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Guest Post: Precious Metal Pullbacks in Perspective

Tyler Durden's picture




 

Submitted by Jeff Clark of Casey Research

Pullbacks in Perspective

If you're bullish about the long term for gold and silver, it's mouthwatering to watch them undergo a major correction after taking earlier profits that added to your deployable cash. For a little historical perspective on pullbacks, consider the following charts.

The current 15.6% gold decline, while considered a "major" correction, is not out of the ordinary, particularly following the late summer spike. And after each big selloff, there was a price consolidation phase that in every instance led to higher prices. The message: hold on, and buy the big dips.

Not surprisingly, silver's biggest corrections are larger than gold's. This is also true for the rebounds; they've been quite dramatic. If we apply the biggest three-month recovery of 44.3% to the current correction, that would take silver to $40.63… meaning we probably shouldn't expect $60 silver by year-end.

 

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Fri, 12/09/2011 - 20:39 | 1964909 Pool Shark
Pool Shark's picture

 

 

Also looks like a good time to arbitrage the Gold/Platinum ratio...

 Oops, almost forgot:  "Bitchez!"

 

Fri, 12/09/2011 - 20:59 | 1965000 GetZeeGold
GetZeeGold's picture

 

 

But he didn't forget Bitchez!

Fri, 12/09/2011 - 21:03 | 1965009 johnu78
johnu78's picture

Buy silver, it's on sale now!!!

 

-John
http://www.youtube.com/carmarketer

Fri, 12/09/2011 - 21:34 | 1965078 trav7777
trav7777's picture

yes, GET RICH QUICK with SILVER!!!!!111

Fri, 12/09/2011 - 21:46 | 1965106 High Plains Drifter
High Plains Drifter's picture

you are just mad because you missed the bus..........

Fri, 12/09/2011 - 22:24 | 1965201 AldousHuxley
AldousHuxley's picture

I can't say whether gold is going to rise or fall....but I can say this

 

Chinese may not accept dollars, but they will accept gold.

Fri, 12/09/2011 - 22:36 | 1965230 Crisismode
Crisismode's picture

Just tell me this . . .

 

When does silver hit $50/ounce.?

 

How long until that?

 

Date & Time would be most appreciated . . .

Fri, 12/09/2011 - 22:54 | 1965277 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

March 21st, 2012

Fri, 12/09/2011 - 23:12 | 1965311 myne
myne's picture

Touche.

For anyone who doesn't know the signifcance, it's the date that many wars are started.

Sat, 12/10/2011 - 01:18 | 1965490 Oh regional Indian
Oh regional Indian's picture

It's the Spring Equinox for heavens sake, literally. Sacrifice, the earth demands sacrifice. Fresh blood, into her so we get food back.

Imagine, they are still playing blood rituals, only it's not High Priests and "Off with his head", it's bombs away!

How would you like your Shekinah?

Shokenah!

Shock n Awe!

ORI

/the-plan/

Sat, 12/10/2011 - 01:40 | 1965507 strannick
strannick's picture

Au contraire. We can expect $60 or $100 silver by years end because, the factors that have caused silver's rise to the present exist and are extenuated 100 fold as....

1. Money is dying

2. LBMA and COMEX silver manipulation is dying

Sat, 12/10/2011 - 09:22 | 1965820 bernorange
bernorange's picture

Alf Field gave a keynote address to the Sydney Gold Symposium where he explained the Elliott Wave pattern mentioned above in the OP:

http://www.jsmineset.com/2011/11/14/keynote-speech-at-sydney-gold-symposium-14-15-november-2011-by-alf-field/

BTFD.

www.pmbug.com

 

Sat, 12/10/2011 - 01:47 | 1965513 tekhneek
tekhneek's picture

Your posts remind me of the guy who wrote the content on the sides of those castille soap bottles you can buy at the grocery store.

Sat, 12/10/2011 - 02:44 | 1965554 Oh regional Indian
Oh regional Indian's picture

Difficult to read but loaded with import?

I'll take that as a compliment! ;-)

ORI

Sat, 12/10/2011 - 05:21 | 1965668 terryfuckwit
terryfuckwit's picture

11:45 am precisely

Sat, 12/10/2011 - 06:02 | 1965695 loftgroovv
loftgroovv's picture

The date of the next British budget.

Fri, 12/09/2011 - 22:58 | 1965284 Stuck on Zero
Stuck on Zero's picture

February 1980.

Fri, 12/09/2011 - 22:59 | 1965288 americanspirit
americanspirit's picture

24 hours after the Israelis hit Iran

Sat, 12/10/2011 - 17:19 | 1966600 Boop
Boop's picture

24 seconds, I think you meant.  Fixed it for you.

Fri, 12/09/2011 - 23:39 | 1965358 ShankyS
ShankyS's picture

Sorry, not buying their shit with good gold. They get fiat and that's it. 

Fri, 12/09/2011 - 21:51 | 1965121 nmewn
nmewn's picture

lol...that would be an interesting article trav.

An article on, how many have gone bankrupt holding physical paper vs holding physical silver ;-)

Fri, 12/09/2011 - 22:55 | 1965278 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I did.

I sold all of my stocks, bonds, MF, and I put it all on silver and gold a few years ago, and now I am bankrupt, hungry, and lonely, because no one will accept my silver and gold at the bar.

Fri, 12/09/2011 - 22:59 | 1965287 Stuck on Zero
Stuck on Zero's picture

I'll pay spot.

Fri, 12/09/2011 - 23:06 | 1965300 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Sorry, I would rather wait it out.  Someone will eventual take my silver for food.  In the mean time I guess I will just let it appreciate.

Funny how silver is trading 1:1 with equity right now.  It's as if the Algo machines can only make bids when real goods appreciate.  I wonder why....

Maybe the PWG will buy me a drink after all

Fri, 12/09/2011 - 22:47 | 1965264 tmosley
tmosley's picture

Trav would rather ignore history and immutable laws of economics and go with his "gut", which is to do the exact opposite of whatever I do because I pissed him off.

lulz, good luck with that investment thesis.

