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Gold, Silver Surge

Tyler Durden's picture




 

Gold finger? Or did the market just get it through its greasy, vacuum-tubed head that the only option for the status quo cabal to preserve said status quo is to print, print, print? Or, perhaps this headline from the FT is finally getting some play: "Italian government on brink of collapse." Or, perhaps this one: "Eurozone crisis fund ‘may be weeks away’." Or, has the break out, predicted yesterday, commenced? Stay tuned to find out.

 

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Tue, 10/25/2011 - 10:16 | 1808008 GeneMarchbanks
GeneMarchbanks's picture

That always follows. A mere follow-up to the previous piece...

Tue, 10/25/2011 - 10:19 | 1808029 Pladizow
Pladizow's picture

"Like liberty, gold never stays where it is undervalued." - J.S. Morill - Speach to the US Senate - 1/28/1878

Tue, 10/25/2011 - 10:33 | 1808077 hedgeless_horseman
hedgeless_horseman's picture

 

 

Here is a great illustration of the US debt from a respondant on Kunstler's blog:
------------------------------------------------------------------------

Barstiat | October 25, 2011 4:02 AM | Reply

Here is why S&P downgraded the US credit rating.

• U.S. Tax revenue: $2,170,000,000,000

• Fed budget: $3,820,000,000,000

• New debt: $ 1,650,000,000,000

• National debt: $14,271,000,000,000

• Recent budget cut: $ 38,500,000,000

Now let’s remove 8 zeros and pretend it’s a household budget.

• Annual family income: $21,700

• Money the family spent: $38,200

• New debt on the credit card: $16,500

• Outstanding balance on the credit card: $142,710

• Total budget cuts: $385

"I wish it were possible to obtain a single amendment to our Constitution - taking from the federal government their power of borrowing."
-Thomas Jefferson, 1798

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
-Napoleon Bonaparte, 1815

------------------------------------------------------------------------
PS: This doesn't include all the Fannie Mae and Freddie Mac mortgages guaranteed by the Federal Government, nor the unfunded liabilities such as Medicare, nor Social Security, nor any state or municipal debt such as California or Harrisburg, PA.

PPS: If you have not read Kunstler's book, The Long Emergency, you should do so.

PPPS: If you have not read Griffin's book, The Creature from Jekyll Island : A Second Look at the Federal Reserve, you should do so.

 

Tue, 10/25/2011 - 12:05 | 1808564 Treason Season
Treason Season's picture

Go back to your trailer park in Tel Aviv.

Tue, 10/25/2011 - 12:23 | 1808638 tmosley
tmosley's picture

Why so butthurt?

Tue, 10/25/2011 - 10:41 | 1808154 GeneMarchbanks
GeneMarchbanks's picture

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes... Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
-Napoleon Bonaparte, 1815

He should know, with all the dealings with the Rothschild Bros.

Tue, 11/22/2011 - 15:32 | 1903679 Mark123
Mark123's picture

I am beginning to think that little frenchman was not so bad after all. 

Tue, 10/25/2011 - 10:48 | 1808190 Snidley Whipsnae
Snidley Whipsnae's picture

hedgeless horseman... great catch!

Tue, 10/25/2011 - 11:12 | 1808327 FreedomGuy
FreedomGuy's picture

Excellent post. The reason I read ZH.

Tue, 10/25/2011 - 11:29 | 1808390 JustObserving
JustObserving's picture

There are the unfunded liabilities of $116 trillion which everyone conveniently overlooks - they would have to be accounted for under GAAP.

Medicare will be bankrupt by 2017 if not sooner - so these liabilities are not so far beyond the event horizon that they can be ignored.

So you can add $1,160,000 to the credit card - with no payments due on that until 2017.

BTW, national debt now is $14.874 trillion today - bit higher than your  $14.27 trillion estimate.  But then $500 billion is just a rounding error when you deal with trillions.

 

 

 

Tue, 10/25/2011 - 11:34 | 1808426 Libertarian777
Libertarian777's picture

yes, but according to GAAP when the US credit rating on those unfunded liabilities drops from AA+ to D the blow out on the credit spread will reduce the market value of the liability and thus it becomes REVENUE. WHOO WHOO.

Greece must be running a budget surplus according to GAAP now.

Tue, 10/25/2011 - 11:25 | 1808391 SilverIsKing
SilverIsKing's picture

I'm going to print this out, laminate it, and keep in my wallet.  The next time someone disagrees with me that the U.S. is fucked, I'll pull it out.  Thanks.

Tue, 10/25/2011 - 12:13 | 1808592 tamboo
tamboo's picture

and read the book griffin ripped off:

 

Secrets of the Federal Reserve by Eustace Mullins

Tue, 10/25/2011 - 12:35 | 1808648 hedgeless_horseman
hedgeless_horseman's picture

 

 

The Creature from Jekyll Island : A Second Look at the Federal Reserve

Including the words, "...A Second Look..." in the title does not earn him a pass?  Nobody complains about Matthew, Luke, and John ripping off Mark.  I say, do whatever it takes to get the message out.

Tue, 10/25/2011 - 11:02 | 1808270 tarsubil
tarsubil's picture

Just got confirmation that Texas Precious Metals shipped my order. Just in time.

Tue, 10/25/2011 - 12:57 | 1808852 SilverIsKing
SilverIsKing's picture

I work for UPS.  What's that address again?

;-)

Tue, 10/25/2011 - 11:04 | 1808281 pupton
pupton's picture

Kitco has the answer:

http://www.kitco.com/reports/KitcoNews20111025JW_update2.html

"Comex gold futures have rallied to their daily highs on fresh safe-haven buying interest following news that a Euro zone finance ministers meeting scheduled for Wednesday has been canceled."

