This page has been archived and commenting is disabled.
Guest Post: Why Has Gold Been Down?
Submitted by Jeff Clarke of Casey Research
Why Has Gold Been Down?
In spite of some short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We're certainly not spending less money in the US, and now we're bailing out Europe via currency swaps with the European Central Bank. Shouldn't gold be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why gold remains in a funk.
- The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.
- The dollar has been rising. Money fleeing the Eurozone has to go somewhere, and some of it is heading into US bonds, which means first converting the foreign currency into dollars.
- It's tax-loss selling season, something that's also impacting gold stocks. Funds and individual investors are selling underwater positions for tax purposes. Funds also sell their big winners to lock in gains for the year and dress up quarterly reports.
These forces have all acted to depress the gold price.
Notice I didn't say that gold has suddenly become viewed as a poor safe haven. Nor that many of the world's major currencies are no longer being debased… nor that global sovereign debt issues are resolved… nor that interest rates are positive. No, the fundamental reasons for owning gold are still intact. So don't let the selling depress you.
Let's put gold's recent price action into perspective. It peaked on September 5 at $1,895 (London PM Fix) and has thus been in decline for about three months. Yet look at the bull market's biggest three-month correction in relationship to the ultimate trend.
Gold fell 20% from August 1 to October 31, 2008, the biggest rolling three-month decline in our current bull market. And yet, it eventually powered much higher, in spite of many investors and industry experts thinking it had peaked at the time. The final quarter of 2011 ended down 5.5% over the previous quarter.
The point? Don't confuse short-term volatility with long-term forces. The investor who looks only at today's headlines is prone to making ill-timed decisions.
I realize that prices could trade lower – but this is why we keep a high level of cash. By the time this bull market is over, our current pullback will probably look something like the small red box in the chart above, with far higher prices in the intervening months and years.
Which makes current prices a buying opportunity. I don't know if we're at the bottom of our recent decline or not – but I do know where gold and silver are ultimately headed Casey Research's Chief Economist and Editor of The Casey Report, Bud Conrad, is convinced gold will hit $2,000 in the first half of this year. If he is right, the opportunity to buy at today's levels will be fleeting.
In the meantime, stay the course with your precious metals investments, no matter how the short-term picture looks. Gold stocks remain undervalued, and these are turbulent times. They appear to be far from over. Gold remains the #1 asset protector.
»
- 15669 reads
- Printer-friendly version
- Send to friend
- advertisements -
Silver doesn't look bad either IMHO.
Gold and Silver both look great, but I'm broke. Hopefully the aluminum prices will skyrocket and I'll make a killing from all the empty beer cans in my garage. I'm also hoping the dirt market kickstarts in 2012.
Good news, my friend. There are rumors out of DC concerning a surplus of Dirt Bags dearly in need of more dirt on one another for the election season.
fuckin love zerohedge
Good news for European silver/gold bugs: GZ says the FED will print on EUR/USA = 1,27 not allowing EUR to go deeper down:
http://argentofisico.blogspot.com/2012/01/cobraf-eurusd-127-la-fed-stamp...
GZ?
A good italian financial commentator: cobraf.com
the greatest retort in my time on the site fo sho
thank god i'm not the only one. i'm long discounted frozen turkeys.
I'm going long sugar and yeast.
Liquid assets, Bitchez!
Shit! I drinked it all. Now... who stoled my beer?
Excellent comment, you made me laugh, which is no bad thing on a cold Friday morning in January.
Gold, BITCHEZ!
Gold is good, but more americans are buying guns.
I imagine those will appreciate nicely as well.
That's diversification!
Cover both aspects. Become "the man with the golden gun".
Get it while it's cheap...oh, and available (physical)!
Junk away but I was really hoping for $21 - $22 silver because I am a tight ass and won't pay more than spot but at those prices I would be happy to pay the premium for silver eagles.
or what about platinum?
It's already raining from the sky.
OOPS, I thought you said plutonium....
Platinum is generally very comparable to gold only with a much higher volatility.
I have a question regarding platinum that NOBODY has ever seemed to manage to answer.
