is a nuisance to them, because its strong performance in the marketplace is a daily reminder of the futility of their seemingly endless crisis meetings and new acronymic rescue mechanisms backed by..........what?

Bernanke has expressed a yearning for some inflation (but not in foods or fuels) to help the hapless housing market.

Obama has failed to put the economy on a growth path. Most of his Republican opponents are as doctrinaire as he—while mouthing different dated dogmas of equivalent futility.

As Reagan put it, when the nation faced similar crisis, "If not us, who? And if not now, when?" (He also summed up the Democrats' economic program pithily, "If it moves, tax it; if it still moves, regulate it; if it fails, subsidize it." That perfectly distills today's Demodogmatism. But the Republicans' dogmatic refusal to permit any tax increases—even on the carried interest of hedge fund managers who create few jobs—is equally unhelpful.

If there were ever a time to start accessing the gold Roosevelt bought at $35—and reducing endogenous risk in the global banking system—this is it.

Gold-backed bonds and gold for sale at $2,200 to all bidders would, of course, be selling off "the family silver." But desperate times call for desperate solutions. The biggest and most obvious asset Obama has is the one asset that he supposedly can't touch.

Why not?

Long-duration Gold-backed Treasurys paying, say, .5% interest would be one way of selling off much of the Treasury's hoard without swamping the cash gold market.

Those with long memories will recall when Jacques Rueff, DeGaulle's gold guru, convinced France to issue some gold-backed bonds as proof that the nation didn't face serious inflation risk. Then came stagflation and the runaway gold market and those gold-backed bonds became fabulous investments.

Most central bankers know that embarrassing story, which may preclude their willingness to make any recommendations now. To be remembered as the guy who sold gold at $2,000 in a long-term bond and gold went to $5,000 would be ghastly.

But the reason why Rueff lost so big was that Nixon closed the gold window in 1971 and then oil prices quadrupled and stagflation—which had never existed before—took charge. Under this tentative scenario, the US would transfer all bullion needed to back the bonds, and Congress would pass legislation guaranteeing those gold bond conversions until the bonds matured.

Finally, the wise, witty folk at the Leuthold Group have published the Chart of the Year showing the cumulative total return on gold vs. the cumulative total return on the S&P since Nixon closed the gold window, repealing the cap on gold imposed by Bretton Woods.

Remarkably, gold's bull market in this millennium has meant that its annualized return has caught up with the S&P—9.9% vs. the S&P's 9.8%. If you'd put a bar of gold in a vault and left it there for 40 years, you'd have slightly outperformed most equity investors. The S&P has been long proclaimed as proof of the triumph of American capitalism with its business schools, management training, and superb collection of so many of the world's greatest companies. Buy and hold the S&P and you're going to be rewarded by the very best wealth-generators. Buy and hold gold and you're as outdated as believers in the phlogiston theory.

This statistic could be used by Obama to argue that now is a good time to lock in the gold bull market by monetizing the nation's holdings through various strategies and vehicles forty years after Nixon uncapped gold and 78 years after Roosevelt boosted it 70%.

The same strategy would apply to some of the more desperate European nations. They have gold; they need to sell bonds and the market doesn't want them; their deficits are scary and they're all supposed to retrench simultaneously. Issuing long-term bonds with a fixed call on gold would make their bonds marketable.

Most of the gold sitting in vaults in the US and Europe was accumulated at significant cost to the taxpayers of the time. It is performing no usual  function at a time when it seems as if all governments—notably Switzerland—want the value of their currencies to decline. The reason nations wanted and needed gold was to back their currencies.

Pawn shops and jewellery stores report high levels of gold cashouts from middle class people who are having trouble getting by. The point of gold is that for all of history, it has been the one certain thing that can be used to buy goods and services or discharge debts.

Why don't the governments bring out their gold and use it to back their bonds?

Obama should, in our view, try to find one non-Keynesian economist who understands gold to advise him. We’re sure he could get an old-fashioned scholar from the University of Chicago to help him out if he made a few calls.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Cheyenne's picture

Gunny: Jesus H. Christ, Pyle! What is THIS!?

Pyle: A jelly donut.

Gunny: A jelly donut.

High Plains Drifter's picture

they are paying for it. you might as well eat it...........

nothing like a little creed to break it on down with this gold talk....

http://www.youtube.com/watch?v=5yY1Nrznh4I

one last breath.....

nope-1004's picture

 

If gold were capped and governments combined their willingness to sell gold with a ban on naked short-selling of bank shares, and on naked Collateralized Debt Swaps, governments and banks might get a breathing spell.

