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Guest Post: Start Thinking in Terms of Gold Price

Tyler Durden's picture


Submitted by Jeff Clark of Casey Research

Start Thinking in Terms of Gold Price

A young woman – let's call her Andrea – inherited some money from her father in late 1997. She was only nineteen at the time. Not knowing the first thing about investing, she kept the money in stocks and bonds as her father had, wanting to hold on to it until she really needed it. She played it "safe."

She got married last year and so began to withdraw the money. She was pleased to see a chart from the broker that showed her portfolio was up about 20%. While admittedly not a great return over 12 years, her account had nevertheless survived both the 2000 tech crash and the 2008 market meltdown. She knew not all investors could not say the same thing.

Andrea began spending the money, thankful that she'd saved the money to start a family. But a cruel reality slowly began to set in: the money didn't seem to be going very far. She couldn't quite put her finger on why, but it all clicked when she saw the lofty price of a new SUV she wanted. She remembered her Dad's favorite vehicle back in the day – a Ford Ranger pickup – and recalled him boasting that he paid only $8,500 for it in 1992. A comparable vehicle today costs more than twice as much.

It hit her like a slap in the face. While the number of dollars in her portfolio was greater than what she inherited, they bought less stuff. It was such a revelation that she actually uttered the words out loud…

"My investments didn’t keep up with inflation… I LOST money!"

Gold Is the Benchmark

Whether they realize it or not, the same thing is happening to most people's investments. Over time, real returns are diluted because of inflation. The only reliable way to measure the value of investments is in terms of a financial intermediary that cannot be inflated: gold. That way, investors can tell how they're doing in real terms.

This has practical ramifications for all of us. Someday, we (or our heirs) are going to spend some of the wealth we are accumulating. How much we can actually buy with our gains will directly depend on how hard inflation has hit whatever our investments are denominated in. A 15% gain in dollars is only 9% in real terms if USD inflation was 6% during that time frame. A money-market return of 1% is a losing investment if denominated in something inflating at 3%. In Andrea's case, by keeping all her funds in dollars, her 20% gain turned into a 16% loss in purchasing power.

In other words, since most people don't adjust for inflation, their investments are not doing as well as they think.

In contrast, if Andrea had kept part of her inheritance in gold, that portion would have grown 332% (from December 1998 to June 2010, when she got married). More importantly, she would have lost no purchasing power during that time. In fact, after inflation and taxes, Andrea could've bought 50% more in goods and services than in 1998, if purchased using liquidated gold. She could buy two small pickup trucks today with the same number of gold coins it took her father to purchase the Ford Ranger in 1992. (This all while gold went nowhere for those first three years and lost a third of its value in the fall of 2008.)

With gold as her savings vehicle, she could have completely sidestepped the erosion in the dollar.

How have you done?

Re-Indexing in Gold – "This Changes Everything"

To demonstrate the effect of currency dilution, we've developed a tool for re-indexing popular indices from dollars to gold. Doing so provides a more accurate picture of the dilution of investments made in dollars (and would work just as well in euros or other currencies). We use gold in grams so the indices won't be priced in decimals.

Here's how the DOW has fared since 2000 when measured in both dollars and gold:

(Click on image to enlarge)

While the Dow Jones Industrial Average is up 4.7% in dollar terms, it's lost 82.5% when measured in gold grams. An investment of $10,000 on January 1, 2000 would total just $10,470 today (excluding dividends) – but in gold it's worth only $1,750.

In other words, investments made in the DJIA Index have not only lost money in real terms, they're worth a pittance when measured in gold. This is a breathtaking loss.

How about a broader measure of stocks, like the S&P 500?

(Click on image to enlarge)

The S&P 500 is down 15.1% in dollars since 2000, but it's lost 85.8% against gold. If you’ve owned an S&P index fund, you not only have fewer dollars that what you started with (excluding dividends) but have fallen dramatically behind when compared to the monetary asset of gold.

How about the technology sector?

(Click on image to enlarge)

Tech stocks show a whopping decline of 38% in dollars over the same time period, but money invested in that sector has lost 89.7% when measured in gold grams.

We also decided to look at some foreign markets. Are they doing better than the US?

(Click on image to enlarge)

The stock market for Hong Kong, one of the largest exchanges in Asia, shows an increase of 6% in dollars. However, it’s lost 82.3% when priced in gold.

(Click on image to enlarge)

The primary stock market for UK companies is down 22.4% since 2000 calculated in dollars, but has fallen 87.1% in gold grams.


Obviously, measuring portfolios in dollars exaggerates performance in real terms. This isn't to say that one shouldn't invest in stocks. It means that one must: a) be cognizant of how results compare to gold or other real assets that one might buy with whatever currency one is dealing with; b) adjust brokerage statements to allow for currency dilution; and c) not rely on stocks in general to outpace inflation.

In fact, it isn't just investments that are eroding. Our entire world is being devalued, even as one reads this article – from groceries and gas to cars and college. Someday we'll want to spend the gains we're making; how will we avoid the long-term erosion of the currencies we invest in?

The answer is simple: save in gold. 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. Conversely, if those savings were denominated in gold, the wealth would have not only been preserved but increased. We believe this trend will continue – and accelerate. It will become increasingly important to your financial future that you cash in earnings from time to time and save them in precious metals – not in dollars, euros, yen, yuan, or even Swiss francs.

Don't make the mistake Andrea did. Save in gold. That new car or retirement home or world travel you want to spend money on someday will be a lot easier to afford if your savings are denominated in the one asset that can't be debased, devalued or destroyed.