If, as is often said, the price of platinum is significanty if not mainly determined and supported by industrial demand, which is largely due to the use of platinum in catalytic reactions, then just what exactly was determining and holding up the price of platinum for all the years BEFORE its widespread catalytic use in industry, which only happened post-WWII? The price of platinum had been near, if not higher than, the price of gold since at least the latter part of the 19th century, so why was it so highly priced then, when industrial demand for it was surely minute if not non-existent?
The demand might be low but so is the supply. Only 30 tonnes are mined each year. Compare that to a whopping 2800 tonnes of gold. At least that's how I see it. It also explains the volatility. Low volume = high volatility.
Again as before stated in earlier comments, throw out all the prices of anything physical because price discovery has not taken place. Just place your bets on your favorite horse and enjoy.
The same goes for real estate you know, you can own productive real estate such as farmland and reap there too (no pun intended)
Did you say "OWN" real estate? LOL!
I understand that, Fall, but that still does not address my question as to what was buoying the price of platinum before its widespread industrial use of the past 50 or 60 years?
Maybe it was barbaric relic's cousin... thus worth one barbarian. Shit, I'd love to have a barbarian right about now.
Because Dr. Smith ("Lost In Space") tried to corner the platinum market (from Alpha Centauri) :)
Actually its industrial uses go further back than most realize.
Perhaps these links and their info will help.
http://bullion.nwtmint.com/platinum_history.php
http://www.penoir.com/platinum.htm
Thanks for the links, RMW.
If you own it. Nobody, including blythe can take it from you.
thats what your investments in brass, lead and steel are for. PMs have each other's backs.
For all the bravado that the current PTB have, they will not send anyone out to collect PMs with not aleast a masters degree in barbaric intuition. Just get a joke going and it will nuetronis (negate) any buerocrat short of oppenhiemer.
FWIW: Me and Newt are expensing this thread for tax purposes.
That's what some other people thought when they used their bullion as collateral for their silver contracts at MF Global.
Jamie and Blythe got it even though it was in segregated accounts. And then they proceeded to use it to satisfy some shorts that needed settling.
The thing about the Gold and Guns crowd is that both are dirty. You dont have to be a Madlock to know that 99% of the people playing the PM market wont show either type of residue.
The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold.
And don't think they won't do it again.
If you stand for delivery prepare to have your account confiscated when your broker "bankrupts" in the next (pre-planned) MF Global scenario.
Got Milk ?
[retracted]
gold can have some pretty big dips and still be a good investment for some. Let me give you some reasons (which have seemingly flown under the radar for a lot of folks) as to why some people might want to own gold regardless of the return on investment.
Situation 1: You are 50 years old. You have acquired some assets but not nearly enough to tide you over in your old age and you are fully aware that you will need to rely on government benefits for supplemental income and medical care. Having over 50% of a brain, you also realize that by the time you are old enough to draw down these benefits, qualification for the benefits will be means tested and in many cases you will be expected to exhaust your personal wealth before obtaining benefits.
Situation 2: You are 35 years old. You have two children ages 6 and 8 for whom you are attempting to save for college. You only have earned income to generate the college savings and your income is less than $200K but greater than $50K. In 11 years you will need to to complete a FAFSA form listing your assets which the college will then use to determine your expected family contribution to the education of your children.
Assume that in both situations, you cannot break off any "big chunks" of cash between now and retirement or tuition billing time and thus currently have a choice of incrementally saving FRN's in a bank, buying equities through a brokerage, or purchasing, for cash, physical gold or silver. (Of course, the government can easily discover wealth held by you in the form of the first two investments.)
i am not suggesting that anyone break the law. however, in a world where everyone (but you of course) is gaming the system, a world where even the sec of the treasury cheats on his taxes, i am merely suggesting that there are substantial incentives to own PMs beyond return on investment. on a personal note, i do not believe that you should be taxed to pay for my medical care nor do i believe you should be taxed to pay for my child's college education, (but you and i don't make the rules, so there you have it).
Exactly....if you are LONG gold you are going to get hurt? I mean 15 - 20 years? hurt?
No. allocate 5 - 10%.....or 20% if you are particularity squeezy about the dollar & ride it out the next decade or two.
This is a no brainer.
how about 80%?
80 - 20 Ag to Au sounds good to me.
or 90%...
