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Gold Nears $1,900 - Venezuela Formally Requests Gold Holdings Held By BOE Ship By Sea

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From GoldCore

Gold Nears $1,900 - Venezuela Formally Requests Gold Holdings Held by BOE Ship By Sea

All major currencies have fallen against gold and silver again today with gold reaching new record nominal highs in most fiat currencies including U.S. dollars. Gold reached a new record of $1,894.80/oz - just shy of $1,900.

Cross Currency Table

Gold is trading at 1,870.10 USD , 1,296.40 EUR , 1,132.40 GBP, 1,470.90 CHF and 143,670 JPY per ounce and has risen some 1% in all currencies. Gold is particularly strong against the yen and Swiss franc which have fallen in international markets on concerns of debasement.

The London AM fix was a fourth consecutive record nominal high in US dollars. Gold’s London AM fix this morning was USD 1,877.75, EUR 1303.17, GBP 1139.55 per ounce (from Friday’s USD 1,862, EUR 1299.28, GBP 1126.91 per ounce).

Silver is in all major currencies and has risen another 1.4% in dollars after last week’s 8% gain.

Gold’s 6.2% rise last week and silver’s 8.2% rise was barely reported in the press and media in Europe over the weekend – with all the focus continuing to be on equities and to a lesser extent bonds. The usual suspects in stockbrokerages and banks warned about gold being a bubble again.

Silver was not reported at all and remains almost completely taboo in the non specialist financial press. Besides the very occasional article warning that it is a bubble.

According to Bloomberg, the central bank of Venezuela has sent a statement by e-mail requesting its 99 tons of gold holdings from the Bank of England, citing the institution’s president Nelson Merentes.

“We’ve contacted the Bank of England and the corresponding protocols have been initiated to complete this operation as soon as possible,” Merentes said, according to the statement. “Once that’s done, the shipments will begin by sea.”

Chavez ordered the central bank Aug. 17 to repatriate $11 billion of gold reserves held in developed nations’ institutions. Chavez fears 'hostile countries' may seize the national patrimony.

Venezuela holds 211 tons of its 365 tons of gold reserves in U.S., European, Canadian and Swiss Banks.

40 shipments will be needed to carry the 17,000 400oz bars by sea. Piracy must be a real concern given the value of the bullion and Venezuala should ensure that the shipment is well protected.

While physical demand remains robust, sentiment in the trading pits remains muted. An indication that speculative sentiment remains lukewarm was seen in the U.S. Commodity Futures Trading Commission data released Friday evening.

Hedge-fund managers and other large speculators decreased their net-long position in New York gold futures in the week ended Aug. 16, according to the CFTC data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 200,086 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 3,487 contracts, or 2 percent, from a week

The opposite was the case in the silver market where sentiment appears to be heating up somewhat with the risk of another short squeeze developing.

Hedge-fund managers and other large speculators increased their net-long position in New York silver futures in the week ended Aug. 16, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 21,928 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 3,540 contracts, or 19 percent, from a week earlier.

The dumb money continues to warn that gold and silver are bubbles.

Their simplistic bubble thesis is based almost exclusively on the nominal US dollar price and recent price movements and on the assumption that (to paraphrase) ‘gold has gone up in price a lot - therefore it is a bubble’.

There is a continuing failure to look at the important supply and demand fundamentals of the gold and silver markets which leads to unsound reasoning and irrational conclusions. There is also a failure to adjust for inflation.

There is little knowledge of the very small size of the physical bullion markets vis-à-vis the stock, bond, currency and other markets.

There is also very little knowledge of financial, economic and monetary history and a continuing ignorance regarding ‘investment 101’ which is diversification.

Being prudent and having an allocation of 10% to gold will protect no matter what economic and monetary scenario develops in the coming months. If one is not leveraged and is prudently diversified and owns gold bullion (coins and bars in the safest way possible), it does not matter if gold is a bubble or not as you own a range of other quality assets.

From a purely investment point of view - an allocation of 5% to 10% makes sense.

From a financial insurance or store of wealth point of view – having a higher proportion of your overall net worth makes sense.

Especially given the risks posed to the dollar, euro, pound and fiat currencies and to deposits “guaranteed” by insolvent states.

Not putting 10% of your wealth in gold is extraordinarily imprudent today and a recipe for further financial destruction.  

For the latest news and commentary on gold and financial markets please follow us on Twitter.

NEWS

Gold Seen Heading for Biggest Gain in 32 Years on Investment
http://www.businessweek.com/news/2011-08-22/gold-seen-heading-for-biggest-gain-in-32-years-on-investment.html

Bulls pounce on European stocks as gold hits record
http://www.ft.com/intl/cms/s/0/eb843958-cc6d-11e0-9176-00144feabdc0.html#axzz1Vk2VwGdR

Gold soars to record high on economic woes
http://www.reuters.com/article/2011/08/22/us-markets-precious-idUSTRE7781Q420110822

Summer malaise helps gold to fresh record
http://www.ft.com/intl/cms/s/0/eb843958-cc6d-11e0-9176-00144feabdc0.html#axzz1Vk2VwGdR

Hedge Funds Buying Corn to Silver to Soy as Commodities Tumble
http://www.businessweek.com/news/2011-08-22/hedge-funds-buying-corn-to-silver-to-soy-as-commodities-tumble.html

BLOOMBERG WIRE

- Thai Exchange Temporarily Halts Silver Futures After Price Jump (20%)
- China’s July Silver Imports Were 284 Tons, Customs Says
- Venezuela Gold Repatriation Won’t Mean Metal Scramble, UBS Says
- Gold is strong in all currencies and is entering a stage when prices go “parabolic,” Dennis Gartman says

COMMENTARY

Things That Make You Go Hmmm.... Such As A Venezuelan Dictator Bringing Down The Global Gold Cartel
http://www.zerohedge.com/news/things-make-you-go-hmmm-such-venezuelan-dictator-bringing-down-global-gold-cartel

Gold, Silver SOAR, Gold Cartel In Shambles
http://news.goldseek.com/LemetropoleCafe/1313960280.php

The Battle For Libya Is Almost Over... As Is The Battle For Its 144 Tons Of Gold
http://www.zerohedge.com/news/battle-libya-almost-over-battle-its-144-tons-gold

David McWilliams: The Future - Tax the Rich
http://www.sbpost.ie/commentandanalysis/the-future-tax-the-rich-58155.html

Should You Sell Your Gold Now? – Dominic Frisby
http://www.moneyweek.com/investments/precious-metals-and-gems/gold/money-morning-should-you-sell-your-gold-13501

Gold Standards: FT’s Lex Column
http://www.ft.com/intl/cms/s/3/0f98ae0c-ca50-11e0-a0dc-00144feabdc0.html#axzz1Vk2VwGdR

 

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Mon, 08/22/2011 - 07:57 | 1585358 Mongo
Mongo's picture

If that ship reaches Venezuela it will be nothing less then a big surprise.