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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.

Thu, 12/08/2011 - 00:00 | 1957203 In Fed We Trust
In Fed We Trust's picture

Glen beck - ( fear mongering Zionist protector)

X2 =. Alex jones. Same Isreali cock suckin sellout

X4. = tyler

Any questions?

Pussy finanxe and geek class ajorned.

Thu, 12/08/2011 - 02:45 | 1957549 akak
akak's picture

Are you sure you are not "In Whiskey We Trust"?

Thu, 12/08/2011 - 02:14 | 1957496 lasvegaspersona
lasvegaspersona's picture


do a spell check and get back to us so we might know what it is that you are trying to say

Wed, 12/07/2011 - 19:49 | 1956713 molecool
molecool's picture

I got your 'fancy tool' right here - LOL:

Wed, 12/07/2011 - 19:50 | 1956721 perelmanfan
perelmanfan's picture

Okey doke, but kinda unfair to confine the charts to a period when gold rose dramatically compared to paper. This trick does not work all the time. However, I do believe it will continue to work awhile longer.

Wed, 12/07/2011 - 20:04 | 1956748 SonOfSam
SonOfSam's picture

Agreed, P-man.... I kinda wonder what the resulting charts might look like if we used 1990 as a starting point, or 1980. That much being said, I think the (unspoken) point being made here is that the trend of the last ten years is likely to continue, and probably even get much much more pronounced. Myself personally, I see my phyzzStack not as some magic bullet that's gonna help me retire early; I see it as a means of staving off absolutely nightmare level disaster in the years ahead.


Fascism: when Big Government and Big Business shake hands, and the little guy gets squashed in their grip

Wed, 12/07/2011 - 20:27 | 1956793 HelluvaEngineer
HelluvaEngineer's picture

Right.  Some day you will be able to exchange your beloved dollars for SDRs.  Make sure they aren't covered in shit.

Thu, 12/08/2011 - 00:27 | 1957255 In Fed We Trust
In Fed We Trust's picture

Thank you

George soros




Wed, 12/07/2011 - 19:50 | 1956723 HedgeAccordingly
HedgeAccordingly's picture

wonde what she thinks of gold... id buy her all she wants..- 

Thu, 12/08/2011 - 02:18 | 1957502 lasvegaspersona
lasvegaspersona's picture

hideously deformed creature in  reptile garb? you must be kidding (I am)

Wed, 12/07/2011 - 19:52 | 1956724 Hulk
Hulk's picture

GOLD BITCHEZ! Its whats for dinner...

Wed, 12/07/2011 - 19:57 | 1956730 Long-John-Silver
Long-John-Silver's picture

Dollars are never worth nothing. Each one can be converted to 12.44 BTU. Gold will not burn so it can't keep you from freezing to death. Silver is perhaps the most useful metal. It can be hammered into a parabolic shape, polished, and used to reflect and intensify the sun for starting a fire.  /sarc

Wed, 12/07/2011 - 19:58 | 1956733 blu
blu's picture

The answer is simple: save in gold. 

I don't see how that is "simple". Prudent maybe, but there is nothing simple about holding gold. If you leave it with a bank or broker you risk losing it all due to co-mingling or WTF other scam they have brewing. If you take physical delivery you risk being killed by someone, maybe by the first person that gets wind of your position ... maybe even by the delivery guy. So you buy guns? Guns are not much protection unless you make it known you have them and will use them. Okay now you risk having the ATF goons breaking down your door in the middle of the night ... taking your guns, your gold and just possibly your life. Dead men tell no tales about where the gold went.

Junk me if you want to, but we're hard in the grip of a police state mentality and I don't see how anything is "simple" any more just because someone says it is.

Wed, 12/07/2011 - 20:03 | 1956745 unky
unky's picture

rule #1.) Buy anonymously and dont tell anyone

rule #2.) see 1

Wed, 12/07/2011 - 20:51 | 1956830 hawks5999
hawks5999's picture

I don't know about any gold..... sir.

Wed, 12/07/2011 - 21:24 | 1956906 steveo
steveo's picture


Wed, 12/07/2011 - 22:16 | 1957028 Pladizow
Pladizow's picture

Buy in person, In cash, from numerous dealers.

Wed, 12/07/2011 - 20:12 | 1956762 SonOfSam
SonOfSam's picture

I agree, blu, it aint that simple: real life never is. But what's the alternative? Not hold any gold or silver at all? Wait for hyperinflation to keep you from feeding yoursel or putting a roof over your head? There's risk in everything; its just there's less risk in gold and silver.  Wanna know why Ben Franklin was the one chosen to be on the $100 bill, back when our currency was worth something? Because he had a saying "Three people can keep a secret provided two of them are dead" Blu, my wife doesn't know how much phyzz we have on this property, never mind anyone else


Fascism: when Big Government and Big Business shake hands, and the little guy gets squashed in their grip

Wed, 12/07/2011 - 20:26 | 1956787 Kanonfodder
Kanonfodder's picture

From my point of view and monetary capability, I find stocking food, guns and ammo, seeds, tools, and knowledge are more cost effective.  Not to mention relocating out of CT to the rural south.  I've spent a significant portion of my disposable income over the last couple of years, but I feel more comfortable about SHTF now than if I had just stocked on PMs.  Now once I am fully prepped, I will start to entertain the purchasing of PMs.