Sat, 12/10/2011 - 16:11 | 1966488 trav7777
trav7777's picture

dude, people like you have cost a lot of people a lot of money with your shameless pumping.  Right at the height of your manic cheerleading, silver crashed almost 50% in price.

The physical did not disconnect from the paper; it is still widely-available, in quantity, for right around the spot price.

Nothing you predicted as imminent came true.  In fact, the opposite happens.  Perhaps you need to accept that you are the equivalent of a chicken little and are actually a MASSIVE FADE.

People who've gotten rich off silver have done so by fading people like you, cliff.

Fri, 12/09/2011 - 20:32 | 1964910 Matt1973
Matt1973's picture

Have to admit that this silver correction has been a religious experience

Fri, 12/09/2011 - 21:35 | 1965082 trav7777
trav7777's picture

it sort of has been like watching religious whackjobs make predictions that failed and then said whackjobs continued to cling to their religion.

Fri, 12/09/2011 - 22:34 | 1965227 AldousHuxley
AldousHuxley's picture

that's why all rewards are in afterlife so that you don't come back to tell the truth.

 

http://www.demotivationalposters.org/image/demotivational-poster/0912/di...

Fri, 12/09/2011 - 22:38 | 1965237 Crisismode
Crisismode's picture

Well, Trav777 IS an idiot so . . . .

 

 

Responding to him is like licking Pavlov's Dog!

 

Kinda disgusting.

Fri, 12/09/2011 - 22:48 | 1965267 tmosley
tmosley's picture

Yeah, because silver ain't dun shit since 2008!

Fri, 12/09/2011 - 22:57 | 1965283 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Trav's bug out bag full of rubles on the other hand....

Fri, 12/09/2011 - 23:37 | 1965357 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

To whomever junked me,

wanna fight?

Sat, 12/10/2011 - 15:16 | 1966392 prole
prole's picture

Mr. Travis you're suffering from a mild delusion.

"it sort of has been like watching religious whackjobs make predictions that failed and then said whackjobs continued to cling to their religion."

Predictions that failed? Are you losing contact with reality? Show me the pm holder who got wiped out by holding PMs in the last 2,000 years that you can think of (Hunt excluded he was a paper ponzi speculator too)

Since 1913 the FRN has lost 97?% of its value.

How has a "religious wackjob" PM holder done who held his PM from 1913 until now? 1813? Pick any frikking date?

What prediction failed? You are sounding shrill and nonsensical.

Sat, 12/10/2011 - 16:13 | 1966495 trav7777
trav7777's picture

oh, gotcha.  I just need to hold silver for 2000 years to get rich like the pumpers promised.  Or do I have to hold for 100 years?

I don't think there's anybody still alive who's been holding PMs since 1813, idiot.  Really, you need to re-read what you type before posting, unless it is your intent to sound stupid.

Sat, 12/10/2011 - 19:43 | 1966828 prole
prole's picture

Well I see you are really good at the insults but you offer no defense of your deluded original post?

I ask again who is the wackjob here?

If you don't want to go back 2000 years or 100 years how about to 1923? 33? 43? 53? 63? 73? 83? 93? (83 and 93 had to ride down a dip here) 2003?

I guess you will just ignore me or insult me more, seeing as how your original (idiotic) post to which I responded is indefensible.

Oh wait---- "get rich like the pumpers promised" I didn't notice that! you're creating a straw man~~ Sorry I didn't notice that I thought we were talking about the sound financial strategy of holding metals. 

Sorry to interrupt that straw-man creation of yours, carry on!

Fri, 12/09/2011 - 23:01 | 1965291 americanspirit
americanspirit's picture

Only if you didn't buy your silver below $10 which, had you been paying attention, you would have.

Fri, 12/09/2011 - 20:35 | 1964925 Hmm...
Hmm...'s picture

I bought gold 2 days ago at $1730+ and also like $66 over spot.

although I believe that Gold may have medium to long term reasons for ownership, I continue to be concerned by the fact that Gold is tracking equities very closely since around Labor Day.

also, it goes without saying that "past performance is no guarantee of future results".   These charts look much like the RE charts did from 2000 to 2007... 

all that said, fundamental analysis would indicate that gold has a good chance of doing well, at least in nominal terms, due to future likely printing by central banks.

it's a big risk, but Gold has a place in a diversified portfolio IMO.

despite that, it sucks that my 20 oz of gold I bought 2 days ago is down like 20 bucks an ounce.  :(

I'm not worried... I just feel like I'm gifted at buying in at tops.

Fri, 12/09/2011 - 20:42 | 1964944 Fukushima Sam
Fukushima Sam's picture

Hold it and forget it until you really need it.  You will know when.

Fri, 12/09/2011 - 20:47 | 1964961 Hmm...
Hmm...'s picture

I know... that's why I bought the stuff in the first place.

Unlike others here, I'm not trying to make a killing.  I'm just trying to tread water and protect some of my assets.

I'm a frugal guy, and I'm a cautious guy.  this type of environment is hell on my nerves.  I've bought gold twice thie year.  Once was over labor day weekend.  once was 2 days ago.  (the other Gold I bought was years ago). Will it pay off or at least be protective going forward, yeah I think so.

but it sucks seeing how hostage I am to the TBTF banks and their machinations.  I just really really wish that gold wasn't tracking equities so closely since September.  I do thinik it'll break ranks at some point... but I'm nervous.

 

Fri, 12/09/2011 - 21:21 | 1965052 Dr Bob
Dr Bob's picture

im right there with you.

Fri, 12/09/2011 - 21:27 | 1965066 fellatio is not...
fellatio is not fattening's picture

Hey Frugal Guy, think outside the box, if your gold is tracking the market (dow or  S&P) and you aren't going to trade the gold, than buy PUTS on the market.  So if both rise your metals rise, if they drop in tandem you will lose on your metals, which you're not selling anyway but will make $$$ on the equity puts to offset the "paper" loss in the other.  Hedge with another asset class.  Hope that helps.