Mon, 08/22/2011 - 08:32 | 1585423 Pladizow
Pladizow's picture

Will Russian or Chineesse ships accompanyed by milatary forces be used?

40 ships definitely diversifies the risk of failure of delivery.

 

Mon, 08/22/2011 - 08:38 | 1585452 bankrupt JPM bu...
bankrupt JPM buy silver's picture

$44 to 42.77 now, looks like Blythe is in early.

www.silvergoldsilver.blogspot.com

Mon, 08/22/2011 - 10:16 | 1585775 Bullionaire
Bullionaire's picture

JPM:SILVER now negative for 21 days.

 

Suck on THAT, Blythe.

 

 

Mon, 08/22/2011 - 10:44 | 1585859 Two Towers AU AG
Two Towers AU AG's picture

IN GOLD WE TRUST

http://timesofindia.indiatimes.com/business/india-business/India-set-for-record-gold-imports/articleshow/9691022.cms

Check this out guys.. not sure if the people of India will ever stop consuming gold.. 1000 tonnes of Phyisical Gold being imported this year...

Mon, 08/22/2011 - 08:51 | 1585494 Coast Watcher
Coast Watcher's picture

"40 shipments will be needed to carry the 17,000 400oz bars by sea."

Why the hell do they need 40 shipments to move a couple of hundred tons of anything by sea, much less gold?

Mon, 08/22/2011 - 09:00 | 1585527 Pladizow
Pladizow's picture

They dont "NEED" 40, they have just thought this through a little bit more then you have!

Mon, 08/22/2011 - 09:01 | 1585530 Coast Watcher
Coast Watcher's picture

Well, please enlighten me!

Mon, 08/22/2011 - 09:08 | 1585541 Sgt.Sausage
Sgt.Sausage's picture

There's an old saying, I can't quite remember it - something about "eggs" and "one basket" - I'm sure you've heard it.

 

Pirate/hijack/terrorist/common-burglar - if they manage to take a boat, they only take 1/40th.

Weather, huricane, tsunami, whatever - if it hits, it only hits for 1/40th.

Have you been enlightened, young Grasshopper?

Mon, 08/22/2011 - 09:15 | 1585558 Pladizow
Pladizow's picture

Thank you for the assist.

One plane, on one date, in one place VS. 40 ships, on several dates, in several places - that will probably have Chineese or Russian military escorts.

Which represents a greater risk??? (rhetorical question)

Mon, 08/22/2011 - 11:18 | 1585996 Thorlyx
Thorlyx's picture

nice tits by the way.....

Mon, 08/22/2011 - 13:02 | 1586500 Coast Watcher
Coast Watcher's picture

Not so rhetorical, given the reliability of air and ship travel. The odds of losing one or more of those 40 shipments are considerably higher than losing one large shipment.

 

Have you been enlightened, grasshopper?

Mon, 08/22/2011 - 09:21 | 1585569 falak pema
falak pema's picture

I don't think he'll ever "get it". He only has ONE pair of boobs to gawk at. None to spare like Hugo does with his bullion rods.

Mon, 08/22/2011 - 09:30 | 1585595 OS2010
OS2010's picture

Sgt, you beat me to it!  What are the odds of a surreptitious (friendly) "hijack" and blaming it on the US?

Mon, 08/22/2011 - 09:33 | 1585599 Mae Kadoodie
Mae Kadoodie's picture

Have the Somali Pirates expanded their operations across the Atlantic & Pacific as well?  Perhaps Capt'n Jack Sparrow is aiming to plunder Chavez booty?

Mon, 08/22/2011 - 09:53 | 1585683 Sgt.Sausage
Sgt.Sausage's picture

I'd be more worried about Ragnar Danneskjöld than I would about Cap'n Jack.

 

 

Mon, 08/22/2011 - 11:48 | 1586152 passwordis
passwordis's picture

 I think you should think it through as well because it's not going by 40 ships.. LOL. They wouldn't announce the details of transport to the world. LOL!!    The gold is going by air!   

This way Obama and or Israel can't claim Terrorists are riding shotgun and steal the gold.

 

Mon, 08/22/2011 - 15:35 | 1587254 The Man in Room Five
The Man in Room Five's picture

Just go after the one that's riding low... /italian job

Mon, 08/22/2011 - 10:29 | 1585813 agNau
agNau's picture

Osama knows the plight of shipment at sea. It is even today, fraught with danger and uncertainty.
Would it be possible that even with Chinese guard, passing over the "Laurentian abyss" ........a sinking tragically occurs!
Nah!
I hope all the Tungsten makes it to Venezuela.

Mon, 08/22/2011 - 16:19 | 1587415 ZeroHour
ZeroHour's picture

The future headlines will look rather strange:

"Guiness has just verified the worst luck a single country has ever had after Venezuela's 40th gold-laden ship sank from a "malfunction".  All 40 ships have been lost at sea.  Leaders of that country could not be reached for comment."

 

 

Mon, 08/22/2011 - 10:00 | 1585711 Red Herring
Red Herring's picture

Ruslan (Antonov AN-124), with a payload of 120 tons, and some "escort" would do the trick, no?

Mon, 08/22/2011 - 10:37 | 1585834 Spigot
Spigot's picture

Ex-act-ly my good Pladizow.

We shall see who is contracted to transport these bars...

Mon, 08/22/2011 - 08:33 | 1585432 Sofa King
Sofa King's picture

Why don't you just paint the damn ship white and paint the word Gold in big black letters on the side.  I think LLoyd's will be more than happy to pay out on this claim.  It will essentially be a huge exchange of paper for gold.  Fucking brilliant way to fill up Englands coffers with gold again.  All thanks to that brainless moron in Venezuela.

Mon, 08/22/2011 - 08:52 | 1585500 Iam_Silverman
Iam_Silverman's picture

"If that ship reaches Venezuela it will be nothing less than a big surprise."

Not really - the big players, the ones with enough resources to take the gold probably know that what he is getting is the Tungsten Bar Special (on sale now!).

Mon, 08/22/2011 - 09:59 | 1585706 Nothing To See Here
Nothing To See Here's picture

Well we know the biggest player is no threat even if the ship is full of real gold. Even if the Bernank was to find the ship wrecked on an island with its content intact, he would leave it there obviously. Who in his right mind would pick up such a load of barbarian tradition?

Mon, 08/22/2011 - 14:22 | 1586885 Anton LaVey
Anton LaVey's picture

I respectfully disagree: you can bet the Venezuela Central Bank first task will be to test a large sample of the bars delivered from London.

If some, most or all of them are found to be gold-painted Tungsten, all hell is going to break loose on the PM markets. Gold prices would then go to the stratosphere.

