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Gartman Flip Flops With Gold Support at 200 DMA at $1618/oz, And Massive Chinese Demand

Tyler Durden's picture


From GoldCore

Gold Support at 200 DMA at $1618/oz, Massive Chinese Demand and Gartman Flip Flops

Gold is trading at USD 1,665.10, EUR 1,261.20, GBP 1,067.30, CHF 1,557.40, JPY 129,550 and AUD 1,643.0 per ounce.

Gold’s London AM fix this morning was USD 1,665.00, GBP 1,068.75, and EUR 1,262.22 per ounce.

Yesterday's AM fix was USD 1,680.00, GBP 1,077.06, and EUR 1,266.49 per ounce.

Gold in USD – 1 Yr (100, 144, 200 DMA – yellow line at $1,618/oz)

Gold fell 2.6% in US dollar terms yesterday on low volumes as technical selling led to price falls which were exacerbated by a number of stop levels getting hit. The falls may be due to banks raising capital due to liquidity and solvency issues.

Gold’s weakness yesterday was primarily a function of dollar strength. This meant that gold’s falls in euros, pounds and other currencies was much smaller (between 1% and 2% in most currencies) and gold fell less in euros than did the DAX and CAC equity indices.

The technical situation has deteriorated. The 144 day moving average which has provided good support for 2 years was breached yesterday and the 200 day moving average at $1,618/oz now becomes support.

Absolutely nothing has changed with regard to the fundamentals driving the gold market. Investment demand for physical bullion remains robust internationally.

Real macroeconomic, systemic and monetary risk remains and will support gold.

There are signs that demand in India and China is picking up again after the latest correction. Bullion dealers in India report bargain hunters again buying on the dip.

Chinese citizens continue to buy gold in record volumes with October the fourth successive record month for imports via Hong Kong (see table above).

The October total was 85.7 tonnes –up very significantly on the September figure which was itself a new record. The October demand was a massive 40 times higher than imports via this route a year ago. 

It is the fourth successive month of record imports into China and overall imports through Hong Kong for the first 10 months of the year are around three times higher than a year ago.

Of importance is the fact that the amount of gold imported through Hong Kong amounted to over a quarter of estimated global demand for the yellow metal – as noted by Mineweb.

Premiums in Hong Kong and Singapore (see chart above) are likely to stabilise near the $1.00 per ounce level as Chinese buyers are likely to again buy on weakness – especially as dealers and jewelers will soon be buying stock prior to Chinese New Year at the end of January.

Cross Currency Table


(Bloomberg) -- Gold Will Average $2,050 an Ounce in 2012, SEB Banking Says
Gold will average $2,050 an ounce next year, SEB Merchant Banking, a unit of Skandinaviska Enskilda Banken AB, said today in an e-mailed report. “Additional outbreaks of volatility should be expected in coming months during flights to liquidity with the European crisis still in a critical phase and the effects of Chinese monetary tightening topping out,” the bank said in the report.

(Bloomberg) -- China’s Gold Imports From Hong Kong Surge 51% on Haven Demand
China’s gold imports from Hong Kong surged 51% to a record in October as investors sought to hedge against turmoil in the financial markets and took advantage of the price gap between the two places.

Mainland China bought 86,299 kilograms (86.3 metric tons) from Hong Kong in October, up from 56,977 kilograms in September, according to the Census and Statistics Department of the Hong Kong government. China doesn’t publish gold trade data. The country imported more than 300 tons for all of 2010, People’s Bank of China Vice Governor Yi Gang said in February.

China’s bullion demand may be more than 750 tons this year, as the country overtook India in the third quarter as the world’s largest gold jewelry market, according to the World Gold Council. The amount includes more than 250 tons of investment demand and 500 tons of jewelry demand, said Albert Cheng, managing director for the far east region at the Council, said on Nov. 17.

“As economies in the West falter, China’s growth will moderate and many people just want to put their money somewhere safe,” said Duan Shihua, Shanghai-based head of corporate services at Haitong Futures Co., China’s largest brokerage by registered capital. The arbitrage between Shanghai and Hong Kong also aided demand, he said.

Prices in Hong Kong mostly traded at a discount to those in China in October, making imports profitable for traders who seek to exploit price gaps. Gold for immediate delivery of 99.99 percent purity on the Shanghai Gold Exchange traded at 339.40 yuan a gram ($1,661 an ounce), compared with 416.60 Hong Kong dollars (340.72 yuan) on the Chinese Gold & Silver Exchange Society.

(Bloomberg) -- UBS’s Physical Gold Flows to India Yesterday Most Since Oct. 20
UBS AG’s physical gold flows to India yesterday were “well above” average and the most since Oct. 20, Edel Tully, an analyst at the bank, wrote today in an e-mailed report.

(Bloomberg) -- Gold Is in the Start of a Bear Market, Economist Gartman Says
Gold is in the “beginnings of a real bear market,” economist Dennis Gartman said today in his daily Gartman Letter. The metal may extend declines to $1,475 an ounce, he said. It traded at $1,663.80 an ounce by 8:24 a.m. in London.

(GoldCore Editors note) – Gartman has been extremely inconsistent regarding gold in recent years. He has swung from being bullish on gold in all currencies to being bearish on gold in all currencies on a number of occasions. This is the second time that he has said that gold’s bubble had popped and we are now in a bear market.

Gartman is a trader and is followed by hedge funds and prop desks of banks and does not appear to understand the proven diversification benefits gold brings to a portfolio.

In November 2009, Gartman said that there “is a gold bubble.” Gartman said that to say otherwise was “naïve”. Gold was trading at $1,100/oz at the time.

In August 2011, Gartman said that gold was the biggest bubble of our lifetime.

Inconsistently, only last week, Gartman said on CNBC that he is “long gold” and has been for “six or seven months”.

Gartman’s short term calls on gold and silver have been wrong more often than not in recent years. He tends to turn bearish after gold has already experienced a correction and is close to bottoming.

Those wishing to diversify and add gold to their portfolio will use his call as a contrarian signal that we may be getting close to a low in this most recent sell off.

Our advice is to ignore gurus, price predictions and noise – up and down – and focus on the real fundamentals driving the gold market.

Having an allocation to and owning physical gold will again protect and preserve wealth in 2012.