The best solution to solve a financial crisis borne out of economic malfeasance, market manipulation, gov't involvement, rigging and white collar crime resulting out of the issuance of too much fiat credit is to.... debauch gold?

Well, makes sense, since the best way to solve a debt crisis is obviously with more debt.

Huh?  Don, c'mon.

Truth is, it's capped already, just done so undercover and under the guise of "GLD".  Plus, there isn't enough gold in CB possession to even come close to outstanding liabilities.  This article makes no sense.  It's all over the place without basic consideration for what the new valuation of gold would do to the USD.

This article is rather weak.

 

Doña K's picture

The author here is advocating a new market manipulation scheme.

Let everyone buy what ever they want at whatever price they feel is reasonable to them. The government has its hands everywhere and can not even manage a lemonade stand.

If gold is tradition, so be it. If it's money, fine use it along with the dollar, euro and whatever. If it's a barbarous relic, fine let us have it at a reasonable price.

What is it? make up your mind world.

Buy Buy physical as no one will be selling at these prices again. These morons are printing money and supress the price. One of these days it will get away from them.

Just as silver went from a stable 16 to a stable 40. That was the first leg.

British sovereigns in Europe are selling strong with at a huge premium.

Have a nice day you gold bashing morons. 

 

 

Oh regional Indian's picture

Dona, here is a non-money thought for you.

If gold is the "good" heart of this 'evil" ponzi-debt system that we all abhor, then when the ponzi collapses, Gold will collapse with it. Does that make sense? it will be baby and bath-water time.

Think about that for a moment. 

Later? oh yes, much later, Gold might be "wealth" again, but it does have a rather sordid history. Not for nothing was Gollum's precious made of gold, as was Midas's "touch".

He who laugh's last...etc....

 

ORI

The Curious Case of Troy Davis

JLee2027's picture

If the Ponzi collapses, then what would Gold be valued against? It would stand alone if the dollar is gone and there would be no collapse.

Oh regional Indian's picture

Jlee, if the Ponzi collapses, there is no counter-party for Gold? But A dollar collapse would be a global event. Who will value what in what?

Currencies? bonds? Tangibles? What "exchange" rate mechanism would one apply, all the way from groceries to national debts? Whatever works? Hardly.

Gold hold's the polarity of being "sound" as opposed to "un-sound' fiat. But they exist in each other's death grip, only. It really is the same for silver too, but it might have a bit of a ways to go (up) yet, due to it having been more easily manipulatable.

And pound for pound, there is much more open manipulation of the Silver price, with JPM/Blythe etc. Why is that? Meanwhile the gold game is played much more at the CB, Government level. Why?

Perhaps the true nature and utility of both these so called monetary metals will become clear shortly (HAH!).

Till then, I'll hold my contrarian view-point. 

ORI

BorisTheBlade's picture

Jlee, if the Ponzi collapses, there is no counter-party for Gold?

Zimbabweans were trading gold for food after their ponzi inception collapsed, so there is obviously a counterparty for gold even during collapse.

Gold hold's the polarity of being "sound" as opposed to "un-sound' fiat. But they exist in each other's death grip, only.

Gold outlived many currencies throughout even recent history, hell it outlived shitloads of countries that seized to exist due to a variety of reasons. You are confusing proximity of fiat to gold for the need of gold to have value to be valued in fiat.

Oh regional Indian's picture

All points well taken Boris.

But perhaps we are beyond logic and reason now, so I'll hold my belief system in the face of some of that logic,a s profferred by you and jLee above.

ORI

BorisTheBlade's picture

What most is referring to as collapse is simply a reintroduction of reality into the construct that blossoms on ignoring it. Quite logical.

LikeClockwork's picture

DOW surely will crash through the floor this morning. Gold 500 or at least crash and the knowledgeable buy like there's no tommorrow? That's my punt of the year.

csmith's picture

Zimbabweans were trading gold for food after their ponzi inception collapsed,

 

AND other Zimbabweans were "trading" bullets for the gold held by the ones you mention. The point being that in a "Mad Max" world where the dollar is worthless, piles of bullion will be only as good as the AK-47 to back it up with.

BorisTheBlade's picture

The fact that during turmoil many people will be after gold, including those with guns, only proves it retains value otherwise why they would be after it and not fiatskis. Bullets will be worth more, sure, no argument about that.

jonan's picture

i thought the whole point of gold was the lack of counterparty risk, i guess i should sell it all and buy an asset where another party gives me some sort of guarantee...

Oh regional Indian's picture

Hmmmmmm, there are other "tangibles" in the world y'know?

One's you really CAN eat too. ;-)

ORI

jonan's picture

i have plenty of bullets, but i really need to work on my stash of beans...