Fri, 12/09/2011 - 21:29 | 1965069 Beam Me Up Scotty
Beam Me Up Scotty's picture

Why is it "hell on your nerves"?  It would be hell on my nerves if I didn't have any.  Couple things to consider.

1. If gold goes down, your stack is still the same size.  Also, other commodities will go down as well.  Gas will go down, and so will food.  So your purchasing power hasnt really changed.  Ya, if you had stayed in cash you could buy more of these items or spend less cash.  But, once again, you still have a stack.

2. If you aren't all "in" in gold, then spend your fiat on day to day activities just like always.  Think of it as a savings account.  You have it.  If the SHTF, will you be able to get your money out of the bank?  Out of your 401K?  Keep some cash at home too.  Why let the banks sit on it and make .001% interest?  Once the SHTF its too late to start stacking or getting your money out of the bank.  Its like waiting until the Hurricane hits before going to the grocery store.  By then its going to be closed.

3.  If and when the SHTF, you won't be able to say, gee, I should really get some gold or silver now.  There won't be any to be found.  Same goes for food.  By the time you realize you need it, the grocery store will be stripped bare.  You need to plan ahead.   That means procuring those things now. 

At least you have a position.  If gold goes down, buy some more.  Im hoping big time for another correction.  Take it down to $1500, ill buy more.  If it goes to $1200 I'll buy more still.

Fri, 12/09/2011 - 22:41 | 1965244 Crisismode
Crisismode's picture

If you think gold is going to $1500.

 

or $1200.

 

you are totally delusional.

 

Best of luck buying at those price points!

Sat, 12/10/2011 - 00:38 | 1965436 Beam Me Up Scotty
Beam Me Up Scotty's picture

Not thinking it will. But if it does, the truck is ready to be backed up.

Sat, 12/10/2011 - 11:12 | 1965949 Raynja
Raynja's picture

you might want to go look at the first chart in this article again, it is making a strong argument that there will be about a 25% correction as the market tanks. that would put the price of an oz in the 1200-1400$ range.  After that gold will take off in a way that has not been seen in a long time (if ever), but there is a major 'correction' still looming in the near future.

Sat, 12/10/2011 - 16:14 | 1966497 trav7777
trav7777's picture

I am really expecting more whipsaw consolidation.  After big moves, gold typically does nothing for 6 months to a year.

Sat, 12/10/2011 - 21:18 | 1966937 nmewn
nmewn's picture

Lemme try my hand at this and see if it will post up...

http://stockcharts.com/h-sc/ui?s=%24GOLD

Nope didn't show.

There is a massive wedge formation with the bottom end of the wedge sitting on top of support at the 50DMA...along with a rising 200. Now, if you follow such things as a trader, even out of curiosity, this can't be good for shorts.

When it happens...it will be massive. But it looks like a spike (in fiat price) is coming just to clear it if nothing else. It (the price) is not just going to languish there.

 

Fri, 12/09/2011 - 23:05 | 1965299 americanspirit
americanspirit's picture

Can you ignore the shills who are paid to panic you? If yes then just sit tight and turn off the TV. And spend more time enjoying life with family and friends. Your gold will take care of itself, and you.

Fri, 12/09/2011 - 23:46 | 1965364 Silver Bully
Silver Bully's picture

' I just really really wish that gold wasn't tracking equities so closely since September.  I do thinik it'll break ranks at some point... but I'm nervous.'

Equities and PM's are simply waiting on money printing, at the same point in time. Everyone is banking on Bernanke to print, and he will. But the Fed's last ace is WHEN. Until then, BTFD and be patient. This is my first time too waiting for PM's the pull through a correction ( I wasn't in them back in '08), but I know enough to keep my powder dry. And wait.

Sat, 12/10/2011 - 12:23 | 1966062 DoChenRollingBearing
DoChenRollingBearing's picture

@ all you guys above

Just buy PMs as money comes and do not worry!  I hve been doing that, in small amounts, and that strategy has worked out great.  Mostly gold, but some platinum and silver too.

Gold is insurance against .gvo and bankster mismanagement of our financial system.  It will go up MORE than any hyperinflation we have.  YES, it could go down 25%.  So what?  Think long term, look at all those charts again.

Buy gold.  Then buy more.  Then buy more.

Sat, 12/10/2011 - 19:38 | 1966823 player333
player333's picture

That should tell you that the equities market is being manipulated-the fundementals are scary-gold is doing what it should-it is insurance and it is reacting to real market issues. You don't sit around watching your homeowners insurance policy. There is an avalanche of nasty financial uncertainty out their, local, state, federal and foreign-circumstances that cannot be fixed in the next twenty-thirty years without printing. Fiat currency will give way and your gold will provide you a bridge. Once you wrap you mind around the size of the problems you will be comfortable with you PM's.

Sat, 12/10/2011 - 23:58 | 1967134 mayhem_korner
mayhem_korner's picture

but it sucks seeing how hostage I am to the TBTF banks and their machinations.

 

Holding PMs is the thing that will free you of their grasp.  Their machinations are aimed at controlling the sheeple.  Those who accumulate REAL MONEY and REAL GOODS are a threat to 'da machine' because they cannot manipulate those assets. 

They want you to feel like they've got you...they don't so long as you accumulate.  First assets are the hardest, because you want to follow the price to 'see if you did the right thing.'  You did.  Put them away and forget about the so-called 'price' on the screen.  You'll never use those assets at Crimex prices.  You get to declare 'spot' when the time comes.

Stack on.

Sun, 12/11/2011 - 17:20 | 1968248 kinganuthin
kinganuthin's picture

+1

This week: silver (I'm a gentelman, not a king..)
Next week: food.
Following week: ammo.
Week after: cash saved. (for next battle rifle, SHTF gear, combat blade, hand tools, etc..)

Fri, 12/09/2011 - 21:21 | 1965054 Geruda
Geruda's picture

I am having the fearing that when I am knowing many peoples will be having the same knowing and the peoples who are not having gold already will not be having many desires of buying the golds that the knowing peoples are having to be selling.