(Reuters) -- Gold steady after sell-off; Europe woes in focus

(Reuters India) -- Gold price drop prompts buying, but caution prevails

(Financial Times) -- Chinese gold imports from HK hit record


(Casey Research) -- Gold and Silver Pullbacks in Perspective

(Forbes) -- Central Bank Appetite And The Monetary Case For $10,000 Gold

(The Telegraph) -- From Mr Copper to Choc Finger: Famous Commodity Squeezes

(You Tube) -- Pan For Gold On The Streets Of New York City

(Armstrong Economics) -- Why MF Global is Worse Than Europe

(New York Times) – Krugman: Debasing The Dollar, Not


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Tue, 12/13/2011 - 09:12 | 1973319 CCanuck
CCanuck's picture

Gold Bitchez!

Tue, 12/13/2011 - 09:16 | 1973333 Momauguin Joe
Momauguin Joe's picture

If it isn't physical, it isn't gold.

Tue, 12/13/2011 - 09:31 | 1973362 ratso
ratso's picture

Gartman - who cares what he says.

Tue, 12/13/2011 - 09:37 | 1973365 Pladizow
Pladizow's picture


Peter Schiff was interviewed with him this last time on CNBS and called him out - Gartman was OWNED and was noticeably irritated!


Tue, 12/13/2011 - 09:51 | 1973431 FEDbuster
FEDbuster's picture

No one is rehypothicating my gold and silver eagles.  Molon labe.

Tue, 12/13/2011 - 10:11 | 1973509 mrgneiss
mrgneiss's picture

Gartman continues to be one of the best contrarian indicators on gold, one of the few indicators that is actually better than the proverbial coin toss.......don't ever change DG!

Tue, 12/13/2011 - 10:25 | 1973585 bania
bania's picture

seconded! trade anti-gartman in gold and you will quadruple your money!

Tue, 12/13/2011 - 10:33 | 1973617 oddjob
oddjob's picture

Gartman is the worst of the worst. The most vile deceitful shill on the street.

Tue, 12/13/2011 - 11:03 | 1973811 High Plains Drifter
High Plains Drifter's picture

and some lemmings pay this guy for advice?  

Tue, 12/13/2011 - 11:25 | 1973872 oddjob
oddjob's picture

Even better was his call that copper would never go over $4 in his lifetime.

Tue, 12/13/2011 - 10:13 | 1973517 WhiteNight123129
WhiteNight123129's picture

Here is the ridiculous Gartman letter from June 2009, advocating that it does not matter to be bearish or bullish you ahve to be right when he defended is "stay on the sidelines of Gold" when Gold was trading at 960. His rationale to advocate why the Dollar is S.A.F.E.: because like Rome and like the British it is natural that the reserve currency is the one from the strongest military, and since Rome had the empire and Britain had the empire and now it is US turn essentially that is what he says. being not American, I nonetheless like very much the Old School America like Ron Paul, but this Gartman guy has a delusional nationalistic in his faith in of the USD. He mentioned paranoid stuff like enemies of America attacking the dollar, while the biggest threat to the Dollar is American policy makers. The funny part is the ridicule of the argument.  First the very fact that Rome was an Empire and Britain was the dominant Empire proves only one point is that empires are transitonary in nature. Second the very argument that the strongest military creates the rationale for being the Empire currency and hence a safe currency is completly upside down, in fact overextended empires result in the demise of the currency of those empires as the cost of the wars ALWAYS CREATE DEBASEMENT, FOR CHRIST SAKE ARE PEOPLE SO FUCKTARDS NOT TO REALIZE THAT, JUST OPEN A HISTORY BOOK GARTMAN. We have a carry trade short squeeze, hold on to your seats Gold Bugs, nothing has changed on the overindebtness of the US.




Tue, 12/13/2011 - 10:53 | 1973717 He_Who Carried ...
He_Who Carried The Sun's picture

Shouldn't you know first what he actually said?

“We have the beginnings of a real bear market, and the death of a bull,” Mr. Gartman wrote. “Since the early autumn here in the northern hemisphere gold has failed to make a new high. Each high has been progressively lower than the previous high, and now we’ve confirmation that the new interim low is lower than the previous low.”

Even more disconcerting is the fact that China has been an aggressive buyer of gold in recent weeks. The total amount of gold entering mainland China from Hong Kong reached 286.8 tonnes in the first 10 months of 2011, which is more than triple the amount just a year earlier.

While buying of that sort should have sent gold prices soaring, instead they plunged.

One of the oldest rules of trading is simply this: a market that cannot or does not respond to bullish news is a bearish market not a bullish one,” Mr. Gartman said. “This was manifestly bullish news and it was received very bearishly indeed.”

Given how much psychological damage has been done to the gold market in the past week, and with so many long positions being caught off guard, he thinks wholesale liquidation and perhaps forced selling will be the outcome.

“It really won’t take much to push it there,” Mr. Gartman added.

Source: Financial Post.

Tue, 12/13/2011 - 11:06 | 1973828 Sean7k
Sean7k's picture

Perhaps he didn't read about the central bank and BIS intervention in the market. This is the real source of his "bear market". Gartman is a tool.

Tue, 12/13/2011 - 11:52 | 1974116 WhiteNight123129
WhiteNight123129's picture

How can the treasuries and Gold be both in a bubble at the same time, which one of the two looks the most dubious of the two?

Tue, 12/13/2011 - 09:35 | 1973369 johnu78
johnu78's picture

Preach it brother!

I'm going to take a nap, wake me up when gold hits $5,000 an ounce. :)



Tue, 12/13/2011 - 09:24 | 1973340 Widowmaker
Widowmaker's picture

There is waaay too much emotion in the gold trade right now.

Sell, you can thank me later.

Otherwise, see ya at 1200-1050 oz. ( or lower!)

Tue, 12/13/2011 - 09:48 | 1973408 Smiddywesson
Smiddywesson's picture

The game for central banking is to kick the can and buy gold, while keeping gold within a trending range which has stayed at +20-25% for ten years.  
So TPTB are not going to crush gold or let it ramp to the sky until this game is over, and it ain't over yet.  They have plenty of margin hikes and fiat left to hold it down, and they have the experieince of driving it to $1534 and almost decoupling it from paper to remind them what happens if they get heavy handed.

Contrast that manipulation mechanism where MARKET forces drive gold prices lower without decoupling paper from physical as everyone sells everything and runs to the USD.  In a general sell off, gold has no bottom, it can continue to fall without any adverse repercussions to the paper gold market at all as long as paper gold is not swimming against the tide.  In a manufactured sell off like in Sept., there are limits the TPTB can achieve before damaging the paper price suppression scam.

