Guest Post: Start Thinking in Terms of Gold Price

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Wed, 12/07/2011 - 19:45 | 1956709 PaperBear
PaperBear's picture

Yep, how many ounces does something cost, not how fiat paper dollars does something cost.

Wed, 12/07/2011 - 19:49 | 1956718 SilverIsKing
SilverIsKing's picture

Too many people still see GLD as Gold and SLV as silver so they view these "stocks" as being expensive.

Hard lesson gonna be learned.

Wed, 12/07/2011 - 20:08 | 1956746 TruthInSunshine
TruthInSunshine's picture

I have a very special tip for you [Marc Faber-esque, heavy Austrian accent]:

Stocks will crash again, not long from now, and then all the talk of gold (as much as I love me precious), silver, oil and other alternative, hard, real currencies to toilet paper fiat will be rendered moot for some time.

You see, we are clearly merely experiencing a sharp bear market equity rally within a secular bear market, the likes of which we haven't seen since 1932, with U.S. equity markets experiencing inflation adjusted losses of some 60% since 1994 (and much worse for non broad indexed beta chasers).

The Bernank will be exposed as the genuinely impotent Central Bankster he's always been to even those who still now think he's imbued with some sort of magical alchemy, although their view of him as such thus far must have been constructed on some sort of analysis completely devoid of the concept of relativity.

The only real question is whether we go full blown Nikkei, and odds are better than not that the longer The Bernank flattens rates with ZIRP, the more likely we'll be

turning Japanese.

I really think so


*For those interested in one of the biggest scams that has been sold to the investing public, please reference survivorship bias, and its absolutely crushing (but rarely mentioned) effects on what are reported to be (falsely) the historical average returns of U.S. equity markets, and pay special attention to peer reviewed studies that decimate Jeremy Siegel's entire thesis and his premises contained in just about every claim made by him.

Wed, 12/07/2011 - 20:27 | 1956789 greased up deaf guy
greased up deaf guy's picture

why do i get the feeling robotwerp will be mia on this thread?

Wed, 12/07/2011 - 23:53 | 1957195 Oh regional Indian
Oh regional Indian's picture

Why do i get the feeling that Silver is always such a deep secondary. How does all this look priced in Silver? Huh?

Remember, Dorothy wore Silver Slippers in the original.



Thu, 12/08/2011 - 05:56 | 1957693 BlackVoid
BlackVoid's picture

"Stocks will crash again, not long from now"

I am not so sure.

If that is the goal, the FED can prop up the stock market indefinitely. They can print dollars and buy stocks. As easy as that.

In fact, I think they have been doing this for years (if not decades). It all depends what they want.

Wed, 12/07/2011 - 20:26 | 1956783 defencev
defencev's picture

Let me put it this way: this article is an absolute bullshit. You probably will be very happy to see your portfolio skyrocketing after Gold will be back to 300 US per ounce but it will not be very helpful in real terms. I recall some time ago similar pitch was made by one boutique Swiss firm which mostly prey on US customers suggesting that the portfolio should be measured in Swiss francs. I guess their customers became nominally happy when the Franc was devalued overnight. The truth is that Gold bugs will push for Gold as an asset unit, Swiss charlatans will try to persuade you that Swiss Franc is the right measure and local brokers will tell you that the best way is to stay in US dollars. As was indicated some time ago by Mark Faber, one of the problems facing an investor is THAT THERE IS NO MEANINGFUL UNIT TO MEASURE THE ASSETS. It used to be US dollar but nowdays it is just a joke. I wonder why anybody would pay any attention to blogers mostly posted over here who just a bunch of motherfuckers with no vision of markets in comparison to relatively few voices who at least have a proven investment record and true vision like Mark Faber. Just ignore the garbage posted over here. This side provides from time to time an interesting factual information but when it comes to "analysis" it is biased and of zero quality ( I would say gives you zero hedge if you are an investor or just simply try to save for retirement).

Wed, 12/07/2011 - 20:40 | 1956813's picture

THERE IS NO MEANINGFUL UNIT TO MEASURE THE ASSETS. It used to be US dollar but nowdays it is just a joke.

The dollar used to be a unit of weight equaling 371 4/16th grains (24.057 grams) of pure silver, or 416 grains of standard silver (standard silver being defined as 1,485 parts fine silver to 179 parts alloy). This kind of dollar was no joke as a unit by which to measure assets.

Today's dollar is a joke because it is simply a ledger entry which is no way representative of anything of tangible value.


Wed, 12/07/2011 - 22:05 | 1957004 Pladizow
Pladizow's picture

To: Defencev

YOUR WORDS - "Just ignore the garbage posted over here."

We'll all oblige!

Wed, 12/07/2011 - 21:31 | 1956931 NotApplicable
NotApplicable's picture

Until gold hits 300, your point is moot. If you think gold will reach 300...