Mon, 08/22/2011 - 09:38 | 1585622 Hulk
Hulk's picture

That ship doesn't reach Venezuela , the ensuing panic will light gold on fire. This operation has to be pulled off perfectly and the bankers know it...

Mon, 08/22/2011 - 07:58 | 1585359 sudzee
sudzee's picture

Bank of Canada has 0 gold. Will have to borrow from Sprott.

Mon, 08/22/2011 - 08:38 | 1585450 Smiddywesson
Smiddywesson's picture

Excellent observation.   All paper gold has risk.  Is SGOL, the Swiss fun any safer?  Snippet from a Canadian article: 

Selling our 109,000 ounces would yield about $196 million today. Perhaps those who crow about Canada's balance sheet and bulletproof financial system should keep this paltry total in mind as they denigrate our neighbours to the south for their debt troubles.

Canada had 21 million ounces -- 653 tonnes -- before 1980 when gold sales started, according to a 2002 Reuters story that I found. The article relates how Canada "took advantage of the sizzling price of gold" to sell 1/8th of its remaining gold reserves. That sizzling price? $350 US an ounce.

Mon, 08/22/2011 - 09:09 | 1585545 samsara
samsara's picture

Read WHY Canada sold the Gold.  Reagan, CIA,  deflate the price of Oil, And Gold.  USSR's (at the time) source of hard currency.

WHEN IRISH EYES ARE SMILING

http://www.lemetropolecafe.com/Pfv1.cfm?pfvID=2612&SearchParam=Shamrock+Summit

"If Canada’s gold was instrumental, it is certainly understandable why neither Brian Mulroney nor his finance minister, Michael Wilson, would want to talk about it publicly. It would not have been helpful for our trading relationship with our ‘Soviet comrades’, if either of these esteemed gentlemen had risen in the House of Commons and announced that Canada was selling its gold in an internationally co-ordinated effort to bring an end to communist regime in the U.S.S.R."

Mon, 08/22/2011 - 07:59 | 1585360 HelluvaEngineer
HelluvaEngineer's picture

Sorry, I think they're gonna give it the silver smack down this week.  If they do, I'll buy more.

Mon, 08/22/2011 - 08:07 | 1585378 maxmad
maxmad's picture

So far so good on that one!

Mon, 08/22/2011 - 08:16 | 1585390 HelluvaEngineer
HelluvaEngineer's picture

Remember what happened when people started chasing silver

Mon, 08/22/2011 - 08:23 | 1585408 maxmad
maxmad's picture

looks like we may run up to 50 this week.... I wouldn't hold your breath on a drop!  Even if there is no direct QE3 announcement at Jackson Hole, I would still expect a pop in PM's....

Mon, 08/22/2011 - 08:02 | 1585361 DB Cooper
DB Cooper's picture

The Dollar (paper) was the real bubble - gold going up only reflects the fiat bubble bursting.

Mon, 08/22/2011 - 08:01 | 1585362 bullionbaron
bullionbaron's picture

Gold is really pushing the price boundaries that are possible given the current Gold/Oil ratio.
Ratio currently sitting at around 23, however history shows that it struggles to hold above 21.
Lower Gold prices on the way short term in my opinion.
http://www.bullionbaron.com/2011/08/goldoil-ratio-where-is-it-heading.html

Mon, 08/22/2011 - 08:43 | 1585465 Smiddywesson
Smiddywesson's picture

Those ratios are no longer very useful.  The game has changed completely for obvious reasons.  Supply and demand matter most when the manipulators of price constitute such a large percentage of the demand.  They can only push prices lower if they can hold their conspiracy together and collectively stop buying on the dips.  But this isn't 2008, and the conspiracy isn't as strong as it used to be.  The Chinese are not playing along, and now Venezuela left the pack.  Who next, panic buying from the Canadian central bank? 

Mon, 08/22/2011 - 08:58 | 1585513 bullionbaron
bullionbaron's picture

Why are the ratios no longer useful? Is it just the Gold/Oil ratio or are you suggesting all ratios are now obsolete? You don't think we'll see 1:1 with the Dow?

Venezuela want their Gold? I remember reading Germany asked for their Gold a couple of years ago as well... what happened to that?

I do think Gold has a long way to run higher in this bull market, but I also think it's at or very close to a top right now (a SHORT TERM top). Happy to be wrong as I am long metals with around 50-60% of my capital right now...

Mon, 08/22/2011 - 09:26 | 1585585 Jim in MN
Jim in MN's picture

Gold:Dow 1:1 at 5,000 is a pretty fair guess IMHO

As for oil, well let's let the ratio tell us.  At 20, it would imply $250 oil.  In US dollars.  In yen or euros, well...interesting question.

If Bernanke continues to devalue $250 oil may be just about right.  Even if there's no sneak peak in oil.

Mon, 08/22/2011 - 10:52 | 1585884 Spigot
Spigot's picture

That is my approximate target as well: $5000 for each.

Its going to be one hell of a ride, IMO.

Mon, 08/22/2011 - 09:35 | 1585616 h3m1ngw4y
h3m1ngw4y's picture

if you panic, panic first. and panic without sound

Mon, 08/22/2011 - 09:50 | 1585672 mess nonster
mess nonster's picture

There seems to be a strong resistance ceiling in gold/oil ratio around 30 barrels/ounce. A breakthrough will indicate a PO (permanent) production squeeze that will indicate a prudent jump into oil.

Oil is useful... until it is all gone.

Gold has no use whatsoever. But it is forever.

Mon, 08/22/2011 - 11:15 | 1585981 RockyRacoon
RockyRacoon's picture

Gold has no use whatsoever.

True.  That's why it works so well.  One of the least mentioned features of what makes a good preserver of wealth is that it be a luxury, or of no use other than it is what it is.   Other factors such as scarcity, divisibility (portability), inertness also are present in gold.   If gold had a large function in manufacturing or other areas that would diminish its preservation it would not serve so well as it does today.   Finding out that a large dose of gold in some medical format would cure cancer would reduce gold to a mere commodity, and that would reduce its role as a wealth preservation medium.   The "price" is high in absolute terms but very cheap when one considers a sudden, life-saving or high-tech application that would offer a high return scenario.  

Mon, 08/22/2011 - 12:37 | 1586385 tamboo
tamboo's picture

hmmmm so why is it so valuable for eons?

one theory:

"445,000 ago, Ea, a Nibiran Sumerians call Enki, rocketed to Earth. Medical officers, 600 miners and 300 crewmen followed him to Earth to get gold to contain and shield Nibiru’s atmosphere. We of theTwenty-First Century use gold as a shield too, in spaceshuttle widows."

http://www.enkispeaks.com/

mom and dad will be demanding delivery of all of it soon as their planet gets back in town

Mon, 08/22/2011 - 12:46 | 1586422 akak
akak's picture

Since this supposed planet Nibiru is presently nowhere to be seen in the Solar System, it must be moving at truly incredible speeds, in one hell of an elliptical orbit.  One has to wonder how the Nibirians fare during the 99.999999% of their year out somewhere in the Oort Cloud at sub -400 degrees Fahrenheit.  One would think that they would much prefer some enriched uranium for nuclear reactors, or even a nice thick blanket, to gold.