Tue, 10/25/2011 - 11:33 | 1808422 NotApplicable
NotApplicable's picture

What, no bunga-bunga tomorrow?

Tue, 10/25/2011 - 10:17 | 1808013 FranSix
FranSix's picture

Options expiry.

Tue, 10/25/2011 - 10:18 | 1808024 PaperBear
PaperBear's picture

Is that today ?

Tue, 10/25/2011 - 10:31 | 1808091 gringo28
gringo28's picture

yeah, Klingon options circling Uranus......

Tue, 10/25/2011 - 12:06 | 1808574 FranSix
FranSix's picture

You know what?  YOU'RE RIGHT.

If you don't have elevenses today, then you'll simply have to wait 'till tomorrow.

Tue, 10/25/2011 - 11:18 | 1808355 uranian
uranian's picture

my first thought, too, but it's tomorrow isn't it?

Tue, 10/25/2011 - 10:17 | 1808016 YesWeKahn
YesWeKahn's picture

It looks like that FED will print another 600 billion, this couples with the death of Euro, yupe, metals will raise.

Tue, 10/25/2011 - 10:17 | 1808020 PaperBear
PaperBear's picture

Is the start of gold/silver leaving this galaxy ?

Tue, 10/25/2011 - 10:18 | 1808023 monopoly
monopoly's picture

Ok,where is Robot to tell us how stupid we are. :)

Tue, 10/25/2011 - 10:24 | 1808053 fuu
fuu's picture

I'm going to make a little silver statue of robotrader to keep on my desk.

Tue, 10/25/2011 - 10:53 | 1808212 LongBallsShortBrains
LongBallsShortBrains's picture

Be careful to place it where the BULLshit spewing from it will not cause a mess.

Tue, 10/25/2011 - 11:23 | 1808379 fuu
fuu's picture

Gold just completed an extremely rare chart formation. The Loch Ness Monster Pop. This chart formation usually leads to more price movement.

http://imageshack.us/photo/my-images/703/lochnessgold.png/

Tue, 10/25/2011 - 11:41 | 1808458 cowdiddly
cowdiddly's picture

"Loch Ness Monster pop" CLASSIC. +1700

Tue, 10/25/2011 - 10:32 | 1808098 Long-John-Silver
Long-John-Silver's picture

Nexflix became falling timber yesterday and today the sawmill is turning it into tooth picks.

Tue, 10/25/2011 - 10:55 | 1808228 Infinite QE
Infinite QE's picture

The key to understand RobotTrader is to understand that he is representative of all the low-level functionaries that were bounced out of financial jobs and became `traders'. They all read the same stuff, call the same 900 numbers, etc. To invest and profit from these people, the best thing is to buy leap puts on whatever they are buying, then sit back and collect. Working like clockwork! Who can forget RT's endless pumping of Netflix. Now obliterated.

Tue, 10/25/2011 - 13:57 | 1809141 akak
akak's picture

Who can forget RT's endless pumping of Netflix. Now obliterated.

Not just obliterated --- blowtorched.

Along with the last shreds of RobotLemming's credibility here.

 

Hey RobotShitforbrains, when are you finally going to join your dear buddy leo quislingasskiss in ZeroHedge exile?

Tue, 10/25/2011 - 11:24 | 1808381 Chaffinch
Chaffinch's picture

Robo's still hiding under his duvet trying not to think about Netflix

Tue, 10/25/2011 - 12:36 | 1808715 Strider52
Strider52's picture

Robo is trying to get the dog to lick the peanut butter off his junk, but his junk is experiencing a margin call. 

Tue, 10/25/2011 - 10:18 | 1808025 firstdivision
firstdivision's picture

Lol!  Well someone needs to remind gold/silver that Ctl+p will happen when markets fall further and lollars harden more from here.  WTI is too high for Benzers to print.

Tue, 10/25/2011 - 10:24 | 1808055 Quintus
Quintus's picture

Let's imagine Ben's thought process if, as is looking likely, the Euro banking system starts to collapse later this week, and contagion spreads to Wall St.

"Well", he thinks to himself "I guess I could print some cash to bail out JPM, Goldman, Citi, BAC etc. etc. and stop them going bust before the weekend, but I'm really worried about Joe six-pack and the pump price of his Gas, so I'd better not."

Yeah.  That's what he'll be thinking.

Tue, 10/25/2011 - 10:28 | 1808073 s2man
s2man's picture

+1.  That gave me a good belly laugh.

Tue, 10/25/2011 - 10:31 | 1808089 firstdivision
firstdivision's picture

which the dollar will harden, and WTI will fall; then printing will commence. 

Tue, 10/25/2011 - 10:33 | 1808100 Quintus
Quintus's picture

The dollar will harden because the banking system is collapsing, including all the big money-centre banks?

Seems a bit.....unlikely.

Tue, 10/25/2011 - 10:55 | 1808225 ATM
ATM's picture

I don't think it is unlikely at all. As Europe struggles in it's death throes the money there will seek a home. There aren't many places big enough to absorb that cash that fast. The only exception is going to be the US.

The bump here is likely to be temporary until the fleeing rats figure out that we are just as fucked as Europe. The the money will go to the last place that is left - real stuff. And all that money flooding into such limited real assets is going to make prices go exponential.

So as a trade - US right now is probably a good bet, but certainly not long term. A broke countries paper is never a good place to store wealth.

Tue, 10/25/2011 - 11:11 | 1808320 Quintus
Quintus's picture

With mobs of people outside shup-up banks up and down the country throwing rocks at the windows and demanding to get their money back, it would be a brave foreign investor that was, at the same time, clamoring to get their money into the US banking system.

I guess there maybe flows into US Treasuries, if people could figure out how to buy them when the primary dealers's staff were all busy carrying their possessions out of the building in cardboard boxes.