Sat, 12/10/2011 - 02:31 | 1965544 Bananamerican
Bananamerican's picture

wha?

Sat, 12/10/2011 - 08:01 | 1965761 nmewn
nmewn's picture

LOL!!!...its like Andy Kaufman meets Borat or sumpin ;-)

Sat, 12/10/2011 - 09:28 | 1965826 Silver Bully
Silver Bully's picture

Jerry Lewis wants to ask the nice lady if she wants to see his gold.

Sat, 12/10/2011 - 15:13 | 1966383 gmrpeabody
gmrpeabody's picture

When the SHTF, she wants to know who might want to buy some of her gold if she needs to sell, because the smart ones already have some, and the dumb ones won't be able to afford it...

I think.

Sat, 12/10/2011 - 16:21 | 1966511 exi1ed0ne
exi1ed0ne's picture

If that's the question, then the thinking is a bit sideways.  It a SHTF scenario, you woudn't trade the PMs for fiat currency (dollars, pesos, rubles).  You would be trading the PMs AS currency - food, medicine, fuel, bribes to GTFO, etc.  I ecourage anyone who doubts that food can be obtained via PMs to go to a local farmers market this week and trade a silver eagle for whatever spot is in produce.  $35ish experiment, so not out of the reach of anyone who's been stacking.  Even now, before TSHTF, you can do so relatively easily in my experience.  Just imagine how easy it will be when the value of paper currency is debased daily.

Sat, 12/10/2011 - 10:12 | 1965874 e2thex
e2thex's picture

Mr Dine would agree with you. .

Fri, 12/09/2011 - 20:52 | 1964974 Rincewind
Rincewind's picture

Man, I know how feel...

Fri, 12/09/2011 - 20:56 | 1964991 SilverDoctors
SilverDoctors's picture

Would you rather have your margin being rehypothecated by E*Trade or Fidelity?  Hmm...- your 20 oz gold stack is still 20oz high, is it not?  This is all noise.  Wake me up when gold hits $2400 and silver hits $100.

http://silverdoctors.blogspot.com/

Fri, 12/09/2011 - 22:13 | 1965179 Michael Victory
Michael Victory's picture

get out while you still can.

Tonight: Jimmy Rogers pulls two rabbits out of his hat.

Fri, 12/09/2011 - 21:07 | 1965020 Vint Slugs
Vint Slugs's picture

You're down 1% on your purchase, maybe a couple-three percent given the dealer spread which you should ignore since you're not a trader.  Get a grip and get some perspective.  1% is white noise in a mkt trading around 1700.  Also, re fundamental analysis, think you meant "real" terms not nominal given CB printing.  One more:  Euro area crisis is near its peak to date but gold is 10% off its QIII highs.  That suggests all known factors to date are priced in at 1700+.  You're going to need some really bad macro news to get into the black; without it mkt could break a couple hundred.

Fri, 12/09/2011 - 21:37 | 1965087 golfrattt
golfrattt's picture

Or...

What Gold is doing is tracking the Euro and moving inversely to the 10yr, which is telling you that investors are still buying bonds as the flight to safety, not Gold... and why the 10yr has held its ground thru the EU troubles...

Of late, Gold has not moved up at all in response to a potential Eurozone collapse..

Imo, Gold takes off when the DOLLAR finds weakness, not the Euro or the Eurozone, because all the other safe haven options will have played themselves out..

Fri, 12/09/2011 - 21:40 | 1965093 golfrattt
golfrattt's picture

I think 1420/oz is on the table sometime in our near future when the Dollar spikes as the Eurozone implodes...imo

Fri, 12/09/2011 - 21:49 | 1965119 High Plains Drifter
High Plains Drifter's picture

goes with the program. everytime you buy gold ,it immediately goes into correction........

Fri, 12/09/2011 - 22:03 | 1965154 seek
seek's picture

I've pretty much bought at the high every purchase I've made.

It's not a big risk at all. You need only let time, inflation, and fiat printing do their work. My average rate of return is right at 17%, even buying at the high, because I've made purchases almost every single year since 1999.

Remember, this is insurance/investing, not trading. A $20 dip a few days after a purchase is nothing.

Fri, 12/09/2011 - 23:07 | 1965303 americanspirit
americanspirit's picture

You understand.

Sat, 12/10/2011 - 12:27 | 1966073 DoChenRollingBearing
DoChenRollingBearing's picture

@ seek

Exactly!  ALmost every time I have bought gold (nearly 30 years now) it has been at or near its ´high´.  So I miss a few $, but when you look at how buying gold through time has worked out, well, it is pretty obvious...

And gold is ready to be there to THE wealth preserver to take you to the other side of almost any calamity that is likely to happen.

+ $55,000

Sat, 12/10/2011 - 07:21 | 1965741 grekko
grekko's picture

Look at the silly humansss!  Poor, misguided peoplessssss.  You are talking about trading your gold and silver for colorful little pieces of paper with the picture of a dead guy on it?  You must all be crazy.  Paper grows on trees, gold doesn't.  The average fiat lifetime is about 43 years.  Only 2 years to go, if they can make it last that long. Don't be silly, humanssssses, else your race will not last long.

Sat, 12/10/2011 - 13:40 | 1966182 Razor33
Razor33's picture

grekko I've been looking for a source for the avg fiat lifetime...  any links/books

 

Fri, 12/09/2011 - 20:37 | 1964930 Hmm...
Hmm...'s picture

I have 2 thoughts on this PM volatility

1) the volatility is artificial, caused by manipulation of PMs through the paper and futures markets.  if this is the case, then the case for PMs going forward is VERY bullish indeed.

2) the volatility is because Gold/Silver has become part of the risk on risk off trades that the fucktard traders have embraced.  If this is the case then it is negative for PMs.

can these traders leave NOTHING to the regular folks.  urgh.