I incline more to the Leprechauns-with-pots-of-gold-at-the-end-of-rainbows theory myself.

Mon, 08/22/2011 - 15:43 | 1587275 The Man in Room Five
The Man in Room Five's picture

This. so many people don't understand that you don't want your money to be used for anything else. My father's biggest beef with a gold currency is that we'd be wasting so much human labor and energy to pull a metal out of the ground that doesn't do anything. He doesn't get that it's a small price to pay for the self-optimizing market that emerges from the use of gold as money.

Tue, 08/23/2011 - 01:25 | 1589241 akak
akak's picture

Anyone who would claim that gold is "useless" would logically also have to claim that policemen, judges, lawyers, composers, musicians, poets, entertainers, priests and monks are "useless" as well, just because they do not directly produce a physical, recognizable product for society.

(Well, I might concede the point with the lawyers.)

Mon, 08/22/2011 - 11:32 | 1586077 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold has no use whatsoever.

Except that it trades for oil.

Mon, 08/22/2011 - 08:01 | 1585363 Badabing
Badabing's picture

BOE says it will ship the gold via the coast of Somalia

Mon, 08/22/2011 - 08:11 | 1585385 BlaZingPenguin
BlaZingPenguin's picture

that's going to be a long boat ride, all the way from libya through the suez canal to colombia

Mon, 08/22/2011 - 08:25 | 1585411 Badabing
Badabing's picture

BOE figures144tons of Libyan gold -99tons for Hugo 45tons balance and then, oops pirates take it all. Oh well Lloyds will insure it and pay out in full with FIAT

Mon, 08/22/2011 - 08:32 | 1585427 The Swedish Chef
The Swedish Chef's picture

You do know that Venezuela has a long strech of coast, right? And that Chavez is the president of Venezuela, not Colombia? Please, say that you knew...

Mon, 08/22/2011 - 08:56 | 1585505 Iam_Silverman
Iam_Silverman's picture

"Please, say that you knew..."

The Ministry of Truth will be along shortly to fix that post.

If your avatar happens to find my wristwatch in there, could you have her forward it to me by post?  Oh, in a plastic bag, of course.

Mon, 08/22/2011 - 09:03 | 1585533 The Swedish Chef
The Swedish Chef's picture

I´m sure we´ll find some space on the Venezuelan gold boat. Don´t worry, I´ll have your watch insured in cases pirates, odd storms or space aliens manages to sink all the tungst...gold bars.

Mon, 08/22/2011 - 11:23 | 1586024 MobBarley
MobBarley's picture

This made me laugh almost out loud.

 

Mon, 08/22/2011 - 08:04 | 1585365 TradingJoe
TradingJoe's picture

Hah, another "bounce" today, heheheh! Am long paper PMs, with tight stops, once executed I'll buy more Physical on the "weaknes", hehehe! Nice Monday for me, don't know about all the "hopefulls" on FEDster's doling out more money this week! HEHEHEH!

Mon, 08/22/2011 - 08:03 | 1585366 Snidley Whipsnae
Snidley Whipsnae's picture

Continued weakness in all fiats means continued strength in PMs... end of story.

Mon, 08/22/2011 - 08:08 | 1585377 sudzee
sudzee's picture

Typical LBMA 4am - 8.30 "gold garage sale" going on again this morning. Last gasp "gold at half price" day. LBMA needs a lower price so they can buy it on the open market to send to Chavez.

Mon, 08/22/2011 - 08:20 | 1585397 ViewfromUnderth...
ViewfromUndertheBridge's picture

Well, it is fungible...

Mon, 08/22/2011 - 08:09 | 1585380 Smiddywesson
Smiddywesson's picture

Gold’s 6.2% rise last week and silver’s 8.2% rise was barely reported in the press and media in Europe over the weekend – with all the focus continuing to be on equities and to a lesser extent bonds.

Absolutely hilarious.

(eyes closed, thumb and forefinger on the bridge of my nose)  "OK, OK, OK, I think I've got it.  Stocks up, gold up.  Stocks down, gold up.  Right?"

Question:  Where do you think stocks are going?

Answer:  Who cares?

WWWWWeeeeee!

Mon, 08/22/2011 - 08:29 | 1585418 machineh
machineh's picture

'The dumb money continues to warn that gold and silver are bubbles.'

Gold and silver ARE in bubbles. It's like Nasdaq 5000 -- WHEEEEE!!!!

Even a retarded squirrel finds a nut now and then. :>)

Mon, 08/22/2011 - 11:53 | 1586177 akak
akak's picture

Gold and silver ARE in bubbles.

And US and European bonds, and governmental debt in general, are ....... ?

Mon, 08/22/2011 - 08:11 | 1585384 urbanelf
urbanelf's picture

I think the fact that all the gold-is-in-a-bubble folks have their eyes glued to the gold/pile-of-paper ratio is the ultimate misdirection that should make any magician jealous.

Mon, 08/22/2011 - 08:36 | 1585440 Koffieshop
Koffieshop's picture

Yeah, thinking in terms of money instead in terms of value. The classic mistake.

Mon, 08/22/2011 - 12:21 | 1586290 Strider52
Strider52's picture

Yes, I know all about "you won't get rich with gold", it has no dividend, it's gains are really just preserving purchasing power, etc, but gold has now increased over 53% in one year, and I don't think the currency has devalued 53% in one year. So, it's kinda difficult to say that goldbugs aren't seeing some form of actual gains.

Mon, 08/22/2011 - 09:06 | 1585538 Smiddywesson
Smiddywesson's picture

Bubbles reach the popping point when trade becomes dominated by the Greater Fool principal.  In most cases, this is because the public has jumped in with both feet and frothed up the waters.

Gold trading has not been taken over by the Greater Fool principal.    Central bank purchases are a chief source of demand.  They are buying and holding prices down, not pushing them up.  They have not taken such pains to buy at lower prices, merely to dump their stores of gold.  They can only push prices lower by halting their purchases, which they won't do.  Margin hikes are becomming ineffective and won't cut it anymore to suppress prices.

On the other hand, the public in the US seems hardly aware of gold.  They are inundated with commercials to induce them to sell their gold, and commercials to sell them gold, but very few have acted.  They have a lifetime's worth of conditioning to sit in the stock market and a lifetime's worth of disinformation about gold to restrain them.  Many of the ones would would have acted think they already missed the boat. 