The risk goes up when you're overly rich in one class of asset. But if you're really sure bad thingstm will happen, for example, and you were sure of that back in the late 90s, your dollar-cost-average might be, say $600/oz and you can tolerate a LOT of risk. This is the benefit of slower accumulation in a semi-stable environment. We're not in that environment any more, but I would argue strongly that the risk is much lower to go from 0% holdings now to 80% than it is to go from 0% to 20% and stay put, over the next 10-year time frame.
I would also say that if you're middle-class or under, you can accumulate slowly with cash purchases for the moment, so everything is off the books (legally.) The downside to being well-off is that it's very hard to move into hard assets without at least a little paper trail, though it's not a big one (wire transfers going to FINCEN, basically, and not easily searchable regarding exactly what was purchased.)
My biggest financial regret so far in life has been not committing to AU more strongly when I was younger, though thank god a crazy conspiracy radio host opened my eyes to a few things in the mid-90s so I got in at $250.
But even if you have accumulated a lot, what you have may have been traded for whiskey and hookers. It just might have had the great misfortune of so much of my gold and silver...a terrible boating accident left it scattered everywhere. And for that matter, someone could choose to accumulate wealth in FRNs and leave them in a safe someplace with the same plausible explanation that they were all spent, stolen by the kitchen help or your children, or handed out to nieces and nephews at Christmas. Of course a $20 FRN from 1912 would buy a hell of a lot more back then than it would today, while a nice double eagle would buy about the same stuff today as it did then...
FRN? 1912? WTF?
Au contraire (get it, Au? Hah ha ha ha) there's a simple way to be fucked in the end. It'll just become illegal to own (no confiscation) and buy or sell the stuff, making reconversion back into the dominant fiat of the land more difficult. The guns/ammo paradigm redux.
yes. the horns of the dilemma. the large and mega transactions (house, car, land etc.) are we entering the cashless society? we have to say goodbye to all that. does anyone really want to exchange those ringing metals for that paper shit ever again? it will have to be coerced! the black market thrives. Ag and by that i mean Agricultural, and of course "the guns/ammo paradigm". Raise animals, farm and garden. the potential is limitless.
I would gladly trade my produce for your gold.
That's certainly one possibility, as is a 90% windfall tax in the event that a new currency is gold-backed, as was suggested by Rickards in his book Currency Wars.
I don't see either of these things happening for one very simple reason: not that many people own gold, so why bother? The numbers here are small and insignificant. It would hurt coin shops and other buyers/sellers of PMs to ban sales, and I don't see the government getting anything out of the deal, so again, why bother? And I'll predict right now that if they try to do a confiscation, all they're going to get is a bunch of boating stories involving lost gold. Regardless of whether there is a documentation trail through credit card purchases, they have to actually get the physical, and I think very few people are going to part with their gold willingly this time around.
I certainly wouldn't be surprised to see the government make a stupid, ineffectual move like banning gold sales/confiscation, but how much money would it take to enforce such a law, and would it really be worth it? This is not the 1930's where people still used gold for money and many people had some. They'd be better off just letting the gold holders take their profits because (IMHO) many people will still hold onto their gold regardless of the price, so it would be merely a blip of profit-taking. Cognitive Dissonance made a good argument for some kind of action from the government concerning gold, but I have to wonder if folks here think this way because gold is one of the few "investments" that has the potential to hold its value through deflation, inflation, currency revaluation, or currency replacement, and many are personally invested in physical? It's not necessarily a bad thing to consider all the possibilities, but to my eyes, the numbers are not big enough to worry about. More succinctly: ya'all are being paranoid.
Good post and good arguments, Geekgrrl.
On the other hand, it must be pointed out that many authoritarian and totalitarian regimes, such as the USSR, Nazi Germany, and China (until 2004) all banned the sales and even ownership of gold as well, and in each case they had NO reason whatsoever to worry about any windfall profits accruing to gold owners in those particular episodes --- yet they banned it anyway.
I agree it's possible, but if this site is a barometer, people will just hold onto it until this insanity passes - and it will. It might not help us, but it will help our heirs.
As the saying goes: there is hope, but not for us.
The 1930's law was barely enforced, it really was just used to pull the gold from the banks and to enable the dollar to be devalued, and the 1%er's aren't exactly known for gold holdings so there's very little propaganda value in taking it or taxing it. I keep puzzling over how devaluation is enabled (outside of inflation) when they don't have such an easy play as the 1930s to repeat.