Fri, 12/09/2011 - 21:05 | 1965015 Bay of Pigs
Bay of Pigs's picture

You had it at #1

Sat, 12/10/2011 - 04:24 | 1965649 DollarMenu
DollarMenu's picture

Hmm-

IMO-

Do not worry it to death.

You bought it, put it somewhere safe, keep your eye out for a good time to get some more.

Use money you have beyond expenses and mid-term savings (car repair, vacation, etc.).

Do not borrow to buy PM.

That being done, give it no more thought than you give to the sofa your wife bought, 

or the washer/dryer you both selected together.

Do you really go into a frenzy when you see the Maytags or Hotpoints go on sale two months after you got 'the best deal'?

Of course not.

Be so with your PM purchases and you will have a fine gift for your children or, if they prove to be unworthy, your grandkids.

Give yourself the peace you are purchasing.

Fri, 12/09/2011 - 20:38 | 1964933 Yen Cross
Yen Cross's picture

 That " Head Line ", is accurate. I shorted the HELL out of comodity currencies, when the spreads widened before the close in N.Y. ...

   Apparently Weakend, ( sp.) SWAPS are dire for the Sunday open!

Fri, 12/09/2011 - 20:40 | 1964940 Savonarola
Savonarola's picture

Don't get me wrong cause I own good amounts of PMs, but when I looked at your graphs in my mind I saw the Nikkei in the 1980s and Tech Stocks in the 1990s.

I think I'm crackin up.

Fri, 12/09/2011 - 20:52 | 1964976 Pladizow
Pladizow's picture

1980: Both Dow & Gold at approx 800

2011: Dow at 12000 and gold at 1700.

Gold up 2X+, and Dow up 14X+

Which one is in a bubble?

Fri, 12/09/2011 - 21:06 | 1965016 Quinvarius
Quinvarius's picture

Paper money is in the largest bubble vs gold of any asset that has ever existed because of government actions.  The paper money bubble is bigger than the tulip bubble and bigger than the South Seas Bubble.  You are looking at a chart of the paper money bubble starting to implode.

Fri, 12/09/2011 - 21:28 | 1965068 Yen Cross
Yen Cross's picture

 Have fun looking @ those fossils! I love a good Historian.   The Nikkei is probably a bad { Pre Cursur}.  Go KOSPI!

 

 

 

Fri, 12/09/2011 - 21:47 | 1965114 Hopium Dealer
Hopium Dealer's picture

Is Gold an ancient fossil of a prehistoric Jew?

Sat, 12/10/2011 - 00:36 | 1965434 nscholten
nscholten's picture

That is what i saw as well.

Fri, 12/09/2011 - 20:54 | 1964965 Taint Boil
Taint Boil's picture

 

 

Isn’t the price of gold always the same? It’s just the crap fiat money that you use to buy the gold with that keeps going down in value. Just buy real things and you will always come out ahead.  Of course you could always keep an eye out for 1982 or older copper pennies and double your money.

$0.0235320 is the melt value for the 1909-1982 copper cent on December 09, 2011. Link

Fri, 12/09/2011 - 20:50 | 1964967 El Gordo
El Gordo's picture

Let me know when it gets to zero.  Then I'll have no need to worry because all will be right with the world.

Fri, 12/09/2011 - 20:52 | 1964978 Muddy1
Muddy1's picture

Why is there no reporting on the downgrade of 3 French banks by Moody's?

http://www.huffingtonpost.com/2011/12/09/moodys-downgrades-three-french-banks_n_1138664.html

Fri, 12/09/2011 - 21:04 | 1965002 Yen Cross
Yen Cross's picture

 Muddy tat ( True & Transparent) call is 3 days old. I like the French. Do them a favor. HOMEWORK!

Fri, 12/09/2011 - 20:58 | 1964996 Shock and Awe
Shock and Awe's picture

Hello. My name is John and I'm a recovering CME manipulator.

(chorus) Hello John.

I've been clean and sober since October 30, 2011. I must tell you that I did not have sexual relations with my paper gold!

I did not deflower JC Flowers as many are saying. I am not a member of the Bilderberg Group and the following people did not have anything to do with funding my previous campaigns:

Lloyd C Blankfein Chairman and CEO of Goldman Sachs
Laura Blankfein Lawyer and wife of Goldman Sachs CEO Lloyd Blankfein
Jon Winkelried former co-COO of Goldman Sachs
Donald Sussman Managed Paloma Partners hedge fund
Jared Kushner Principal with the Kushner Companies
Gary D Cohn President and COO of Goldman Sachs
Kevin W Kennedy EVP of Human Capital Management at Goldman Sachs
Philip D Murphy Ambassador to Germany-Designate
Kenneth D Brody Founding Partner, Taconic Capital Advisors
Jay Rockefeller US Senator from West Virginia

I do not know where the money is and Cramer said my defense is brilliant. It's all golden.

That is all.

Fri, 12/09/2011 - 22:58 | 1965285 RockyRacoon
RockyRacoon's picture

One day at a time, John.  Keep coming back.

Fri, 12/09/2011 - 23:09 | 1965306 americanspirit
americanspirit's picture

How about some home addresses with google maps for all these folks. Some might find this info useful.

Fri, 12/09/2011 - 21:03 | 1965007 QuantumCat
QuantumCat's picture

Sounds like linear thinking to me... no more bear markets in gold, at least not one that will last for more than a month or so.  This bull market is going on 12 years and the psychology surrounding it so pathetically predictable.  Sure, I believe in real money and buy on the dips, but I'm not using margin to exchange borrowed FRNs that have to be paid back at the worst times. Selling short FRNs with an unstable currency is part of the problem. Thanks for the wild ride, gamblers... and don't be worried about the correlation of metals to other risk assets... I'm sure it is just an anomaly to be explained away. 

Fri, 12/09/2011 - 21:10 | 1965026 Yen Cross
Yen Cross's picture

 I have a Sunday open idea. Small   liquidations. Stay out of the market , unless you are tack SHARP!  I'm staying flat.