Repeating like magpies that gold is in a bubble earns the public the pat on the head for being so smart they so desperately yearn for from other magpies.  Until they start congratulating each other for the intelligence of following the crowd, we will not have a Greater Fool situation.  This is simple human nature, and the driving force behind wholesale acceptance of such religions as: global warming; free trade; notions about racism; politics; religion; you name it.  Groupthink becomes a religion.   Gold is not yet a religion among the public, so even without the fundamental arguments why gold must rist, just based on psychology alone, gold doesn't qualify for a bubble yet.

 

Mon, 08/22/2011 - 11:23 | 1586009 RockyRacoon
RockyRacoon's picture

Thank goodness for inertia, momentum, or whatever it is that keeps people from actually ACTING on what may be best for them  -- like buying PMs.   The other side of the coin is the self-talk that makes people look for that confirmation of why they don't buy:  Bubble, fad, late to the party, or whatever.   I like it!   Being a contrarian by nature, I hate crowds, mobs, and group-think.   The time to either start burying my stash or selling it will be apparent.   I'll bury it when the hungry start to migrate out of the city, and I'll sell it when the financial markets get some common sense and fixes itself.   I wouldn't bet on the latter.   Well, actually, I have bet on it by buying at every opportunity.

Mon, 08/22/2011 - 08:13 | 1585387 WmMcK
WmMcK's picture

Bubbles, tiny bubbles -- Don Ho (hold the Bitchez)

PM's are not in them yet by a long shot.

Mon, 08/22/2011 - 08:13 | 1585389 Azannoth
Azannoth's picture

Smells likes Pirates of The Carribean all over again

Mon, 08/22/2011 - 08:27 | 1585414 falak pema
falak pema's picture

Do you think hugo will sub his bullion ship protection to Captain Sparrow?

That would make Johnny Depp's day; another sequel to the old tale. $$$$$$!

Mon, 08/22/2011 - 08:17 | 1585393 TooBearish
TooBearish's picture

I'm calling bull shit Tyler - they can fly 100 tonnes in a 747 crago jet - no fukking way by sea.

Mon, 08/22/2011 - 08:23 | 1585406 Smiddywesson
Smiddywesson's picture

Sorry toobear, I have to differ.  Would YOU ship your gold on one vessel and risk it having an accident and disappearing?  By the time they found it was empty it would be old news.

Mon, 08/22/2011 - 08:27 | 1585416 Midnight Rambler
Midnight Rambler's picture

Exactly. Time is of the essence here.

Mon, 08/22/2011 - 08:33 | 1585428 Mr. Mandelbrot
Mr. Mandelbrot's picture

I agree--sea shipment too risky.  Calling the Antonov AN-225.  Can hold 550,000 lbs. (225 tons) internally . . .

 

http://en.wikipedia.org/wiki/Antonov_An-225

Mon, 08/22/2011 - 08:37 | 1585447 Pladizow
Pladizow's picture

One plane on one date in one place VS. 40 ships on several dates in several places - that will probably have Chineese or Russian military escorts.

Which represents a greater risk??? (rhetorical question)

Mon, 08/22/2011 - 08:46 | 1585474 Old Poor Richard
Old Poor Richard's picture

Yup, we've seen that movie.

 

Mon, 08/22/2011 - 09:50 | 1585670 Uncle Remus
Uncle Remus's picture

Apparently the Chinese have some stealthy submarines...

Mon, 08/22/2011 - 10:21 | 1585792 snowball777
snowball777's picture

And now a little game theory: is it better to divide the gold equally among the 40, put it all in 1 with 39 decoys, or some other distribution?

My personal choice: 20 decoys and a binomial distribution over the remaining 20.

 

Mon, 08/22/2011 - 11:11 | 1585962 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

+1

Mon, 08/22/2011 - 11:25 | 1586039 Thorlyx
Thorlyx's picture

Another idea here. You divide in 41, give me one part, and do what you want with rest....

Mon, 08/22/2011 - 08:20 | 1585399 Smiddywesson
Smiddywesson's picture

There is also very little knowledge of financial, economic and monetary history and a continuing ignorance regarding ‘investment 101’ which is diversification.

Oh I'm diversified alright.  I own gold, AND silver.  That's all the diversification I can stand in this abortion of a market.  Anyone in stocks or bonds, or just about anything else, is just gambling.

(Oops, I forgot my hedge in bullets)

Mon, 08/22/2011 - 08:28 | 1585401 bob_dabolina
bob_dabolina's picture

The money doesn't get any dumber than Chavez.

Might wanna' be looking for a short/medium term top right here. This is unless of course people think Chavez is the smartest money at the table, in which case I would proffer you to take his side of the trade. 

I'm going short gold here.

Mon, 08/22/2011 - 08:33 | 1585430 slewie the pi-rat
slewie the pi-rat's picture

earth to bob_d:

this is not a trade

Mon, 08/22/2011 - 08:50 | 1585490 bob_dabolina
bob_dabolina's picture

Cramer said this morning that he's a gold bug, and always has been. 

Just sayin'

Mon, 08/22/2011 - 09:25 | 1585583 Snidley Whipsnae
Snidley Whipsnae's picture

"Cramer said this morning that he's a gold bug, and always has been. "

He is also a babbling fool and always has been... are you long babbling fools?

Mon, 08/22/2011 - 12:29 | 1586348 Strider52
Strider52's picture

I briefly tuned in CNBS this morning - just to see where the POG was - and Cramer was so amped on something that he was having trouble making sense. The other crews were rolling their eyes, shaking their heads slightly, etc. Geez, Cramer, lighten up on the amperage in the mornings. I don't know why they can't find someone else to take his place, preferably a cute gal, of course.

Mon, 08/22/2011 - 12:16 | 1586235 akak
akak's picture

Cramer said this morning that he's a gold bug, and always has been.

A very curious claim, given Cramer's repeated and numerous CNBC bashings of gold in 2008 and 2009, and his rabid insistence on the superiority of holding equities above "dead commodities".  Repeat a lie often enough ..........

The only thing dead here is that part of Cramer's body above the neck (minus, of course, the mouth, which is autonomously animated).
That, and his credibility.

 

Mon, 08/22/2011 - 08:59 | 1585523 Iam_Silverman
Iam_Silverman's picture

"this is not a trade"

Right.  It's like withdrawing your savings from BAC and putting them in your mattress.  Makes sense to me!

Mon, 08/22/2011 - 09:13 | 1585555 Smiddywesson
Smiddywesson's picture

A lot of people shorted stocks over the last two years and got creamed.

A lot have shorted gold with a similar result. 

Even if we were just discussing something with no fundamental reasons to continue to rise, shorting a ten year trend can be a littly risky.

