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Gold Seen At USD 3,500, 6,000 And 10,000 Per Ounce

Tyler Durden's picture


From GoldCore

Gold Seen At USD 3,500, 6,000 and 10,000 Per Ounce

Today's AM fix was USD 1617.00, EUR 1285.37 and GBP 1032.90 per ounce.
Yesterday’s AM fix was USD 1608.50, EUR 1278.31 and GBP 1025.70 per ounce.

Gold rose by $24.40 in New York yesterday and closed up 1.5% at $1,622.80/oz. Silver surged to as high as $28.45 and ended with a gain of nearly 3%.

Gold has traded erratically overnight and this morning in Europe but is slightly lower than yesterday’s close in New York.

Cross Currency Table – (Bloomberg)

Further impetus to higher prices may come from the ECB who are expected to cut interest rates to a record low tomorrow – continuing ultra loose monetary policy which should further weaken the euro.

Negative interest rates continue to penalise pensioners and savers in European countries and this will lead to further diversification into gold.

Financial markets are already starting to wonder about the solidity of last week's summit measures to tackle the euro zone crisis and soon they may question whether even looser monetary policies will help prevent recessions and sovereign defaults.

With Independence Day today (Happy July 4th to all our American followers, clients and friends), the ECB decision tomorrow and NFP on Friday, trading should be quite today but as we know illiquid markets can lead to outsized market moves.

We tend to try and avoid predictions in GoldCore as the future is largely unknowable and there are so many variables that drive market action that it is nigh impossible to predict the future price of any asset class.

However, our opinion has long been that over the long term all fiat currencies will depreciate and devalue against the finite currency that is gold.

For this reason we have long held that gold would reach its inflation adjusted high of $2,400/oz and silver its inflation adjusted high at $140/oz and the equivalent in euros, pounds and other fiat currencies.

Gold at just over $1,600/oz today remains 33% below its record nominal high in 1980.

Silver at just over $28/oz today remains 80% below its record nominal high in 1980.

However, we have tended to focus on the important diversification, store of value and safe haven benefits of owning physical gold (and silver) bullion.

Overnight, some respected analysts of the gold market have suggested that gold is likely to or will reach much higher levels in the coming years – between $3,500/oz and $10,000/oz
(see commentary).

We see no reason to change these estimates and would concur with Amoss, Davies and Sinclair that there are strong grounds for believing that gold prices will rise much higher in the coming months and years.

Indeed, given the huge increase in credit growth and money supply internationally we believe that these estimates may in time be conservative.

(Bloomberg) -- Turkey Exchange Says Gold Imports Were 23.9 Metric Tons in June
Turkey’s gold imports were 23.9 metric tons in June, the Istanbul Gold Exchange said on its website.

(Bloomberg) -- Kazakhstan Raises 2012 Gold-Purchase Target to 26 Tons
Kazakhstan, the largest oil producer in the former Soviet Union after Russia, raised its target for gold purchases this year to 26 metric tons as it encourages producers to refine their output domestically.

The country plans to boost domestic output to 70 metric tons a year by 2015 and wants to refine all of that at a new facility near the capital Astana, Industry and New Technologies Minister Aset Isekeshev told reporters in Astana today.

The central bank last month said it planned to buy 24.5 metric tons of gold this year.

(Bloomberg) -- Deadly Newmont Protests Lead Peru to Call State of Emergency
Peru declared a state of emergency in an area of the northern Andes after three people died in clashes between police and opponents of Newmont Mining Corp.’s $4.8 billion Minas Conga project.

The government imposed the measure in three provinces of the Cajamarca region where Newmont plans to build the copper and gold mine, Justice Minister Juan Jimenez told Lima-based Radio Programas yesterday. Authorities will investigate the cause of the deaths, Jimenez said.

The declaration comes a week after Newmont was cleared to resume work that was halted in November when its installations in the area were destroyed during six days of protests. President Ollanta Humala allowed the restart by the largest U.S. gold producer after it pledged to build reservoirs to ensure water supplies for farming in the region.

The clashes are a result of Humala’s government refusing to negotiate with those opposed to the project, regional president Gregorio Santos told Radio Programas yesterday. Newmont is committed to talks and to the region, according to an e-mail from the company’s local unit late yesterday.

Police fired tear gas and bullets at demonstrators after as many as 2,000 people planned to storm the town hall in Celendin, close to where the mine will be built, Radio Programas reported. Some protesters were armed and shot at the police, it said.

“We renew our commitment to Cajamarca and to our faith in dialog as a bridge to achieve understanding between everyone,” the statement from Newmont’s local unit said.

(Bloomberg) -- Platinum Users Seen by Moody’s Moving to Palladium on Prices
Platinum users will probably keep switching to palladium in the automobile, jewelry and financial sectors, Moody’s Investors Service said.

Palladium will probably trade between $600 to $900 an ounce over the next few years, Moody’s said in an e-mailed report today. “Platinum has traditionally sold at prices roughly four times that of palladium, but today platinum sells for close to twice the price of palladium,” says Arvinder Saluja, a Moody’s analyst and author of the report. “That spread is narrowing as new technology allows end-users to switch more easily to the lower-priced metal.”

For breaking news and commentary on financial markets and gold, follow us on Twitter.


Gold near 2-week peak on hopes for monetary easing - Reuters

Gold eases from two-week high in Asia - MarketWatch

Gold Set to Gain as ETP Holdings Rise to Record on Stimulus Bets - Business Week


Sinclair: The Rig Is Up; Gold will go to and above $3500/oz - Jim Sinclair's Mineset

Hinde Capital's Davies on Why Gold Could Reach $6,000/oz - Business Week

Amoss: The Path to $10,000-an-Ounce Gold - The Daily Reckoning

Golden Cognitive Dissonance - Zero Hedge

On The Inevitability Of EU-thanasia - Zero Hedge

ECB Meeting On Thursday Could Ignite Gold, Silver - Forbes

Gold Re-entering Monetary System - Resource Investor

RICHARD RUSSELL: The Third Phase Of The Gold Bull Market Is Still Ahead - Business Insider

 Silver Manipulated, and a Silver Exchange Holiday - JESSE'S CAFÉ AMÉRICAIN

Arensberg: COMEX Silver Futures Skewed Short, Potentially Explosive - Got Gold Report


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Wed, 07/04/2012 - 10:11 | 2586526 tsx500
tsx500's picture

i'm getting a chubby just thinking about gold 10000  ! ! !

Wed, 07/04/2012 - 10:14 | 2586538 ParkAveFlasher
ParkAveFlasher's picture

just tore through my pleated khakis.  

Wed, 07/04/2012 - 10:29 | 2586593 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

July 13th, Silver bomb!

Participate!  Buy one oz!  Buy 100!



Wed, 07/04/2012 - 11:04 | 2586715 Kyron95131
Kyron95131's picture

have, will , and do


but don't forget all the ETF's are prolly trading at at least 40:1 per certificate (kyle bass thinks 80:1) since they own the regulators so before it explodes to said anticipated hights, im sure we'll see just as synthetic a drop in its value when people try to redeem thier paper promises.

if you buy it, take delivery...

Wed, 07/04/2012 - 11:59 | 2586859 Abitdodgie
Abitdodgie's picture

Gold has done nothing for about 12 months now ( well it has gone down in price). Yet you see all the time how gold is going to go up in price . Do people not understand that it will do nothing untill the banks want it to do something ,so all these people who got gold to stick it to the bankers ,well you better be nice , because wthout them your gold goes nowhere .

Wed, 07/04/2012 - 14:22 | 2587204 RockyRacoon
RockyRacoon's picture

If your PM horizon is 12 months then you are the one who is "going nowhere".  I've been buying gold/silver for the last 16 years.  It has gone nowhere but up.   You might look into the concept of delayed gratification and get off the "trading" platform of thinking.