Tue, 10/25/2011 - 11:39 | 1808451 Chump
Chump's picture

You're ignoring the timeframe.

Tue, 10/25/2011 - 11:49 | 1808496 Quintus
Quintus's picture

As we saw with Lehmans, contagion is more or less instant.  If Euro banks hit the rocks on Thursday, Wall St. will have a very, very bad Friday.

Tue, 10/25/2011 - 12:45 | 1808767 Chump
Chump's picture

...and the $ hopped on a rocket ship after Lehman, too.

Tue, 10/25/2011 - 13:03 | 1808891 GoinFawr
GoinFawr's picture

Hey, just about anything's possible. Then again, "The ol' Gray Mare...".

Tue, 10/25/2011 - 13:03 | 1808892 trav7777
trav7777's picture

yeah gold went up $80 in a day too.

There's not going to be a paper lockup this time around because the CBs are standing there ready to provide unlimited money.  Hell, the SNB is printing to maintain a EUR peg.

Tue, 10/25/2011 - 13:20 | 1808983 Chump
Chump's picture

Yeah this is all true, which is why the pop will likely be far shorter this time.  The paper market conditions are different but the herd mentality rushing to "safety" in the $ is not.

Tue, 10/25/2011 - 13:00 | 1808874 trav7777
trav7777's picture

yes; the global run on money markets in Sept 08 was basically hours away from total bank lockage.  CP markets locked up, interbank locked, everything locked.  The Fed had to step in to guarantee the function of these markets with unlimited credit.  They still are in that position as far as I'm concerned.

If it happens again, the CBs will step in to provide cash.  Expect that.  They won't do anything else and that is basically supposed to be their core function.

Tue, 10/25/2011 - 11:20 | 1808365 rosiescenario
rosiescenario's picture

The rats flee the Titanic to the Andrea Doria.....the question here is how soon they notice the bilge rising in their new habitat.

Tue, 10/25/2011 - 10:54 | 1808221 LongBallsShortBrains
LongBallsShortBrains's picture

Interesting younsay that.

Both silver and wti are up nicely today with rbob down.. WTF?

Tue, 10/25/2011 - 10:20 | 1808026 jmcadg
jmcadg's picture

Love it, sold a Dec WTI Call and picked up a Feb 2200 Gold Call and Dec 4250 Silver Call with the proceeds, about 30 seconds before the spike.

You gotta smile.

Tue, 10/25/2011 - 10:18 | 1808028 unky
unky's picture

Because the economic data? Crazy to trade these markets... just stack the phyzical and forget about it

Tue, 10/25/2011 - 10:19 | 1808031 tmosley
tmosley's picture

Jumping the gun a little.  

Surging all the way to levels last seen TWO HOURS AGO!

Tue, 10/25/2011 - 10:29 | 1808083 Snidley Whipsnae
Snidley Whipsnae's picture

Exactly... "Surging all the way to levels last seen TWO HOURS AGO!"

Posters tiring of the Greece/Euro/ECB/Germany/France, et al Europe hype... Gotta stir interest somehow.

Tue, 10/25/2011 - 10:33 | 1808102 tmosley
tmosley's picture

As if the volatility, manipulation, and the apparent total disconnect between American and foreign physical markets aren't interesting enough.

Tue, 10/25/2011 - 10:55 | 1808223 Snidley Whipsnae
Snidley Whipsnae's picture

TMos... Here is hoping for 'change we can believe in' when PAGE opens for trading in China.

I'm a curious observer that went physical long ago. Now looking on with interest. :)

Tue, 10/25/2011 - 10:40 | 1808143 Hearst
Hearst's picture

Surging all the way back up to levels seen when obl was ahem killed. This manipulation is going to end bad.

Tue, 10/25/2011 - 10:46 | 1808172 tmosley
tmosley's picture

As does all manipulation.  The only questions are "When?" and "How?"

I am looking at "By the end of the year" and "Comex implosion" as answers to those two questions, but I give only 75% confidence in them.  Could be later, and it could be through position limits or through the opening of a clean futures exchange in Asia.

Tue, 10/25/2011 - 10:54 | 1808217 qussl3
qussl3's picture

If i were the Chinese why the hell would i want to have real price discovery until ive bought all i want?

It's in the Chinese or any other large USD bagholders' interest to see gold suppressed until they are sufficiently divested.

I completely agree on the long term trajectory on the PMs, but i dont think the Asians will be the ones who pull the plug on the shenanigans at least not till they have enough.

Tue, 10/25/2011 - 11:00 | 1808256 Smiddywesson
Smiddywesson's picture

If i were the Chinese why the hell would i want to have real price discovery until ive bought all i want?

The Chinese are still marching in lock step with their co-conspirators in the West when it comes to margin hikes, so your conclusion is supported by the evidence.  When that cooperation stops, it's game over.

Tue, 10/25/2011 - 11:01 | 1808260 tmosley
tmosley's picture

Definitely true, that is why I assign that scenario a fairly low probability.  

The likely trigger for the Chinese pulling the plug would be riots in their major cities (or even the countryside).  They will wind up pulling the plug in order to hold on to power.  Otherwise, you are right, they would keep doing it infdefinitely, or until they had the vast majority of the gold as well as the silver production capacity.

Tue, 10/25/2011 - 11:06 | 1808292 qussl3
qussl3's picture

Yup agree, if there was anyone who could be itching to blow it open its the Ruskies.

I just wondering why noone has made a play on all that Indian gold, or perhaps thats what they are paying the Iranians with?

I need to go buy more damnit lol.

Tue, 10/25/2011 - 11:18 | 1808354 FreedomGuy
FreedomGuy's picture

The Chinese buy all their own domestic production. It will take about ten years to back their currency minus what they buy internationally. They don't want to pull the trigger any time soon. In a meltdown where the world goes back to a gold standard they get nuked.