... yeah, whatevah.

Wed, 12/07/2011 - 23:32 | 1957151 Leraconteur
Leraconteur's picture

It can easily do so. At that point, the DJIA will be at 3,000 and the SPX at 300.

That's when all assets deflate in value.

You will, however, retain the value of the gold vs. the SPX or other asset classes.

Thu, 12/08/2011 - 14:10 | 1959570 trav7777
trav7777's picture

go back to dickerforum, lemming

Wed, 12/07/2011 - 21:50 | 1956974 BigJim
BigJim's picture

I'd sell your gold now, if I were you, defencev. I'll even give you a 10% premium on what you think it's worth.

Where shall I send my 330 clownbucks per ounce?

Wed, 12/07/2011 - 23:04 | 1957108 Calmyourself
Calmyourself's picture

Funny I was reading some 2-4,000 year old historical writings the other day and gold and silver were mentioned frequently Swiss francs not so much..

Thu, 12/08/2011 - 00:53 | 1957323 bill1102inf
bill1102inf's picture

And your point is??? When those 'PAST' currencies/countries went bust - so did their gold valuation. When we reprint, gold will be worth what it was in the early 1900's compared to everything. good luck

Thu, 12/08/2011 - 05:11 | 1957669 johny2
johny2's picture

you may be right, and human population may be back to 1.2 billion, together with productivity. thanks and good luck to you too.

Thu, 12/08/2011 - 07:52 | 1957755 WhiteNight123129
WhiteNight123129's picture

I agree this post is bad, but frankly you are not measured in your overall assessment of this blog. Zero Hedge is a news outlet with very good quality and interesting insights overall. THere is no recommendation to go long say Titanium Oxide and Short Iron ore, or go long MTG and short the dollar . The universal theme though is that while teh debt is being destroyed Gold is still a good bet. I think you saying other people are motherfuckers is kind of a circular argument, just take what is interesting in this blog and leave teh rest, pick and choose what you like and avoid trying to be an arsonist just because one post is particularly bad.

Wed, 12/07/2011 - 21:05 | 1956866 Freddie
Freddie's picture

Full Metal Jacket - bitchez!

Beans, bullets, Bibles and bullion.

Wed, 12/07/2011 - 21:16 | 1956890 CvlDobd
CvlDobd's picture


Without those the Zionism wouldn't be so rampant and perhaps the problems wouldn't loom so large. Thus making the need for your other items less.

If only...

Wed, 12/07/2011 - 21:53 | 1956976 Clinteastwood
Clinteastwood's picture

Are you utopian?  Prejudiced? just ragging off?

Honestly, you feel threatened by the Bible?

Have you ever actually read it?

Didn't think so.

Try to become a bit more informed.  Here's a challenge: read the most popular, most published, most read book in the history of this world.....right you guessed it, the Bible.  Start with the book of John in the New Testament.  It's an easy read.  Then come back to Zerohedge and let's hear you again.

Wed, 12/07/2011 - 22:24 | 1957042 CvlDobd
CvlDobd's picture

I've read it. Thanks.

Read the book of Mormon too.

Bits of the Quran, can't say the whole thing. It's on the bucket list.

I try not to blindly bash. I have my reasons. Not everyone loves the book Into Thin Air even though I like it. Religious texts don't make me think, "wow this is an epic book I should base my life around, and if possible find a group of people to give 10% of my money to. " they actually just scare me with the overbearing violence and hypocrisy.

Let take the 10 commandments. Though shall not kill seems important. Nephi 1 in the book of Mormon. Nephi kills a man and God is cool with it. I told that to some missionaries at my door. I said I would sign up for the church if I get to kill people like Nephi.

Wed, 12/07/2011 - 23:10 | 1957120 Calmyourself
Calmyourself's picture

You read the bible but you get the Ten commandments wrong..  It does not and never has said do not kill, it says do not MURDER you moron telling us that we are cretins and you cannot get the Ten commandments right.. STFU..  Oop's am I a hypocrite or are you just an ignorant tool with opinions and little actual knowledge?  Read the ten commandments and then the tracts laying out the difference between killing and murder and come on back to fight club..

Wed, 12/07/2011 - 23:44 | 1957175 Clinteastwood
Clinteastwood's picture

Calmyourself.  Even if he has read the Bible (I get lied to for a living and that sounded like a whopper), he has no spiritual vision.  He's more concerned than anything else about the possibility that some church will insist on a 10% tithe.  Be happy you are not so cursed.

Thu, 12/08/2011 - 00:03 | 1957196 CvlDobd
CvlDobd's picture


Seems minor. I said I read it, not memorized. Thief, robber. Banker, loan officer. Politician, liar. All one and the same to me.

Read your username.

Mr. Eastwood is right. I do have a problem with the money grab by organized religion. At the end of the day though, I just don't believe in God. That's cool if you do. We can discuss it here on zerohedge.