Failing to understand the difference between these two situations can ruin you.  

All of us must have a physical position for reasons of wealth preservation.  Nobody can perfectly time the coming collapse so you are just going to have to purchase physical at what prices you can get.  But those of us who trade in and out of the market have to understand, gold is still part of that overall market until the market dies.  Ignore market sell offs, and you will lose your money.   I think Widowmaker is right.  There is going to be much lower prices before this is all said and done and then you will get your payoff in the form of a gold reevaluation.  Until then, ignore the pain and preserve your paper for much lower prices. 

Tue, 12/13/2011 - 09:55 | 1973446 Free Markets
Free Markets's picture

I believe it will go lower with the market also. Hedge it with GLL or DGLD with paper

Tue, 12/13/2011 - 11:50 | 1974105 Smiddywesson
Smiddywesson's picture

It's tough to trade with this much manipulaton, emotion, and volatility.  I've retreated into a big physical position and a big cash position.  If gold continues to rise @25% a year and we don't see a sell off with the stock market, I still have that cash to buy at higher prices.  But if gold sells off with the market, I can scale in with the rest of my cash.  Win-win.  I'm not fighting the central bankers and I'm not trying to predict the future, but the sell off prior to super high prices seems probable to me.

Tue, 12/13/2011 - 18:57 | 1976364 Free Markets
Free Markets's picture

My strategy is for those that are waiting for some magical entry point. Buy physical now and the hedge till you find the right price to drop the hedge.

Tue, 12/13/2011 - 10:00 | 1973467 Widowmaker
Widowmaker's picture

My favorite visual aid is stamped on every eagle - $50.

Tue, 12/13/2011 - 10:12 | 1973516 mrgneiss
mrgneiss's picture

JB is that you????

Tue, 12/13/2011 - 10:21 | 1973545 Widowmaker
Widowmaker's picture


Trading gold and owning it in perpetuity are as different as owning and renting a house. It's a means to an end, but different reasons and risks.

Like a home, when emotions are involved, the most emotional pays the premium - ALWAYS.

Young gold bugs beware. Settle on an eagle for each child you have, with the year they were born (or something)

Giving that "investment" to them at the right time is worth more than any premium paid (or lost) based on fear or greed.

Tue, 12/13/2011 - 11:05 | 1973821 High Plains Drifter
High Plains Drifter's picture

it is a terrible place we are leaving the children. 

Tue, 12/13/2011 - 11:16 | 1973905 Widowmaker
Widowmaker's picture

Children, democracy, business, rule of law, privacy, etc...

"The business may be dirty but the money is always clean."

Tue, 12/13/2011 - 10:19 | 1973550 Sean7k
Sean7k's picture

The problem is: when will the paper and physical price decouple? When will we be unable to purchase physical at any price? 

I agree there are many games to be played. Any study of economies that suffer irreparable damage show longer timelines and resiliiancy than one might expect. People want the system to survive and will do all they can to encourage the can being kicked down the road.

China and India have much better understandings of the value of gold and silver then we do- and they are buying like crazy as their economies face hard landings. 

Further, with a limited experience with gold and silver, will Americans even understand its' useage? Will they be able to see its' value? We continue to hear statements of "you can't eat it", "it isn't backed by anything" or "how do you buy a loaf of bread". 

We could end up with a huge population of people holding wheelbarrows of dollars wondering why there isn't a better substitute. Then, what do you use for new capital formation? It would not surprise me to find the banks holding the gold and creating a new wealth system based upon it. 

The banks could just screw up things so badly, the people are too lost to figure out a way through. They could "win again". 

The beauty of an ignorant public is they have no idea of what is possible.

Tue, 12/13/2011 - 11:20 | 1973932 Badabing
Badabing's picture

"We continue to hear statements of "you can't eat it", "it isn't backed by anything" or "how do you buy a loaf of bread". 



I get this shit all the time from family and friends and have some answers to these planted statements by the gold bashers in the MSM.


“You can’t eat it”

Reply:  Yes I know, and all other money is valued on it’s edibility?


“It isn’t backed by anything”

Reply: Gold is backed by gold, I guess that’s a little hard to understand.


“How do you buy a loaf of bread”

Reply: How do you buy a loaf of bread now?


“why would you buy gold when its at an all time high?”

Reply: That’s what you said the last time I bought gold.


“Do you think it’s the end of the world?”

Reply: No, just the end of the fiat ponzi.


Tue, 12/13/2011 - 11:56 | 1974145 Smiddywesson
Smiddywesson's picture

Give up on family and friends.  It's a trap.  If they make money from your advice, they will forget it was your advice and think they are a genius.  Worse, if they lose money, they will cash out at a low and blame you, then absolutely hate you when prices climb after they dump their gold.  

If they have taken this much to convince, they don't have the intestional fortitude to survive the kind of volatility that is coming.  You can't save them.  I'm very sorry, I have tried and learned my lesson.

Tue, 12/13/2011 - 12:15 | 1974255 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 as usual Smiddy

Until a year or so ago I always tried to tell friends and family about buying gold as a wealth preserver through lousy economic times.  A few listened politely, but only TWO actually went and bought some.

So I gave up trying.  They all know my position anyway.   I learned my lesson as well.

Great observation on how they might mis-time gold purchases and sales.  Yes, they might sell to low and miss the huge spikes to come.  And hate you for it.

Maybe you have to be BORN to be a fan of gold?  The ones I helped convince were already dubious of our financial system and cynical of .gov and the banks...

Tue, 12/13/2011 - 16:12 | 1974793 Smiddywesson
Smiddywesson's picture

Maybe you have to be BORN to be a fan of gold?


Some view history as a story that is written and over with.  Others view it as one long story that is retold again and again.  Even if they don't say the words, the former live their lives under the belief "It can't happen to me."  Since no amount of convincing can get them past this belief, yes I believe they were born that way and gold bugs were born different.

Caveat:  People who are subject to starvation are sometimes so traumatized that they horde food for the rest of their lives (Ex.  The survivors of the Essex.)  Given enough trauma, people can understand their own mortality, to include their financial mortality.

Tue, 12/13/2011 - 14:59 | 1975069 data_monkey
data_monkey's picture

This is how I feel about my co-workers. Sad.