I think I need to buy a gun's picture

as of october 1st 2011 ebay will no longer be allowing buyers of precious metals to obtain ebay bucks ......to buy more

RockyRacoon's picture

The cheap bastards weren't making enough as it was.   They just couldn't stomach the fact that they were subsidizing the sales of PMs.   I was doing quite well in that department!   Oh, well.   Back to square one.   Just proof that eBay is about as clueless as 90% of the population in understanding what PMs actually are:  MONEY.

clymer's picture

Agreed. The fact that the author has a very weak price-point in mind (2200), coupled with his love-fest for GS ("A great bank that had survived for more than a century as a pillar of Swiss prudence and rectitude had tried to become Goldman Swiss—and it lacked both the smarts and the capital for that remake.") is revealing.

Here's an idea - reign in spending. 

Even if Barry's handlers had him confiscate and place a peg on gold, and then issue a blizzard of gold-backed paper, the price point of $2200 has little realistic correlation to the sheer amount of ungodly defecit spending

 

 

 

BigJim's picture

If the US government were to declare it would buy gold at $2000, and sell at $2200, it would indicate that gold was becoming re-monetised, and everyone would dump their USD to buy the US' gold.

At 8100 tonnes, or 286 M ounces, that's $631B to buy all the US' gold. The Fort Knox and West Point vaults would be drained dry in the blink of an eye by China alone.

But valuing gold much higher might work... $7500?

Two Towers AU AG's picture

Well if the USA was to cover its 14 Trillion in external debt using the 6000 tons of gold held by USA ( valued at approx 396 Billion @ approx $2000/ounce). the multiplier would be 35. Which means the price of gold would then have to be fixed at 2000*35 = 70,000, of course the USA could cover only portion of its external lliabilities say 25% of 14 trillion in which case the value for gold would have to be 70000/4 = $17500..

Feel free to correct me if I am wrong in my understanding..

6000 tons *1000kg*33 ounces per kg = 198,000,000 ounces

198,00,000 ounces *2000/ounce = 396,000,000,000

14,000,000,000,000 (external debt) /396,000,000,000 ( value of gold held at $ 2000 per ounce) = 35 ( thats how I got the multiplier of 35..)

So the gold which is today say at 2000 will become 2000*35 = 70000 ( i know gold is at 1800 odd and not 2000). :) :)

What a nice wet dream at 3.15 AM in the morning..

Dugald's picture

This article works on the principle that the USA still has worthwile gold holdings, but has it, any body been in Fort Knox of late. As I understand it TPTB flatly refuse an audit. Given the current situation would they not be bragging about all their gold.....Why such shyness...it is not afterall the... Why no Whoopdedoo, Yahoo, Weeheee....look what we have....!!

 

PhilofOz's picture

The Monday edition of Keiser on RT pretty much tells us there is no gold left in Fort Knox. The last time anyone got in there was circa 1973 and they were led to the smallest vault of them all and were not allowed to go further, and all the bars behind them had a distinct copper sheen to them.

BigJim's picture

Probably because most of that gold came from melted down coins, which were 90% (?) purity.

RockyRacoon's picture
Good Delivery

 

Gold bars
  • Fineness: minimum of 995.0 parts per thousand fine gold
  • Marks: serial number, refiner's hallmark, fineness, year of manufacture
  • Gold content: 350 oz t - 430 oz t
  • Recommended dimensions
    • Length (top): 210 – 290 mm
    • Width (top): 55 – 85 mm
    • Height: 25 – 45 mm
 Silver bars
  • Fineness: minimum of 999.0 parts per thousand silver
  • Marks: serial number, refiner's hallmark, fineness, year of manufacture, weight (optional)
  • Silver content: 750 oz t - 1100 oz t (900 oz t - 1050 oz t recommended)
  • Recommended dimensions
    • Length (top): 250 – 350 mm
    • Width (top): 110 – 150 mm
    • Height: 60 – 100 mm
Snidley Whipsnae's picture

This article makes the enormous assumption that governments own and have, unemcumbered, in their physical possession, the gold that they claim to have.

Prior to any government bonds issuance there should be a complete, audit, inventory and assay of all gov owned gold.