Mon, 08/22/2011 - 09:24 | 1585579 fuu
fuu's picture

Robo can give you the number of a good blood transfusion service.

Mon, 08/22/2011 - 11:20 | 1586010 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bob,

Please always post when you think there will be a top.

Thank you.

Mon, 08/22/2011 - 14:43 | 1587015 Bay of Pigs
Bay of Pigs's picture

I wonder how Bob's "silver to 20 bucks by Dec" call is working out?

Mon, 08/22/2011 - 08:22 | 1585402 wilburpup
wilburpup's picture

with danger of more physical delivery, does it make more sense to own the producers, whose stocks have vastly underperformed the metal?

 

Mon, 08/22/2011 - 11:06 | 1585936 snowball777
snowball777's picture

Fuck paper.

Mon, 08/22/2011 - 08:23 | 1585409 Oh regional Indian
Oh regional Indian's picture

Very interesting trend I'm seeing. I check Google News to see what stories are being pumped and what stories are being dumped. A good social engineering by news indicator.

LAst few months, Au/Ag were never mentioned, up/down or sideways.

LAst week, every day, th estory was there, at least twice on the same Google News landing page. And as is their style and India's unregulated market, each of the three bold headlines had a different price mentioned and a different sentiment. It's parabolic, it's a bubble, it's good, it's silly.

Tells me that there is a bit of confusion in the controllers minds right now and PM's are going to see wilder swings in all directions. Hold on seems to be the best play of the day/week.

Vivek (ORI)

http://aadivaahan.wordpress.com

Mon, 08/22/2011 - 11:23 | 1586027 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I have noticed during the last few years the media, and especially in advertising, has used gold and silver as catch phrases.  This may be subliminal advertising, or maybe gold and silver are creeping back into the fore.

Mon, 08/22/2011 - 12:20 | 1586278 Real Estate Geek
Real Estate Geek's picture

And now starts the speculation that Col. Gaddafi could be fleeing to . . . Venezuela of all places! 

http://preview.tinyurl.com/3k9j4u8 

As Gomer Pyle would say, "surprise, surprise, surprise!"

Mon, 08/22/2011 - 08:51 | 1585419 FlatEric
FlatEric's picture

Yeah, cool move Hugo! Now your next on the GS/JPM list since Blankfein today was able to take Mr. Q officially from it and made you No.1

In case you didn't know:

http://angryrottweiler.wordpress.com/2011/08/22/message-from-goldman-suc...

Mon, 08/22/2011 - 08:56 | 1585506 Old Poor Richard
Old Poor Richard's picture

Chavez has just anted up at the Axis of Evil table with this move.  How long before we get a CVN and a few DDs and CGs down there?

 

Mon, 08/22/2011 - 09:14 | 1585557 FlatEric
FlatEric's picture

Better leave the screenplay development to people like James Cameron and the Pentagon...

In "Avatar" he takes care of Venezuela in a sense that his movie will be up to date in 2 years from now.

http://www.youtube.com/watch?v=t6kTGn52dCw

 

Mon, 08/22/2011 - 09:56 | 1585689 Uncle Remus
Uncle Remus's picture

From Chavezes (oops, I mean Venuzuelas) perspective, his (their) gold may well be Unobtanium.

Mon, 08/22/2011 - 08:30 | 1585421 anony
anony's picture

Don Ho?

Shouldn't you be making arrangements for either spending every cent you have, or passing it on tax free to whomever?  Like, yesterday?

Mon, 08/22/2011 - 11:07 | 1585938 snowball777
snowball777's picture

Dibs on the hawaiian shirt collection.

Mon, 08/22/2011 - 08:30 | 1585422 somethingelse
somethingelse's picture

40 shipments of gold from england to venezuela....i think it's same to presume one or more get waylaid by pirates.

wow....just like back in the explorer days of the 1300-1500's....pirates going for gold booty

Mon, 08/22/2011 - 08:35 | 1585437 Mr. Mandelbrot
Mr. Mandelbrot's picture

Maybe the 40 number is just a diversion.  If I were shipping by sea, I would have far more ships without gold than with so there less of a chance that pirates would actually get anything . . .

Mon, 08/22/2011 - 09:39 | 1585629 citta vritti
citta vritti's picture

a la The Italian Job?

Probably all going by plane(s). Or better yet, Chavez is asked to take delivery personally, brick by brick.

Mon, 08/22/2011 - 09:42 | 1585640 Carmagnole
Carmagnole's picture

The "40 shipment" is probably an incompetent journalistic fumble, and is meant to describe the number of times an armored truck will have to convey 2.5 tons of gold bars from the bullion vault to the docks where it will be transferred aboard one of the ships on this list

http://en.wikipedia.org/wiki/Bolivarian_Armada_of_Venezuela

most of those having a larger than 90 tons cargo capacity, and in a small convoy making a not-very-easily-piratable target, by the way

 

You shouldn't misunderestimate Chavez, his was a master coup

You can expect some of the sailors to be equipped with cordless drills, and to throw back on the bankers the gold that will be found too hard and too dark to be worth more than 50bucks a kg.

Yes, they WILL have fully loaded spare batteries for the drills

Mon, 08/22/2011 - 11:28 | 1586060 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Great post!

Back in the day, more times than not, pirates worked for the Royal families.  The pirates would take over a ship, loot the gold, deliver the gold back to the Royals, the Royals would pay them and give them another perdium to rob another ship, and then collect insurance on the ship.  People would think the Royals had lost their gold, and taxes would be increased because....problem, reaction, solution.

 

Mon, 08/22/2011 - 08:31 | 1585425 The Deleuzian
The Deleuzian's picture

The most likely outcome of "A Gold Bubble" would be a monetization event...  Not a crash signiature vs. the US Dollar (which is terminal)

Gold I suppose has 'gone up' but as far as the 'mass psychology of a bubble?'  NA!! I definitely do not see it.  Still meet people who think the US $1 coins are real gold!!  We are far from the end of this!!

When you no longer project any downside to gold, (ie.. It will never go down!...) Who cares how much you had to spend to get an oz. of gold/silver.. (Atleast you got it!!)  These are the attitudes and atributes of "A Bubble'

When bloomberg is highlighting Canadian juniors with analysts from the big houses debating how high they will go...

I'm just saying...

Mon, 08/22/2011 - 08:34 | 1585435 Sudden Debt
Sudden Debt's picture

Options go south this week so I expect some serious PM bashing by wednesday or another hike by tomorrow.

 

Mon, 08/22/2011 - 08:40 | 1585456 Sudden Debt
Sudden Debt's picture

TAKE THE SHORT CUT THROUGH THE BERMUDA TRIANGLE!!

Mon, 08/22/2011 - 08:46 | 1585473 DosZap
DosZap's picture

Be an idiot to ship it all at once,needs to break it into 3 shipments.