Tue, 12/13/2011 - 10:33 | 1973622 Gohn Galt
Gohn Galt's picture

I hope your right, but with his track record, Gold will continue to spike.  That son of a bitch.

What was someone in here saying.  There are two type of hedgefunds, those who make money just top loose it to primary brokers and those who understand the game and loose their clients profits in unnamed overseas trusts.  It's hard to understand how these Primary Brokers can be trusted to hold on to a lump of coal.

Tue, 12/13/2011 - 10:34 | 1973624 Innocent Bystander
Innocent Bystander's picture

buy - 1587.

Tue, 12/13/2011 - 12:07 | 1974211 Smiddywesson
Smiddywesson's picture

That's a good level if the can is still being kicked.  However in a big sell off, picking bottoms can be dangerous.  If gold prices slide during a big sell off, scale in.  You are unlikely to be able to buy when the bottom happens, it will be during the Asian session.  More importantly, any drop in PM prices towards end game will be a slide off in prices, followed by a spike down and then a ramp from the bottom.  Even before end game, it will become increasingly difficult to buy on the ramp, both because vendors won't sell it to you, dragging their feet and experiencing technical difficulties with their web sites, and because of the time compression of the ramp.  At the very end, when PMs hit the bottom, there won't be any gold available at all.  So you HAVE to buy on the way down and not call the bottom.

Tue, 12/13/2011 - 12:19 | 1974281 DoChenRollingBearing
DoChenRollingBearing's picture

My strategy of buying physical is similar, although I really do not let the price influence my buying decision.  I BUY when I have extra FRNs.  As income arrives, part goes to gold.

OK, if there has been a big spike down, I *may find* a little extra income to buy...

Please note that I have bought some 85% of my gold at or near *record highs* through the decades, and it has worked out very well.

Tue, 12/13/2011 - 10:59 | 1973785 WhiteNight123129
WhiteNight123129's picture

How about the emotion in the Treasury, invisible lethal bubble. Check Gross on US worse than Greece. Check out Buffet on treasury in the bubble of the ages. Not enough emotion in the Treasury trade my friend. Asleep at the wheel is what you are. I will surrender when the political consensu of putting everything on the credit card and not worrying because 10 years treasury are at 2%. Who is in that camp? Only your Ron Paul guy is not sleeping at the wheel. Once you sell your Gold you do what with buy 30 years treasuries at 3%????





Tue, 12/13/2011 - 09:15 | 1973322 speconomist
speconomist's picture

Gartman said in August that the greatest bubble of all history had exploded (gold). Peter Schiff called him out recently on that topic, with gold around $1750 (IIRC), and Gartman negated what he had said.

Tue, 12/13/2011 - 09:33 | 1973364 fonzanoon
fonzanoon's picture

damn right speconomist. I wish ZH or someone on here could put a youtube together of that fat fuck making that call in august and then Schiff calling him out and watching him deny it. Everyone on this site should get that video to go viral.

Tue, 12/13/2011 - 09:38 | 1973376 Pladizow
Pladizow's picture

See above!

Tue, 12/13/2011 - 09:41 | 1973389 fonzanoon
fonzanoon's picture

Thank you

Tue, 12/13/2011 - 09:13 | 1973323 LookingWithAmazement
LookingWithAmazement's picture

Gold and silver are massively overvalued. If all the "paper gold and -silver" would be removed from the markets, prices would plunge. The market is strongly manipulated/frauded upwards. So better not buy PMs until then.

Tue, 12/13/2011 - 09:15 | 1973331 HellFish
HellFish's picture

Either you forgot the /sarc tag or I think you've got that backwards.

Tue, 12/13/2011 - 09:25 | 1973349 Crash N. Burn
Crash N. Burn's picture

In case you weren't being sacastic/facetious:

Why gold and silver - full dvd Mike Maloney

Tue, 12/13/2011 - 09:30 | 1973357 eddiebe
eddiebe's picture

Looking, gold and silver are vastly over valued compared to what? And as for your other statement about the PM's paper market, you are completely wrong. How do you come to your conclusion.Are you being sarcastic? If paper (ie.fractional derivatives) were to be removed from the, the price would be vastly higher.


Tue, 12/13/2011 - 09:35 | 1973371 LookingWithAmazement
LookingWithAmazement's picture

Overvalued compared to the situation without all the paper crap. And if prices without would be much higher, why aren't prices rising sharply now? Present prices would be a bargain if you're right.

Tue, 12/13/2011 - 09:49 | 1973419 eddiebe
eddiebe's picture

Prices are a bargain now.

Tue, 12/13/2011 - 12:25 | 1974321 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1  

Correct, physical prices are a bargain now.

And LookingWith Amazement will be left behind when gold revalues.  Hey, it was his choice.

To be fair, no one can predict the future.  But, the $123,000 each taxpayers owes (on our $15 tn Federal Debt only) leads me to the obvious conclusion that gold will go up in US$ at its appointed hour.

Tue, 12/13/2011 - 09:50 | 1973424 LoneCapitalist
LoneCapitalist's picture

Paper gold and silver are part of the supply. If you reduce the supply , prices go up.

Tue, 12/13/2011 - 10:08 | 1973500 Kina
Kina's picture

Obviously acting deliberately dumb.

Of course it is the selling of paper gold and silver way beyond physical holdings that is supressing prices and deliberately so, I don't think anyboyd disputes that any more.


So the US prints money so the fiat value of gold is meant to go down not up? The more dollars you print the greater their purchasing power. LoL




Tue, 12/13/2011 - 09:30 | 1973359 moonstears
moonstears's picture

Just as the Market dropped like a rock in 2009, only to rebound nicely, for the swift (see SLW as example), I'd buy PHYSICAL PMs, a little now, and alot on the paper collapse, if physical's available, at those prices. This you forgot to discuss. When silver hit $9 in late 2008, I bought a little, at $13...a 33%+ diff for physical purchase.

Tue, 12/13/2011 - 09:55 | 1973445 Smiddywesson
Smiddywesson's picture

Gold and silver are part of the market until they are not, so yes, we will see much lower prices in the future as everything continues to sell off.  The difference is that gold and silver prices will recover after the sell off because of the fundamental strength of PMs, whereas stocks and bonds will lay on the floor sucking their thumbs.  But then Ben will step in to continue to suppress PM price appreciation and artificially support stock prices.  Rinse and repeat until the can comes to a standstill.  Then PM prices take off.