An outright ban as a competing currency would be possible if it started to compete signficantly, but that seems unlikely at this time.
Where keeping ownership secret does make sense, I think, is if there is any sort of widespread "one time" (ha) asset tax, or significant means testing. Both of these are things that have been seriously proposed.
Also, we have a very greedy government that sees asset seizure as a source of revenue, and is willing to bend the rules quite a bit to allow this to happen -- in which case having a valuable, portable asset off the books is another safety net/insurance argument, since as you point out, it's a lot harder to get to that just transferring a bank balance. Of course by that nature, it is also something the government actively looks for in cases where seizure is in play (nearly every drug warrant I've read specifies "cash and precious metals.")
So I wouldn't say it's being paranoid as much as actively trying to not be a target of opportunity.
Certainly any gold (or silver) in safety deposit boxes is ripe for being seized, and like anything else, the low-lying fruit will be picked first. Gold "lost at sea" will be harder to come by, and may just seemingly disappear forever.
But I agree with you about not being a target of opportunity. Particularly for municipalities, there is going to be a bending of the rules to collect more income.
Can someone explain to me how the gubmint is going to know which 1% of the safety deposit boxes have gold in them?
Seeing as there is no such thing as a "safety deposit box", I don't think they are going to have any trouble with them.
(I'm still waiting for somebody to describe to me how one can physically deposit safety into a box.)
It is called a "SAFE deposit box", you boobs! NOT "safety"!
I bet you also talk about "PIN numbers" and "ATM machines" too.
Is that what it's called? I thought it was a safety deposit box, but I could be wrong.
Regardless of what it's called, if the bank can see what you have in it (and they can), then if there is Au or Ag in it, then I think that would be reported and then subsequently seized. Do you think it wouldn't?
Good point geekgrrl.
Well, supposedly the banks cannot "see" into your box without you supplying the second key to open it, short of drilling it open. And while I have heard of the latter occurring in certain cases, it is not going to be practical on a widespread basis I think, as I hear the job is not easy and rather time-consuming. As for the former, while I can easily imagine that the banks might in fact keep a second, secret "customer" key (WHAT! Banks lying?!), and could access your box without your knowledge, they do strenuously deny that that is the case, and I have never heard of any evidence to support that theory --- to the contrary, in fact, as they DO on occasion drill open boxes of known criminals who might have hidden evidence in a safe deposit box, for example, and one has to assume that if they didn't need to go to that bother by having a secret customer key, they wouldn't.
My gut feeling? Bank safe deposit boxes are a relatively safe option for storing precious metals, IF one can quickly access it on short notice --- say, a few hours at most. I have a hard time imagining that some bank holiday or shutdown would literally occur out of the blue, with no warning whatsoever. When that bastard tyrant Roosevelt did it in 1933, there were several weeks, at least, during which the writing was on the wall, and people were pulling their money (in gold) and other valuables out of the banks that were not yet closed.
Thanks for that perspective akak. Although I'm fairly confident I could open a "safe" deposit box in less than a minute without any keys, I really don't believe they don't have copies of the keys in the back office.
The problem with trust (like credibilty) is that when it is lost, it is not easily recovered. I predict there will be much "buried treasure" going forward, both large and small.
I keep puzzling over how devaluation is enabled (outside of inflation) when they don't have such an easy play as the 1930s to repeat.
Inflation (currency printing) is all they need. They can take the dollar down to zero that way.
I don't think gold outlawing / confiscation would work politically. China allows their people to own gold now. Outlawing it here would be a huge political black eye.
Youd never get a gold backed currency ever again. It would be impossible to defend in todays market. Farmland, some PMs, who cares what happens to the monetary system?
guns, lead in finished product, gold, coke and hopium-all illegal; hmmm
sounds like a get rich quick scheme
lets us evaluate;
1st amendment trashed
rights stripped
2nd next?
and that will be the wake up call - if not heeded, well ,might as well join the millitary to be on the right side
or get the fuck out of dodge...
Sorry Jeff, but you're wrong. Earth is in space and space is a vacuum. So everything happens in a vacuum. Attention to detail is paramount.