Tue, 10/25/2011 - 11:30 | 1808410 tmosley
tmosley's picture

Not really.  Industry is their saving grace.  The form of the monetary system isn't important so long as you have a productive industrial society (and your government doesn't steal all the net benefit from foreign sales by printing the national currency).

Of course, if their industral base were to collapse, perhaps due to the machinations of their idiotic government, then all bets are off.  Their actions are nonsensical, so it is hard to predict what they will do in a given situation.  Perhaps that is the way they want it.  Otherwise, they are as they appear on the surface--idiots giving away the productive capacity of their nation for literally nothing (trading it for US paper that they never call).

Tue, 10/25/2011 - 16:42 | 1809904 FreedomGuy
FreedomGuy's picture

Good points. They are rookies in this thing called capitalism combined with the dangers of central planning which comes naturally to commies.

They have huge potential domestic demand but one of the problems in a mercantilist economy is most of their production is priced and oriented to the West.

They are clumsy but they also learn fast and are pragmatic.

Tue, 10/25/2011 - 13:56 | 1809145 trav7777
trav7777's picture

the chinese DON'T NEED TO BUY, idiot, they are a producer in their OWN RIGHT

Tue, 10/25/2011 - 19:40 | 1810440 fnord88
fnord88's picture

plus isn't there a Rothchild on the board of the new Asian metal exchange?

Tue, 10/25/2011 - 13:51 | 1809122 trav7777
trav7777's picture

another soon to be failed prediction I'll be reminding you about.  You've been bleating about this imminent COMEX implosion for a year now, yet you remain totally impervious to education about what COMEX does.

Fuckin "75%"?  ROTFL...another number straight outta your ass

Tue, 10/25/2011 - 11:05 | 1808277 silver500
silver500's picture

and in case there was any doubt as to whether the market is manipulated:

"Central banks stand ready to lease gold in increasing quantities should the price rise" - Alan Greenspan 24/07/1998

Source: http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm

Tue, 10/25/2011 - 10:56 | 1808230 Smiddywesson
Smiddywesson's picture

The PM prices we are watching are just paper prices, and fiat isn't exactly in short supply.  This isn't over yet. 

If we break sharply over $1700, then I'll believe something interesting is going on.  Until then, yawn.

Tue, 10/25/2011 - 11:28 | 1808403 junkyardjack
junkyardjack's picture

What they need is a margin hike to get rid of some of that speculation

Tue, 10/25/2011 - 10:20 | 1808034 Clint Liquor
Clint Liquor's picture

US Silver Eagles sold over 36 Million so far this year to set a new record. Here is an interesting link where you can review the present and past years sales by the month. In 1998 when Silver was $4.50, 4 million sold.

http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2011

The higher the price, the more they sell?

Tue, 10/25/2011 - 10:26 | 1808065 qussl3
qussl3's picture

Price creates a demand of its own.

We are entering the 2nd to last act, where the masses are beginning to catch on, the stampede isnt here yet but will accelerate the higher we go.

Still waiting for another dump in oil and by extension silver before the printers come out to play.

Tue, 10/25/2011 - 10:35 | 1808114 Snidley Whipsnae
Snidley Whipsnae's picture

"We are entering the 2nd to last act, where the masses are beginning to catch on, the stampede isnt here yet but will accelerate the higher we go."

Yet another Amerocentric! The 'masses' are in China, India, SE Asia, and the mid east... and they 'caught on' about 5,000 years ago.

Today is another paper manipulation of PMs. The real move will come when paper/physical diverge.

Got physical?

Tue, 10/25/2011 - 10:46 | 1808171 qussl3
qussl3's picture

Funny how you keep labeling those you dont even know.

I live in Asia, done so for over 30 years.

Yes, they buy, but the "masses" could probably afford 1oz of gold or an oz of silver a year AT BEST.

The real purchasing power still lies in the WEST.

Sure that may change, but if you want a moonshot in the next couple of years its likely the WEST's middle class needs to be buying in a big way.

Tue, 10/25/2011 - 11:05 | 1808290 Snidley Whipsnae
Snidley Whipsnae's picture

"The real purchasing power still lies in the WEST."

Hmmm... So, that is the explanation for the US being the worlds largest debtor nation?... And why avg income in US is shrinking?... And why US deficits are growing larger by the year?... And why ALL western banks are a hair away from implosion?...

Fact is, western central banks are between a rock and a hard place. They use paper manipulation to supress PM prices while rest of world buys the paper and take physical delivery. Dumb move for western CBs... but they gotta make their fiat look as good as possible...which isn't very good!

BTW, I lived/worked in Asia for six years and have a fair idea of what is going on there. China has surpassed S Africa as the worlds largest gold producer. China is not exporting gold. China/Mid East/SE Asia have some very large soverign wealth funds that are under reporting their physical PM stocks.

Western middle class isn't going to buy anything! They are up to their eyeballs in consumer/housing/student debt! Get a clue!

Tue, 10/25/2011 - 11:12 | 1808326 qussl3
qussl3's picture

Your points are all true and valid, the large marginal buyer is clearly Asia and the ME, and since marginal demand disproportionately affects price in inelastic markets this "new" demand is blowing open the paper games.

However, the West still purchases huge amounts too, and if they were to stop or cut back in a big way, the strains on the physical market would ease - dramatically so.

Much as i like to think new buyers can fill the void i'm inclined to think otherwise, mainly due to the ridiculous wealth distribution in Asia, the proles dont have the wealth to divest, they barely get by on income.

Sure there are huge whales in Asia, but once they have had there fill of PMs, they would look to other stores namely RE and equities in strategic corporates.

The whales will not have all eggs in one basket.