Wed, 12/07/2011 - 21:09 | 1956874 SonOfSam
SonOfSam's picture

Is there any rule against doing both at the same time? Like, buying shells, beans and heirloom seeds, and picking up some Silver Eagles too? Point taken about the knowledge though: I never thought I'd be learning locksmithing, but that's next on the list -- I think I've got the "groing food in small spaces" pretty much down


Fascism: when Big Business and Big Government shake hands, and the little guy gets squashed in their grip

Wed, 12/07/2011 - 20:30 | 1956796 Long-John-Silver
Long-John-Silver's picture

I remember a time when a $100 bill might as well have been a $1,000 bill today. They were difficult to spend as shop keepers never had enough money on the premisses to make change for one. The only place in town that could change one was the Bank. Today you can spend a $100 bill just filling up the gas tank or buying a bag or two of food at the grocery store. Sooner than anyone can imagine we will have a new $1,000 bill that will circulate with our $1, $5, $20, $50, and $100.

Wed, 12/07/2011 - 23:02 | 1957101 WmMcK
WmMcK's picture

What about a new $500 bill?

Wed, 12/07/2011 - 23:07 | 1957116 Long-John-Silver
Long-John-Silver's picture

Better to wait and produce a new $5,000 bill.

Fri, 12/09/2011 - 06:41 | 1962164 TruthInSunshine
TruthInSunshine's picture

I am working on a process whereby I transform tin and/or lead into gold.

Rest assured that The Bernank will be the last person on earth I will allow access to my secrets with.

We will all laugh at The Bernank, and pelt him with crumpled up BernakBux, as he grovels in the filthy dirty for a cup of gruel.

I will toss him a stale donut if he decides to give up a detailed list of who he works for, and he turns over all his notes, files, address/contact books and all other information about the inner workings of his proxy system, however.

Thu, 12/08/2011 - 00:22 | 1957239 prole
prole's picture

Won't have a 1,000 and the 100s will be cancelled soon enough. Got to ban that paper currency and go all digital currency so Big Brother can sit in on every transaction. To cancel or at least skim. Already happening in Europa.

I think it was Louisiana already banned certain cash transactions and I can tell you of toll roads that flat-out-don't accept cash, only mark-of-the-beast car pay strips.

Thu, 12/08/2011 - 00:06 | 1957209 CuriousPasserby
CuriousPasserby's picture

Have physical delivered to your PO box, then hide it in a door frame at home (or fake electrical outlet, or potted plant, or under a sink cabinet). Just don't forget where.

And don't blab. But that's it, you can't help but blab. So you're screwed.

Wed, 12/07/2011 - 20:06 | 1956751 ebworthen
ebworthen's picture



"A bird in the hand is worth two in the bush."

Wed, 12/07/2011 - 20:07 | 1956753 DavidC
DavidC's picture

Two words, meaning a lot...excluding dividends.

What about the effect of dividend reinvestment?


Wed, 12/07/2011 - 20:38 | 1956811 i-dog
i-dog's picture

What dividends do index funds pay?

Wed, 12/07/2011 - 21:16 | 1956882 nmewn
nmewn's picture

I wanted to add my two cents in here and see what everyone thinks on the dividend question.

The problem with the strategy, in my opinion, is capital loss.

A 20% decline means you need to have a 40% gain just to get back to par on your initial capital invested. A heavy lift unless you're in the bluest of the blue...the KO's-CLX's etc. Just to get to par. And of course, are you being compensated properly for the carrying cost of your risk, even there (in the blue).

It should be noted (though most in the MSM would like you to forget) the time loss of a major decline can never be recovered. To someone at the wrong time of their life they will not recover...a factor of personal risk vs greed no doubt...but a large consideration. We are all on "a timeline".

A capital loss can work against you for those years or months, where in that same time frame you should be (theoretically) making capital gains from the money you the drip of reinvested dividends.

Then there is the time decay of fiat the article says. Nominally, it could appear you have more but as prices for stuff accelerate one is fortunate to be even on a purchasing power level when its time to withdraw.


Wed, 12/07/2011 - 22:00 | 1956991 BigJim
Wed, 12/07/2011 - 22:31 | 1957054 nmewn
nmewn's picture

"The only plausible alternative interpretation of these policies requires us to believe that the government officials who set these policies are complete idiots about basic economics."


Its almost as if they are actually trying to destroy the base of capitalism, which is savings. Some, I have no doubt are, which is this ridiculous admonition we are subjected to constantly to go out and spend!!!...its your patriotic duty!!!

Others are so damned stupid they grovel along with it all and wouldn't know what "it" is if it bit em in the ass.

Its not beyond my cynical mind to think that the pump & dumpers (those like Robo) are in league with them for taxation & commission. I never see any point in his crap. There is such a thing as wash sales to catch the unwary small fry.

So, its print...debase...devalue...lie...cheat & steal...try to make it just one more year till retirement. Then they will be shocked & mortified when the "units" of their retirement are worthless. Hamsters on a treadmill...rats in cage.

Its pathetic.

Thu, 12/08/2011 - 02:58 | 1957566 Libertarian777
Libertarian777's picture

wtf, where'd u learn math

1 / 0.8 = 1.25


a 20% loss requires 25% gain to break even.

only a 50% loss requires a 100% gain (doubling). its not linear.

Thu, 12/08/2011 - 08:03 | 1957770 nmewn
nmewn's picture

You're correct. That was an inexcusable error on my part and it was the 50% rule I was thinking of as I typed.