It sucks, don't it :o)
Can someone explain to me why I would want to buy a miner/junior miner instead of gold?
I've been thinking about this for several months. I can't see the benefit but would love to.
Buy mostly physical and sprinkle a little miner on top for that extra umph!
leverage without the margain calls. Gold goes upto $2000 you have made 30%, but the miners profits double.
Some of my current aussie miners are not doing so well, but others more than make up for it, I bought some that had a market cap suggesting in ground gold was worth $12 ounce. Still only paying $120 an ounce.
What about input costs like energy?
Energy stretches the miners on the margin..gold goes up regardless. So why buy the miners?
They're not bears, but it'll do.
http://www.youtube.com/watch?v=fFg0mp9Z2xk
miners are definitely coming into play. when the Comex busts, they will crucial for the commercials. check out CDE.
how are miners going to be crucial for commercials after "Comex busts"?
What the fuck difference does it make if you've got a fake account with a reset button?
Let me fix Bobby D's post:
"Can someone explain to me why I would want to buy a miner/junior miner instead of gold (in my paper account)?
I've been thinking about this for several months. I can't see the benefit but would love to."
If you want to own gold, you buy bullion.
If you want to own a miner, buy a mining company.
If you wnat to wn a gold mining company, buy a gold mining company.
They're separate businesses/investments. Period.
Buying a gold mining company to own gold is like buying an Italian bank to own Italian sovreign debt.
The theory is that they would explode as the gold market goes parabolic, as they did in the 79-80, when many fortunes were made. Of course, those people fail to account for the fact that GLD and other paper products sate the desire for exposure to gold. They may still be correct, should something happen to prove to the public that those ETF's are simply not to be trusted.
I myself don't advise owning any more paper than you are willing to stuff down the toilet on the results of a coin flip.
But what if energy costs go parabolic? That's not good for miners.
If gold goes to $2500 and silver to $100, which I think is highly probably, the miners are going to be printing money. That is why gold and silver stocks could very well be the investment of this decade.
Why? Trend following. If the mining stocks begin rising, many investors are going to jump on the bandwagon. And why not? There will be money to be made. And what other industries/sectors are going to be making money? It's possible that the gold/silver mining sectors could be one of the ONLY sectors making money.
My feeling has always been that history will repeat itself with regards to gold. If you look at the 1930s and 1979, the gold mining stocks did really well. It's likely that will happen again during this bull market.
In January 1980, nearly 20% of the value of the stock market was gold and silver stocks. That is a stunning number. And it occurred from a mania into these stocks. Today, the valuation of gold and silver mining stocks is less than 2% of the stock market, and the total for all gold mining stocks is about the valuation of Microsoft ($250 billion). For silver mining stocks, it is an incredibly miniscule $25 billion. That's it people. The potential for these sectors to explode in value exists.
Very few people are interested in gold and silver mining stocks today. A big reason is the ETFs: GLD and SLV. Why buy stocks when bullion has done so well? In fact, bullion (up 500%) has been a safer play than stocks during this bull market, so that has been the trend. But this will change in my opinion as silver passes $50 and gold passes $2000. The upside will then diminish for bullion, yet increase for stocks (because of leverage).
I think all of the gold and silver stock categories (majors, mid-tiers, and juniors) will do well going forward. The dividends from the majors could be incredible. The mid-tiers could easily triple in value. And the juniors should blast off, with many returning 10x their current values.
A 10x return is a called a 10 bagger, or what I call a homerun. In my opinion, their are going to be a lot of homeruns in the juniors. There are about 150 decent gold and silver juniors. I would expect at least 25 of those stocks to be 10 baggers. Some of them will be 50 baggers. As a group, the juniors could become the investment of the decade (yet today no one wants them!).
The last time there was a mania in gold and silver stocks in 1979, there were at least 10 stocks that were 100 baggers.
We have not had any sort of mania yet in these stocks. However, First Majestic Silver rocketed from $1 to $28 from 2009 to 2011. It has since fallen back, but I think it will eventually reach $50. And I don't think it will be the only 50 bagger during this gold bull market. FM and a few other stocks have been clues of what is going to happen.
I don't know if 2012 is the year mining stocks take off (probably not), but I do know that majors will lead the way. As gold and silver prices rise, the majors will increase their dividends to the point that many investors will be enticed. That will be the transition into the mania wave.