Wed, 07/04/2012 - 16:31 | 2587470 SILVERGEDDON

Here we go again. From the Rocky Raccoon sublime, to the Million Dollar Bonus faceplant ridiculous. Guess who gets the cream pie in the face for business acumen.

Hint - not the gold investor, but, probably Mister Facebook himself, Pimp Promoter of the century, His Royal Strokinoff, THE MIGHTY PAPER PECKERHEAD, i GIVE YOU - mdb ! 

See stupidity at it's finest below. Jesus, even a crack head isn't this stunningly retarded. 

Wed, 07/04/2012 - 16:49 | 2587500 The.Oracle
The.Oracle's picture

Yeah, exactly. 'Even a crackhead'. Ever get the idea that maybe... he's trolling? I find his shit to be hilarious, mainly because people (see above) get so worked up about it. Read it, and move on hahaha (or don't even read it--whoaaa)

Wed, 07/04/2012 - 17:11 | 2587529 SILVERGEDDON

If you do not publically refute the stupidity, then, statistically speaking, a fairly high percentage of readers will assume there is an element of truth to even the most idiotic comments.

Yeah, MDB is a fucking troll most likely, but it is the responsibility of any intelligent being to publically berate the retarded poster. Then, no one gets burnt by assuming the logic put forth by troll - boy, MDB, is possibly sound, acceptable, or rational.

I always read Million Dollar Bonus. Like Goldman Sachs or JP Morgan, I want to do exactly the opposite of what he is babbling about. MDB is my chief investment advisor - in reverse ! 

ROF LMFAOL. Seriously. 

Tue, 07/17/2012 - 23:54 | 2626942 MeelionDollerBogus
MeelionDollerBogus's picture

Yup. Despite any comments I leave indicating I'm in on the game I feel a red arrow is mandatory as is an explanatory comment if I have the time.

It's all part of the immune response.

You may realize it's a vaccine rather than the actual deadly virus.

You still have to tag it & go through the motions.

If all you can do is laugh at the mockery of your own demise (green arrows & no retaliatory comments to the content, rather than the commenter) then the next step is obvious. If you are entertained by your own demise you will not be trying hard enough to survive.

Tue, 07/17/2012 - 23:41 | 2626890 MeelionDollerBogus
MeelionDollerBogus's picture

12 months means nothing unless you're greedy or trading options. If you're trading options all you care about is that the price is moving either very rapidly (buying puts and calls) or temptingly near it (writing them).

If you're actually taking delivery of gold all you need worry about is that in 12+ months you've got the cash-value back PLUS you've got no counter-party risk all along the way.

THIS is what the real 52-week picture looks like, rechecked every week, on a multi-year trend:

2012 apr 17 gold ROC trends - 52 week ROC - goldpricemodel

Wed, 07/04/2012 - 10:31 | 2586595 MillionDollarBonus_
MillionDollarBonus_'s picture

It's amusing to me that doomer goldbugs still can't see that US Treasuries are the true safe haven, whereas gold is a risk asset. While gold has  sold off over the last few months, the 10 year yield has been making new all time highs. Furthermore, these record low yields prove that there is simply no inflation, despite the whining from nerdy libertarians, and that our creditors are more eager than ever to build their dollar reserves. I am confused that Goldbugs and Silverbugs reject the safe-haven status of US treasuries despite their 20 year track record.

Wed, 07/04/2012 - 10:40 | 2586632 tocointhephrase
tocointhephrase's picture

You got some strong weed with that bonus

Wed, 07/04/2012 - 10:42 | 2586633 SWCroaker
SWCroaker's picture

Here's yer 20 year track record, mdbooby...


Wed, 07/04/2012 - 15:22 | 2587330 zhandax
zhandax's picture

MDB, here is one that should put a smile on your face....Yahoo (in honor of the 4th of July?) is reporting paper gold at it's real value at the moment:


Gold Jul 12 (GCN12.CMX)

0.00 Down 1,621.30(100.00%) 8:35AM EDT


Wed, 07/04/2012 - 10:42 | 2586643 Snidley Whipsnae
Snidley Whipsnae's picture

"Furthermore, these record low yields prove that there is simply no inflation, despite the whining from nerdy libertarians, and that our creditors are more eager than ever to build their dollar reserves."

SEE: China has bought no treasuries in ~ the last year. So who, besides the Fed, are the buyers of treasuries? Let's here some names.

Without the Fed purchases of treasuries there would be no floor under them and prices would crash and interest rates would spike.

Without central bank supression of PM prices they would already be much higher.

You're slipping, MDB.


Wed, 07/04/2012 - 10:55 | 2586684 MillionDollarBonus_
MillionDollarBonus_'s picture

If there is no demand for our Treasuries, then how do you explain the record low rates? This is proof that the world values both the dollar and the full faith and credit of our elected officials more than ever. This has been highlighted yet again by the fierce safe-haven bid for US treasuries during the Eurozone crisis.

Wed, 07/04/2012 - 11:07 | 2586721 Kyron95131
Kyron95131's picture

the real estate under the rock that which you live must be cheap enough to afford you a connection to the internets.

Wed, 07/04/2012 - 11:14 | 2586740 Hulk
Hulk's picture

To answer your question MDB, (and  I really enjoy your sarcasm!) Treasuries are a completely manipulated market and therefore the rate is artificial, not in any way reflecting reality.

But reality is about to re-introduce itself, and in a big way...

Wed, 07/04/2012 - 11:17 | 2586746 Snidley Whipsnae
Snidley Whipsnae's picture

"If there is no demand for our Treasuries, then how do you explain the record low rates?"


Record low rates are a result of what I stated in my comment above... The Fed is buying treasuries in enormous quantities. It's been reported here on this site that the Fed is purchasing at least 70% of new treasury issuance. If the Fed is not, who is buying them? We know that China is not, we know that Russia is not, we know that Japan is not, we know that EU nations are not, that leaves England, the Mid East, India, and some emerging mkts and they most are in no position to buy huge quantities of treasuries. The US purchases of Mid East oil are down but treasury issuance is WAY UP. Who is buying them?

The Fed is now in discussions about NIRP! Negative interest rates.

If the Fed resorts to NIRP, continueing suppression of gold will be a must. Otherwise the opportunity cost of owning gold vs any other asset, excepting other commodities, is a no brainer. Like it or not the paper suppression of PMs and other commodities is nearing an end.

Wed, 07/04/2012 - 12:22 | 2586922 Geruda
Geruda's picture

For many years peoples could not be owning golds.  The fed which is having many many powers can be making the rules to be having changes to make owning golds or at least not having easy ways to be selling gold and buying gold to be happening again if the fed is deciding gold is being a problem too big for them to be having.   Even if the gold you are having in the holes you are digging in your back yard are not being found by any peoples who are wanting to take your gold away your gold in the ground will be having to stay there because nobody else will be wanting to make the peoples who are saying you can't buy gold angries.

Wed, 07/04/2012 - 13:12 | 2587065 akak
akak's picture

Indians and their eternal love of the present progressive tense --- gotta love it!

I am wanting to be asking you to be telling me to be doing the understanding of, why is being you Indians always, always using the gerund (present progressive tense) alling of the timing?  Whating ising iting being thating ising making youing soing obsessing withing thising forming ofing theing verbing?

Wed, 07/04/2012 - 14:06 | 2587171 Geruda
Geruda's picture

I am being impressed you are having knowledges about gerunds and tenses that are present and tenses that are progressive.  The tenses i have learning about are making me be very hard to have studying.

Wed, 07/04/2012 - 14:25 | 2587208 RockyRacoon
RockyRacoon's picture

No shitting.

