Guest Post: Gold And Silver: We Were Right – They Were Wrong

Submitted by Brandon Smith of Alt Market

Gold And Silver: We Were Right – They Were Wrong

Only now, after three years of roller coaster markets, epic debates, and gnashing of teeth, are mainstream financial pundits finally starting to get it. At least some of them, anyway. Precious metals have continued to perform relentlessly since 2008, crushing all naysayer predictions and defying all the musings of so called “experts”, while at the same time maintaining and protecting the investment savings of those people smart enough to jump on the train while prices were at historic lows (historic as in ‘the past 5000 years’).

Alternative analysts have pleaded with the public to take measures to secure their hard earned wealth by apportioning at least a small amount into physical gold and silver. Some economists, though, were silly enough to overlook this obvious strategy. Who can forget, for instance, Paul Krugman’s hilarious assertion back in 2009 that gold values reflect nothing of the overall market, and that rising gold prices were caused in large part by the devious plans of Glen Beck, and not legitimate demand resulting from oncoming economic collapse:

http://krugman.blogs.nytimes.com/2011/07/19/the-glenn-beck-debeers-connection/

To this day, with gold at $1600 an ounce, Krugman refuses to apologize for his nonsense. To be fair to Krugman, though, his lack of insight on precious metals markets is most likely deliberate, and not due to stupidity, being that he has long been a lapdog of central banks and a rabid supporter of the great Keynesian con. Some MSM economists are simply ignorant, while others are quite aware of the battle between fiat and gold, and have chosen to support the banking elites in their endeavors to dissuade the masses from ever seeking out an alternative to their fraudulent paper. The establishment controlled Washington Post made this clear with its vapid insinuation in 2010 that Ron Paul’s support of a new gold standard is purely motivated by his desire to increase the value of his personal gold holdings, and not because of his concern over the Federal Reserve’s destructive devaluing of the dollar!

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/13/AR2010061304881.html?hpid=topnews

So, if a public figure owns gold and supports the adaptation of precious metals to stave off dollar implosion, he is just trying to “artificially drive up his own profits”. If he supports precious metals but doesn’t own any, then he is “afraid to put his money where his mouth is”. The argument is an erroneous trap, not to mention, completely illogical.

Numerous MSM pundits have continued to call a top for gold and silver markets only to be jolted over and over by further rapid spikes. Frankly, it’s getting a little embarrassing for them. All analysts are wrong sometimes, but these analysts are wrong ALL the time. And, Americans are starting to notice. Who beyond a thin readership of mindless yuppies actually takes Krugman seriously anymore? It’s getting harder and harder to find fans of his brand of snake oil.

Those who instead listened to the alternative media from 2007 on have now tripled the value of their investments, and are likely to double them yet again in the coming months as PM’s and other commodities continue to outperform paper securities and stocks. After enduring so much hardship, criticism, and grief over our positions on gold and silver, it’s about time for us to say “we told you so”. Not to gloat (ok, maybe a little), but to solidify the necessity of metals investment for every American today. Yes, we were right, the skeptics were wrong, and they continue to be wrong. Even now, with gold surpassing the $1600 an ounce mark, and silver edging back towards its $50 per ounce highs, there is still time for those who missed the boat to shield their nest eggs from expanding economic insanity. The fact is, precious metals values are nowhere near their peak. Here are some reasons why…

Debt Ceiling Debate A Final Warning Sign

If average Americans weren’t feeling the heat at the beginning of this year in terms of the economy, they certainly are now. Not long ago, the very idea of a U.S. debt default or credit downgrade was considered by many to be absurd. Today, every financial radio and television show in the country is obsessed with the possibility. Not surprisingly, unprepared subsections of the public (even conservatives) are crying out for a debt ceiling increase, while simultaneously turning up their noses at tax increases, hoping that we can kick the can just a little further down the road of fiscal Armageddon. The delusion that we can coast through this crisis unscathed is still pervasive.

Some common phrases I’ve heard lately: “I just don’t get it! They’re crazy for not compromising! Their political games are going to ruin the country! Why not just raise the ceiling?!”