So, do I have your attention? Are you now perhaps a little interested in gold and silver mining stocks? If so, go check out www.goldsilverdata.com.
Newager
yea yea yea....I get that.
Gold @ 2,500
But what if OIL is @ $300 p/b (hypo)?
Would you rather have gold or have the ability to drive your car?
Unless someone comes up with a viable way to power the bloody things, absent oil (and very expensive oil is functionally equivalent to 'no fuel available', for the man on the street), we're all gonna be giving up our cars in the relatively near term anyway. So why worry about it?
The way I see it;
I don't need (obviously I'd like to) to travel more than a few miles with any great regularity. Walking and cycling have that covered.
Something will evolve to cover those few occasions where I need to travel a greater distance, or cover a short distance with a heavy load.
I do need to eat and do not need to freeze my posterior off in the winter.
Where are the fruits of my productivity (whether manifested in fiat, gold, silver, etc) better spent?
We are, of course, assuming that the elite will allow mobility at all, come the day. Personally, I wouldn't, if I were faced with running the post-oil world (while keeping my G650 and fleet of Ferraris, of course!); I'd do everything in my power to make the population stupider, less able to communicate, functionally illiterate if possible, limited in their mobility, unable to access proper healthcare, stressed, overworked, barely nourished and at the mercy of the elements summer and winter. Thus making life a struggle for bare survival, with no time/energy left to think about much else than work, women, beer and betting.
Why? Because if I don't take that approach, they'll all too soon come knocking to take away my shit!
It only sucks until you equalize.
Nothing happens in a vaccum? Never seen one of those Dyson commercials then, have you? Shit's swirling around madly up in there.
a much more compelling analysis.http://www.theundergroundinvestor.com/2011/12/did-bankers-deliberately-c... and regarding the the hysteria over the compensation of investors at MF Global, we have the following from Bob Chapman:
It is important to note that there has been little balanced reporting of the events surrounding the MF Global episode.
A recent decision by a judge seems to portend that the Lehman Bros. Holdings dispute with Barclays regarding securities in customer reserve accounts, margin accounts, as conditional is an event that could well influence the status of client accounts in the MF affair. The SEC has sided with the judge in that clients should be made whole and then the creditors will be attended too. The US Bankruptcy Judge James Peck’s ruling that told Barclays to return $2 billion in margin assets to Lehman should stand.
Relating to the MF global situation a lawyer for the CFTC has said creditors cannot put their private interests ahead of customers’ interests. Lawyers for creditors disagreed, but the CFTC says the trustee shall distribute customer property ratably to customers on the basis and to the extent of such customers’ allowed net equity claims.
The administration has already repaid $2 billion to customer accounts and is in the process of retrieving the remainder. Thus, it seems the clients will be made whole. http://silverbearcafe.com/private/12.11/trouble.html
Gold and silver goes up a little after CRASHING and the gold and silver cockaroaches come out to play. The correction is only the biggest in the past 10 years but not the biggest in history as portrayed this author. Buy pizza instead. At least you can eat it. Better yet stock up on guns, ammo and high alcohol content booze. You can trade all three for just about anything and if their prices decline by much you can at least shoot yourself while being completely blotto.
You don't stock up on alcohol. You acquire the equipment and knowledge to make it. When the time comes when you would trade alcohol for goods and services, no one will be around to enforce their now useless alcohol tax laws. You can setup production and distribution providing yourself with a continuous stream of incoming wealth. Having a still is not illegal and you can use it to purify water which could be critical in the time leading up to total economic meltdown.
that's a hell of a lot of work. i think you can effect an exchange at the local discount liquor for cases of your favorite hard liquor for pennies on a future hyperinflated G-note.
There's a nice site out of Kiwiland, I believe, called homedistiller. Check it out.
"acquire the equipment and knowledge to make it."
Very good suggestion.
Thats the hard /expensive way. Check out the amazing still instructions at brewhaus.com
Great site. Lots of stuff, but I'm not so sure shipping them is exactly going to stay under the radar.