The deeper the selloff in stocks, the deeper the sell off in PMs, until the system breaks.  General sell offs make it easy to push PMs out with the tide.  Keep your powder dry.

Tue, 12/13/2011 - 10:21 | 1973563 fuu
fuu's picture

Shill faster.

Tue, 12/13/2011 - 15:50 | 1975344 bardot63
bardot63's picture

What a load !  When, not if, paper gold implodes, 'disappearing from the market' as LookingWithAmazement says, gold will have one direction - interplanetary.  Gold and silver are not overvalued.  The overvalue is in global debt.  To believe otherwise is to ingore history, which some of the uneducated among us are obviouisly more than willing to do.  I hope writer LWA waits until PMs are zero to consider buying.  Good luck, Sucker. 

Tue, 12/13/2011 - 09:13 | 1973324 Big Corked Boots
Big Corked Boots's picture

Fiat, and all of its imaginary 0's and 1's, is the biggest bubble of all.

Tue, 12/13/2011 - 10:06 | 1973491 FEDbuster
FEDbuster's picture

I say let Congressmen dig for their deficit spending.  Anything they can't steal from the people to spend, they would have to go out and mine it.  Balanced budget problem solved.

Tue, 12/13/2011 - 09:16 | 1973328 The Deleuzian
The Deleuzian's picture

Who cares what Gartman says!!! 

Tue, 12/13/2011 - 09:15 | 1973330 Bazooka
Bazooka's picture

Hello! My consistency, I'll now dub it as the "Bazooka Equation" below has been extremely consisten:

Equities Down = Gold & Silver Down
Equities Up = Gold & Silver Up

Both physical and paper prices are like equities.

This article leaves out behavior precious metals during DEFLATION!
They crash with equities because CASH becomes king.
When margin calls hit, banks and all margined investors sell assets to raise cash!!!!

Tue, 12/13/2011 - 09:25 | 1973353 Quintus
Quintus's picture

Can you provide a single example of when Gold and Silver have crashed during a deflationary episode?  Just one will do.

Tue, 12/13/2011 - 09:41 | 1973390 Pladizow
Pladizow's picture

I know that during the 30's, the two largest miners had gains of 500%.

Tue, 12/13/2011 - 09:52 | 1973433 Flakmeister
Flakmeister's picture

Yes.... there was a gold standard at the time though....

Tue, 12/13/2011 - 10:45 | 1973674 Smiddywesson
Smiddywesson's picture

Yes, when using the 30s as an example, we can't forget about the effects of going off a gold standard on the market's sentiment, the fact that politicians were running around parroting Keynes' drivil that gold was a barbarous relic, and the fact that they revaluated gold, and made it illegal to hold.  This skews all your data, which of course, is exactly the shadowy misdirection central banking is designed to bring about.  So when someone says "deflation does this and that is that,"  take care.  It's not that simple.

Last time around, it was in the Fed's interest that the dollar be devalued, so gold had to go up, but that was their line in the sand for gold prices.  This time around, they are stacking gold, they have tremendous liabilities, foreign currency reserves are no longer acceptable to balance your trade, so all that is left for them to remain solvent is to ramp the price of their one remaining asset, gold.

Bazooka is right, gold will fall in price during the sell offs.  But that process can only go on for so long before the system crashes and PM holders get the big payoff.

Tue, 12/13/2011 - 11:16 | 1973898 Flakmeister
Flakmeister's picture

Just to be clear, I am a PM bull in that they offer the best chance (along with the cashflows from domestic oil production) of keeping the what you have... The catch as I see it is that in nominal terms, there will be a global haircut and only the most nimble of traders will be able to time it... Think of a strengthing dollar, weakening PMs untill the fateful day when the dollar dies (likely when the House of Saud falls and the petrodollar is no more), at that time PMs will vanish from the market and you will have taken a haircut.  BFD if gold is $10,000 per oz if you can only buy the equivalent of $1,000 of goods (measured in today's dollars)....


Tue, 12/13/2011 - 11:43 | 1974078 jimmyjames
jimmyjames's picture


Yes, when using the 30s as an example, we can't forget about the effects of going off a gold standard on the market's sentiment

Last time around, it was in the Fed's interest that the dollar be devalued, so gold had to go up, but that was their line in the sand for gold prices.


There was no gold standard in the 30's-in fact there hadn't been a gold standard since 1922-it was reduced to a gold exchange standard-read about the "Genoa Convention" and the double counting of gold and you will discover it was that act that brought about the inflation of the 20's and the subsequent crash of the 30's-


The price of gold never moved until Roosevelt manually/illegally re-priced it but comparing CPI data-gold did very well -


Tue, 12/13/2011 - 09:54 | 1973439 Rakshas
Rakshas's picture

Homestake mining??  I hear they paid a dividend too; $56 per share in 1935, what would that be in today's green shoe liners?

Tue, 12/13/2011 - 09:57 | 1973451 Quintus
Quintus's picture

Indeed - and since the price of gold was officially fixed by the government (unlike today's unofficial price management)  and then confiscated, miners were the closest the average investor could get to finding a safe haven in gold during the great depression.

I guess my initial comment is a trick question since there has never been a deflationary episode under the fiat currency system.  There can't be if the system is not to crash completely as debts rapidly become unpayable and the fractional reserve system collapses.

Think Japan has had two decades of deflation?  Everyone says they have.  Try going to Tokyo and offering to pay the 1990 price for a meal or a taxi ride, or indeed just about anything but property.  This Japanese deflation sure looks a lot like inflation.

Tue, 12/13/2011 - 10:20 | 1973559 Smiddywesson
Smiddywesson's picture

Gold and silver prices go down in a delation just like everything else, but they still outperform other assets.  More importantly, this is not just a deflation, this is a debt induced and leverage induced collapse, so our models about what happened in the 30s are only relevant up to, but not including, the collapse.  A collapse will destroy all paper and leave gold and silver as the only survivors.  References to the 30s also have to recognize that gold prices were set by the government, something Bernanke said you would do to battle deflation.