Wed, 07/04/2012 - 15:47 | 2587382 4horse
4horse's picture

. . . appreciating your participation here, after 5thousand year of such faraway vedas and varietyoflife, Atman. Spice. am all the more so appreciating your everpresent tensing of . . .






july 4

knowing it was you, hindu, the so-called euro was first after-- Indian --investors who, as much dutch as the eventual first nations were east indian, trading company one-for-the-other__ no matter __one wampum being as good as another, rupee, am nonetheless left name&number with what's said, a certain sadness, when it's all turned out the same in what remains


invading you anyway




nothing's changed




happy birthday i'm sorry to say

to either/or of whatever shore as thinks of its founding, Freedom, or yet to explore what's all the more so sadly said-- Independence --when it's never in fact ever been the thought fought for

Wed, 07/04/2012 - 17:20 | 2587545 NOTfromSanFrancisco
NOTfromSanFrancisco's picture



This was Googling Translating at its finest!...

Wed, 07/04/2012 - 11:32 | 2586794 BigInJapan
BigInJapan's picture

Never heard of Japan, then?

Tue, 07/17/2012 - 23:30 | 2626868 MeelionDollerBogus
MeelionDollerBogus's picture

Rehypothecation and printed money. The Fed purchases the long-end and sells the short-end. The sales of shortdated maturities go into accounts for which leverage is applied on the collateral paper.

Later the long-dated treasuries will be used for the same in combination with another trick.

Wed, 07/04/2012 - 10:51 | 2586668 giggler123
giggler123's picture

US Treasuries exist as long as the USA in its current form.  A collapsed USA will likely mean anything issued under its raine will be null and void while the guy holding physical metals still does, until they are confiscated. ;)

In this scenario no one is better off...


Wed, 07/04/2012 - 11:00 | 2586696 Temporalist
Temporalist's picture

Ooo you invented a new word. 

Wed, 07/04/2012 - 11:27 | 2586771 falak pema
falak pema's picture

dont rant about the raine that falls on the plaine in good ole maine. 

Wed, 07/04/2012 - 11:03 | 2586712 TrulyStupid
TrulyStupid's picture

You tell em... get your Facebook shares now before they go ballistic.

Wed, 07/04/2012 - 11:05 | 2586716 Nathan American
Nathan American's picture

signed in just to give you the up arrow, /sarc always appreciated MDB.  It's hilarious to see the newbs not get it and get fired up over your post.



Wed, 07/04/2012 - 11:11 | 2586730 Gringo Viejo
Gringo Viejo's picture

It's well understod in Psychiatry that individuals incapable of garnering positive attention, seek negative attention as opposed to none. Would suggest that trolls such as MDB are here for the negative attention. Refraining from rating comments or replying to them is the course most apt to make them leave.

Wed, 07/04/2012 - 12:28 | 2586936 Geruda
Geruda's picture

The negative attentions you are seeking with the personal comments you are having asking for censorship of thinkings you are not being happy with is making many peoples laugh because the comments you are asking other peoples not to do are the comments you are doing.  The word that is describing what you are doing is called hypocrisy and you are doing it.

Wed, 07/04/2012 - 13:14 | 2587070 akak
akak's picture

I am doing the guessing that you are doing the making of your investment banking with Ing.

Wed, 07/04/2012 - 12:15 | 2586906 Geruda
Geruda's picture

The speaking you are doing has much wiseness.  When peoples who are being on a cruise ship are looking at the boats with canvass along the rails the boats they are looking at with canvasses do not look good to them but when the cruise ship is sinking the same peoples are now looking at the canvasses with many wantings in their hearts.   The cruise ship that is sinking is Europe and the canvass boats are treasuries.  Maybe gold is being the foods that are stored in the canvass boat but it will only be good for the peoples who are having a way to be floating when are the sinking done.  Whatever is making a cruise ship sinking could be so bad it will be making the canvass boats to sink too and then the foods that are gold will not be much good eithers.

Wed, 07/04/2012 - 13:19 | 2587082 akak
akak's picture

History proves you wrong.

Gold IS your canvass boats --- treasuries are merely another, equally crippled and doomed cruise ship, one built from only paper mache and lies.

Wed, 07/04/2012 - 16:21 | 2587450 4horse
4horse's picture

History proves An Indian --with bells on their fingers and baubles round their toes, silver/andgold-- wrong . . .


bright shiny beads


please xcuse such yak yak akak: hold gold but not much hope




ask an indian, any indian, what's thousands of years old by which they've anyway always been bought&sold




those for who might makes right especially when fighting for what's false,fraudulent&allwrong

Wed, 07/04/2012 - 17:23 | 2587549 Shazam342
Shazam342's picture

I guess you are not aware of the recenmtly ratified 'Ansel III' agreement amongst the banks internationally?  They just declared Gold as a Tier I asset along with T-debt.  Gold used to be lower than that, i.e. Tier III.

Thu, 07/05/2012 - 02:09 | 2588049 4horse
4horse's picture

E pur si muove!

when they're good&goddamn ready for it to


otherwise . . .
le dernier cri
                     keeping up with the latest fashion statements and currency events___
or not TB, infected, after swallowing what names&numbers they feed their following
Tier II
Amschel III
Tiers, Idle Tiers

                 ___which is exactly what they know goes without saying, when monkeys are given words to play with


cri de coeur, mon amour
                         whose emotions in vain of pain and echolalia they do find so moving



and while laughing like hyhyhyHYEANAS

Wed, 07/04/2012 - 10:32 | 2586547 Azannoth
Azannoth's picture

How much is 1oz of Gold in Zimbabwe $ today? ... see what I did there?

I am reminded of a statement of a Citibank executive after the crises started and a reporter asked him what IF the government let's Citibank fail where would the depositors money go etc.? The response was ".. that could only happen if the Moon crashed into Earth", it's similar with Gold going to stratospheric heights (like 10000$) when that happens we're definitely not going to be in a position to celebrate


or put it anotherway, imagine somebody living at the peak of a volcano and thinking he's smart by shouting to everybody else who's also living there, "that volcano's gonna blow!" but still camping the peak, well 1 day the volcano does blow do you think that guy who's been screaming about it but kept camping on top got vindicated in any way?

Wed, 07/04/2012 - 11:52 | 2586840 CuriousPasserby
CuriousPasserby's picture

But when gold was at $350 an ounce and went down to $275, everyone thought $500 was impossible, $1000 was what insane goldbugs thought, and here we are at $1600 and while things aren't the best we aren't living in a Mad Max world. $25,000 put into gold at $300 is looking pretty good today, no?

Gold going to $5000 or $10,000 from here would be like when it went from $275 to here.

Thu, 07/05/2012 - 01:09 | 2588012 HungrySeagull
HungrySeagull's picture

I remember 200 gold.

And silver cheap as dirt.

But no, we all were blasted with the Organs telling us to invest in the 401Ks and the like.

Never again. We got out of the paper and moved towards a portion stacked in metal.

Copper is more expensive and harder to convert to cash these days. But that does not stop them from chopping up light poles and scrapping for cash.

Wed, 07/04/2012 - 10:18 | 2586557 Cognitive Dissonance
Cognitive Dissonance's picture

If Gold goes to $10,000 just imagine where the dollar will be.

While it is not a direct correlation, if Gold quadruples most likely the dollar is going in the other direction nearly as far and as fast. Consider what that means to you and all that you interact with on a daily basis.

This isn't a plea for things to remain as they are, but rather a plea for all of us to consider where things really are going and how all of us will be affected.

Wed, 07/04/2012 - 10:29 | 2586590 Snidley Whipsnae
Snidley Whipsnae's picture

CD, if gold reaches $10,000 I don't want to be holding any fiat currency excepting enough to pay regular bills/food/taxes/other expenses for at least a year.

I suspect that if gold were to reach such a high dollar amount that we would see many extrodinary events regarding the government, banking, civil order, etc.