What these people are lacking is a basic understanding of the bigger picture. Ultimately, this debate is not about raising or freezing the debt ceiling. This debate is not about saving our economy or our global credit standing. This debate is about choosing our method of poison, and nothing more. That is to say, the outcome of the current “political clash” is irrelevant. Our economy was set on the final leg of total destabilization back in 2008, and no amount of spending reform, higher taxes, or austerity measures, are going to change that eventuality.

We have two paths left as far as the mainstream economy is concerned; default leading to dollar devaluation, or, dollar devaluation leading to default. That’s it folks! Smoke em’ if you got em’! This train went careening off a cliff a long time ago.

If the U.S. defaults after August 2^nd, a couple of things will happen. First, our Treasury Bonds will immediately come into question. We may, like Greece, drag out the situation and fool some international investors into thinking the risk will lead to a considerable payout when “everything goes back to normal”. However, those who continued to hold Greek bonds up until that country’s official announcement of default know that holding the debt of a country with disintegrating credit standing is for suckers. Private creditors in Greek debt stand to lose at minimum 21% of their original holdings because of default. What some of us call a “21% haircut”:

http://www.reuters.com/article/2011/07/22/us-greece-iif-idUSTRE76K6VX20110722

With the pervasiveness of U.S. bonds around the globe, a similar default deal could lead to trillions of dollars in losses for holders. This threat will result in the immediate push towards an international treasury dump.

Next, austerity measures WILL be instituted, while taxes WILL be raised considerably, and quickly. The federal government is not going to shut down. They will instead bleed the American people dry of all remaining savings in order to continue functioning, whether through higher charges on licensing and other government controlled paperwork, or through confiscation of pension funds, or by cutting entitlement programs like social security completely.

Finally, the dollar’s world reserve status is most assuredly going to be placed in jeopardy. If a country is unable to sustain its own liabilities, then its currency is going to lose favor. Period. The loss of reserve status carries with it a plethora of very disturbing consequences, foremost being devaluation leading to extreme inflation.

If the debt ceiling is raised yet again, we may prolong the above mentioned problems for a short time, but, there are no guarantees. Ratings agency S&P in a recent statement warned of a U.S. credit downgrade REGARDLESS of whether the ceiling was raised or not, if America’s overall economic situation did not soon improve. The Obama Administration has resorted to harassing (or pretending to harass) S&P over its accurate assessment of the situation, rather than working to solve the dilemma:

http://news.yahoo.com/obama-officials-clash-p-over-downgrade-threats-200358261.html

Ratings company Egan-Jones has already cut America’s credit rating from AAA to AA+:

http://www.bloomberg.com/news/2011-07-18/egan-jones-cuts-u-s-rating-to-aa-on-spending-cut-concern-1-.html

Many countries are moving to distance themselves from the U.S. dollar. China’s bilateral trade agreement with Russia last year completely cuts out the use of the Greenback, and China is also exploring a “barter deal” with Iran, completely removing the need for dollars in the purchase of Iranian oil (which also helps in bypassing U.S. sanctions):

http://uk.reuters.com/article/2011/07/24/china-iran-oil-idUSLDE76N0DJ20110724

So, even with increased spending room, we will still see effects similar to default, not to mention, even more fiat printing by the Fed, higher probability of another QE announcement, and higher inflation all around.

This period of debate over the debt ceiling is liable to be the last clear warning we will receive from government before the collapse moves towards endgame. All of the sordid conundrums listed above are triggers for skyrocketing gold and silver prices, and anyone not holding precious metals now should make changes over the course of the next month.

What has been the reaction of markets to the threat of default? Increased purchasing of precious metals! What has been the reaction of markets to greater spending and Fed inflation? Increased purchasing of precious metals! The advantages of gold and silver are clear…

European TARP?

The MSM blatantly glossed over the EU decision on the latest Greek bailout, as many pundits heralded the plan as decisive action on the part of Europe. But, what was the EU solution to the possibility of Greek default? In the end, their solution was to LET GREECE DEFAULT! Brilliant!

http://blogs.reuters.com/felix-salmon/2011/07/21/greece-defaults/

EU proponents of the plan for Greece are calling the solution a “selective default”, which I suppose, is meant to make it sound less default-ish. However, this is, indeed, a default, and many Greek bondholders are going to lose substantial sums of money as the Greek government decides who they are going to pay back, and who they are going to give the finger. Strangely, this plan also includes the creation of a kind of European Monetary Fund, or a European TARP. This means a broader strategy is being put into motion that involves continuing bailouts and fiat injections of Euros, not just into Greece, but into other countries as well, including Ireland, Portugal, Spain, and even Italy:

http://www.zerohedge.com/article/goldmans-complete-summary-european-council-decisions

Extended printing of Euros means devaluation, and devaluation means greater international interest in gold and silver. The EU Council plan is a blinding flashing neon sign telling us to BUY PRECIOUS METALS, while we still can.