Fri, 12/09/2011 - 21:17 | 1965045 Georgesblog
Georgesblog's picture

After the example set by MF Global, we shouldn't have to be reminded that there is no substitute for having the metal in your physical possession.

http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Sat, 12/10/2011 - 01:43 | 1965070 Bansters-in-my-...
Bansters-in-my- feces's picture

"CORRECTIONS"....My A$$. I'ts goverment and central bank manipulation...

You are overly polite with your views and opinions....

So I will say what you won't.

We are being Robbed once again through gold price manipulation.

No matter how hard you try, the Cenrtal Bank will steal your money....

Even in the form of gold......

............................FUCK OFF......!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Bankers.

Fri, 12/09/2011 - 21:44 | 1965101 Hopium Dealer
Hopium Dealer's picture

Based on inflation since 1980, gold should be priced at $8,500 an ounce. John Williams Bitchez....

Fri, 12/09/2011 - 22:37 | 1965232 economics1996
economics1996's picture

Inflation has increased from 78.00 to 226.763 (1982-4) or 190.7% and gold 615.00 to 1710.70 or 178.2%.  Gold has increased in price 4,177% since 1971, the monetary base 3,658%, DJIA 1,262%, GDP 1,233%, and silver 1,975%.

Opium is not good for you.

Fri, 12/09/2011 - 22:38 | 1965238 economics1996
economics1996's picture

All you ZH'rs would be wise to do your research for your next round of metals.

Fri, 12/09/2011 - 23:40 | 1965361 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Do, pray tell, wise one. 

Sat, 12/10/2011 - 12:38 | 1966091 jomama
jomama's picture

gold was on average 40.82$ in 1971.  Of course it was off to the races after that year.

todays prices realize a ~42x rise in fiat terms from 1971 (average prices).

unfortunately i don't have those data on monetary base going back to 1971, but i would love to crunch those numbers for comparison.  this is what i am working off of currently, but it seems like a stretch to try to get those variables to parity (monetary base and gold).

what is left out of your statement is the massive amount of debt accumulated into today's markets and on sovereign balance sheets.  using these data to complete the picture would provide a compelling argument against aversion to PM investment.

Sat, 12/10/2011 - 12:12 | 1965983 flattrader
flattrader's picture

Hopium Dealer,

 

I have never seen the SGS inflation adjusted gold chart to date that shows $8,500

Only this

http://www.fgmr.com/real-gold-price.html

which stops in 2008

Got an update?  Post link please.

http://www.shadowstats.com/inflation_calculator

 

Fri, 12/09/2011 - 22:09 | 1965171 AndrewCostello
AndrewCostello's picture

The reality is, when the whole system crashes, the only worthwhile assets will be hard assets.

 

Read;

http://www.wix.com/andrewcostell3/simple-wealth-book

Fri, 12/09/2011 - 22:11 | 1965175 ONERYDOG
ONERYDOG's picture

Beam me Up Scotty has the right position. 1 oz of gold will buy the same thing now as it did 1 year ago,

10 years ago, 100 years ago, 1000 years ago. The only thing that changed was the value of fiat money,

which always, and i mean always goes to zero, it's real value. So accumulate Ozs of gold and silver, never

mind the price. And don't lose sleep over the up and down. 1 oz in hand is worth 10 in the bush also.

 

Sat, 12/10/2011 - 02:15 | 1965530 delacroix
delacroix's picture

in 1964 a   quarter would buy a gallon of gas. that same quarter will buy 1 1/2 gallons today.   that would take 21 new quarters

Fri, 12/09/2011 - 22:41 | 1965248 xtop23
xtop23's picture

 The whole thing is rather rediculous actually.

 Gold seems to me to be the obvious investment.

 Central banks are buying it, countries are hoarding it, the price is being manipulated downward to facilitate continued buying at a discount by those with the means and connections to do so, it has intrinsic value, it is without counterparty risk, and its beautiful.

 It's nice to read new information on the topic from time to time but the continued cheerleading does tend to get a bit annoying.

 I own Silver as well and I think there will be a time where it may appreciate more radically, but I like the portability and mainstream comfort associated with Gold more.

 Besides, what else is there?

 /crickets

 

 

Sat, 12/10/2011 - 13:52 | 1966198 Zero Govt
Zero Govt's picture

Agreed

KISS: Keep It Simple Stupid

Fiat currency is toilet paper and being trashed as is anything and everything in Govt (mis)management.

You wanna be 'out' of everything big and institutional such as national Govt, its monopoly money system, the big banks, big pensions, big pharma and healthcare etc etc etc

You wanna be 'in' with small businesses and build relationships with them as they are considerably more likely to survive the economic meltdown. You should be with small conservatve local banks or better still, be your own bank and stack that Gold and Silver with as little FRN (fraud money) as you can hold

Get out of all the big markets. The whole game, from brokers to exchanges to regulators, are crooks

The key to survival is being local and small ...let the big players fuk each other over... not you or your assets

And finally Stop Paying Your Taxes ...stop fueling and funding this grotesque murderous destructive US Govt and its armies of clowns, cretins and parasites any further. Have nothing to do with any of these suckers of society

KISS

Sun, 12/11/2011 - 14:20 | 1967775 Moe Howard
Moe Howard's picture

'Forever' First Class Postage stamps come to mind.

Fri, 12/09/2011 - 23:00 | 1965289 gnomon
gnomon's picture

Only unconscious minds devoid of a sense of History could proclaim that Gold is in bubble territory.  Or they have ulterior motives.  Take your pick.

Fri, 12/09/2011 - 23:03 | 1965295 AU79
AU79's picture

If silver is the place to be, I guess I will have to change my username from AU79 to AG47.

Fri, 12/09/2011 - 23:04 | 1965297 Stuck on Zero
Stuck on Zero's picture

A real part of the joy in owning physical gold and silver is knowing that you don't have your wealth in the hands of the dirtbags in Wall Street or in the filthy clutches of the Feds.  A real pleasure.