Tue, 10/25/2011 - 11:34 | 1808432 Snidley Whipsnae
Snidley Whipsnae's picture

"However, the West still purchases huge amounts too, and if they were to stop or cut back in a big way, the strains on the physical market would ease - dramatically so."

Who, in the west, is buying 'huge amounts' of gold?

"Much as i like to think new buyers can fill the void i'm inclined to think otherwise, mainly due to the ridiculous wealth distribution in Asia, the proles dont have the wealth to divest, they barely get by on income."

Asians have traditionally/historically saved ~ 40% of income. Over generations that adds up to a LOT OF DOUGH... much of it buried under homes, mostly in old silver. Asians leared thousands of years ago to avoid paper...fiat. A lesson the average 'proll' in the US is about to learn the hard way. Asians are producing more millionaires/billionaires per year than any other part of the world...while in the west the productivity gains of the past 30 years have gone to the top percentile... less than one per cent. Most in the West that are wealthy have most likely already diversified into gold...if they have any smarts. The new Asian wealthy are buying gold in quantity... they are literally playing catch up... Just as the Chinese soverign wealth fund is playing catch up with gold reserves. Of course they will not 'have their eggs all in one basket... right now they are buying gold eggs.

"since marginal demand disproportionately affects price in inelastic markets"

Inelastic markets change with economic change. At one time it was 'a fact' that petroleum use in the US was 'inelastic'... now we know it is not because of a declining economy = economic change = decline in petroleum use. If a spate of new currencies will be the norm after the paridigm change that we are now in there is no one that can say what value will be placed on PMs. We only know that over the very long haul that PMs do have a practical value in bread/shelter/trans, etc. We also know that over the long haul PMs are a better store of value than any paper asset.

 

Tue, 10/25/2011 - 11:58 | 1808488 qussl3
qussl3's picture

Yes the tides are turning, but not so much that EVERYTHING hinges on the Asian middle class.

Why is it so hard to accept that for PMs to have a moonshot soon, BOTH EAST and WEST need demand physical?

They are both critical in this move.

You mentioned living in Asia for 6 years, surely you can see the wealth gap, and how MANY live from hand to mouth, what wealth or income do those masses have with which to divest into the PMs?

For certain the Asian middle class is growing, but they have not surpassed the west in absolute terms yet.

Where does the bulk of disposable income lie?

Where does the bulk of wealth reside?

The locus is shifting east but it has not arrived yet.

BTW if you were wondering im not junking you. lol

Tue, 10/25/2011 - 12:21 | 1808626 Snidley Whipsnae
Snidley Whipsnae's picture

First, I'm not 'looking for PMs to have a moonshot'... either soon or over the next few years. I have been accumulating over my lifetime and am in no rush to 'get rich quick' or, even slowly. My interest is in wealth preservation and to have something for my children to, hopefully, use wisely.

For PMs to have a moonshot would mean, in reality, that most fiat would take a vertical nose dive. I don't even think in terms of PMs valued in fiat... I don't care how much monopoly money one would offer for my PMs, I would refuse the offer. I don't need anything that fiat can buy that I can't cover with fiat on hand.

What I see happening in Asia is an upward mobility, in fits and starts, of the population. If I think back to my grandmothers farm and doing chores there while still in school I can see that she lived much as a Chinese peasant does today. The entire area of the state around my grandmothers farm languished in depression until LBJ became pres and began to make changes that effected that part of the US economy... (not an LBJ fan). She got an indoor toilet in 1959! Gas stove instead of wood about the same time and I can remember dumping the water drip pan when the ice man delivered a new 25lb block of ice. Not so different from the current Chinese peasant, eh? But, it was a good healthy life. We had fresh eggs, fresh chicken, smoke house with ham/bacon, raised our on beef, big garden with lots of canning for winters, pecan orchard, and a cash crop of rotating corn/cotton/soy. Lots of hunting/fishing. Great life for a kid. We never saw a cop, never heard of a kid being abducted, rape, murder were unknown to us. I even had a bicycle, rusty but trusty. At the time there were many share croppers in the area that had it much worse than we did... they might have been living below the current Chinese peasant for most of them were hungry most of the time and rarely had a dollar in their pocket.

Sorry for the long anecdote but I want you to know what it was like in 1955 in the area of the US where I am from... not so different from today's China.

Now, in the area of my deceased grandmother's farm there stand multi million dollar homes that have decreased in value ~ 35% so far. My dumb cousin bought one with some oil royalty money and it's dropped like a rock.

What I see here in the West is an economy stifled by regs, too much gov, too many stupid laws, too much prison industry, too much gov agency snooping into citizens business, too many bankers/pols running free that should be in jail, too much political haggling, etc

What I see in Asia is a gov that is tyrannical but seem to have the best interests of the COUNTRY at heart. At least they have made it plain to their people that getting wealthy is ok and that they are encouraged to buy PMs. Sure, they are making a boatload of mistakes but what emerging economy facing dollar hegemony does not? They are doing the best they can, their workers want to work and are not afraid of hard work and the people are genuinely proud of what their cournty is accomplishing.

Once I was proud of America, I served in a war. I can't say that anymore and it makes me sad.

Tue, 10/25/2011 - 12:41 | 1808737 qussl3
qussl3's picture

Thanks for sharing your experience, it gives context to your earlier posts.

The west is clearly in decline but i hesitate to welcome the rise of the east.

There is too much cronyism, nepotism and rule by force for me to be enthusiastic about the rise of the east.

It seems the world is heading into a period of savagery and competition rather than cooperation.

Tue, 10/25/2011 - 13:24 | 1809003 Snidley Whipsnae
Snidley Whipsnae's picture

About cronyism, nepotism and rule by force... We have plenty of that here as well.

Is the rotation of GS to Treasury to GS not cronyism?