My point was, its far "easier" to incur a loss than a gain at any given point in time and in a very short amount of time. And far far  "harder" to recover if you let it happen to yourself because of the disproportinate amount of time it takes to grow it back.

If you go back and look at any index you wish to look at, from the start of the drop in 07 until now...anyone who was long still has not recovered from their losses after four years. The loss only took roughly a year and a half-two years to materialize.

My S&P chart says they're still sittin on a 17% loss of what they had.

Wed, 12/07/2011 - 20:07 | 1956755 anynonmous
anynonmous's picture

not only should we start thinking in terms of Gold price but for the self satisfied Canucks out there might I suggest you start thinking in terms of Janet Napolitano, DHS and all of the other wonderful aspects of (North) American Life

Canada-U.S. border deal aims to strengthen North American perimeter while unblocking trade

Wed, 12/07/2011 - 21:28 | 1956923 Jendrzejczyk
Jendrzejczyk's picture

How many Napolitanos can you get for an ounce of gold?

Wed, 12/07/2011 - 20:19 | 1956780 brxn
brxn's picture

This is a bit silly.  What if Andrea inherited this money in 1980?  Dishonest examples, we may as well be quoting Jim Cramer.

Wed, 12/07/2011 - 21:39 | 1956950 i-dog
i-dog's picture

If Andrea had inherited the money in 1980 and invested it in the 30 underlying stocks in the Dow at the time, then she would find that 21 of those stocks are now no longer in the Dow.

Wed, 12/07/2011 - 20:28 | 1956795 DavidPierre
DavidPierre's picture

Gold Juniors

In case you have not been following the earnings picture, senior Gold mining companies earnings have exploded. Earnings are up nearly 5 fold since 2007 and even CNBC has to grit their teeth when they report and admit that Gold miners are now to be considered "growth companies" when it comes to the earnings picture. In fact, the CNBC "reporters" can be seen nearly choking on their words as they must admit that earnings in the mining industry are now growing at a faster pace than nearly any other industry on the planet.

Mining company balance sheets (the majors) are by and large very healthy, very clean and not goobered up with any "make believe" valuations like our banking system has reverted to. Yes, it is ALL good...except for one minor detail. They must continually replace their reserves that are extracted from the ground each year as Gold and Silver ar not like apples and do not produce a new "crop" each season.

Speaking of apples, the mining industry has already "picked it's low hanging fruit" back in the late 90's and early 2000's to simply stay alive. This "low hanging fruit" was the ore that was very rich in metal, easiest to extract and would yield the most upon leaching. In a nutshell, the lowest cost ore to produce has already been mined and today is the day that they "fought to live another day" for.

So the easy stuff to mine AND the easily findable stuff has already been mined and what?

Somehow, some way the major mining operations MUST replenish and replace their reserves. If they do not...they WILL die. These mining concerns have very limited choices, they can "look" for precious metals on their own or they can "look" for companies that "look" for precious metals. It is really this simple, either hire Yukon Cornelius and do it themselves in the field or hire some poindexter accountants with a geology background and scour the exploration companies.

Back in the early the late 90's and early 2000's exploration budgets were slashed to the bone which is one reason that very few if any world class deposits have been discovered over the last 5-10 years. They had to slash their exploration budgets for their own survival because cash flows could not support the expenditures. This, ironically is a Mother Nature thing.

Mother Nature"?

Of course it is, Gold and Silver prices were artificially depressed to prices that were BELOW the total cost of production (which is what originally attracted demented minds to the sector in the first place) which led to a lack of "future crop". Any farmer who eats his seed corn knows about this phenomena.

As supply is crimped, prices rise, Mother Nature is only now beginning to get her revenge, global production of Gold and Silver have been stuck in place now for nearly 10 years, no growth now because there was very little exploration back then, very simple!

So supply is not growing while demand out of systemic fear is growing, a very potent brew. This would be a very neat situation for the major mining companies if they could count on continued product, which they cannot. The majors who are now flush with cash and no longer highly levered on their balance sheets must decide what to do. They can begin dividends (even increase them), they can hold back some production which Eric Sprott so intelligently suggests...or...they can do what Mother Nature will force them to do anyway, FIND NEW RESERVES with their cash flows!

For Yukon Cornelius to go out into the field and start drilling is a very costly (not a problem for cash rich mining companies) AND very time consuming (a very big problem) endeavor. These mining giants will very soon start to pounce on junior mining concerns who have properties that are rich in ore. Some of these will be "stand alone" properties and many more will be "adjacent" properties. "Adjacent" meaning next to or surrounding existing mines owned by the majors.

We will also see mines start to pop up where there WERE mines many many years ago in the past. The old saying "the best place to find Gold is where they have already found Gold" is very very true, especially when the prices have gone to levels that make this "unprofitable ore" ...well...profitable.

Gold itself at $270 back around the year 2000 was a homerun and a no brainer to some. The juniors today represent an even better buy today by MULTIPLES than Gold was at $270 and Silver at $4. The junior mining sector make what happened with the internet mania look like a yawner! The sector is extremely small from a capitalization standpoint AND there are and can be only so many of them. Barrier to entry is huge, you must have real property that is located in or around known mineral rich areas and you must have already done lots of homework (field work, mapping, electromagnetic studies and drilling) to be able to "show them the money (Gold)".

Recall the internet craze, you could have been a crack head living on the streets and come up with any ridiculous idea or name with the magic words "Dot Com" after them and you had a homerun. It cannot be like this in the mining industry as real property must be owned and it must be located in a logical location. The fact that you will need a "real address" is a major barrier to entry which did not exist in the Dot Com fairy tale.