Stock Market Facade Is Over And Inflation Is Here

The “great bull run” over the past two years has been somewhat successful in fooling a certain percentage of Americans into believing all the recovery talk was real. The fundamentals, though, show that this run is entirely fabricated. Besides a static real unemployment rate of around 20%, housing market hellfire, and crushing inflation in commodities, trading volume in stocks is also at a three year low:

http://finance.yahoo.com/news/Wheres-the-volume-Stock-apf-2486403790.html?x=0&sec=topStories&pos=4&asset=&ccode=

This means that the overall value of the Dow is being driven by a much smaller pool of investors. A smaller pool of active investors means a more volatile market, with a greater chance of wild swings or inflated values. This lack of stock participation also leads one to question the validity of the bull run as a whole. What, we might ask, has really been holding the markets up for so long, if so few people are feeding the machine?

We must keep in mind that since the credit crisis began the Fed has held interest rates at near zero. That’s almost 3 YEARS of near zero interest rates; far beyond the predictions of many mainstream analysts. The reason? Easy fiat from the Fed is the only thing keeping markets alive. Without it, they would crumble. We hear only of the fiat pumped into the system through bailouts and quantitative easing, but rarely do we hear about all the printing that goes on in-between these public events. The extent of Fed currency creation is made more apparent by the St. Louis Fed’s Adjusted Monetary Base:

According to the Fed publication ‘Monetary Base In An Era Of Financial Change’, the AMBSL is an index measuring the central bank balance sheet, including open market operations, statutory reserve requirements, and foreign exchange market interventions. The index, though, includes only what is reported by the fed, and without an audit, it is impossible to determine its accuracy. In all likelihood, it actually under-reports the amount of fiat being flooded into markets.

Can the Fed prop up the markets forever? No. The volume versus value conflict is too revealing, and I believe we have reached a point at which the weight of negative data is preventing any further significant climbs in the Dow even in the face of manipulation. A kind of critical apex is created; a point at which two forces once balanced meet and derail each other. Stocks, at this time, are very vulnerable, especially when they are supported by a central bank induced fiat framework

When investors realize that the bull run is fake, not to mention over for a very long time, that dollar devaluation is a certainty, and that bonds are a deathtrap, where will they turn to protect their savings? That’s right…gold and silver. The price potential for metals going into the final half of 2011 is extremely high. Lows can strike abruptly, and they do often under such volatile circumstances, but unlike MSM talking heads, we look well beyond week to week progressions. The long term trend is really what matters, and the long term trend for gold and silver has been impressively positive.

To those who chose not to take my advice over the past three years, or the advice of countless other alternative analysts and economists, I can only say we stand by our record. Our purpose is to help you secure the safety of your buying power as much as possible in these dangerous days. That is all. It is not too late to establish a foundation in precious metals, and it is not too late to accept the reality of our country’s quandary. Warnings, though, are just a small window in time, and they are only useful, so far as they are heeded.

Comments

[BaBaBouy]

It Befuddles me how Kitco  employs Naadler .?.

Then again, isn't Kitco in partial BK protection ???

[sskid]

I think Kitco has pooled accounts, that contain paper rather than the precious metals  that customers think they bought.    If you don't hold it......

[sunnydays]

Yep, that is why they have Nadler as their front guy.  They don't want people to try and get the physical metals, who had purchased their pools. 

Also one time I did purchase from them, in Nov. 2008 - it took them almost 2 months to send me the physical. 

Let's see how their legal problems work out in Canada, it is quiet on all fronts about that one now. 

When they have their front guy so anti metals and says they will get smashed down and aren't the investment they are made out to be, you know he/they are connected to the fiat money printers.

[Monedas]

Kitco embraces Jon Nadler.....and bans Monedas ! Their actions are more poetic than Monedas' humble offerings ! Monedas 2011 Maybe they deserve to go BK ? Ynot2K ? Ynot2che (touche !) ?