No matter what mode.

I like the odds of some making it, if it leaves in partial loads.

Never put all yer aigs in one baskit.

Mon, 08/22/2011 - 08:48 | 1585483 Yogibear101
Yogibear101's picture

"The long term outlook for gold and silver prices is rainbows, unicorns and butterflies as far as the eye can see" said one trader who goes by the nickname Yogibear101.

Mon, 08/22/2011 - 08:51 | 1585485 Ignorance is bliss
Ignorance is bliss's picture

If we look at the ratio of 850 to 250 being 3.4 and multiply that by the current price of Gold ($1900) then to see the peak price adjusted for inflation = $6450 an ounce of Gold. If we took $6450 and extrapolated Silver at 17 to 1 (what we saw w/ the Hunt Bro) then we are looking at $379 Silver. We should be at $111 today. Iif you believe the correct ratio betwn. Gold and Silver should be in the  17 to 1 neighborhood. 

 

I don't believe in diversification... not when the system is a Ponzi scam. No thanks...I feel much safer knowing what's in my safe.

I was listening to Kings world news. A silver dollar bought 5 gallons of gas in 1950. a Silver dollar today will almost fill it up. (rough paraphrase)

Mon, 08/22/2011 - 08:55 | 1585502 Sudden Debt
Sudden Debt's picture

a Silver dollar today will almost fill it up.

Depends on which side of the world you live.

I need 4 peace dollars to fill up my car.

 

 

 

Mon, 08/22/2011 - 09:08 | 1585540 Ignorance is bliss
Ignorance is bliss's picture

I went to Italy back in April for 2 weeks. I couldn't believe how expensive Gasoline had become. Too fill up a hybrid cost me about $100 fiat dollars or 2.5 American Eagles. The tolls the Italians pay to use the highway were also outrageous. High fuel prices and taxes are certainly a burden on their economy.

Mon, 08/22/2011 - 09:35 | 1585617 FlatEric
FlatEric's picture

You should be aware of who is the main supplier of gas to Italy! Guess who? Mr.Q from L., the one Berlusconi is kissing hands. Either that meant "Thanks for the cheap gas and the bribes" or Berlusconi wanted to be healed form impotence by the healer from Tripolis! May be we will find out that the BUNGA BUNGA stuff was an idea for Mr.Q in the end and not that of Berlusconi. Anyway, as Mr. Q is officially been kicked out of healer business today expect prices for gas to drop in Italy. How convenient for the italian and all who have been short oil.....

Mon, 08/22/2011 - 09:41 | 1585633 ViewfromUnderth...
ViewfromUndertheBridge's picture

many here would agree with the concept of "user pays"...

high fuel prices and tolls (note, you pay this particular tax or you don't get any further down this road, other taxes are a national past-time) anyway, where was I? Right, sucks to have those high fuel costs in Italy, right? Whereas in USA the costs are seperated...gas prices and military adventures in oil producing regions...imagine if the costs were accurately reflected at the pump. Pay as you go, indeed!

Remember Rupert was in favour of Iraq for "$20/barrel oil".

Mon, 08/22/2011 - 11:21 | 1585990 Ignorance is bliss
Ignorance is bliss's picture

When we can no longer fund the military juggernaught we in the U.S. will see prices like the Italians. The real questions are when, and how will the population react when they can't afford to fill the truck for a pit stop at McDonald.

 

By the way: Was recently at McDonald getting a coffee for a really long drive (work related). I hit them at around 5:00 P.M. just as the dinner crowd was coming in. It was full of lower income minority workers. The crowd was in really bad shape, from kids to adults. Maybe there is nothing to fear from these soft, malnourished citizens. They looked defeated.

 

Perhaps the ones outraged are upper middle class bordering on elitist status. Maybe Joe Six has already been defeated.

Mon, 08/22/2011 - 11:10 | 1585952 snowball777
snowball777's picture

But was the traffic light?

Mon, 08/22/2011 - 11:18 | 1585998 Ignorance is bliss
Ignorance is bliss's picture

Yes...except for rush hour and I believe the real reasons Italians drive fast is to get the hell off the road. It costs a fortune to be on it.

Mon, 08/22/2011 - 08:50 | 1585491 FlatEric
FlatEric's picture

May be he sould ask the chinese if he's allowed to rent their new aircraft carrier for a short trip! Failsafe IMHO. Who ever sinks the carrier should not forget to have some "Made in Iran" or "PR of North Korea" sticker on the torpedo for the forensics. :-)

Mon, 08/22/2011 - 08:58 | 1585517 DutchR
DutchR's picture

Just Fed-Ex the stuff.

(the standard 747-400 Freighter can carry 124 tons (113,000 kg) of cargo up to 4,450 nautical miles (8,240 km))

Mon, 08/22/2011 - 09:12 | 1585551 tip e. canoe
tip e. canoe's picture

 “Once that’s done, the shipments will begin by sea.”

note to ship's captain: stay clear of the Bermuda Triangle.

Mon, 08/22/2011 - 10:45 | 1585861 False Capital
False Capital's picture

Fire up the HAARP boys! Can't let that shipment of tungsten make it to the assay office in Caracas.

/takes tinfoil hat off.

Mon, 08/22/2011 - 09:13 | 1585553 Silverhog
Silverhog's picture

Boy is this the most screwed up forecast for Gold.  

http://www.cnbc.com/id/44224584

Mon, 08/22/2011 - 10:36 | 1585833 Badabing
Badabing's picture

Nice find SH

Published: Monday, 22 Aug 2011 | 6:35 AM ET
By: Reuters

 The brokerage now sees gold prices of $1,650 per ounce for 2012 and $1,500 per ounce for 2013.

It had previously forecast $1,325 per ounce for 2012 and $1,225 per ounce for 2013.

LMFAO  I wonder if CNBS changed the stats

Mon, 08/22/2011 - 11:37 | 1586098 augmister
augmister's picture

Cramer just wants to get in!  LOLOLOLOLOL

Mon, 08/22/2011 - 13:04 | 1586512 zerozulu
zerozulu's picture

They are not talking about the price of gold but the price of museum ticket in 2013 to watch an ounce of gold.

Mon, 08/22/2011 - 09:16 | 1585559 Downtoolong
Downtoolong's picture

There is little knowledge of the very small size of the physical bullion markets vis-à-vis the stock, bond, currency and other markets

Not to mention the size of the paper gold markets. This is the problem with most commodity markets really (I know, gold is money not a commodity, yada, yada). When the dog starts wagging its tail the tail instantly starts wagging the dog even more, because, the tail is 100 times the size of the dog. I like gold as an investment, but, this shitty market structure adds too much risk to make it a big part of my portfolio. I guess I can thank the bozos on Wall Street for that too.