In other words, the supply of goods (mineable ground) is limited (another Mother Nature thing). 10-20 baggers will be yawners as this coming mania progresses.

In the paper markets, "everything is worth nothing". The major mining concerns will become cornerstones of the next banking system and considered the new "Blue Chips", suitable for widows and orphans in the future.

You could say that when all of this has run it's course, "everything" will have come from nothing because the market cap of the juniors is virtually nonexistent. In other words, the entire precious metal mining sector which had a total market cap of less than $100 Billion (virtually nothing) 10 years ago will suck up capital from paper markets in every and all directions and again take up a major portion of global market cap,

The juniors will be where the real excitement will be.

Go back into history and the mines were in many civilizations and in many different eras the highest market cap and biggest employers. They were the Blue Chips, they will be again!

Thu, 12/08/2011 - 02:08 | 1957486 wee-weed up
wee-weed up's picture

"The juniors will be where the real excitement will be."


Only until the gov't nationalizes them!

Wed, 12/07/2011 - 20:32 | 1956799 agent default
agent default's picture

If gold is the benchmark, then silver may in  fact out perform gold given the present price ratio.  So do we go with gold, or underweight gold and overweight silver?  I am in favor of heavy silver positions myself at the present time.

Wed, 12/07/2011 - 20:57 | 1956849 Deo vindice
Deo vindice's picture

I tend to agree.

Wed, 12/07/2011 - 22:52 | 1957084 bilbert
bilbert's picture

85% Silver

15% Gold

That's my ratio.  When Silver gets to 15 to 1, I'll start trading out of Silver into Gold 50/50.

Silver may then go to 10 - 1, so 50/50 will be my end point.



Wed, 12/07/2011 - 23:11 | 1957121 nmewn
nmewn's picture

DoChen nailed it last the 20's to one. So did Turd on the trade stop.

Just sayin...waiting for the perfect time (ratio) may leave you behind. Its a target, it doesn't have to be a bullseye, just inside the rings somewhere.

Thu, 12/08/2011 - 00:12 | 1957215 traderjoe
traderjoe's picture

Don't forget platinum and palladium.

Thu, 12/08/2011 - 03:22 | 1957592 CitizenPete
CitizenPete's picture

Pt - price dictated by SA mines and Escom reliability on the supply side, and (still currently) Auto industry on the demand side

Pd - dictated by russian mines production



Thu, 12/08/2011 - 09:16 | 1957920 WhiteNight123129
WhiteNight123129's picture

When GOld silver ratio is at 15 you should exit GOLD and SILVER and buy stocks because KO will be trading at 9 times earnings and 6.6% dividend like it did in 1980

Wed, 12/07/2011 - 20:40 | 1956812 Spigot
Spigot's picture

Gold has returned an average, annualized 23% since it bottomed in 2000. This year, again we are facing a very difficult time holding due to a meagre additional 23% return. Life can be tough, but we're hanging in there.

I will also point out that there is a wedge that has formed in the price which can be seen in the lows of early July 2011, and highs of early September 2011. We are rapidly coming to the apex at 1725 this month.

When gold breaks to the up side sometime in the next month it will shoot straight past 1900 and should find its new playground above 2300 then we will see if it comes back down to kiss 1900/2000 again or not.

Just remember +23% on 1900 is 2340, but from this formation I believe we will see a major breakout to that figure early next year, and possibly either catastrophy or another muddle through year where we AGAIN only pull in another 23% or so on that gold thingie...

Wed, 12/07/2011 - 21:25 | 1956910 CvlDobd
CvlDobd's picture

The gold triangle is being painted too well for me to believe it. I'm looking for a high volume break DOWN, then a throwback to new highs. I think they want to take out the 150 day average with authority, say "see you shouldn't buy gold" then ramp the shit out of the price after late to the party GLD holders have sold.

I think higher gold prices are the name of the game but there will be shenanigans on the way there.

Thu, 12/08/2011 - 09:17 | 1957926 WhiteNight123129
WhiteNight123129's picture

Get out of GOLD only when the debt has been flushed and is again at a sustainable level.

Wed, 12/07/2011 - 20:46 | 1956821 TheSilverJournal
TheSilverJournal's picture

When everything will be going down in terms of gold..then nothing is worth investing in..except silver.

Wed, 12/07/2011 - 20:54 | 1956840 URZIZMINE
URZIZMINE's picture

All u really need is enough firepower to defend your food/wheat/rice/beans/homebrew/mash/vitamin stash.

Thu, 12/08/2011 - 09:06 | 1957899 BeerBrewer09
BeerBrewer09's picture

+1 on the hombrew.

I've got 24 gallons of a Russian River Beautification Clone to bottle with wild yeast. Once wax dipped, those suckers will be great for 10-20+ years. Also soon to clone Portsmouth Kate the Great. Another one sent to the cellar.

I'll be nice and drunk when our currency falls apart.

Wed, 12/07/2011 - 20:56 | 1956846 RobotTrader
RobotTrader's picture

SPY is now advancing in all major currencies:


See for yourself:$spx:FXE,$spx:FXY,$spx:FXC,$spx:FXS,$spx:FXA,$spx:FXM,$spx:FXB,$spx:FXF|D

Wed, 12/07/2011 - 21:29 | 1956897 akak
akak's picture

RoboRetard's head is now advancing up his rectum from all major perspectives.