[Catullus]

The Krugman article was fantastic. It'll be used for years to show the continued embarrassment of establishment economics and specifically Keynesian economics. It's as if the 1970s just didn't happen for these folks. The methodology, the analysis, and conclusion are so discredited that it's not even worth reading. What's great is that a lot of them understand this. Talk to people in economics, they know its wrong. They know econometrics is bullshit. They're simply too cowardous to admit it and seek out truth.

[FranSix]

The economics that ppl espouse as their justification for holding bullion may not be material when you consider that gold prices ought to be merely adjusting for inflation, and that average price, say, ~$2000/oz. U.S. is still in the works.

Kinda removes all of the false claims about economic theory and how one had presaged the future and redeemed one's self with their economic body of Christ.

If you had been invested in the gold miners, especially if the share price lagged gold, then your position is open to question as it had not confirmed the rally.

[Franken_Stein]

Put the Rothschild family in the clink !

It costs 5 cents to print a $1 bill.

It costs 5 cents to print a $10 bill.

It costs 5 cents to print a $100 bill.

Nice ROI, bitchez.

[Long-John-Silver]

I continue to wonder when the FED will start printing $500 bills for circulation.

[DCFusor]

They won't anytime soon -- the DHS/DEA/FBI sez it makes it too easy to launder money.  Which is why they attempt to discredit all "real" money that doesn't automatically go through a bank's computer -- even bitcoins.  You did know that under the "Patriot act" banks have new reporting rules (classified of course) about any large transfers -- and what's defined as large is actually pretty small.  My small town banker slipped and let me in on that one when I was about to make a big move (nice of her!).

[Jambo Mambo Bill]

Short pull back coming with this dodge debt deal. When the hype is gone a better entry point will unfold. Watch!

[Caviar Emptor]

Here's one way to look at it: 

-The value of stocks, bonds, even Treasuries rests on the ability of "The Big Game" to continue with confidence and full backing by governments, central banks and a few of the largest private banks. Think about that. All of the above institutions are technically insolvent at this point and they are also all interdependent. If one leg of the stool weakens, they all go down. So in essence the value of those paper assets rests on the political will of a few backers to continue backing them. Things that make you pause and say hmmmm. 

-The value of Gold in exchange for international currencies (paper) is universally accepted and understood as gold ownership has gone mainstream. Gold has increasingly moved out of central hands and into widely distributed ownership as more and more individuals in Asia (especially CHina and India), the Middle East and Western countries have been accumulaitng it. People with large wealth have been especially enthusiastic. And the value of government holdings of gold are about the only asset they own that has increased in value. Emerging market central banks have been avidly snapping up gold in an attempt to rival Western holdings. So gold's value doesn't depend on politics or the will of a few broke backers. It will buy you the same amount of goods in China, Saudi Arabia or Brazil as it will in the US.

[jrpuffnstuff]

I've been heavily invested in metals for years, but NOT about to gloat yet.  Hubris anyone?  It's still too early, the government has tricks up it's sleeve. 

[malimujo]

Few more trillions will change nothing:

http://www.wtfnoway.com/

[malimujo]

Few more trillions will change nothing:

http://www.wtfnoway.com/

[actour22]

The only problem with the We were right they were wrong outburst is Zero has been consistantly bearish on equities and Bonds for (ever) and they have done nothing but go up regardless of the reason which we all know is the Treasury..While I love the hubris the reality is readers of ZERO hedge would have been crucified if they listened to any equity advice. Truth is on a long enough timeline every position will be right just depends on the time frame..

[actour22]

The only problem with the We were right they were wrong outburst is Zero has been consistantly bearish on equities and Bonds for (ever) and they have done nothing but go up regardless of the reason which we all know is the Treasury..While I love the hubris the reality is readers of ZERO hedge would have been crucified if they listened to any equity advice. Truth is on a long enough timeline every position will be right just depends on the time frame..

[actour22]

The only problem with the We were right they were wrong outburst is Zero has been consistantly bearish on equities and Bonds for (ever) and they have done nothing but go up regardless of the reason which we all know is the Treasury..While I love the hubris the reality is readers of ZERO hedge would have been crucified if they listened to any equity advice. Truth is on a long enough timeline every position will be right just depends on the time frame..