So Bazooka is probably going to be proven right.  Up to the collapse, gold and silver will sell off with everyting else.  I think they will recover between bouts of sell offs, but it's likely our wives will be very dissatisfied with our investing skills as our stash loses worth in fiat terms.  It's going to take a lot of intestional fortitude to hold on for the collapse, especially if your cost basis is over $1600, but at this point my stash is insurance for wealth preservation and I'm keeping the rest of my fiat ready for the big sell off.  I definitely am not trying to capture the bottom in gold price, it will happen in a fraction of a second, probably during the Asian session, and then boom, prices will respond to paniced buying.  In this, my last remaining position in physical, I am scaling in as we approach the collapse of the system.

The problem with the deflationists is their argument assumes the system survives the crisis.  I have no faith in that assertion due to MF Global, $707 trillion of derivatives, political ineptitude, and war being in the self interest of Russia, China, and the USA.  We are going over the cliff, so all historical examples are of limited use.

My advice for what it's worth:  Establish a core physical positon, sit in the USD with the remainder of your money until the great deflate, scale into lowering PM prices, accept that you won't catch the bottom (and sleep like a baby)

Tue, 12/13/2011 - 11:26 | 1973978 Flakmeister
Flakmeister's picture

Well said....

Tue, 12/13/2011 - 10:40 | 1973573 thunderchief
thunderchief's picture

I feel your pain Bazooka.  When you bash the PM's for Fiat trash, you are on a one way ticket to the nearest S&M Massage Parlor.  I hope you get the beating you are looking for there.

It is in the markets interests for the PM's to behave as all other equites.  This is so true with the PM Miners.  PM investors should disregard this, stick to their positions, and keep accumulating cheap minors and the physical product. 

Tue, 12/13/2011 - 09:16 | 1973335 chinaboy
chinaboy's picture

October mainland import was  85.7 ton. Full year 2011 import is expected between 470-490 ton (combined output of South Africa and Australia). Paper traders please sell: USD yours, bars ours.

Tue, 12/13/2011 - 09:23 | 1973346 youngman
youngman's picture

To me Gold is not a trading item..its a security don´t sell your bullets one day because they have gone up in keep buying more for security..this is a paper game...I don´t like should be illegal...but we don´t donate enough to the politicians to make it illegal...The key is the fundimentals have not changed and have got worse...IMHO....

Tue, 12/13/2011 - 09:24 | 1973348 Dr. Engali
Dr. Engali's picture

When somebody says that an asset that represents less than 1% of a portfolio managers position is the biggest bubble in history then they look like the biggest fool in history. The bottom line is that gold won't be in a bubble until everybody and there brother is scrambling to get it. Until then I'm buying on every dip and I will be selling when Gartman is desperately buying.

Tue, 12/13/2011 - 09:34 | 1973363 Widowmaker
Widowmaker's picture

Open your eyes, literally everyone is buying it.

I know people with new families buying 1g off eBay because they are scared, and recommending you do the same.

Might as well be my Gardner...

Tue, 12/13/2011 - 09:37 | 1973368 Ignorance is bliss
Ignorance is bliss's picture

By the time America wakes up and starts to hoard precious metals it will be too late. Anyone that has precious metals wouldn't sell it at any price for promises of a hyper inflating currency. Precious metals holders will either be trading PMs in for other real assets, or waiting for the replacement currency / new world order. Those without precious metals or other valuable assets in their possession will join the newly created poor.

Tue, 12/13/2011 - 10:56 | 1973745 Smiddywesson
Smiddywesson's picture

When somebody says that an asset that represents less than 1% of a portfolio managers position is the biggest bubble in history then they look like the biggest fool in history. 

Bwahahaha.  Yes, they are desperate and their lies are becoming more transparent.  

They are buying gold.

They control the system.

They are not going to let you feel any love before they get what they want, especially because this will invite more traders to compete with them for the available gold.

Therefore, you are not going to get the kind of price appreciation we all anticipate until the central bankers make their move.  In fact, they will use their remaining margin hikes and unlimited fiat to shake us out of our positions in physical and paper if they see the end coming.


Most gold bugs have the mindset backwards.  If all goes according to plan, gold will continue to climb 20%-25% each year as central banks slowly acquire gold.  However, if the system begins to fail, gold prices will naturally go down as thing sell off, maybe with a little help from our central banker friends, who will really attack PM markets if the jig is up.

Tue, 12/13/2011 - 09:28 | 1973352 Ignorance is bliss
Ignorance is bliss's picture

The oligarchy's plan is to bleed the American people to the point where they sell their Gold willingly. That's why all those "we buy Gold" shops litter the landscape. Elderly American's sell a lifetime of accumulated gold and silver keepsakes to stay off dog food. The price suppression ensures that no one get's too much and keeps the elderly hand to mouth. Very sad...


Tue, 12/13/2011 - 09:43 | 1973397 yabyum
yabyum's picture

"We buy gold" You meen the one with the dancing wildlife? The one that MAY pay 50% on the spot? Nothing more than parasites!

Tue, 12/13/2011 - 09:56 | 1973448 BeerBrewer09
BeerBrewer09's picture

Sadly, I see it every time I go into my coin shop to buy silver. I am in there for only 15 minutes at a time, and someone else is always there trying to sell their precious metals, OF ALL KINDS.

However, I have to remain thankful to those people who keep bringing in their junk silver and fine silver so that I'll have something to trade for gasoline when the time comes.

Tue, 12/13/2011 - 10:23 | 1973562 Rakshas
Rakshas's picture

I know I'm gonna get junked for this but WTF; depending on your situation wrt land holdings farming etc, grow crops of a starchy nature, with the right biological entities the starch converts to sugar, you jam the sugar down some turbo yeasts' throat and they poop enthanol, most car mfgs can spec up to E85 or you can go old school and build your own dragsta up to 13:1 compression ratio to make up for the energy differential at any rate building a frac column still er filter device is easy enough but you can buy them fairly cheaply as well.  

The point is you can take care of some of your needs with the stuff you compost every day, or you can get the really good bio-mechanisms to break down cellulose to starch/sugar, corn blows but sweet potatoes aren't so bad and potatoes are good too. Yeah it's work but here is the best part of the plan - use a stainless keg for your tank and carry a flavour kit with you so if you break down on the way to where you're goin siphon some out and it's magarita time........ it's not like you're not gonna have the time after TSHTF....

Or you could just sell the hooch and pay somebody to be your car bitch either or


Tue, 12/13/2011 - 13:35 | 1974649 omniversling
omniversling's picture

= white lightning!