In addition I suspect that food/fuel/and perhaps energy delivery would be spotty at best.

Everyday life would be anything but 'normal'.

Got PMs? Food? Fuel? Sufficient medical supplies? Defense mechanisims?

Wed, 07/04/2012 - 10:55 | 2586663 Cognitive Dissonance
Cognitive Dissonance's picture

Agreed. You make my point for me. If Gold goes to $10k, life (suddenly) is very different here in the USA as well as around the world.

We must stop thinking about $5k or $10K Gold within the context of today's "reality". Economic, social and political life will not "work" the same way it does today if Gold goes to $10K.

BTW people rarely talk about stocking up on medical supplies, so thanks for mentioning it.

Wed, 07/04/2012 - 11:00 | 2586701 xela2200
xela2200's picture

Gold at 10K sounds awesome. But, if a big mac costs 20 bucks, it is not much of a gain. Purchasing power is the issue.

Wed, 07/04/2012 - 11:18 | 2586751 Al Huxley
Al Huxley's picture

Unless you've been buying a lot of gold, in which case you just sell what you need to meet monthly expenses.  This is what is meant by using gold as money and insurance (IMO).

Wed, 07/04/2012 - 11:29 | 2586782 ParkAveFlasher
ParkAveFlasher's picture

tptb will *hopefully* "amortize" the net impact of dollar dilution by fixing prices on certain manufactured goods either directly or on a de facto basis.  the mechanism is geared for absorbing the blow by scattering the bruise across the economy.  thus you will see not all prices spike at once but rather a sort of localized and off time impact in various place as all the different joints bend in succession and recoil.  so you could see gold spike to those heights without a weimar event, assuming the central bank ... oh shit, we're screwed, forget it.

Wed, 07/04/2012 - 11:46 | 2586822 Snidley Whipsnae
Snidley Whipsnae's picture

xela... "Gold at 10K sounds awesome. But, if a big mac costs 20 bucks, it is not much of a gain. Purchasing power is the issue."

Purchasing power is not the issue in the sense that some believe.

Purchasing power will be RETAINED by holding gold vs holding fiat.

Just as in your example of the cost of a burger.

Retention of purchasing power should be the goal for those holding gold... not 'making a killing' because gold goes to some huge number vs fiat. There could be a spike where gold will be over valued vs real estate and other assets but that would soon be corrected by market forces.

The goal is to retain purchasing power to bridge troubled waters and reach a calm shore at some point in the future. Along the way be alert to opportunities that always crop up during troubled times... there will be bargains because when economic circumstances are changing quickly markets do not always adapt quickly. Be alert for possible opportunities.

Gold is a wonderful asset but it doesn't think for us...we have to think for it.



Wed, 07/04/2012 - 14:30 | 2587217 RockyRacoon
RockyRacoon's picture

So few understand that.  The person whose eyes sparkle at the idea of $10K gold is the one who doesn't get it.   The one who lives the day that gold goes to $10K and wipes his brow, knowing that he has preserved his purchasing power, is the guy who gets it.   The "cost" of anything, let alone a Big Mac, becomes irrelevant.

Wed, 07/04/2012 - 13:26 | 2587097 sosoome
sosoome's picture

that settles it for me then...I'm loading up on big macs

Wed, 07/04/2012 - 19:35 | 2587708 delacroix
delacroix's picture

I hear, they have an indefinite shelf life                                                                                                    

Wed, 07/04/2012 - 18:46 | 2587658 Mesquite
Mesquite's picture

Check the price of a Big Mac in Zurich right now..!

Wed, 07/04/2012 - 13:06 | 2587051 Citxmech
Citxmech's picture

Got antibiotics? Good prep to hold btw.

Wed, 07/04/2012 - 15:50 | 2587398 Goldilocks
Goldilocks's picture

"...stocking up on medical supplies,"


Band-Aid Commercial (0:32)


Thu, 07/05/2012 - 01:10 | 2588013 HungrySeagull
HungrySeagull's picture

Google Chinook for the good pressure bandages. Not the crappy ones sold in Walmart.

A little birdie told you to.

Wed, 07/04/2012 - 10:54 | 2586677 Flakmeister
Flakmeister's picture

Yep, I swear that one half of the people here imagine that gold will go to $5000 while everything else remains in some kind of stasis.... They are in for a rude surprise when they find out that filling a gas tank will still cost ~1/25 of an oz of gold....

The one place where, maybe, you will get real deals is real estate....

Wed, 07/04/2012 - 12:16 | 2586910 Cognitive Dissonance
Cognitive Dissonance's picture

I suspect you're correct about the possibility of deals in real estate at some point in the future. It appears that anything purchased with cheap and easy money along with leverage will de-lever pretty fast. Of course one must have capital (or access to capital) in order to purchase "real" assets on the cheap when they become cheap.

Thus the reason I use PMs. To preserve what little wealth I have so that I can transition to the new game board. That means that at some point I am out of PMs and converting to an asset that will have more "value" on that new game board. Fully paid for income producing real estate is one of the items on my "goodie" list now and in the future.

Wed, 07/04/2012 - 13:13 | 2587069 reload
reload's picture

You have a plan and that is great, most do not. And those with plans are making them based on various assumptions, yours assumes that income streams from real estate assets will not be taxed into oblivion. But I may have miss read what you meant by `income stream`, my view is that a money income stream being paid through the banking sysstem will be a sitting duck. An income stream comprised of tradeable goods, fruit, poultry, vegetables, eggs etc offers what may well be a more flexible and `secure` income stream. Harder work than rent collecting. The great thing about a PM nest egg is that you can deploy it as you see fit when the time comes.

Wed, 07/04/2012 - 13:38 | 2587118 Cognitive Dissonance
Cognitive Dissonance's picture

I understand what you are saying. But I am talking about the "new" board game coming, the makeup of which I really don't know. What you seem to be speaking of is the final death throes, the terminal phase, of the present board game.

I agree that the coming end game, which may last much longer than many here have considered or even can conceive, will entail barter and other flexible systems of exchange and commerce. It will be very difficult to navigate and many who think they are prepared physically are not prepared mentally or emotionally.

Wed, 07/04/2012 - 20:09 | 2587731 AustriAnnie
AustriAnnie's picture

"many who think they are prepared physically are not prepared mentally or emotionally"

This is my challenge.  I am not sure I am prepared mentally.  And neither are most people.  Its hard to be prepared to see human nature at its ugliest.  I don't think one can ever truly prepare for that.   There is no preparing for a breakdown of humanity and the damage it does to the mind.

I also wonder if I am prepared to turn away people who come to me for handouts when they are unable to barter themselves.  I fear I would have a hard time turning my back on people, and would end up sharing everything I have with people who didn't prepare.  Even though they are ignoring my advice today, I wonder if I can harden my heart enough to slam the door in their face when they come knocking.

Thu, 07/05/2012 - 01:12 | 2588015 HungrySeagull
HungrySeagull's picture

Strangers don't come knocking at our place. Much.

When they do, they are kept at the outer perimeter door with one of us covering the other.

They are not getting inside. Period.

Thu, 07/05/2012 - 18:26 | 2590346 AustriAnnie
AustriAnnie's picture

Its not STRANGERS that are the problem.

Its the people you know.  

Wed, 07/04/2012 - 14:31 | 2587143 oddjob
oddjob's picture

Hitching your wagon to a bunch of broke municipalities and their deadwood pensioners is the wrong tack.

Wed, 07/04/2012 - 19:56 | 2587721 BidnessMan
BidnessMan's picture

If 30 year fixed rate mortgages go away, would be easy to see real estate dropping to 20 cents on the dollar from current "values".  5% - 20% down is what people are actually paying in cash to purchase a house.  If there is no mortgage lending, most potential buyers disappear until real estate prices drop by 80% or more.  The real estate Great Reset. 