[EFNuttin]

The US government confiscated citizen holdings of gold during the First Great Depression, paying $20 per ounce then pricing it at $35 per ounce once they had it at Ft. Knox backing the dollar in dealings with other countries.  Presidential candidate Ron Paul (and others no doubt) consider that the first US default.  (Suddenly the dollar bought 40 percent less gold than before so the dollar had been devalued 40 percent.)  Assuming we are in the Second Great Depression (versus 0 before the Federal Reserve Bank Act), other than hyperinflation and its' gift to PM's, what are the other scenarios for getting all those unrecoverable loans off the books?  

PM holders got shafted in the 1930's as a way to clear unrecoverable loans.  Paying the loans off with Bernanke's green toilet paper sounds rather like a replay of the late 1970's inflation I remember from my childhood.  However, given that the Fed(eral) Government has stuffed the system with enough money to have inflated economic growth to Chinese levels and serious inflation is not here even years later, what is next?  From what I have read, US long bonds were a great investment through the First Great Depression.  If you bought a 30 year US bond at 13 percent in 1981/82, you are cashing it in now with a huge smile on your face.  Should we just hedge and buy PM's for one scenario and long US Treasurys for another?  

Consider: since you bought your house, it has fallen in value by 30 percent, but you still owe 90 percent of the purchase price.  You and your wife still have jobs, but your combined income has fallen 30 percent since the Crash of 2008, and you stopped borrowing money during the Crash and are saving whatever you can of your 70 percent of pre-Crash earnings.  This sounds very believable to me and this is two people who both escaped layoffs.  When you start tossing in the record low work force participation rates and the old assumptions about less than 5 percent of borrowers defaulting, it appears to me that the actual money supply would be down.  (e.g. Married couple's income fell 30 percent and lots of folks went from $50k per year to 99 weeks of paltry unemployment checks.)  Eventually, businesses have to start setting lower prices to keep moving product and the deflation, long delayed by Uncle Ben, begins in earnest.  It's like Japan after the 1989 Crash all over again with steadily increasing national debt and lots of putting off the pain for banks.  How do PM's fit into that scenario?

What other scenarios am I missing?

[Tedster]

Not a big bond guru, but iirc marketable securities issued prior to 1985 were deemed calleable at some point. Nice, huh?

[FreedomGuy]

Buffet has a point of view and it is of the traditional investor. You cannot argue with his success. However, I would argue that the paradigm has changed. It's not about Coca Cola, profits, efficiencies, free cash flow and the normal business models and investment considerations. It's a political economy now. Let me ask anyone who doubts this, what moves the market more, Coca Cola and Apple quarterly reports or the Fed interest rate, Greek debt default, healthcare regulation, ethanol subsidies, oil release from the strategic reserve, Congressional debt and budget discussions, etc.?

Unless you live in a cave, you know the answer. Gold makes much more sense in a political economy with willful, purposeful currency devaluations, inflation and central planning than in a free market system. In a free market with stable currencies gold is a commodity more or less like any other and can be evaluated against a host of other investments. However, in a political economy it is supreme in that it also has an insurance value that no other commodity holds. That is what makes it a better bet than other investments over time. Like the stock market, it will not go up in a straight line, though. So, be patient.

The shorter term consideration to me is the balance of inflationary versus deflationary forces. Currency and central banks and even governments are shooting for inflation which will inflate the price of metals. However, these same governments and most importantly, the U.S. government are wrecking economies which is the destruction of wealth and deflationary. Moving ever higher amounts of GDP into government is the same thing. So, it is hard to tell but my opinion is if you play metals long you still have the best bet in investing. If things go hyperinflation you win the lottery with the insurance value of the metals...as long as you hold physical. I am also one who believes that the current stock of metals has been way oversold which suppresses the true market price and leads to disaster if you are holding paper metals.

Betting against governments doing the right thing seems to be a good bet to me. Gold is the manifestation of that bet.

[Harlequin001]

'Buffet has a point of view and it is of the traditional investor. You cannot argue with his success. However,...'

Buffet could have bought any old piece of shit and simply let Greenspan devalue the debt, inflate the money supply in the general economy and do nothing. His days are over...

[Bob]

One can hope that the world takes a better turn.  He deserves some credit for just coming out with it about the class war, but still. 