Fri, 12/09/2011 - 23:21 | 1965326 americanspirit
americanspirit's picture

If you are nervous about owning gold and silver all you have to do is imagine how you would feel 10 years from now if you hadn't bought any now. I remember in 2004 when my mother died and her 'financial advisor" was horrified when I cashed out her municipal bond fund ( now gone to zero) and bought PM with all of it. I also was on the board of a non-profit art organization at the time and their entire endowment was being "handled" by Wells Fargo. At the time it was worth $4 million - today it is worth $600K. I tried to advise them  to put at least 50% in PM and was actually jeered. It was a pleasure to watch those ignorant faces laughing at me - and of course I resigned the board immediately. Social pressure plus self-doubt is a double-bitch. That's why understanding history is critically important. It let's you make decisions in the face of howling mobs and then sleep at night. The road goes on forever and the music never ends.

Fri, 12/09/2011 - 23:28 | 1965341 tmosley
tmosley's picture

Nice perspective.

Fri, 12/09/2011 - 23:52 | 1965378 kito
kito's picture

american spirit, whats your take on the future of this country--3-10 years from now?

Sun, 12/11/2011 - 13:38 | 1967680 Moe Howard
Moe Howard's picture

Thanks for the story. The crazy thing to me is how it was not that long ago that gold was in almost everyone's [who had money to put away] savings / investment pools. It seems to me they used high returns on things like CDs to move people away from physical long term savings and investments, only to "pull the carpet out" from under those same people. They have lost their memory of the times that people invested in physical things. Most don't even have a physical stock certificate or even have a printed statement of account balance mailed to them - please "save the planet" email only option. They are totally at the mercy of those who hold the power cord.

Sorry, paper is cheap, pulp wood is in abundance, if there was a shortage it would be expensive. Plus those postal workers need the revenue.

Sat, 12/10/2011 - 00:12 | 1965354 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The Central Banks are getting desperate.  They know that the price of gold needs to stay up, above $1650, to keep their assets at par, yet at the same time, they do not want the price to rise before they have another round of QE, whatever that entails.

Will it be major liquidity swaps from the Fed to Europe that drives the market for the next year?  Perhaps more MBS buying?  And have these two things already begun?  I believe they have.  I think that Bernanke is in every market now, and that he will do what he wants as long as he can.  I think he is also in the MUNI market, for what other reason would the MUNI market still be so high?  He can keep "rates" low, but that is only a floor, it doesn't mean other and comparible rates can't rise...unless he is controlling them.  He is in all markets, we can be sure.

This week we saw how they will manipulate the price of gold here on out; with little gold leases at incremental times, as oppossed to one big lease at certain times.  We saw two this week, as the price was dumped, let to rise, and dumped again.  It is a dangerous game, as Bernanke can't put too much fear into equity, and equity risk is trading 1:1 with gold, therefore if he tanks gold too much, so to he tanks equity.

The delema is the risk delema:  Bernanke must keep some fear in the market, so that indirects buy as many bonds as possible, but doesn't want too much fear, so equity stays in range.  This is where gold comes in- it is made to keep a floor and lid on the market.

But inflation is catching up to him.  Bernanke can't keep doing this forever and keep rates low.  Litterally, gold is going to catch wind and buyers will come out knowing it won't go through support, then we will test the next level up ($1900).  Bernanke does not have long, which is why Europe seems to be finally wrapping up its own bailout.

So soon, in the next few weeks, gold along with silver and oil (because they trade inverse the dollar and Bernanke's only bullet is to lower the dollar's value- see econ 101), will rise again.  Throw in geo-politics, and it is easy to see where the big bet will be made- real assets/real goods/ real MONIE.

Sat, 12/10/2011 - 07:55 | 1965757 theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

great post

Sat, 12/10/2011 - 00:58 | 1965466 css1971
css1971's picture

If you invert the perspective and look at how much gold (anything) a dollar would buy you, you are getting a better picture of reality. An almost perfect exponential decay.

You are not really making money. You are only preserving wealth you already have. Even if gold drops in price in deflation, it will only do so as everything else also drops. You will still be able to buy for example about the same amount of other goods, for example oil or food with the gold (within trading ranges).

I've found the 3 month moving average a good buying point.

Sat, 12/10/2011 - 03:18 | 1965577 bill1102inf
bill1102inf's picture

When gold was $2000/oz house prices were X. Now gold is $1700 and house prices are (X - 5%) AT MINIMUM, Gasoline was $3.50 and now is $3.15 and when gold was at 2000 I was actually considering paying taxes, not so much anymore.  You just proved its better to be in CASH than gold.  Cash does not have the counterparty risk that gold does either.

 

Sat, 12/10/2011 - 04:42 | 1965652 DollarMenu
DollarMenu's picture

Cash does however have the risk of being replaced by a new currency over a three day weekend.

You may have a short period of time to turn old in for new at some ridiculous ratio.

You seem to forget that things are moving while you want to make observations that require stillness.

IMO, hold many things so that some will prove to be worthwhile.

Ultimate security is usually found in a grave.

 

Sat, 12/10/2011 - 10:05 | 1965869 Bicycle Repairman
Bicycle Repairman's picture

Compare cash and PM in 2001 versus today and get back to us.

Sat, 12/10/2011 - 11:20 | 1965957 Bam_Man
Bam_Man's picture

When was gold $2000/oz?

Somehow I must have missed that.

Sat, 12/10/2011 - 12:14 | 1966042 jomama
jomama's picture

it never was.

Sat, 12/10/2011 - 12:16 | 1966046 goldfreak
goldfreak's picture

came within 80 dollars of 2000

Sun, 12/11/2011 - 13:41 | 1967686 Moe Howard
Moe Howard's picture

for a moment. Doesn't count.

Sat, 12/10/2011 - 07:13 | 1965735 walcott
walcott's picture

copper...

Sun, 12/11/2011 - 13:44 | 1967694 Moe Howard
Sat, 12/10/2011 - 07:13 | 1965737 walcott
walcott's picture

Copper prices will soar with war. Ammo.