Mon, 08/22/2011 - 09:19 | 1585568 scratch_and_sniff
scratch_and_sniff's picture

The fundamentals may not indicate a bubble, but the price does, so does the behaviour of the herd. Its not that the "price has gone up so it must be a bubble", its the way that the price has gone up - if it had of slowly grinded up to 1900 then no need for concern, happy days, but it has lept up; the buying has entered a critical phase of the bubble. The model i am tweaking gives 4th September for a critical saturation point, i.e. when the moon is in the Seventh House and Jupiter aligns with Mars, peace will guide the planets and love will steer the stars. Don’t say you weren’t warned.

Mon, 08/22/2011 - 09:46 | 1585651 ViewfromUnderth...
ViewfromUndertheBridge's picture

we were warned, for years and years...after $1,764 the price goes exponential. Golden Angels, Lady-Dogs!

Mon, 08/22/2011 - 09:24 | 1585580 Gromit
Gromit's picture

Any of the gold ETFs is at least as safe as a money narket fund.

Mon, 08/22/2011 - 09:29 | 1585588 cramers_tears
cramers_tears's picture

A russian battle frigate w/ air support will easily carry 425 (1/40th) 400 oz bars.  Insured via Lloyds through multiline coverage underwriting for each load.  @1870/oz each load will be only $317,900,000 which will be easily syndicated on the coverage.  So even if the gold never makes it - Hugo still gets paid.  I'm sure Russia is lovin' this shit.  Hell it might have been their idea.

http://www.darkgovernment.com/news/did-someone-hit-rewind-on-history-or-...

Mon, 08/22/2011 - 09:29 | 1585590 FlatEric
FlatEric's picture

Now posted this earlier but I think it fits: Mr. Q asked for being repayed from losses that GS caused and today he is gone. Hugo asked for his gold at BOE and JPM and should have learned his lesson by today. Never underestimate the network of finance and the MIC as they will surely help out.

Some of the european leaders have been happy to be on the tv screens with Mr.Q while at the same time Chavez is really off limits. Looks like money can buy you friends I would say. Anyway my condolences go to Sarkozy and Berlusconi who lost a friend today, especially one that used to help out in times of need....

Berlusconi kissing Mr. Q's hand is priceless. The real Mafia...

http://angryrottweiler.wordpress.com/2011/08/22/in-memory-of/

 

Mon, 08/22/2011 - 09:33 | 1585610 Inspector Bird
Inspector Bird's picture

For what it's worth, gold IS in a bubble.  Once the dollar is worthless, gold's value (in dollar terms) will go from however high it gets to zero - because nobody will sell it for dollars. 

Technically, that's a bubble, isn't it?  LOL

I tell people who say it's a bubble there 2 ways to look at it, if you assume it's a bubble (honestly, it is, but there are good reasons for it to bubble).

1. Saying it's a bubble doesn't inform you of anything.  If you don't know what the peak will be or when it will occur, then it's like investing in anything else.  You can buy and hold Pan Am stock in 1955, and today you could still be saying "it wasn't a bubble in 1965, I don't understand what happened."  Anything can, and will have peaks and valleys, but unlike stocks, gold will always be around.

2. You have to assume that, given the reasons for it bubbling, only 2 outcomes are possible.  The first would be bad - the government gets its act together and solves all its issues, stabilizes the economy and gold pulls a 1980's classic collapse.  This seems unlikely, but is completely possible and if you hold on too long, you'd be hurt.  So buy and be prepared to sell - big deal.  The second is the government DOESN'T fix anything, and the dollar is worthless and gold goes from $10,000 an ounce to zero overnight.  But you're holding gold, and guess what?  NOW THAT'S MONEY!  You win.

 

Or you could buy gold mining stocks, but there is plenty of risk in those.  What's interesting is how they've been ignored to a large degree........

Mon, 08/22/2011 - 10:00 | 1585709 aphlaque_duck
aphlaque_duck's picture

If nobody is selling then the price (bid) continues rising toward infinity. 

Mon, 08/22/2011 - 10:18 | 1585778 bill1102inf
bill1102inf's picture

Yes, it will go to infinity like so many other things.  Not.  It will go the same way EVERY "thing" has gone before.

Mon, 08/22/2011 - 10:38 | 1585838 bill1102inf
bill1102inf's picture

Yes, it will go to infinity like so many other things.  Not.  It will go the same way EVERY "thing" has gone before.

Mon, 08/22/2011 - 12:54 | 1586469 zerozulu
zerozulu's picture

Gold is not like everthing.

Mon, 08/22/2011 - 11:34 | 1586088 Abitdodgie
Abitdodgie's picture

I was in a coin shop in Fargo on Friday and there was a line out of the door of people SELLING gold , we dont need no stinking gold , says America 

Mon, 08/22/2011 - 12:21 | 1586292 RockyRacoon
RockyRacoon's picture

An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is “trade in high volumes at prices that are considerably at variance with intrinsic values”.

There ya have it.   There are too many arguable terms (variables) within this definition to be a firm definition.   It's too squishy.   There are terms that need defining within the definition of the term being defined.    Bottom line:  One man's bubble is another man's investment of a lifetime.

Mon, 08/22/2011 - 09:43 | 1585641 Eugend66
Eugend66's picture

It`s a fizzle. CNN will show his ugly mug confirming the air lift was succesfull. Putting that kind of wealth at the mercy of the sea only worked with spanish gallions and the earth is flat mentality. Oh ..... air drop confirmation will come from Beijing, IMVHO.

Mon, 08/22/2011 - 09:50 | 1585671 Eugend66
Eugend66's picture

If there are no goodies for Hugo, try to figure how the TBTF will look after a week. Hugo may even come out as a hero - Paying with cash, hauled with mules.

Mon, 08/22/2011 - 09:54 | 1585685 Nothing To See Here
Nothing To See Here's picture

This all sounds so transitory

Mon, 08/22/2011 - 10:11 | 1585759 bentaxle
bentaxle's picture

BOE to Chavez - "come and get it yourself, bitchez!"

Mon, 08/22/2011 - 10:19 | 1585780 High Plains Drifter
High Plains Drifter's picture

there is very little knowledge about how small the bullion market is ?  wtf?  we are zerohedgers. we know all about this shit..............

Mon, 08/22/2011 - 11:08 | 1585946 Randy Kruger
Randy Kruger's picture

Where are the Somali pirates when you need them?  Someone ought to intercept these ships and take from the "people" of Venezuela.  

Mon, 08/22/2011 - 11:21 | 1586016 JW n FL
JW n FL's picture

I need a Legal opinion..

If! I am in international waters and I take that Gold?

and.. Venezuela is more or less and enemy of the United States..

if I pay the taxes on the value and declare it..

would I get to keep it? LOL!!

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