[jomama]

don't break your arm patting yourself on the back there, buddy.

[e_goldstein]

Don't really care about being right... Just so long the duh duh deflationists are wrong.

[RobotTrader]

Since the open....

Bank stocks straight up

Gold stocks straight down

Full control by the PigMen

Probably some more margin hikes coming

[Vergeltung]

I instinctively went for the junk button, but alas, it is no more!

[Harlequin001]

sounds like more nanotrading from robot with a three second memory span on a two minute chart...

cute, but stupid.

[akak]

Yeah, just WHAT the Hell is up with this shitty new format here?
I hate it with a passion, and will probably visit ZH (the threads under the articles anyway) much less as a result.

Tyler, you fucked up!

IF IT AIN'T BROKE, DON'T FIX IT!

[MiningJunkie]

The JPmorg is back in there trashing the gold market going into options expiry tomorrow - so fucking predictable. Buy the break and look for new intra-day high ground by Wednesday...

[Watauga]

So, with everyone climbing on board the PM train, does the contrarian buy government bonds and U.S. stocks?  Dare he SHORT PMs?

[moonstears]

Watauga, If you wanna do that...short the metals, long the bonds I'll assume two things: your balls are massive and the world gets another martyr. Please keep us informed if you decide to do it!

[Harlequin001]

I'd assume his balls are bigger than his brains, but that's just me...

[chumbawamba]

So, if a public figure owns gold and supports the adaptation of precious metals to stave off dollar implosion, he is just trying to “artificially drive up his own profits”. If he supports precious metals but doesn’t own any, then he is “afraid to put his money where his mouth is”. The argument is an erroneous trap, not to mention, completely illogical.

It's also an admission:  politicians use their power to drive up the value of their personal investments.

Shocking.

[bill1102inf]

"Once main stream realize that they must own Gold and Silver it wont be available for purchase.  At least not at these levels.  America is still going through its 'cash for gold' phase - the latest scheme of American's fleecing themselves.."

YEAH, ok.  "Main Street Usa" is strapped for $$ as it is. They will not, EVER, in the future 'realise' that they 'need' to buy gold, EVER.  They NEED TO BUY: housing, energy, food. Period.  No one needs to buy gold.  

If you think gold is going to 10K an ounce.  Your thinking wrong.  Don't bother flaming, I won't be checking.

[RobotTrader]

AEM charging towards 52-week lows while AAPL is approaching $400.

Unreal how people still love tech more than anything else.

[koot]

Situations like what the federal government of North America are in is tenuous and dangerous at best, and anything can happen.  It is important that people who have been right and recognize the prerogative nature of Government stay vigilant in their positions of going forward to a sound and stable republic, otherwise this nation will slide into tyranny and empire.

Lucky for us, history is replete with examples of such tyrannical empire failures where we can show that evil existed then and is always trying to gain power and control for another time.  We are also lucky in that the United States was founded with the best of the best in Humanity, who themselves sought freedom, liberty and the pursuit of happiness.  Stand and hold fast, this is a battle.

[sullymandias]

1. Where'd the junk button go?

2. I like the consistent focus of the, uh, reputricans?, in this budget deal mess of "no new taxes". Dollar and US fiscal situation are both going to shit no matter what. Having that happen without ridiculous tax increases is about as good a position in the "serfs vs elites" war as you can take at this point.

3. To anybody that talks about silver/gold ratio going down because of silver industrial uses, it is important to keep in mind that as this ratio goes lower, (especially if it goes drastically lower), there will be more gold-based industrial substitutes for those silver industrial uses. (Same with palladium and platinum.)

[scatterbrains]

...and it's gone

[mt paul]

ungrateful peasants ...

if you don't allow us

to raise the debt ceiling...

we're gonna spank silver...

a thought ..

maybe silver likes 

getting spanked

buy the dip....

[CharlieSDT]

I think this is hilarious:  the Barak Obama Fiji gold coin.

http://www.apmex.com/Product/62564/Fiji_2009___1_10_oz_9999_Fine_Gold___Barack_Obama.aspx

Yes we can!

www.singledudetravel.com

[Monedas]

Thanks ! I bought 3 @ $166.40 plus $19.95 s&h ! Monedas 2011 And they didn't threaten to ban me ?