PS: Dear RobotLemming, until you can manage to sustain an argument by using more than a ten-minute timeframe, just shut the fuck up already.  Not that you EVER even try to sustain an argument here, or even take a stab at answering your critics, however.  No, you are too much of a coward, a blowhard and a liar to even be able to attempt that level of honest interaction. 

There is a word for your kind of poster: TROLL.

Wed, 12/07/2011 - 21:32 | 1956933 nmewn
nmewn's picture

SPY & BAC alternate chairs as the highest volume leaders day after day, month after month. Wonder why. For a while C was in the mix till the reverse split.

Lets see, C is only down 34% since then. Must be screaming buy right?

What to do, what to do...short SPY or BAC ;-)

Wed, 12/07/2011 - 20:57 | 1956848 URZIZMINE
URZIZMINE's picture

And don't forget the green coffee beans.

Wed, 12/07/2011 - 21:21 | 1956901 steveo
steveo's picture

I have been pimping out SPX priced in Gold, copper priced in gold for quite some time.     On the blog, frequent updates.

Wed, 12/07/2011 - 21:34 | 1956943 Newager23
Newager23's picture

I find it amazing that people can be anti-gold after watching it rise 20% year after year for a decade. It comes down to understanding economics and most people don't. Gold is a misunderstood unit of value. This is is odd, considering the rarity of the metal. They only mine 2500 tons per year. That is hardly anything. Once demand appears (the recent SF Gold show was empty), there won't be any physical to be had.

From a simple analysis, everyone should want to own at least 10% of their net wealth in gold. That analysis should acknowledge that if the bond market has any BIG problems, gold is going to rise substantially. If the bond market holds, then you can always keep your gold for a rainy day. The odds of gold going back to $500 anytime soon are pretty slim (because of peak oil). And if you lose money on holding physical gold, that is probably a good thing. That means the world economy did not contract and kept on chugging along.

What happens when Greece defaults? And then Italy and possibly Spain and Portugal? And then their is Japan and the US. What about those bond markets? Is all of this going to be contained? Are you really so sure that you don't think you need gold?

Everything that is happending today points to a rising gold price. That could turn around, but anyone on MSNBC who smiles and says the US Economy is doing fine and then recommends financial, consumer, and industrial stocks is ignorning a pretty big elephant in the room. That elephant contains all of the problems and headwinds that we face. Getting through 2012 and 2013 without a bond meltdown is going to take a miracle. And only that miracle will keep gold from taking off.

I'll take gold today. And run from S&P stocks. The risk levels for stocks are very high if you ask me. It is time to be very defensive and see what happens to energy supplies and energy prices. Can the economy grow in the face of high energy prices and high debt loads. We can print money and write off debts, but we can't print gold or oil.


Wed, 12/07/2011 - 22:10 | 1957015 akak
akak's picture

We can print money and write off debts, but we can't print gold or oil.

Well, the CME apparently thinks that they can ... or has so far, anyway.

Thu, 12/08/2011 - 00:53 | 1957325 seek
seek's picture

Only as long as the illusion they can delivery holds up -- and that went out the window with MF Global.

I half wonder if that isn't intentional. If everyone is driven away because you can't count on delivery (and can count on being fucked by CME) they basically drive away the people who can -- and would -- bust the comex, leaving the manipulators with the whole pie. Psychologically speaking, if they knew they were busted, this would be the thing to do, since it would be a "shadow bust" that wouldn't be reported.

I have to think we're really, really close the the paper/physical price separation. I know the premium changes on gold during the dips sure is suggesting this.

Wed, 12/07/2011 - 21:46 | 1956967 AmazingLarry
AmazingLarry's picture

When is someone going to do some real research and price the Dow in Dows?



Wed, 12/07/2011 - 22:22 | 1957037 f16hoser
f16hoser's picture

I'll count my PM's by the Oz. Price is meaningless at this point in time.


Wed, 12/07/2011 - 22:24 | 1957041 f16hoser
f16hoser's picture

Christ; now I have to pull the bulk of my funds out of TD Ameritrade. I trust the system anymore.

Wed, 12/07/2011 - 22:30 | 1957052 vegas
vegas's picture

The only 2 things that will keep value will be farmland and precious metals. After that it's a crap shoot.

Wed, 12/07/2011 - 22:31 | 1957055 Georgesblog
Georgesblog's picture

It takes a rude awakening to understand that gold and silver aren't measured by the currency, but the other way around. I know of several people who've known that for at least 20 years.

Wed, 12/07/2011 - 22:55 | 1957089 TideFighter
TideFighter's picture

Gold will not power you from point A to point B. Gold will not grow food. Gold will not power your lights or refrigerator. If you do not have gold for three days, you will not die (water). If you do not have gold for five days, you will not starve. If you run out of Charmin, your Jockeys are full of shit. Goldbugs common denominator: never been in a disaster zone or combat.

Thu, 12/08/2011 - 00:28 | 1957105 akak
akak's picture

And you, King Canute, have obviously never studied economic or, more to the point, monetary history.

Try to wrap your mind around the fact that time spent in a lifeboat is ALWAYS necessarily brief.  Once you land on shore, and have nothing to trade .... then what?

Thu, 12/08/2011 - 00:31 | 1957263 TideFighter
TideFighter's picture

It doesn't take much to bring you out of your troll hole, RANDy. It is you that has failed to grasp the entirety of the gold market [value] versus kleptocrat endless printing. Your lifeboat analogy is so fucking stupid it deserves no reply. It is truly amazing that trolls like you continue to post the same trite comments about others, over and over. I will tell you again, your collective posts turned into a word cloud looks like a chicken's asshole. 