What rational person would lend 80% - 95% of the "value" of a house for 30 years for 4% fixed?  No one.  The mortgage lenders package those mortgages up and sell them to the Feds as fast as they can - they don't want the hot potato.  The Feds will continue to prop up Fannie and Freddie as part of ZIRP.  If they don't, real estate craters immediately. Every realtor in the USA will be crying to their Congress person.  That is a domino the Feds can't let tip over.  

Real estate lending is where a lot of the money printing is going.  The Fed created $2 trillion and bought mortgage paper with it.  The Fed is buying up almost all the mortgage paper to provide fresh cash to prop up real estate "values". Banks are hungry for the mortgage transaction fees on the real estate sales churn.  A winning game as long as it lasts.

If the Fed was not buying up all the mortgage paper at 100 cents on the dollar, real estate lending would have ground to a halt, and therefore real estate prices would have already cratered by now.

Wed, 07/04/2012 - 11:50 | 2586836 Talleyrand
Talleyrand's picture

If gold "goes" to $10,000, where will the dollar be? The dollar will be at 1/10000 of an ounce of gold. It's that simple. Thinking of gold priced in terms of US dollars is, well, bassackwards.

Gold is not going anywhere. It is the fiat dollar that is going somewhere. Wonder where that might be....

Wed, 07/04/2012 - 12:07 | 2586884 Cognitive Dissonance
Cognitive Dissonance's picture

As I tell my clients it's not that Gold is becoming more expensive, but rather that the dollar is becoming worth less and less in relation to Gold. Thus you need more dollars to purchase the same "thing" of "value"....or in this case Gold.

Ultimately that is the explanation for the effects of inflation. You need more dollars to purchase the same "things' you purchased last year/decade with less dollars.

To steal a line from "The Usual Suspects"....the greatest trick the devil ever played was convincing everyone he was not real. The same applies to inflation. The greatest trick the fiat Ponzi ever pulled was to distort the effects of inflation as simply rising prices.....which we are told again and again are actually good.....because that means the price of your assets are also rising.

Unfortunately most incomes are not rising as fast as the price of goods and services (asset prices are distorted by leveraged money and have their own problems) thus we see the main reason two workers are now needed to support each household where one was sufficient 40 years ago.

Wed, 07/04/2012 - 12:21 | 2586915 Oracle of Kypseli
Oracle of Kypseli's picture

Yes there is a long term correlation of dollar purchasing power and physical gold. However, at times when sudden uptick on the gold price and manic buying and tight availability, this correlation breaks in favor of gold by a big margin turning into a hockey stick graph, which could be a signal to sell some and take a breather.

Thu, 07/05/2012 - 00:58 | 2587985 Newager23
Newager23's picture

Gold has went up 600% since 2000, but the value of the dollar has not dropped 600%. In fact, a lot of items have went up very little, such as cars, computers, televisions, etc. Why can't gold keep going up much faster than the dollar drops? I paid $3 for a 16 oz. box of Grapenuts in 2000, and it is only marginally more today. Where is the huge drop in the dollar? If it hasn't happened yet, why does it have to happen just because gold goes up? Maybe gold is going up for a different reason? Maybe gold is going up because of one reason: demand. Maybe it has nothing to do with the dollar. After all, the correlation between the rise in the gold price versus the drop in the dollar is not close. The dollar index has fallen from 100 to 80. That is not exactly a 600% drop. 

Thu, 07/05/2012 - 01:07 | 2588009 akak
akak's picture

Well, for one thing, how could the value of the dollar drop 600%?  If it fell by 100%, it would mean that the dollar had become completely worthless ---- so are you suggesting that we should have negative values for the US dollar?

OK, aside from that lighthearted quibble, it is indeed a fact that the price of gold has risen faster in the last 12 years, or in the last 20 years, than can be accounted for by the fall in the value of the dollar.  There are many possible reasons for this rise, from the initially artificially low price of ~$250 due to official suppression of the gold price, to the rising cost of petroleum and extraction costs, to (until recently) stagnant or declining annual mine production, to yes, increased demand.  But the latter is certainly only a fraction of the total equation.

Incidentally, and for the last fucking time, the contrived and essentially bogus US Dollar Index does NOT in ANY way measure the value of the US dollar!  It is specious and completely meaningless to compare DXY values from different years, much less across decades, as it is inherently calculated only against other, more or less equally depreciating fiat currencies, and is NOT even remotely a stable measure of the absolute value (purchasing power) of the US dollar --- quite the opposite in fact.

Wed, 07/04/2012 - 11:34 | 2586799 whatsinaname
whatsinaname's picture

what or where can one find demand supply data for gold consumption that impacts the futures markets pricing (however distorted the pricing might be) ??

Wed, 07/04/2012 - 16:23 | 2587457 Peter Pan
Peter Pan's picture

I am a gold bug as much as the best of them but we need to temper our great expctations with a couple of considerations. Firstly, it is not the currency value of gold and ilver we need to watch but its relative value to other real assets such as housing, oil etc.

Secondly, the inflation adjusted values of gold and silver based on previous highs is a little self serving. Those highs lasted for a small period of time. Even in the case of gold the average price during that month of the $850 high was only around $675 and for the year $594. These are more correct reference points.

The dollar price of gold is relevant only when you are taking advantage of a spike in price to pay off fiat debt.

Wed, 07/04/2012 - 10:12 | 2586530 spinone
spinone's picture

Deflation is inevitable, and will reduce the dollar value of all investment classes.

Wed, 07/04/2012 - 10:17 | 2586554 Stuck on Zero
Stuck on Zero's picture

Deflation of incomes and inflation of prices ...  that's the future.


Wed, 07/04/2012 - 10:24 | 2586578 Levadiakos
Levadiakos's picture

That's a bet you cannot reccover from after you discover your error

Wed, 07/04/2012 - 10:37 | 2586620 Debtless
Debtless's picture

The guy in the helicopter begs to differ.

Wed, 07/04/2012 - 10:13 | 2586532 quasimodo
quasimodo's picture

All these predictions are just that, until they no longer are. Although I do feel like they are nothing more than the boy crying wolf lately, seems there are those making these predictions every other day.

Wed, 07/04/2012 - 10:16 | 2586544 ParkAveFlasher
ParkAveFlasher's picture

even our reptilian overlords agree, gold is the bomb.  so i junked you.

Wed, 07/04/2012 - 10:27 | 2586569 Lord Koos
Lord Koos's picture

"We tend to try and avoid predictions in GoldCore..." 

It's easy to make a prediction without saying WHEN.  Sure gold will someday go to $3k, it's a no-brainer.   But will it be 2014, or 2018... no one is being too specific.

Wed, 07/04/2012 - 10:17 | 2586549 Levadiakos
Levadiakos's picture

Green Unicorns spotted in Dallas

Wed, 07/04/2012 - 10:42 | 2586642 tocointhephrase
tocointhephrase's picture

What are they doing in Dallas?

Wed, 07/04/2012 - 11:48 | 2586832 Likstane
Likstane's picture

BBQ and the Waterpark

Wed, 07/04/2012 - 10:19 | 2586558 Red Heeler
Red Heeler's picture

Each month buy a little gold or silver.

Wed, 07/04/2012 - 13:07 | 2587056 VallejoVillain
Wed, 07/04/2012 - 10:21 | 2586566 Chartist
Chartist's picture

At $10K per ounce, I'll finally get around to selling my swiss 18k all gold watch.....Probably get the old lady to sell her Rolex Presidential too.

Wed, 07/04/2012 - 10:23 | 2586567 SRSrocco
SRSrocco's picture


If gold and silver were still money, then during a DEFLATION we would see their values fall (unless there is a devaluation which took place in 1933).  However, if we are involved the ENDGAME of the world's fiat monetary system, then during a DEFLATION we will have falling prices in THINGS YOU OWN, and rising prices in things you CONSUME and USE... as well as GOLD & SILVER.