I could tell you of a lot of nepotism that I witnessed while building high speed rail systems... some of it might curl your hair... especially what I saw when working with the council of governments when involved with building Metro Rail. Unbelieveable... and Marion Barry was the mayor! lol 

We have more people in jail per capita than any other nation on earth.

I don't 'welcome' the rise of the East but see it as unavoidable. As Lord Acton famously quipped 'once a certain level of bureaucracy exists only drastic measures can dislodge it'...paraphrasing of course. I see the West as bogged down in bureacuracy and we have been on this course for a long time. imo, capitalism died when FDR introduced a lot of social programs to avoid the country turning to outright communism. Of course, the real destruction came before, with the creation of the Fed. Only the markets can determine what interest rates should be. Now everything is manipulated... until it isn't and it all crashes. It might be spectacular.

It's been pleasant sharing some thoughts with you...and, I try to avoid 'labeling' people. I do become irritated when people can't place themselves in the shoes of others... see the another's point of view. The Chinese are simply people with the same needs, dreams, hopes as all people have. My nationalistic fervor went away in Viet Nam...and the Unpatriot Act was the last straw for me.

Tue, 10/25/2011 - 11:58 | 1808534 cowdiddly
cowdiddly's picture

Yep the PMs have been heading East to the Chinese, Indians, Taiwan and  the Russkies for 3 years now. They have all been making steady and fairly large PM purchases

It will continue until the metals are not manipulated any more. The longer they keep jacking with the markets the more likely markets in the East will disconect from the CME scum. 

You are witnessing the greatest transfer of wealth from West to East that has ever occured in our lifetimes.

And these dumbfuck bankers only answer is to try to suppress PM prices and only make it easier for the East to buy on the cheap. The western bankers and their PM Cartel are making the biggest mistake they have ever made in their desperation to keep the Ponzi going.

Mark my words, The next time China reports gold reserves it will be shocking.

Tue, 10/25/2011 - 13:19 | 1808975 Gavrikon
Gavrikon's picture

So, if I understand this correctly, we've allowed China and India to suck up our manufacturing and tech jobs, then they use the money to buy UST until they conclude that they will be worthless, so they start using those treasuries to acquire actual hard assets, i.e., precious metals, resources, AND US property. 

Is that about it?

You gotta wonder how the banksters end up in this deal, and how they'll try to screw over those of us who saw fit to transfer what we could into metals.

Tue, 10/25/2011 - 12:24 | 1808639 Smiddywesson
Smiddywesson's picture

Snidley's right.  I never lived in Asia, but I watched every episode of Kung Fu, at least twice, and I can assure you the Chinese know PMs.  Nobody snatched a panda out of Master Po's hand, ever!

  • Most gold appreciation happens when their markets are open.
  • They are encouraging their citizens to buy gold and silver and even allow them to open bank accounts denominated in gold.
  • They no long export silver or gold.
  • They are opening their own exchange
  • They have contradicted their own gold purchase data, proving they are lying about their gold purchases.
Tue, 10/25/2011 - 14:12 | 1809237 trav7777
trav7777's picture

you're an idiot..."take physical delivery"? WTF, do you think sovereigns buy from fuckin COMEX?  They buy from miners or other sovereigns.  COMEX has jackshit to do with this.  You idiots seem to think every ounce of gold in the world moves through COMEX somehow and that COMEX is on the hook for the trades of its SHORTS.

Tue, 10/25/2011 - 13:20 | 1808959 Gavrikon
Gavrikon's picture

Thanks for the reminder.

Here in Germany, the delivery times for silver are getting longer at the various precious metals dealers I patronize.  Definitely, some folks are nervous about the Euro (including me, a little old US expat paid in Euros).

Tue, 10/25/2011 - 10:21 | 1808038 New Survivalist
New Survivalist's picture

Euro gold, bitchez.

Tue, 10/25/2011 - 10:21 | 1808039 Bastiat
Bastiat's picture

Shorts just got pantsed--for a change.

Tue, 10/25/2011 - 10:22 | 1808043 thunderchief
thunderchief's picture

This is long overdue.

Many are waiting for a final smackdown by the big banks to cover their shorts, but may just end up having to buy higher and higher. 

I hope the train pulls out the station and all these scared little rabbits on the sidelines, hoping to buy cheaper run and run, and get shredded under the tracks.  They are as bad as the big banks and shorts.

 

Tue, 10/25/2011 - 10:31 | 1808093 ViewfromUnderth...
ViewfromUndertheBridge's picture

I'd waited all month to trade the OpEx short for once...luckily was watching! Serious buying and covering action.

Tue, 10/25/2011 - 10:23 | 1808049 Irish66
Irish66's picture

Ft. Italian govt brink of collapse

Tue, 10/25/2011 - 10:24 | 1808051 El Gordo
El Gordo's picture

My pucker factor just relaxed a little.

Tue, 10/25/2011 - 10:24 | 1808052 dirtydroog
dirtydroog's picture

+1 silver had a solid tank just before. no doubt it'll be back below 31.50 soon

 

(was in reply to tmosley)

Tue, 10/25/2011 - 10:24 | 1808054 KandiRaverHipster
KandiRaverHipster's picture

my silver 26s, THEY SPINNIN!

Tue, 10/25/2011 - 10:25 | 1808058 Sweet Chicken
Sweet Chicken's picture

SKITTLES BITCHEZ!

Tue, 10/25/2011 - 10:25 | 1808060 El Gordo
El Gordo's picture

To the moon Alice, to the moon...

Tue, 10/25/2011 - 10:26 | 1808062 SheepDog-One
SheepDog-One's picture

Buckle up, we're all on the Hellbound Express bitchez!

At least its not boring times.