If you purchase your needs with a gold coin, you just may end up without a coin and the hand holding it. Go read about what happened in Argentina, dipshit. Talk about a history void, wow.

Thu, 12/08/2011 - 00:42 | 1957281 akak
akak's picture

Was there a coherent thought in that mindless rambling rant?
If so, I failed to find it. 

Your "argument", such as it was, boiled down to the oh-so-repetitious and inane "Gold, what good is it, you can't eat it!"  Anyone attempting to make such an argument at this stage of the game, much less here on ZH, deserves neither consideration nor respect.

You sound both bitter and stupid.  Possibly borderline retarded, too. 
I pity you in your ignorance and hate.

Thu, 12/08/2011 - 06:42 | 1957721 TideFighter
TideFighter's picture

There you go again. Your the Don Rickles of ZH, aren't you? Well, your not a fan of mine? Boo fucking Hoo. I'm guessing you're short, with short little hands. Funny thing about trolls like you, calling everyone with a different opinion "retarded", "bitter", "hateful", while NEVER posting a coherent thought. Amazing. You amuze me, slightly. Remember, every time you crawl out from under your rock, I'll be there. 

Thu, 12/08/2011 - 00:36 | 1957284 SilverIsKing
SilverIsKing's picture

I can always spot the guys who can't afford to buy any gold from a mile away.

Thu, 12/08/2011 - 00:16 | 1957221 CuriousPasserby
CuriousPasserby's picture

So you're saying stock up on toilet paper?

Thu, 12/08/2011 - 03:01 | 1957572 Libertarian777
Libertarian777's picture

and prosthetic hands

Wed, 12/07/2011 - 22:59 | 1957095 Savonarola
Savonarola's picture

I have PM's, guns, and food. And, as a farmer I know the value of land and feeding my family, no matter what.

Something has been bothering me about all the money printing... where is the inflation? I mean the flaming, hell hath no fury, we're all gonna die - inflation.

I think we are going into a global depression, and food, oil, land etc prices will collapse. PM's will also lose value beause while everyone has lots of dollars, it all has little value. So, prices must come down to allow the dollar and other assets to grow in value. Bottom line, anyone owning anything will continue to take it in the shorts.  

Somthing is just not right about this whole stinking situation.

Wed, 12/07/2011 - 23:22 | 1957132 delacroix
delacroix's picture

you can't sell something, for less than it costs to produce, (unless you're GM)

Thu, 12/08/2011 - 03:19 | 1957589 CitizenPete
CitizenPete's picture

or Budwieser   (he he) 

Thu, 12/08/2011 - 02:11 | 1957479 Boxed Merlot
Boxed Merlot's picture

Something has been bothering me about all the money printing... where is the inflation?...


There are 3 factors in the equation.  If you think of it it terms of a reservoir and a dam, (money supply and the forces that prevent it's free flow), the ingredient is the flow out of and into the lake.  Most often people forget about the velocity, or amperage, if you will.


Or as another allegory, just because your heart will pump 2000 gallons of blood a day, it doesn't mean you need 2000 gallons for a day.  You can get by quite nicely on about 1 and a half gallons.


Personally, the factor most responsble for the bottleneck in the flow is lack of trust, uncertainty that expended wealth can / will be returned. 


Once the powers that broke the trust, i.e. dismantled the US middle class by bifurcating vast numbers of mortgage papers virtually rendering them DOA and subsequently bet on their demise through AIG and were paid in full through the fall 08 bailout, realized the golden goose has died, all they can do is sit on the paper and ether world ciphers hoping against hope that someone or something will breathe life back into the thing.


That's my frn .02.

Thu, 12/08/2011 - 03:06 | 1957577 Libertarian777
Libertarian777's picture

inflation's here.


gasoline is over $3.50/gal

yogurt costs min 67c vs 50c last year

milk is $3.19 / gal at its cheapest vs $2.89 last year

a loaf of bread runs $2.50 on special vs $2 last year.

ground beef (4% fat) runs $4.99/lb vs $3.99-4.50/lb last year.


everything's up at least 10% in the last year. Inflation is here and now.

Thu, 12/08/2011 - 03:18 | 1957588 CitizenPete
CitizenPete's picture

See MADIII section2

Wed, 12/07/2011 - 23:08 | 1957118 Bansters-in-my-...
Bansters-in-my- feces's picture

So why doesn't someone do an article on Gold Lease rates.
And what Neagative gold lease rates mean to the little guy saving physical.
Why are rates so low.???
Like very negative,anyone want to chime in,that has some knowledge.?
Thanks in advance.

Wed, 12/07/2011 - 23:26 | 1957134 delacroix
delacroix's picture

ponzi extension, it's a paper lease= more naked shorting. physical metal, does not actually change hands.

Wed, 12/07/2011 - 23:31 | 1957149 player333
player333's picture

There will be deflation for a little bit then the fiat creators will print, deflation will not be allowed. With some or a lot of inflation the debt holders get paid something with deflation debt is destroyed-they will print it takes currency to keep kicking the can. Buy gold, silver prepare to  feed and defend yourselves gentlemen something ugly is coming to a location near you.

Wed, 12/07/2011 - 23:40 | 1957170 Teamtc321
Teamtc321's picture

Buy gold and silver...................