Thu, 12/08/2011 - 00:35 | 1957282 Calmyourself
Calmyourself's picture

Lol indeed, he finds it a minor difference... Okay your just a fool, everything you say from this point forward is spoken through a veil of ignorance, cloaked in the false confidence of the truly uneducated.  I say that with a resting pulse rate of about 70.

Thu, 12/08/2011 - 00:39 | 1957293 CvlDobd
CvlDobd's picture

Mine is 69.

Thu, 12/08/2011 - 01:07 | 1957360 constitutionalist
constitutionalist's picture

Have any of you really religious guys played the game "telephone" as a kid? I did, and just about everytime the story changed..But I've also seen the movie "goodfellas" too. Those 2 things remind me a lot of religion. And I have found that the most "religious" people dont give a flying fuck about anyone but themselves, so im going with a) science b) just try to treat people how i want to be treated, but hey, i dont know a thing, and neither does anyone else, we all just keep reading books and hoping.. 

Thu, 12/08/2011 - 09:34 | 1957979 Clinteastwood
Clinteastwood's picture

Do you know where that idea came from about treating others as you would have them treat you?  Hint: it wasn't from "science," or a movie.

Tue, 12/13/2011 - 23:42 | 1977281 constitutionalist
constitutionalist's picture

the funny part of that statement is that I dont believe in religion and it came from the bible, and yet the people who believe in the bible dont believe in that statement. interesting how that plays out huh? but thanks for reminding me dad

Thu, 12/08/2011 - 06:54 | 1957727 kkam
kkam's picture

...the most popular, most published, most read book in the history of this world.....

Bullshit. How many of those bibles were actually willingly purchased by people and willingly read? I'd guess 90% of them were forced down people's throats at gun-point, or given away as freebies with some food or clothes, or put in hotel rooms for free. And b4 you get all worked up, I've read it, cover to cover a few times. A more violent, disgusting, book, glorifying incest, rape, murder, pillage, one that contradicts itself all over the place, would be hard to write. I've also read the koran, the gita, buddha's gospels, and the historical truth of how the bible was composed. The bible is a work of fiction based on some wisps of historical truth, written by people interested in power over others. You've got to be truly brain-dead to think the bible is anything but the biggest curse to befall mankind. 

Thu, 12/08/2011 - 09:41 | 1957992 Clinteastwood
Clinteastwood's picture

That wasn't even a nice try.  Is there another book you have in mind more popular/published/read?  You claim to be well-read.  That's good, as long as you're not so open-minded that your brain falls out.  The biggest curse to befall mankind isn't being overeducated beyond your's the lack of spiritual vision.  

Thu, 12/08/2011 - 11:33 | 1958605 Ace Ventura
Ace Ventura's picture

"...and the historical truth of how the bible was composed. The bible is a work of fiction based on some wisps of historical truth, written by people interested in power over others."

I assume you have proof of this? By extension, what gives you reason to trust whomever wrote the 'historical truth of how the bible was composed', any more than you trust the authors of the bible itself? How does the bible specifically grant power to those who seek it over others? How does your 'non-dead brain' attribute the biggest curse to befall mankind......with the bible? And you read it cover to cover, multiple times?


Thu, 12/08/2011 - 03:35 | 1957605 Divine Wind
Divine Wind's picture


Smells like we got some Jew-hatin' going on.

As I have repeatedly said, when you peel back the layers of coffee house bullshit talk and burrow down on the reasons for dislike of Jews (often referred to Zionists to hide their cowardice), it ALWAYS comes down to money, complaints about Jewish prowess in a business dealings or how Jews are found at the top of the sciences and basically everything else in the world that has serious value and meaning.




Thu, 12/08/2011 - 07:55 | 1957759 WhiteNight123129
WhiteNight123129's picture

I don´t care about the Jews, neither in a bad or a wrong way. To me jew is an adjective not a substantive. I just do not care.

Thu, 12/08/2011 - 14:14 | 1959607 trav7777
trav7777's picture

that's complete horseshit.  The great scientific minds throughout history were anglosaxons.  There were relatively few jews.

jews dominate nobels because they added categories in jewscience like economics.

you find jews galore in shit like economics and finance, peddling race angst, and pornography or other cultural smut.  They've made fortunes on every vice trade known, including running most of the slave trade from Lousiana to south america.

yes, of course, EVERYONE hates the poor victim jews because they're just so damned smart and good at business.  Typical nonsense.  They use clan nepotism to dominate societies but are the FIRST to complain and bitch whine and moan if such a thing were used against them.

They have the fucking ADL for that.  But where is the ADL when the entire Fed board is semitic?