I am repeating the LINK to my article which shows just how much gold left the United States Q1 2012:

U.S Gold Net Exports Increased Substantially During First Quarter 2012


Wed, 07/04/2012 - 10:34 | 2586611 FranSix
FranSix's picture

I can't say that abolute, total deflation will be the correct outlook at this point.  Fact on this issue that gold prices are responding to negative real interest rates, not whether it responds to some abstract concept of deflation.

The facts that can really be argued is the level of inflation out there, which if you accept shadowstats, then gold price rises fall into place.


If you try to argue total, absolute deflation, the point becomes trying to gainsay the argument contrary to the facts.  So people have sided with absolute, total deflation on the one hand or absolute total inflation on the other.

You can have a mixture of both with the loss of purchasing power in currencies.

Wed, 07/04/2012 - 10:51 | 2586667 LvM
LvM's picture

That's not right, deflation means the economy grows faster than the money supply, or the money supply decreases faster than the economy decreases or grows. So if silver and gold were still money, deflation would mean their relative value goes UP.

Wed, 07/04/2012 - 10:58 | 2586692 Flakmeister
Flakmeister's picture

Imagine what inflation and deflation mean in a resource limited world....

Peak Oil is highly deflationary.... 

Wed, 07/04/2012 - 11:21 | 2586756 NidStyles
NidStyles's picture

Have you ever actually read into those theories and who wrote them? 

Wed, 07/04/2012 - 11:23 | 2586761 Vendetta
Vendetta's picture

True, however as the deflation continues on its path, the bankers derivatives exposure continue to impair their balance sheets accelrating the money printing to bail them out ... it will be (or is) a positive feedback loop.  In sciences, it is similar to thermal runaway in transistor circuit or natural resonant frequency of the Tacoma Narrows bridge aggravated by the winds of monetary madness:

The oscillations of the markets tend to confirm the similiarity.  Its when this monetary feedback loop has reached its saturation point that holding what is real money/value will show its greatest value while the foundation of a seemingly strong monetary system cracks up and falls into the river.

Wed, 07/04/2012 - 10:22 | 2586568 thatthingcanfly
thatthingcanfly's picture

Silver at $140? Wow, that means 28X what it costs to dig it out of the ground, right?

Wed, 07/04/2012 - 10:53 | 2586673 LvM
LvM's picture

There are also such things as 'demand' and 'time'.

Wed, 07/04/2012 - 10:57 | 2586688 Clint Liquor
Clint Liquor's picture

70% of all Silver production is a byproduct of Base metal mining. So it actually costs nothing at all to 'dig it out of the ground', meaning that Silver should be free? Supply and demand dynamics have nothing to do with production cost unless there is an unlimited supply.

Wed, 07/04/2012 - 12:47 | 2586998 kito
kito's picture

when the deflationary tsunami washes every asset and commodity away, silver will go with it at twice the rate of gold.........ben wont know what hit him...........

Wed, 07/04/2012 - 13:30 | 2587096 akak
akak's picture

Still waiting for the Bigfoot/Elvis/LochNessMonster of deflation and an APPRECIATING fiat currency, eh?

How's life on that flat earth of yours, anyway?


While I have nothing but derision and contempt for your complete and willful historical ignorance, I still in some way pity those such as yourself who are actually running directly in front of the steamroller of currency debasement.

Wed, 07/04/2012 - 13:44 | 2587127 kito
kito's picture

Oh akak, derision and contempt? Flat earthers used to feel the same way about anybody who challenged their myopic view of the world based on previous historical assumptions........still holding on for gold 2000?....not until qe3......if the world will even make it that far.........

Funny, perhaps you can point to a time in history where credit derivatives and swaps to the tune of hundreds of trillions of dollars collapsed and wiped out the entire global banking system and we ended up with global hyperinflation??? Keep leaning on your version of history like a crutch and you will never learn to walk.........

Wed, 07/04/2012 - 14:04 | 2587145 akak
akak's picture

So in essence, your (unsupported) argument is "this time is different!".

Please, once again, point to even ONE time in history when the fiat currency of an overspending government with unsustainable and ever-growing debt actually ROSE in value --- or even maintained its value, instead of falling or collapsing, as ALL of them have done.  The fact that this time it is essentially every national government engaging in the debt insanity changes nothing, except the extent of the final currency crises.

The funniest part of it is, you are ALREADY constantly losing wealth due to your pigheaded and wrongheaded assumptions, as every national (fiat) currency constantly loses value --- and yet you deflationary flat-earthers adamantly refuse to open your eyes.  Go ahead, suffer and voluntarily lose your savings; you will have nobody to blame but yourselves.

You are a fucking idiot.  But coming back to say "I told you so!" when the dollar loses 80% of its value in one month or one year's time will be small consolation.

Wed, 07/04/2012 - 14:07 | 2587175 kito
kito's picture

Akak what you lack in vision you Shirley make up for in hostility. Perhaps you can tell me how far back in history derivatives and swaps go???? Perhaps you can tell me how many times in history the entire global banking system was so interdependently linked by these financial frankensteins that nobody understands?.....physical cash is king for now akak......

Wed, 07/04/2012 - 14:19 | 2587192 akak
akak's picture

Again with "This time is different!".

No, it is NOT.

Unsustainable governmental debt always --- ALWAYS --- leads to a repudiation of that debt, with the concomitant debasement (or outright destruction) of the associated fiat currency of that government.

What you are essentially asking us to believe --- against ALL historical precedent --- is that every promise of a bankrupt government is going to be broken --- except THIS one! (upholding the value of its currency)  Some might say that peddling such nonsense and gross illogic is simply naive, but I suspect that it is even more (and even worse) than that.

My hostility is more than justified in the face of your raging stupidity (and/or disingenuousity).

Wed, 07/04/2012 - 14:53 | 2587261 kito
kito's picture

what you fail to understand, something that guys like david stockman ( i guess he also is a raging idiot) see, is that when there is a sudden pricing/deleveraging reset of all assets, it will happen far too fast and far to strong for any central bank to react.......there are too many digital dollars out there chasing everything that will be wiped out....those digital dollars will get eradicated from the matrix, the "default" will happen without any willfull govt printing......and that, akak, leaves you with precious physical dollars in still didnt answer my question akak, how far back does the derivatives/swaps history go?  poor akak, always looking back, never evolving in thought......... 

Wed, 07/04/2012 - 15:06 | 2587290 akak
akak's picture

I hope you and that raging maniac Karl Denniger have lots of fun with all those physical dollar bills you have stuffed in your mattresses when they are worth >80% less than they are today.


"This time is different!"

"This time is different!"

"This time is different!"

"This time is different!"

Wed, 07/04/2012 - 10:28 | 2586587 AchtungAffen
AchtungAffen's picture

I'm tired of all these news about Gold at 5000 or whatever. Don't you know that Goldman said this year it expects Gold to finish at 2000? That means Gold WILL NOT REACH 2000 by years end. If Goldman says it, the opposite is true...

And I especially hate calls of "Gold will reach 3500" but without a timeframe. It's like saying "It's gonna rain"... it will eventually. But it's kinda meaningless like that.

Wed, 07/04/2012 - 10:38 | 2586599 krispkritter
krispkritter's picture

Maybe then I can afford a boat that doesn't leak...

So, will silver follow this trajectory lockstep? It's sparred with the dollar as well but looks to have more appeal to the masses and not the banks? 