Otherwise, bondholders will be buying bonds based on another government promise; ie, 'trust us, we have the gold'

YHC-FTSE's picture

The article is weak because it advocates using gold to prop up fiat to facilitate more debt. It's not just gold, it's every tangible commodity known to man used and abused to prop up the reserve currency controlled by undisciplined criminals doing it ostensibly  for our love of instant gratification. Then there's the infighting amongst the currencies to make theirs more desirable than their neighbours', often teetering on the highwire act of attracting investments without destroying their export industries. It goes on and on until the smaller players crack and their people begin to realise that what they hold in their bank accounts and their wallets is not a passport to wealth and pleasure, but coloured paper as common and useful as autumn leaves. Moreover, coloured paper that represent not just their own labours, but the labours of future generations to come. We are in the era of the big players cracking, and cracking big.

Instant gratification, greed, blind trust, and tradition are the drivers that allow central banks to issue more and more debt to play the game of creating liquidity out of thin air. Paying for things and services with magic money is almost a byproduct of their love affair with power and enslavement. Anything that threatens the supremacy of USD will end up like the rest who dared to challenge it. Deflation is not the enemy. Economic contraction is not the enemy. Inflation and growth based on gross manipulation of trust that empowers a few leeches to lord it over all of us, until the next bust, is the real enemy. 

RockyRacoon's picture

Yessireebob!  That's called eating your seed corn.   Totally inappropriate use for any gold that is accountable.   Of course, the proposition won't be adopted because, just like the shadow banking "assets", nobody now knows what anyone else holds.   PM markets have become obscure by design.

snowball777's picture

"nothing like a little creed to break it on down with this gold talk...."

Even Jesus hates Creed.

PaperWillBurn's picture

If the U.S says $2200..Europe will outbid at 30,000 Euros.

 

Where will the gold flow? Who's balance sheet will look better? Who's economy would YOU invest in?

Two Towers AU AG's picture

You are forgetting China with about 2 trillion in USD, They could outbid anyone to get their hand on gold and their hands off the USD. Hell, I am not even sure what is stopping them from initating such a mark up purchase of gold.

GoldBricker's picture

Good question.

How is that 2 tril held? Methinks not much in benjamins, but rather electronically-registered bonds (govt, agencies, other rubbish). If China upsets the gold market, the US declares them a 'hostile power' and nullifies their bond holdings. Debt problem solved by selective default.

If your creditor can't hurt you, then you need to please your creditor only as long as you still need to borrow from him. If China bids up gold too much, then it means that they'll likely quit lending to the US and the game is over. China's problem is how to dump their paper discreetly.

It's a fight club for CBs. Debt and credit are weapons, with default (hard or soft, via inflation) as the nuclear options.

Bicycle Repairman's picture

"If China upsets the gold market, the US declares them a 'hostile power' and nullifies their bond holdings. Debt problem solved by selective default."

Ah, there's the world's strongest military again.  As long as Brit..., I mean USA, rules the waves, etc.

Snidley Whipsnae's picture

Two Towers... China has already been 'outbidding' for gold... China, India, SE Asia, Mid East are the soverigns and populations that have driven the price of gold to current levels.

 

zhandax's picture

Tyler, Hopium makes your ass look big.......

XenoFrog's picture

Well, this is disconcerting.

Shell Game's picture

Truly. It lends mechanism to a greater Fascism..

Doña K's picture

This may be a another propaganda (using fear) to take gold lower for next week's option expirations.

If it goes lower I am buying another stack. Every time I bought, I thought that it may be too high to buy. So far none of my buys have gone lower than purchase price.

Buy with conviction. They are printing stealthily and openly. They have no qualms. they are now desparate. there is no going back for Bernanke and co. Inflate or die.

Lord Koos's picture

I've been adding physical the last few weeks ever since it started trading sidewise between $1750-1900... anything under $1800 is a go for me.  After October I think $1800 is gonna be pretty far back in the rear-view mirror.

I Got Worms's picture

I buy gold and silver just as much as an investment as a philisophical stand agaist the bankers.  Please take it down to a dollor. I'll buy it hand over fist.

I think I need to buy a gun's picture

theres millions of chinese with "gold" accounts in china right now they can't create the accounts fast enough and we are going to be confiscating?  I call bullsh*t...........

After all Cramer sold all his stocks and bought physical. He's first to give up his gold one way or another.

Snidley Whipsnae's picture

I wouldn't believe Cramer if he told me 'the sun is going to rise tomorrow'.

caerus's picture

i'll give you my gold when you pry it from my cold dead hands

freeasabee1's picture

get your shavels ready.

Bananamerican's picture

and your navels rooty..."we're going in"

Top_Kill's picture

I am a seller at $10,000. Any takers?

ps You can have my silver at $750 in a package deal.

LaLiLuLeLo's picture

Why don't the governments bring out their gold and use it to back their bonds?

Because they don't have any...

gorillaonyourback's picture

yep, thats what i was thinking,  the author may want to fact check fort knox before positing this