Tue, 10/25/2011 - 10:27 | 1808066 youngman
youngman's picture

I think the big move will be when the Asians dump dollars and Euros....and run to the metals...the survival trade..and its pretty close to that time as I see it...I sure as hell would be doing it,,,oops ...I did already

Tue, 10/25/2011 - 10:27 | 1808067 ViewfromUnderth...
ViewfromUndertheBridge's picture

had been actively trading short, profit taking and being cautious then was just thinking for the day before options expiry, when they are trying to paint an outside reversal day, this is just not going down...was about 30 seconds late but reversed positions and caught about 3 inches of upside....very unusual price action. Makes sense.  

Tue, 10/25/2011 - 10:27 | 1808068 Hephasteus
Hephasteus's picture

No surprises. It had the weirdest boner all weekend.

http://www.youtube.com/watch?v=A3A1nprfuJs

Tue, 10/25/2011 - 10:27 | 1808069 s2man
s2man's picture

Go, go, gold.  Hoping for 1800 by Jan, when I can finish cleaning out the 401k, which is mostly in IAU.

Great googly moogly.  The gold chart isn't parabolic, is is nearly vertical.  Woohoo!

Tue, 10/25/2011 - 10:28 | 1808070 Sudden Debt
Sudden Debt's picture

NO!! SELL IT TO ME FOR 4$ ONE MORE TIME!!

 

Tue, 10/25/2011 - 10:28 | 1808071 Apostle of Unknown
Apostle of Unknown's picture

pop! goes the weasel

Tue, 10/25/2011 - 10:28 | 1808072 BW
BW's picture

Their only hope is to balance their budget.

Tue, 10/25/2011 - 10:28 | 1808074 Spitzer
Spitzer's picture

euro land doing some buying

Tue, 10/25/2011 - 10:28 | 1808075 Trad3er_1337
Trad3er_1337's picture

bernake is at it again... as jim rogers said less then a week ago... look at the m2 numbers

 

Tue, 10/25/2011 - 10:32 | 1808076 swanpoint
swanpoint's picture

Copper -2.42%, Au/Ag +1.5%

I bought my first SLV put (Nov, '11) yesterday. This makes perfect sense.

Tue, 10/25/2011 - 10:29 | 1808081 NuYawkFrankie
NuYawkFrankie's picture

Abandon ship! Man the lfeboats!!!

Women & children first....  Oops!!! Make that "Hedge Fund CEOs and Bankstas first!!!" 

Tue, 10/25/2011 - 10:33 | 1808103 Bastiat
Bastiat's picture

Make that "Hedge Fund CEOs and Bankstas first!!!

Yeah, before the lifeboats are lowered.

Tue, 10/25/2011 - 10:44 | 1808169 Sudden Debt
Sudden Debt's picture

 

 

Don't worry, none of them are on the Titanic anymore. They are all laying in the sun on a tropical island enjoying a BBQ with fires made out of the wood from the lifeboats.

The remaining lifeboats onboard are just holograms.

 

Tue, 10/25/2011 - 11:29 | 1808407 Rhodin
Rhodin's picture

If they are on the islands, and we are lucky, they won't hear about the tsunami in time.

Tue, 10/25/2011 - 10:29 | 1808082 Syrin
Syrin's picture

Maybe we'll get a guest post here today telling us gold might go up, or it might go down as a second part to the one discussing silver yesterday.

Tue, 10/25/2011 - 10:30 | 1808085 Ghoaster
Ghoaster's picture

Finally....Silver Bitchezz

 

Tue, 10/25/2011 - 10:30 | 1808086 Jimmy Carter wa...
Jimmy Carter was right's picture

wake me up when silver hits 40 bucks

Tue, 10/25/2011 - 10:30 | 1808087 RobotTrader
RobotTrader's picture

Surge?  Gimme a break.

SLV is still down 50% from the highs.

Unlike multi-level marketing pyramid makeup companies like NUS, which started the 2009 year lower than SLV at $9, but is now trading at world record highs of $48.

And don't even get me started on TRX, vs. any name brand retail stock....

Tue, 10/25/2011 - 10:34 | 1808105 Bastiat
Bastiat's picture

How's your NUTFLUX, clown?

Tue, 10/25/2011 - 10:45 | 1808168 Pladizow
Pladizow's picture

RobotTrader - Just stop it - you have ZERO credibility on ZH - go post on youtube!

Tue, 10/25/2011 - 14:15 | 1809235 akak
akak's picture

I think RobotLemming's credibility has now actually sunk into negative territory.

If he doesn't stop, it is soon going to go into imaginary territory (square root of -1).

When he starts talking up Netflix again, watch for his credibility to go into the realm of negative, infinite imaginary numbers.  I bet a mathematician would just LOVE to observe this progression!

 

PS: Hey RobotLemming, how's that BLOWTORCHING of Netflix been treatin' ya?

Tue, 10/25/2011 - 10:47 | 1808177 Sudden Debt
Sudden Debt's picture

My silver still sells at 33euro or 46$ per ounce here in Europe while you're picks are the worst any fool could make!

EVEN CRAMER HAS MORE RIGHTS THAN YOU!!

 

Tue, 10/25/2011 - 10:47 | 1808182 kito
kito's picture

robovision hindisght 20/20. cant beat it. 

hey robo, dont get me started. apple stock was 1.90 in 1985, its now 400!!!!!!!

LOL!!!!!!

Tue, 10/25/2011 - 10:49 | 1808191 homersimpson
homersimpson's picture

Robotrader - only blind people on ZH take you seriously with your "monday morning QB" type tactics. Save us your drivel and your eternal optimism on the fraudulent stock market you obviously have a vested interest in..

Tue, 10/25/2011 - 10:50 | 1808200 The4thStooge
The4thStooge's picture

I love you robot. Just wanted to say...

The comments would be boring without you.