Sat, 12/10/2011 - 10:46 | 1965922 goldfreak
goldfreak's picture

anybody can recommend a book to give for the holidays to the sheeple relatives?

Sat, 12/10/2011 - 13:58 | 1966219 Zero Govt
Zero Govt's picture

you'd be better emailing them a link to ZH for a good daily read ...and drop a $35 Silver coin in their XMas card as a hint ...they might 'get it' in a few months time when their bank account disappers to zero (the coin being a reminder of your foresight they ignored!)

Sat, 12/10/2011 - 14:19 | 1966267 goldfreak
goldfreak's picture

oh yeah they get zerohedge articles from me all the time. Last year I gave them End the Fed by Ron Paul. One of my relatives actually bought some gold. I gave them copy of Inside Job,

Am thinking of The Great American Stickup: Robert Scheer

or the Creature from Jekyl Island

Sat, 12/10/2011 - 14:02 | 1966227 vegas
vegas's picture

It's called a market people. It goes up, down, corrects, spurts, and is ripe to manipulation. Why anybody needs to be reminded of this is amazing. Right gold gold is correcting. So what? Is there any chance world governments will stop printing fiat paper anytime soon? NO. Case closed; gold has nowhere to go but up from whatever corrected level it decides to stop and reverse.

For traders there are always ups and downs. For long-term investors that wish to put earnings and wealth into an asset class to preserve and store value? It's easy, own gold and silver.

 

http://vegasxau.blogspot.com

Sun, 12/11/2011 - 14:02 | 1967739 Moe Howard
Moe Howard's picture

They are confused by the facts. They want to dream of Unicorns shitting skittles and the land of ever-rising McMansion values, and, of course, the fantastic FRN that will be here forever and only loses 99% of its' value every 100 years.

The Federal Reserve would never even think of massive inflation to cover unfunded spending by FedGov.

In fact, Ben Shalom Bernake swore to Congress he would not monetize the debt, so we are safe for sure.

Meanwhile, back at the sanity ranch, I'll be trading FRNs as they come in for silver and gold. I don't mind paying shipping, I do mind paying storage for something someone assures me they have in my name. Meaning demand physical in your hand or you own nothing until you successfully cash out, if you can.

I purchased premium gasoline yesterday at BP for $3.27 a gallon, 14 gallons. Total FRN price: $45.78.  Provident has 10 U.S. Mercury silver dimes for $23.90. So it cost me in US silver dimes roughly $1.92 to fill my tank. Something is happening here, what it is ain't exactly clear. Seems to me either silver is becoming very expensive, gasoline is actually very cheap, or FRNs aren't worth a shit. Take your pick. It could be a combination. I'm going with FRNs aren't worth a shit, and are well on the way to becoming worth less.

Sat, 12/10/2011 - 16:29 | 1966520 Ramboy
Ramboy's picture

looks like a dotcom chart.  right, buy more near the high.

Sun, 12/11/2011 - 10:12 | 1967409 ietalon
ietalon's picture

Dear Tyler,

Thanks as always for your educational offers.

Please in the future can you use articles with downloadable charts. In this piece by,

Jeff Clark

the charts are blacked out. What gives with the minister of public thought?

Open source please. ietalon

Sun, 12/11/2011 - 19:59 | 1968560 omniversling
omniversling's picture

I have the same problem, also with many of William Banzai's magnificent artworks. Plus some of the copy on this article is also obscured by the ads and RanQuawk News column on the RHS of screen. I'm viewing on a Mac running OS10.6.7 and Safari 5.0.5.

As I'm commenting on delivery not the content of ZH, may take the opportunity to balance what I hope is not misconstrued as criticism, to compliment the Tylers and ZH for the splendid, thought provoking and profoundly informative 'way ahead of the curve' content. And also all you posters for the illumination, humour, sarc, tools, tidbits, knowledge, stories, experience and, and, and..

I'm not a trader, nor in the financial sector. I live in a small town in the west of Australia (by choice) after 25 years in London where I was able to watch and experience first hand the launch and subsequent collapse of the Thatcher/Regan 'unregulated freemarket globalist economic experiment'. After saving prudently and re-investing in my tools and production facilities for decades, I've acquired a modest beach-house, and land plot which now has my workshop/studio, and self-sufficency organic garden and orchard. I'm currently working on an ethanol bio-fuel project using yeast as raw content. 

I design and make things, including high-spec engineered performance parts for Harleys, and in London had success utilising the era of cheap debt to acquire run-down properties in pre-trendy areas, renovate, let and re-sell.

I sold up in London in '06 as I smelled the indicators of collapse caused by overwhelming public and private debt. At the time every man, woman and child had around GBP17k debt attached to them (statistically not personally). Plus, as engineering in the UK and the US was outsourced to China, we could no longer compete in the Harley after-market, either in the US or in Europe where most of our sales were previously. I travelled regularly to the US to present our products at Dayton Bike Week, Indy and Cinci dealer shows, and Sturgis.

I loved travelling to the US...everytime I got off the plane, I was overwhelmed with the scent of 'anything is possible here'...in a positive way. Now I doubt that I'll be able to return, principally because I refuse to have my biometric data taken just to get a visa. IMHO that is legit for criminal suspects, not ordinary citizens. Nor do I wish to be XRAY'd naked and my nuts groped by anyone who I'm not intending to get jiggy with.

We are not immune to serious  encroachment on civil liberties here either. In fact we're about to get scanners at major airports too. And our 'booze busses' (random checkpoints for DUI) are about to be fitted with fingerprint scanners to cross reference all security and police databases. We are about to all be reclassified as 'criminals in principle'. And we're getting 2500 of your dear troops to help us with our 'democracy' and 'freedom'...

I watch with interest what's happening in your beautiful country that has brought so much energy, innovation and technology to the world... and again thank ZH staff and posters for your priceless alternative info-stream...wish you all the best of luck and fortune, and hope I can contribute in some way to the dialogue (without mentioning the....

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