Wed, 07/04/2012 - 10:32 | 2586604 SRSrocco
SRSrocco's picture


For some strange reason people have been mistaken on the REAL COST to produce silver.  CASH COSTS are not TRUE COSTS.  Cash costs are not a GAAP.  They are used to compare ore grades between individual mining companies and do nothing for profitabilty.  For instance SILVER CORP METALS had a negative cash cost of $4.22 an ounce.  Here is their up to date financials so far for 2012:


TOTAL REVENUE = $237.9 million

NET INCOME = $73.8 million

This is only a NET INCOME PERCENTAGE of 31%.  Where is the FREE SILVER??  They produced 5+ million oz of silver during this time and if we did the math we would come up with this:

5.2 million oz X $32 oz = $166.4 million

According to those who believe that CASH COSTS are real costs, then SILVER CORP should be at least showing a NET INCOME of $166 million... but they are not.

The marginal cost to produce silver is nearly $30 an ounce for the overall market unless you have extremely high ore grades.

Wed, 07/04/2012 - 11:02 | 2586705 Flakmeister
Flakmeister's picture


check this one one out...  U.S. Silver

Very high cash costs (~$20 per oz), however, these guys are making money hand over fist....

Wed, 07/04/2012 - 11:10 | 2586727 SRSrocco
SRSrocco's picture

FLak...  I follow US SILVER CORP.  They are not making money hand over fist.  They are making some money.  Here is their Q1 2012 results:

NET REVENUE = $23 million

NET INCOME = $2.8 million

This turns out to be a 12% profit.  I would imagine this quarter they may actually see a NET LOSS due to high COSTS and a lower price for silver. 

Furthermore if all the PRIMARY SILVER MINES made approximately 25% profit on their silver production in 2011 this would be the total PROFIT:

210 million oz X ($35 X 25%) = $1.87 Billion dollars PROFIT for all PRIMARY SILVER MINES

FACEBOOK just had an IPO at $19 billion... Folks the money SILVER MINERS make compared to the rest of the Financial Industry is PEANUTS...

Wed, 07/04/2012 - 11:23 | 2586760 Flakmeister
Flakmeister's picture

PE of 8 or so and I also like the quality of their ore... ~11 oz/ton, so you have to consider what you are paying for that cash flow....

Compare these guys to a collection of asshats like Excellon.... the highest grade ore miner but they can't make money...

Margins in the mining business will never huge, esp. giving decreasing ore quality... I'll take a solid 15-20% margin with a multiyear mine life...

All that being said, I don't know what to make of this merger with RX Gold...

Wed, 07/04/2012 - 12:23 | 2586926 fonzannoon
fonzannoon's picture

Some of the other miners have refused to sell silver at these prices and instead are stockpiling. I own those.

Wed, 07/04/2012 - 10:36 | 2586615 Debtless
Debtless's picture

MBS, Libor, Gold, Silver, Oil, Food, it's all so blatantly manipulated by the banksters.

What's the fucking point anymore. Bury a little precious in your backyard and get on with life. The status quo is firmly in place. Change is rarely if ever, abrupt.

Wed, 07/04/2012 - 10:37 | 2586621 EmileLargo
EmileLargo's picture

If gold goes to $10,000, what is a loaf of bread going to cost?

Wed, 07/04/2012 - 10:39 | 2586631 Debtless
Debtless's picture

A nice men's suit will cost about $10,000. The math starts somewhere about there.

Wed, 07/04/2012 - 11:07 | 2586722 EmileLargo
EmileLargo's picture

Exactly. Gold is not a money making trade, it is a money saving trade. It is to ensure that your money buys in four years what it buys now. And they call this "speculation."

Wed, 07/04/2012 - 11:31 | 2586788 Talleyrand
Talleyrand's picture

What is "money"? Gold is money.

Wed, 07/04/2012 - 13:17 | 2587076 Debtless
Debtless's picture

Oh, i dunno. When i bought it at $800 in '08 and sold some last year I made money, and now when I stack on dips I seem to have more shiny than when I started. Rinse, repeat. Same with silver. 

End of the world trade only happens once.

Wed, 07/04/2012 - 15:01 | 2587278 fuu
fuu's picture

"Unless, when that perfect hand comes along, you bet and you bet big, then you take the house."


-D. Ocean

Wed, 07/04/2012 - 21:31 | 2587790 Antidisestablis...
Antidisestablishmentarianismist's picture

The price of gold is a reflection of the level of aggregate confidence there is in the future of the dollar on relative to alternative currencies.  In 1980, with inflation running 13%+ and the prime rate around 21% there was a lot of pessimism and the order of the day was to preserve value.  Gold became the instrument to preserve wealth in an inflationary environment.  Then Paul Volcker (the only Fed chairman who was ever worth a damn) came along and started pursuing policies that changed perceptions, and it was everyone rushing out the exits, so the price of gold, i.e. the number of dollars required to buy an ounce of it, crashed. 

So the situation now is that there isn't a whole lot of confidence in the dollar but we're better off than the euro or the yen, and it's devilishly difficult to say with total assurance that we are facing deflation or inflation as a bigger menace.  If deflation, gold and most everything else will tank or default.  If inflation, gold will soar as will most everything else, only maybe it will be a repeat of 1979-80 because the price will be bid into the stratosphere by a panicked public.  Hopefully we'll be a bit smarter this time and sell somewhere near the top and maybe buy stocks?

Wed, 07/04/2012 - 16:13 | 2587440 harleyjohn45
harleyjohn45's picture

about 12.00.

Wed, 07/04/2012 - 10:41 | 2586640 JR
JR's picture

And here are a couple more “happy” Fourth of July thoughts on this “Independence” Day from one of America’s own as this nation takes her final walk into the John Roberts-Elena Kagan-Ben Bernanke era of We-the-Rulers fascist socialism. There’s only one Justin Raimondo of

“When the colonists declared their independence, they recorded their reasons in a document – a Declaration that demonstrated this wasn’t just a territorial matter. They asserted their right to make a revolution because sovereignty resided in the people – not the king and his councilors. They didn’t want to create a centralized European-style state that would mimic the imperial grandeur of Britain. They wanted a republic – and they wanted to be left alone.

“Flash forward 236 years, and – poof! – the republic is a bloated empire, one that asserts its “right” to attack any nation on earth for any reason. Having divested itself of its modest republican cloth coat, and taken to wearing the imperial purple, Washington has also discarded the old-fashioned concept of popular sovereignty as conceived by the Founders. When the President can take the country to war with a single command, without consulting anyone, sovereignty is no longer in the hands of the people, but of one person – our de facto king. …

“Please do go out and celebrate the fourth of July – get out the grill, invite some friends over, and enjoy the show. When you see those fireworks light up the sky, think of the second war for independence you – or more likely your children – will have to fight if you want to keep what little freedom you have left.”

All tyranny needs to gain a foothold is for people of good conscience to remain silent. – Thomas Jefferson

Wed, 07/04/2012 - 11:20 | 2586753 Hulk
Hulk's picture

Its time to re-issue the declaration of independence

I hereby declare the 4th of July to be the second declaration of independence day...

Wed, 07/04/2012 - 10:47 | 2586652 Jolly.Roger
Jolly.Roger's picture

"Gold Seen At USD 3,500, 6,000 And 10,000 Per Ounce"

Nobody has SEEN gold above 3,500.

SEEN is the past tense.



Wed, 07/04/2012 - 10:58 | 2586687 ObungaBoy
ObungaBoy's picture

see saw seen

The gold is up because Wall Street is concentrated on the present short squeeze

When they make the muppets to cover their short positions with substantial losses they will resume the attacks against the gold

Wed, 07/04/2012 - 11:28 | 2586776 Jolly.Roger
Jolly.Roger's picture

Just saying ... some prick 'visionaries' who know nothing, are telling us what they've 'SEEN'.

"Gold Guessed At USD 3,500, 6,000 And 10,000 Per Ounce"
would be a better headline.

Wed, 07/04/2012 - 10:57 | 2586689 falak pema
falak pema's picture

well thats the whole point; if you can go to 2000+ the sky is the limit.