( - In a speech delivered at Osawatomie High School in Osawatomie, Kansas, on Tuesday, President Barack Obama argued that while a limited government that preserves free markets "speaks to our rugged individualism" as Americans, such a system "doesn't work" and "has never worked" and that Americans must look to a more activist government that taxes more, spends more and regulates more if they want to preserve the middle class.

"'[T]here is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. 'The market will take care of everything,' they tell us," said Obama. "If we just cut more regulations and cut more taxes--especially for the wealthy--our economy will grow stronger.

"Sure, they say, there will be winners and losers," Obama continued. "But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.

"Now, it’s a simple theory," said Obama. "And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government. That’s in America’s DNA. And that theory fits well on a bumper sticker. But here’s the problem: It doesn’t work. It has never worked.

Wed, 12/07/2011 - 23:56 | 1957198 Bansters-in-my-...
Bansters-in-my- feces's picture

In 2000,gold could be had for less than $300 joo bucks pr oz. So let me do some mark to market math,instead of mark to unicorn math,and mmmm, thinks me gets more than 25% loss of purchasing power. In gold brains,oops,i mean gold grams,me thinks thats many hundreds of percents.%%%

Silly rabbit.

Thu, 12/08/2011 - 00:05 | 1957207 Boxed Merlot
Boxed Merlot's picture

I recently had an occasion to drive through the delta region of central Ca with a couple of elderly brothers from Texas and Oklahoma, ages 86 and 94. Neither had seen this part of California in over 60 years, the older gentleman from Texas had never been to CA.

Anyway, after viewing the seed crops growing in the fertile peat lands the younger one said he remembers working in the hay fields for frn .20 an hour as a kid and was grateful to get even that.

I had to laugh, because at that time, he was paid in silver coin which would've been equivalent to roughly frn 5. today. Not too much has changed, I suppose.

Thu, 12/08/2011 - 00:16 | 1957222 jack stephan
jack stephan's picture

Walk without rhythm and you won't attract the worm.

Thu, 12/08/2011 - 00:38 | 1957286 monopoly
monopoly's picture

LOLOL... just let Robot and the "brilliant ones" continue to tell us how stupid we are.

Gold at 900, Ha, a rip off.

Gold at 1,100, better sell before the floor opens up and swallows all of you.

Gold at $1,300. You gold bugs are out of your minds. Don't you know this is a bubble. It is a worthless relic. Suggest you unload it while there are still suckers left to buy your gold.

Gold at $1,500. Well, anyone that still owns gold at these absurd levels is really an idiot. My vote is for the dollar. The dollar will always be the reserve currency. Gold is such a waste.

Gold at $1,600. It is on its way to 500 again. Get out while you can. Don't listen to these weirdos on Zero Hedge.

Gold at $1,700 You know this is a bubble worse than the NAS. How can you still be holding gold at these inflated levels. What is the matter with you people here at Zero Hedge. You just keep drinking the cool aid thinking gold is money. What kind of people are you. This is investing? You will be sorry. The dollar will never not be the reserve currency. The Federal Reserve knows what they are doing.

Gold at $1,800 Having gold as part of your portfolio instead of stocks is beyond words. The Spoos will provide much better results, if you are patient. Besides, hard to buy, store and keep track of. Buying gold makes no sense at all.

Gold at...............:)))))))

Good Night!



Thu, 12/08/2011 - 00:44 | 1957305 akak
akak's picture

So you've been reading Jon Nadler then?

Thu, 12/08/2011 - 00:51 | 1957322 monopoly
monopoly's picture

lol +1

Thu, 12/08/2011 - 00:49 | 1957321 bill1102inf
bill1102inf's picture

You show an ELEVEN FUCKING YEAR timeline and start asking people to (now) start pricing SP500 in gold?!?!?! BWAHAAHAHAHAHHAHAAHAHHAHHAHAHAHAHA like there is a single 'long term investor' still in thIs market. And gold has been a POS investment for the last half a year!


What a piece of shit.

Thu, 12/08/2011 - 01:22 | 1957395 Bansters-in-my-...
Bansters-in-my- feces's picture

I love at the top... Similar articles you might enjoy; Shocker :JPM sees gold at $2500 by year end.

Don't get me wrong,I'm a gold bug,but theses guys are pure filth of the earth.

The PPT won't even let it get past $1750,and they are in on it.

Scum JPM

Thu, 12/08/2011 - 07:16 | 1957737 Dempster
Dempster's picture

To Mr T. Durden

If you ignore dividends when calculating compound value there is little sense in your percentages.





Thu, 12/08/2011 - 07:23 | 1957740 Savonarola
Savonarola's picture


I get the inflated prices thing. When I was a kid a haircut was 25 cents.

But, that is not what I'm getting at.

Having lived through the 1970s I guess I am using that as my baseline.

Short term interest rates were above 15% and going higher, as I recall.

Everything was inflating, not just yogurt and bread.

If we have so much money in the system now, where is the inflation? 

Thu, 12/08/2011 - 11:38 | 1958635 onebir
onebir's picture

Wouldn't all the charts look similar pricing everything in long-dated treasuries? ;-)

Thu, 12/08/2011 - 18:33 | 1960965 ZIRP Hedge
ZIRP Hedge's picture

I'm all for gold but Casey Research should include data going back to 1980. At which point it we obvious that's not as simple as they point out as gold went from 850 to 200. 

Fri, 12/09/2011 - 07:35 | 1962197 onebir
onebir's picture

^^^ As long-dated treasuries will probably go over the next few years...

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