Tue, 12/13/2011 - 12:36 | 1974387 DoChenRollingBearing
DoChenRollingBearing's picture

@ BeerB

Most of the times I go to the coin shop I also see more sellers of junky PMs (jewelry, silver coins) than buyers of Eagles, Maples and Krugerrands.

And once I heard a really sad tale of a middle aged lady, dressed well, who was there to sell a small gold coin on her necklace...  Margin call.  Ouch.

Tue, 12/13/2011 - 17:16 | 1975756 bardot63
bardot63's picture

The big buyers are not pulling out their wallets in front of you.  They make the deal over the phone and then go by to pick it up.  Casual customers like you never see them.  They don't want their business put on the street by casual customers in a coin store, or thugs watching them from the parking lot with a loaded shotgun under the seat.

Tue, 12/13/2011 - 09:30 | 1973356 PulauHantu29
PulauHantu29's picture

Gold demand from China is fierce. Something must be up especially since the Chinese gubberment told its people to invest in gold.

Will the new world currency be backed by a basket of PMs?

Tue, 12/13/2011 - 09:33 | 1973366 AngryGerman
AngryGerman's picture

of course. PMs and natural resources

Tue, 12/13/2011 - 11:03 | 1973809 Smiddywesson
Smiddywesson's picture

I don't think you are going to see a basket of commodities backing currency.  The banksters have no intention of handcuffing themselves.  We are likely to continue to have fiat currency for domestic trade, but all international trade deficits must be settled in gold, not the USD.  FOFOA describes this as a primary and secondary system and it makes a lot of sense.  Not that the NWO people wouldn't mind having one world currency, I just think they waited too long to pull it off.

Tue, 12/13/2011 - 12:40 | 1974404 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1


I too believe that FOFOA has the right idea: that we will use a paper currency backed with essentially nothing and use gold to store accumulated wealth.  I do not recall reading that FOFOA says that international trade deficits (debts) will paid off in gold (maybe it´s my 55 yr old brain not remembering), but that is certainly plausible.

Tue, 12/13/2011 - 13:55 | 1974739 omniversling
omniversling's picture

a worthwhile read:


"When a currency system comes to the end of its reserve use, I'm speaking politically, its domestic market will come to a point where it can no longer export "real price inflation" in the format of; "shipping its excess currency outside its borders". This happens because internal money inflation, that is super currency printing, is increased so much that it overwhelms even its export flow. Worse, even that export flow later tumbles as the fiat falls on exchange markets."

"The effect is that local "passive inflation", built up over decades and fully reflected in "Sir John's" paper assets, spreads out as "aggressive inflation" and hyper price rises begin. In this action, the very same wealth effect that was eventually priced into "John's" Dow stocks and other assets, begins a long march of being priced into real gold."

"Anyone that has accumulated physical gold over this past long period was doing the exact same thing Dow buyers of the late 60s and early 70s were doing: ------ saving "wealth" as unpriced "virtual wealth" stored up over that "passive inflation" period. ---"


"Remember; in political inflations, money is printed to save the assets as they are currently priced… This paper gold market will be cashed out at prices far below real bullion trading so as to inflate further the books of the Bullion Banks,,,,,, not destroy them. At least this is how the US side will proceed." 

Tue, 12/13/2011 - 09:30 | 1973360 vegas
vegas's picture

Nothing against Gartman personally, but the guy has been wrong more often than right. As I have argued for years, nobody can tell me what "the fundamentals" are regarding any market. You simply don't know every variable that makes up price action. If you did, you would have all the money in the world within 2 years.

Having said that, I can't understand why people follow him or listen to his analysis. Maybe they need tax losses, I dunno.

Tue, 12/13/2011 - 09:37 | 1973373 RagnarDanneskjold
RagnarDanneskjold's picture

And what happens to gold demand from China when the property sector goes down?


Chinese home buyers squeezed by interest rates; Beijing triples transfer taxes; waterfall price declines coming


Tue, 12/13/2011 - 09:42 | 1973391 PaperBear
PaperBear's picture

Gartman is being a whore and I wonder what he is privately doing. Perhaps loading up on gold and silver.

Tue, 12/13/2011 - 09:42 | 1973394 PaperBear
PaperBear's picture

"technical selling" ?

That bloody phrase again.

Tue, 12/13/2011 - 09:48 | 1973415 Saxxon
Saxxon's picture

Come on, can we let up on this.

To everything there is a season, and looking at the chart should tell you the season to be buying gold is not here.

End of story.  People get to preachin' and testifyin' when this topic comes up.  

In physical it is a measure of security.  In paper/electrons, it's just another trade.

Not a buy here.

Tue, 12/13/2011 - 09:53 | 1973437 fonzanoon
fonzanoon's picture

maybe so but just because for trading purposes something is not a buy does not mean it just entered a bear market. Unlike the miner's which entered a bear market immediately upon my purchases.

Tue, 12/13/2011 - 11:15 | 1973896 Ignorance is bliss
Ignorance is bliss's picture

You have it ass backwards. Tis the season to buy Gold. The season to sell Gold is still a few years out....I hope.

Tue, 12/13/2011 - 09:50 | 1973425 FunkyOldGeezer
FunkyOldGeezer's picture

Even so, with all the financial turmoil that's happening and patently about to happen, Gold (and Silver) ought to be far higher in price if the goldbugs are to be believed and Gold (and Silver) really are money and/or the only real store of wealth.

All I can imagine is that there are far richer pickings everywhere, otherwise why else would they both be in such tight holding patterns with real downside risk if they don't break out, some time soon?


Tue, 12/13/2011 - 09:54 | 1973438 Bullionaire
Bullionaire's picture

Please stop feeding the trolls.



Tue, 12/13/2011 - 09:56 | 1973443 Henry Chinaski
Henry Chinaski's picture

We don't have a track record for a severe global depression, so it is harder to predict what PM's will do in that case.  However, we know how PM's perform when more fiat is printed.

If the choice is between crash or print, I am betting that TPTB will print.

Tue, 12/13/2011 - 11:19 | 1973921 Smiddywesson
Smiddywesson's picture

"We don't have a track record for a severe global depression, so it is harder to predict what PM's will do in that case.  However, we know how PM's perform when more fiat is printed.

If the choice is between crash or print, I am betting that TPTB will print."