Tue, 12/13/2011 - 23:48 | 1977311 constitutionalist
constitutionalist's picture

I truely dislike any "general racism/anti semitism". There are good and bad people in every race/religion. We're all assholes and scumbags, i dont care where youre from. Most people who hate jews dont know any jews. just hate them because they have been taught that, its unfortunate that we only know what we have been taught. the funny thing is that if i wasnt some Irish prick and was born in say..Iraq, I would believe what they taught me. so basically what im saying is we are what we have been bread to become. use your brain, both sides, and try not to be bias for a second and youlll realize we are ALL the same. want the best for our families, want the next generation to do better than us, want to work, have a home, eat nice food, fuck a little, doesnt matter if youre chinese to estonian, or american or arab, we all want the same. we just all need to see that. i promote peace rather than violence and never use violence to promote peace

Thu, 12/08/2011 - 11:58 | 1958712 Imminent Collapse
Imminent Collapse's picture

MSM is to ZeroHedge

as the Bible is to the Urantia Book

Wed, 12/07/2011 - 23:19 | 1957126 Bansters-in-my-...
Bansters-in-my- feces's picture

Freddie,skip the bible,and add babes,and you got a bitch'n list.

But don't put the babe near the beans byproduct,or the bitch'n babe will be bang'n your bullets.... and it will be ,bye..bye......Freddie

Wed, 12/07/2011 - 21:27 | 1956913 SHEEPFUKKER

When can I start "thinking of the gold price" in terms of the gold price? 

Wed, 12/07/2011 - 20:21 | 1956781 WhiteNight123129
WhiteNight123129's picture

This calculation is wrong because over the medium term gold is not stable against goods and services. Its ratio over M1 is not constant and it is investable. A better way is to use a realistic inflation index like shadow stats or use another non investable commodity index that is very stable. The closest commodity index to general inflation is processed tobacco, not substituable, very inelastic demand, very steady increase in price, you to correct tofarm productivity though. This calculation is wrong again, using Gold price post 1980 would result in saying that there was deflation in the 1980s which is absurd. There was just lower inflation and crash of Gold. We are far away from over priced Gold today but that is not the point.

Wed, 12/07/2011 - 20:50 | 1956825 akak
akak's picture

I also take issue with the following absurd statement from the article:

The dollars you keep in a money-market account will steadily lose value year after year. In fact, monies deposited into a simple savings account in 2000 have lost an incredible 25% of their purchasing power since then.

"25%"?  Are you FUCKING kidding me?  Who claims this --- Bernanke?

Prices overall are up at the very least 50% since 2000 (more likely in the range of 60-70%), and anybody who would try to deny that is either an idiot or a liar.

Wed, 12/07/2011 - 20:58 | 1956855 Pool Shark
Pool Shark's picture



But, but, but...

Consumer electronics and Chinese plastic stuff have gotten cheaper since 2000...


Wed, 12/07/2011 - 21:12 | 1956879 AldousHuxley
AldousHuxley's picture

Your leather running shoes are now made in plastic molds.


Central banksters will say that's increase in life quality, but men on the street knows better.


Capitalism doesn't reward quality, but quantity of shitty quality and call it progress.

Wed, 12/07/2011 - 21:43 | 1956962 Totentänzerlied
Totentänzerlied's picture

Capitalism!?! Where! Damn, I missed him again, sneaky bastard! Been waiting all my life to catch a glimpse!

Wed, 12/07/2011 - 22:01 | 1956995 Clinteastwood
Clinteastwood's picture


Attention math majors:

What we have here for an economy is a function:

Whatever the market will bear.......

.........divided by........

the lowest common denominator.

Wed, 12/07/2011 - 21:39 | 1956892 akak
akak's picture

Consumer electronics and Chinese plastic stuff have gotten cheaper since 2000...

Get back to me when shitty Chink-made plastic crap and i-dildoes become an unavoidable necessity of life or mandatory expense on the order of groceries, utilities, gasoline, clothing, insurance and taxes.

Wed, 12/07/2011 - 21:55 | 1956982 BigJim
BigJim's picture

Dear Mr. Akak,

You may find prices are up 50% in the last ten years, but that's because you're wasting your bonuses on food and clothing instead of hookers and blow like the rest of us.

Yours Sincerely,

The Elite

Thu, 12/08/2011 - 07:44 | 1957750 WhiteNight123129
WhiteNight123129's picture

Agreed this is a bad post Tyler

Wed, 12/07/2011 - 23:49 | 1957185 In Fed We Trust
In Fed We Trust's picture

Why not dump all that paper bullshit and invest in

Peace & love

Your a trader
Always pus in sheeple

Back into the caisano

What kind of tyler dryden is That?

Wed, 12/07/2011 - 23:52 | 1957192 In Fed We Trust
In Fed We Trust's picture

So. I suppose when money goes electronic

Gold will go to zero over night

I guess thats why they call them



Tyler willbe herding the sheep back into the yars for another feeding.

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