That is the reasoning that got the Burj Al Khalifa built in Dubai as the tallest, most beautiful tower in the world; now totally empty !

Dubai's Burj Khalifa Is A Complete Flop With Buyers - Business Insider

Wed, 07/04/2012 - 11:03 | 2586711 LULZBank
LULZBank's picture

You've never been inside a Gold Bugs head.

Wed, 07/04/2012 - 12:13 | 2586902 GlomarHabu
GlomarHabu's picture

There are an encyclopedic number of events mankind has NEVER seen before  ...right up until they were seen.....

  • Flat Earth vs round ...round
  • Sun revolving around the Earth .... the other way
  • Fire ... warmth, ask the naked natives of Tierra del Fuego
  • The wheel ... aboon all around
  • Fermat’s Last Theorem ... solved
  • E=mc squared ... change the world

The list is just too long, but you get the point.


Wed, 07/04/2012 - 17:06 | 2586670 Antidisestablis...
Antidisestablishmentarianismist's picture

I'm not one to question the bullish precious metals outlook, but one thing that always bugs me about these big round numbers people call for is the use of "inflation-adjusted" in the argument.  Whenever I read that I wonder if the writer is a charlatan or just conceptually confused.

An ounce of gold is an ounce of gold.  It will always be an ounce of gold.  It is a constant.  What changes is the dollar's relationship to gold, i.e. the price of gold expressed in dollars.  Isn't that an all-inclusive comparison in itself, fully baking in inflation?  The only thing that matters is how many dollars it takes to buy gold, period.  The fact that it has gone from $35 in 1971 to $1500+ now and probably $10000 eventually says everything you need to say without adding muddle and confusion to the analysis.

Wed, 07/04/2012 - 11:03 | 2586709 DosZap
DosZap's picture


If there is no demand for our Treasuries, then how do you explain the record low rates?

There is demand, the govt is the buyer of last resort.

They stop purchasing 65-75% of all tendered, look out.


Wed, 07/04/2012 - 11:11 | 2586732 Massholio
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As someone who is on the edge about buying gold/silver, here is a question for gold buyers/investors. If the central banks don't want the public buying/using gold/silver, why can you continue to buy it? Thanks for any replies.

Wed, 07/04/2012 - 11:48 | 2586829 Massholio
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no one?

Wed, 07/04/2012 - 12:01 | 2586866 JOYFUL
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I think you've misread the intent of the kartel banks and their gubernmental accomplices...

it's not that they don't want peeple to buy long as they have the power to manipulate prices they are happy to see new dupes step up for the ring toss and watch them get burnt.

Anybody who gets it in their head that precious metals are a trouble free, high yield investment is the perfect mark for the moneypowers...they shake out those newbies like leaves on a tree, and scoop up the reward of cheaper supply and burned players...who can be guaranteed to never go near pms again! Double victory!

You'll buy gold n silver because you want a head start in the race for survival once the curtains drop on this kabuki theatre economy....and because you learned somewhere's along the way that 90% of what passes for "bizness" now is bluff n bullshit.

Wed, 07/04/2012 - 12:10 | 2586898 Massholio
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Then why didn't they buy them all up when prices were cheaper? Why not demand them under threat of violence? 

Wed, 07/04/2012 - 12:31 | 2586941 JOYFUL
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I suspect that yu overlooked the part about "bluff n bullshit" in previous...

it pretty much covers yur questions, if yu choose to look at what appears to be simple economic decisions from a wider lense perpective...

all shell games require audience participation.

Wed, 07/04/2012 - 12:51 | 2587009 Diogenes
Diogenes's picture

They used to do those and other scams back when gold and silver were money. Then they figured out they could scam even more money just by writing bad checks (issuing paper). But to do that they had to get the public to forget about gold and silver and concentrate on paper (fiat money).

That doesn't mean they got rid of gold and silver. They still let the gold bugs and silver kooks hang around. They just marginalise them  by sneering and laughing in the media, and rip them off in the gold and silver paper markets.

They can actually make MUCH bigger profits by finageling the paper, than they can by stealing the gold. Easier too.

Read "The Ascent of Money" by Niall Ferguson for a good explanation of how they discovered paper to be more profitable than gold and silver. Pay particular attention the chapters on the Dutch in the 16th and 17th century, the French in the 18th century, vs the Spanish during the same period.

The Spanish had mountains of gold and silver in South America; the Dutch had a trade empire financed by the most sophisticated paper markets of the time; and the French succumbed to a series of scams based on paper.

Spain let the gold and silver run through their fingers and became a backwater; the French government collapsed, resulting in the French revolution; and the Dutch became a world power.

The lesson is paper is more powerful than gold and silver. It can be used to fuel the engines of progress or it can burn through a nation's wealth leaving nothing but ashes.

Wed, 07/04/2012 - 20:45 | 2587765 jumbo maverick
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Kabuki theater economy and here all along I thought it was bukaki theater economy.

Wed, 07/04/2012 - 12:04 | 2586873 GlomarHabu
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I refer you to Rogoff and Reinharts book, <i> This Time It's Different:Eight Centuries of Financial Folly </i>

NO country has ever printed it's way out of debt..NONE,NADA backed paper is doable. 

Wed, 07/04/2012 - 12:12 | 2586901 Massholio
Massholio's picture

Are you suggesting governments want their citizens holdin pms?


Wed, 07/04/2012 - 18:59 | 2587671 prole
prole's picture

Only China does.

Chinese premier is also the only leader who personally bent over and picked up his countries flag sticker from the ground. Other world 'leaders' ignored their own and trampled them happily underfoot.

I think the Dubai government also has very friendly policies WRT it citizens owning gold. Maybe also Swiss.

US Government a history of outright stealing its own sla-- oops, "citizens" gold.

Wed, 07/04/2012 - 13:31 | 2587106 CuriousPasserby
CuriousPasserby's picture

Because we still have a little freedon left. They aren't bold enough to outright ban it yet.

But they might if things get bad enough some day, so one protection is to buy "numismatic" PM like gold proof sets, or older (1800s) silver coins, so there is more liklihood they won't want to call those in like in 1933. You pay a little more than melt, but it's the cost of possible insurance against a call-in.

Also I wonder about jewelry. Will they demand wedding rings? Maybe I'll melt all my gold eagles into rings!

Wed, 07/04/2012 - 14:33 | 2587224 americanspirit
americanspirit's picture

Hi Massholio - at least a partial answer is that allowing your citizens to buy gold and silver is a good way of governments creating a steady stream coming across their borders at no cost to the government. Then at some point they simply confiscate it all. It costs them nothing to acquire it except some ammo and probably some blood, but what the heck. At least I assume that's the thinking behind China allowing her citizens to own gold and silver.

Wed, 07/04/2012 - 14:58 | 2587270 Massholio
Massholio's picture

^^^This at least has the ring of truth to it. What to do? hold on to fiat and enjoy the end of the ride?

Wed, 07/04/2012 - 11:20 | 2586752 kito
kito's picture

there is no chance gold gets to 6,000 an ounce. the great reset will happen well before that milestone could be reached......................

Wed, 07/04/2012 - 11:25 | 2586765 Hulk
Hulk's picture

You fool !!! (read that in your mental Gilbert Gottfried (who is Max  Keiser's twin brother) voice)

Read your History !!! No mystery as to  where we are headed...

Wed, 07/04/2012 - 12:37 | 2586954 kito
kito's picture

there is NO HISTORY for a massive globally intertwined unregulated centrally controlled 40 year credit and derivative bubble where the worlds liabilities are in the hundreds of go sit on your gold....... 

Wed, 07/04/2012 - 12:58 | 2587023 Hulk
Hulk's picture

You Fool !!! There is absolutely nothing new under the sun...

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