Truth.  Other truths we know for sure:

  • PMs do well when the printers are running, and they must print
  • Central bankers are buying lots of it, and that's just the amounts they are admitting.
  • Central banks won't even tell you where they are buying it, a very innocent fact, which means they are pulling a scam.
  • We are likely to revert to the tried and true in a crisis because we only get one shot and you need a consensus from all major central banks, that means a return to a gold referrenced standard similar to one from the past.
  • Greenspan, in a pathetic attempt to save face, is now saying a gold referrenced system is the answer.
  • Mom and pop are selling gold, and they always lose
  • Gold and silver are being manipulated lower and it's not to give you a better entry point
  • There's a shell game with paper gold in the Comex and at the ETFs like GLD


That's pretty much all I need, and that leaves out what we suspect.

Tue, 12/13/2011 - 09:58 | 1973459 Roy T
Roy T's picture


I wish there was a anti Gartman ETF to go along with ZH's anti Tilson ETF.  I watch in amazement when he speaks so confidently of his calls on Fast Money and watch them burn over the next days.



Tue, 12/13/2011 - 10:00 | 1973469 monopoly
monopoly's picture

I told you guys yesterday the "briliant ones" would be showing up. They always do when we get the proverbial dump in gold and silver. Would be disappointed if they did not voice their knowledge of where the price of gold will be in the next few days and weeks. Yup, these are the people to follow. Just because they missed the first $1,000 rise in gold means nothing.

They know where the metal is headed, even though few if any have even 1oz of gold stashed away.

Tue, 12/13/2011 - 11:35 | 1974040 Smiddywesson
Smiddywesson's picture

If they don't have a core stash already, even if it's just a small percentage of their money, they are stupid.  

This can go either way:

Scenario One:   Central banks would love to keep the can kicking, letting gold appreciate @25% a year for as long as they can while they stack at low prices.  In this scenario there's no great sell off and currencies are slowly debased  while gold continues to slowly rise.  

Scenario Two:  The system will break down, or paper will decouple, or there will be a war, and the great selloff will take gold prices down as the tide goes out.  Then, central banks will try to shake everybody out of gold before they buy gold like crazy.   In this scenario, gold prices go down (and perhaps crash in the final hours/days) before central banks step in to revaluate gold to the moon.

Scenario Three:  Crisis sets in and gold prices climb while everything else sells off.  It hasn't been my observation that this is how the real world works.  Gold prices are being held down by the system, and until that system breaks completely, gold will remain part of that system and sell off with it.  Sure, the fundamentals are so strong that gold always comes back, but that doesn't mean it is immune to lower prices as we have been taught over and over.

Bottom line:  We have been stuck in scenario one for years.  I believe scenario two is the rest of the story.  I can't see gold escaping the price suppression scam until the system collapses, because the price suppression scheme IS THE SYSTEM.  Hold onto your hats if stocks begin to crash. 

Tue, 12/13/2011 - 10:07 | 1973496 Watson
Watson's picture

How much leverage is there in the 'physical' (not ETF or other derivative)?

If lots of folk have borrowed money to buy their gold bars then there will be trouble for the gold price if the repayments cannot be met.

If they pledged those bars as security for the loan, then there will be _big_ trouble.

Tue, 12/13/2011 - 12:46 | 1974432 jimmyjames
jimmyjames's picture

If lots of folk have borrowed money to buy their gold bars then there will be trouble for the gold price if the repayments cannot be met.

If they pledged those bars as security for the loan, then there will be _big_ trouble.


I doubt many borrowed to buy gold-in fact reading the comments on this and other blogs-i doubt very many have any gold at all-so all the hype surrounding "when everyone sells" is BS and the same goes for "who will be the buyers" if everyone is broke-

The public has never been in on the gold market and never will be-the goldbugs are simply following in the shadows of smart money-

Tue, 12/13/2011 - 10:07 | 1973497 eddiebe
eddiebe's picture

Gold is re and re hyopothecating all fiat. The super smart money knows that and is in gold already. All the plebes run for fiat. Excess fiat should be exchanged for real money regardless of what the hype du jour is.

Tue, 12/13/2011 - 10:11 | 1973507 Saxxon
Saxxon's picture

I'm neutral and dispassionate; some of you guys read that as 'Anti'.

Gold is not a buy 100% of the time.  It is just a trade.

Tue, 12/13/2011 - 10:57 | 1973771 Clint Liquor
Clint Liquor's picture

Trade for what? Something with counter-party risk?

Tue, 12/13/2011 - 10:16 | 1973521 Kina
Kina's picture

Love the trolls - sell your gold and silver..... just as the whole show is about to collapse into chaos, where it all ends nobody can possible know.


Anybody who doesn't have some portion of their wealth in gold and silver you would have to be a total fool. Some imagine that gold would suddenly plunge and they can at their leisure load up assuming the world will be normal at that time and they can just take many thousands out of their bank accounts to buy it..... hopefully no runs on banks, capital controls limiting cash


At this point in history gold is not a trade, it is an insurance position.


Tue, 12/13/2011 - 12:35 | 1974384 Smiddywesson
Smiddywesson's picture

Yes you need a core insurance position and a steely eyed position for acquisiton.  The later is used with the full knowledge that the system can freeze up at any moment and you lose what's left in your acquisition position.  

Tue, 12/13/2011 - 10:25 | 1973586 fiddler_on_the_roof
fiddler_on_the_roof's picture

I bought today at $1664. 

Tue, 12/13/2011 - 11:21 | 1973939 Right-on Left-off
Right-on Left-off's picture

I bought today at $1664. 

All right!  Somebody who is willing to jump in the pool.  Both POG & POS testing necklines at the moment.  There is probably a little upside here but be ready to take profits when the Euro and the equities get into problems again.

Tue, 12/13/2011 - 10:51 | 1973712 agNau
agNau's picture

"Our advice is to ignore gurus, price predictions and noise – up and down – and focus on the real fundamentals driving the gold market."
Here, Here!
And the fundamentals for G&S say BUY!

Tue, 12/13/2011 - 11:24 | 1973963 azzhatter
azzhatter's picture

If you follow the CNBC shills you will be broken rather quickly.

Tue, 12/13/2011 - 11:32 | 1974021 Robot Trader's ...
Robot Trader's brother's picture

My brother agrees with Gartman.

Tue, 12/13/2011 - 12:32 | 1974366 Ted Baker
Ted Baker's picture


Do NOT follow this link or you will be banned from the site!