Tue, 10/25/2011 - 11:05 | 1808282 Captain Benny
Captain Benny's picture

Go long long long NFLX!

Apocalypse must be coming soon when the market actually dumps the biggest turds in the market...  I don't know if I have enough popcorn for this cause I'm laughing my ass off!

Tue, 10/25/2011 - 11:11 | 1808324 oddjob
oddjob's picture

Robo now down 75%+ on his Netflix. What a trader!

Tue, 10/25/2011 - 10:31 | 1808092 kito
kito's picture

the markets reacting to bad news????!!!!! shirley you jest. that head is buried in concrete, it will take a jackhammer to get it out........

Tue, 10/25/2011 - 10:32 | 1808099 xcehn
xcehn's picture

What people in the know (insiders) are saying 'privately' about the impending calamity is being publicised by these surges.  As the massive flight of Euros from the shunned euroland nations continues to land in Germany, it is reasonable to rush for the exits.  We are in DEEP DEEP SHIT, and it is now hitting the fan for real.

Tue, 10/25/2011 - 10:36 | 1808108 Johnny Lawrence
Johnny Lawrence's picture

Is it me or is gold only up $4 today (~0.2%)?  And silver is down.  I don't get this post.

Tue, 10/25/2011 - 10:42 | 1808155 Snidley Whipsnae
Snidley Whipsnae's picture

It's just you... gold up 1.56%... or, $25.70

http://finviz.com/forex.ashx

 

Tue, 10/25/2011 - 10:51 | 1808209 Johnny Lawrence
Johnny Lawrence's picture

Indeed, it was just me.

Tue, 10/25/2011 - 10:42 | 1808159 ViewfromUnderth...
ViewfromUndertheBridge's picture

more for traders than hoarders Johnny...gold expecting a beat-down ahead of options expiry tomorrow and went from $1648 to $1684 pretty quick. You related to Bravo?

Tue, 10/25/2011 - 10:36 | 1808121 I need more cowbell
I need more cowbell's picture

If gold is ever allowed to rise more than 2% in a given day, that will be room for some excitement. Until then, well, at least it's up today.

Tue, 10/25/2011 - 11:34 | 1808430 latcho
latcho's picture

so the 2% itself today is leaning to nearly some excitement from your side no  ?

 

Tue, 10/25/2011 - 10:37 | 1808127 eddiebe
eddiebe's picture

maybe China or another biggie finally decided to go for the gold?

Tue, 10/25/2011 - 10:38 | 1808130 Caviar Emptor
Caviar Emptor's picture

Only gold can save you from the grip of Biflation. From here on we'll always be caught between a rock: the danger of recessionary contraction, and a hard place: the specter of massive inflation. 

There are no easy answers. As I've been warning, the old playbook no longer applies to the current global economic situation. They have screwed it up royally and the way forward has many and huge risks. 

GOld will save your wealth and savings from buying power decimation of anything denominated in dollars (cash, stocks, bonds). 

Tue, 10/25/2011 - 10:38 | 1808133 mayhem_korner
mayhem_korner's picture

 

 

Dimon: Ben, Timmay, it's me.

Timmay: Yes, Jamie?

Dimon: Shall we...you know...(whispers) hike margins?

Timmay: Did you say Motte or Lynn?

Ben: Ignore him.  Blue horseshoe loves Anacott gold.

Tue, 10/25/2011 - 10:55 | 1808151 undercover brother
undercover brother's picture

x

Tue, 10/25/2011 - 10:41 | 1808152 undercover brother
undercover brother's picture

i think starting October 1,  the federal reserve has been secretly printing huge amounts of dollars that are being loaned to the ECB and this massive run up in Eur/usd was that cross being executed in the market.   it makes sense, because the Euro zone can't print more euro and gold, crude, silver, euro all started ramping at the same time and the dollar got hammered. 

Tue, 10/25/2011 - 10:45 | 1808170 BigInJapan
BigInJapan's picture

Let's not all start sucking eachothers' dicks just yet! Plenty room left on the downside. 

Tmosley is just about the smartest dude here when it comes to keeping his head on straight. If he ever gets excited, I'll pull the cork out.

Tue, 10/25/2011 - 10:47 | 1808178 JimmyTheHand
JimmyTheHand's picture

If you want to find out what is happening with Silver and Gold I highly recommend that you go here.  Read the Turd's posts and then go to the forums and check out some of the content put out by the community there.  Good stuff.

http://www.tfmetalsreport.com/

 

Tue, 10/25/2011 - 10:48 | 1808186 Sudden Debt
Sudden Debt's picture

LET'S ALL BUY FACEBOOK CREDITS!

 

Tue, 10/25/2011 - 10:50 | 1808196 tekhneek
tekhneek's picture

Wake me up when both metals move 5-10% in a day.

Until then, BTFD.

Tue, 10/25/2011 - 10:51 | 1808208 Duke of Con Dao
Duke of Con Dao's picture

hey Hedgeless, 

nice little home budget 

here I have a classic car chase from What's Up Doc thru streets of SF.

with all the talk of special investment vehicles I tossed this vid together...

http://www.youtube.com/watch?v=Vkxz_oZLM7E

 

Tue, 10/25/2011 - 10:53 | 1808215 user2011
user2011's picture

Something is strange.   PM are going up.   AUD is staying strong.   YEN is strong.  USD is weak.  Oil is strong.   But the market is going down.

 

Seems like USD is crashing.    People are fleeing to AUD, YEN and PM.    The problem is with USD and not EURO.   Could it be something's up with US side ?

Tue, 10/25/2011 - 11:02 | 1808275 qussl3
qussl3's picture

It looks like someone big just went all in on QE3 next week.

Not much else can explain the action.

PM move led everything else, interesting to say the least.

 

 

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