[Marty Rothbard]

An old girl friend (from a long time ago, and we're both old now) contacted me yesterday, and wanted me to talk about investments.  I explained to her that it was inevitable that the dollar would become worthless, and that at some point, there would be a rush by foreign central banks, to rid themselves of US dollars, and the price, in US dollars, of everything that we import (almost everything), or that was traded on international markets, would double or triple overnight.  That she needed to consider buying precious metals, and that if she wanted to hold dollars, to make them Canadaian dollars.  I then told her to read ZH for a few days, and let me know what she decided to do.  I wonder if she will.

[Monedas]

That's happening to the Monedas, too ! Ex-wives who pooh poohed on my bare chest while I was passed out and took money from my wallet (just kiddin') are gettin' curiouser and curiouser ! Caveat Emptius Wallet Alert ! Monedas 2011 Use 'em then lose 'em ! They had their chance ! Life is getting sooooo rich ! Hoarders have more fun !

[moonstears]

Marty, all good advice IMO. Hope she reacts sooner than later. When I say similar stuff to folks they look at me like I have a woman's titty or a "Vageena" growing outta my forehead... speaking of...if I did... I'd play with it constantly, but that's another story for some other time.

[mogul rider]

Watauga

never short the precious. So many traders are gaming PM's now one has to be very careful. Shorting is a dangerous game best left to the idiots.

However, there are times to take profits. Or if you are time or trading knowledge challenged simply be long till everyone here says 15K gold. wait a week and sell.

Most are pumpers here so take their comments with a grain of salt like you should take mine.

In other words -

Don't ask for advice do you own DD

[gwar5]

Thanks for the insights Brandon. You were right!

[Temporalist]

Just wanted to add re rating's agencies and China from Nov 2010:

China's Dagong Lowers U.S. Credit Rating on Fed Monetary Policy

"China’s Dagong Global Credit Rating Co. reduced its credit rating for the U.S. to A+ from AA, citing a deteriorating intent and ability to repay debt obligations after the Federal Reserve announced more monetary easing."

http://www.bloomberg.com/news/2010-11-09/china-s-dagong-downgrades-u-s-t...

Better to be ahead of the curve than behind it.

[Temporalist]

Oh and about "Selective Default" I totally agree...WTF does that mean?

That's okay...they are defaulting but at least they know it.  All is well.

Been laughing my ass off since I heard that one. 

[akak]

Dear Tyler,

This new comments format absolutely SUCKS!

Not only is it LESS easy to read and follow a conversational thread, why the Hell did you take away our "Junk" button?
Don't you realize how irritating it is to read the mindless stock-pimping flyby posts of RobotLemming, for example, without being able to junk them?

IF IT AIN'T BROKE, DON'T FIX IT!  And it wasn't broke!

[Blanche DuBois]

We want the JUNK! Gotta have that JUNK! Oh, we want the JUNK!
Bring it back now...Please!?

[Dr. Gonzo]

If my PM's double one more time I am going to cash out 1/2 and buy a few renal properties. (hopefully pay cash while interest rates rise and prices fall.) If this happens I get to quit my job and retire. Cross your fingers for me fellow Zerohege comrads. 

[akak]

Would any of those renal properties be located in the Isles of Langerhans, by chance?

[DCFusor]

Hey, when you use a spiel checker, you rape what you sew...

[moonstears]

lolololol, thanks!

[Temporalist]

Most people have already traded those in for iPads anyway...

[SilverDoctors]

Move over Silver Bears...The Morgue's Silver Robots explain why the silver manipulation is failing!
The Life of a Silver Hitman

[Temporalist]

Brian Kelly on CNBC was discussing the "Remonetization of Gold"as well as its properties as a store of value, etc., then he went right into discussing gold ETFs.  The same with another of their commentators they say Gold is up then immediately tout the ETFs.

When will the paper monkeys get it?

[Ag1761]

I've been trying to do a little planning for the end of days recently. I acquired 3 acres of land (abandoned a serious look at Greek olive farm as a bolt hole, whilst cheap, risk of death) and the garden element is up and running now with some crops that I can store over the winter and trade if needed. I tell you one thing, gardening is fucking hard, a lot harder than metallurgy. Whether I can defend the output from the land if the SHTF is a risk worth taking.

I've got plenty of booze to trade and have honed many skills over the years that can be traded as long as I'm healthy.

But, at some point I'm going to need to trade silver or gold like many ZH'ers. Now, if I'm seen throwing 1 Oz rounds about in exchange for fuel or bread or medicines, then it's only a matter of time before I am a target.

I have been accumulating of late some 1/2 Oz rounds and 1/4 Oz Lydian Lions, reckon these may come in handy for smaller trades but WTF does the PM holder do to conceal a silver trading pattern? This is in a practical sense where I assume I'm going to need to keep a small stak of handy trading silver aside from my secured insurance pile.

Advice....

[DCFusor]

Gardening IS hard, at first.  Anyone who moves to this lifestyle gains a lot of respect for "dumb dirt farmers" and quickly realizes they can't be dumb and still make it.  It does get easier as you add tons of organic material to the soil and kill weeds over the years.  It's money in the bank to have a rich plot...You also learn what does well in your micro-eco-system and have fewer failures with less work as you get more experience.

I'd be adding things like tobacco and standard caliber ammo types to my stash for trade -- likely they go up more in value in really bad times than even PMs.  I can say that tobacco is a real serious addiction, and Buglers keep nicely along with other stuff in ammo cans.  For me, the ammo is easy, I'm a gunsmith and competitive shooter and have reloading gear out the wazoo, make ammo for my hunter neigbors already.  Brass ain't a bad investment either, and it's dual use, kind of.  I love it when people come to my private practice range and leave me free brass and lead I can recycle.  Where I live, shooting is more like golf is in other places -- it's where the rich old farts get together for fun -- and to make deals.

Security is a real trick in those kind of conditions.  An "air gap" where you send someone else out with very minor amounts of PM's to trade, who watches their back to make sure they aren't followed comes to mind, but may not be practical.  You're in a bind because if no one knows what you have, they won't offer you stuff for it, but if they do, the worse of them might decide that makes you a target.  I'd go for a lot smaller sizes, myself -- you'd not want to be trading something that costs you huge money now for a loaf later, and your trading partner might have only one for sale!  At any rate, it'd be a lot easier to cover a partner's backtrail if you knew when and where, and didn't have to be constantly vigilant.  Security in a fixed location is always harder -- attackers can choose when and you've chosen where - advantage, attacker.  Best to be under the radar if your location is fixed.

I'd guess that one thing to do now, would be to make *real* friends -- hopefully your land is in an area where that's easy to do, and count on doing most trading among yourselves -- along with sharing some security tasks, kind of like neighborhood watch, but with real teeth.  Takes awhile if you're new to a rural area, but way worth it even when times are good -- better lifestyle now!  Good friends are just good -- better than most anything else you can have if times get really hard.

The nice thing about farming being hard is that farmers are therefore hardworking, standup guys.  So making friends might be slow, but they are good friends to have, not losers -- people you can really trust more often than not, no matter the times.  Not like dog-eat-dog city people.

I noticed you mentioned metallurgy.  In an area of woodworkers, artists, musicians, and farmers, I'm the guy with the machine shop and welders....a good trading gig.  And one no one wants to steal particularly -- I'm more valuable to all alive and intact via that channel -- they could steal my tools (good luck with that) but not my skills.

In other words, diversify.  Don't depend on one magic solution (PMs) to take care of everything.  Have spares, and spares on the spares, as I do for electricity (solar, more than one working backup generator, batteries, spare inverters).  You don't think I have just one gun, right?  There might even be one in the food stash, or the PM stash you'll need me to open for you if you try to steal it.  Heh.

[Ag1761]

Thanks for the advice DCFuser, I hadnot thought of tobacco, nice one. Building real friends and community especially like minded friends will be important in the near? future.

I think we will have more discussion on this, lot smore.

[Monedas]

DoChenRollerBearing and Harlequin001 ! Thanks ! Do Chen Tribute (also see post on page 1)......you are my #1 fan ! Don't ever leave me alone with some of the Liberals around here who want to see me impaled on a stake ala Vlad the Impaler ! Tell me a little about your name....is that the name of a roller bearing company in Taiwan ? I smell a humorous post ! If I win...you win ! Thanks, Buddy ! Monedas 2011 Don't feed the Bears, stay off the grass and don't encourage Monedas....he's crazy !

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[Bijuterii]

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