Bigger unit(s):
http://www.coppermoonshinestills.com/
Make your own alcohol, huh? Interesting notion, but I'll probably pass. When the SHTF, I suppose we can expect a turbulent reset lasting....I dunno....several years? 20 years, maybe? Maybe even a lot shorter. Zimbabwe just ran through a monstrous hyperinflation, and as I understand it, their "currency" finally collapsed. Nothing else has changed: Mugabe's still stealing everything not nailed down; the Army's stealing the rest, but there's a new currency now and, just a few months later, life goes on.
So in that turbulent period before a new coin of the realm arises, what do you think will fetch a higher price in barter? A jug of "Long John's Rotgut and stain remover" or a bottle of Johnny Blue? Count me as a stocker-upper.
Dear BelowZero,
Actually, you are wrong --- this latest correction in the price of gold is NOT the largest in the last ten years, as the price of gold fell more in 2008 in percentage terms. Focusing on the nominal dollar decline is all but meaningless, and rather disingenuous, in this context.
I was quoting the article's baloney off from their chart and story. You gold cockaroaches need to switch to pumping and buying lithium since it is used to treat manias.
I take it that your handle here is a reflection of your IQ.
I thought it might be his trading account balance that is below zero since he is such a gold hater. How is that gold short at $800 an ounce treating you, BlowZero?
Hey Killian, here lies Below Zero, now plain zero.
Hey dickhead, they use lithium carbonate for fuckers like you, not the metal lithium which is a highly reactive metal.
But then I appologise if you mean by cockroaches that when the fiat currencies implode in the order of a nuclear bomb the gold holders will still exist.
below zero brains
like ground hog days
things just go over and over .. the zero brains rip gold while it continues up '
at 2100 gold come out swinging again
http://www.jsmineset.com/2012/01/05/persistent-panic-proves-predictable/
Nadlers of the world, unite!
You have nothing to lose but your chains .... and your bracelets ... and your earrings .... and your cufflinks ....
When trolls come, fear not! For dumpster and akak will take out the trash.
You guys are not even good gold promoters. When I posted the truth I fully expected you gold lovin cockaroaches bozos that seem to inhabit Zerohedge would go bonkers that someone dare confront your lunacy. Now all you can do is give me a down arrow or recite nonsense? I heard you morons pumping silver at 50 and gold at close to 1900. How did that work out morons?
Do I need my Jon Nadler decoder ring to decipher your posts? Apparently so.
Nadler? No ...just an unflouridated independent brain that isn't making a living by shilling.
Please point to the post, and exact statement, in which I was supposedly "shilling".
Now, if you want to discuss you and bashing ....
Paranoia! Symptom of being bitten by gold cockaroaches producing a high fever that makes one think that someone that thinks that gold is not God is evil....
What is it about ZeroHedge that draws schizophrenics off their meds like flies to shit?
I can think of $15+Trillion reasons WHY you should some hard commodities. Two more wordz: Exponential Functions.
[EDIT] this was in reply to below zero's comment, not you Akak (frikken cyber-gremlins...)
Hey Zero - the dollar is a delusional measuring unit. "Price" movements in PM's are now essentially meaningless. Lesson over. You can go take your meds now.
way below zero
crap for brains
at 4.25 dumpster was shouting load the truck .. at 300 gold ditto
of coiurse that was before you popped out of a trash can .
at 500 gold at 10 silver ditto
at 750 gold at 15 silver ditto
yadda yadda
gold will go to 2100 2200 this cycle then you way below Z can pop up from the trash can as the next consolidation in gold takes place silver at 70 such
then you can repeat again ,, your abject lack of physical gold .. and your twenty something brain in the diaper you wear
gold is on track for 4500 .. silver 200 plus .
now either you join the party or stick a brown paper bag in your zero ...
bush's fault
Oh, you mean Obama's election?
Nixon's fault
Voter's and the enlisted men's fault.
Lest you forget, Japan dumped 100+ tons of scrap gold onto the market in 2011 and the pace isn't slowing.
Japanese garbage - it's made of gold!
I thought Japanese garbage glowed....
As is so often the case, the gold mafia boys stopped a furious gold advance at 3 AM NY time in London when The Gold Cartel traders reported for work.
How many times does this have to occur before it gets covered by the gold market press? Five hundred? One Thousand?
Nope, the cowardly gold press sycophants will never go there.
Instead, they will point to a much stronger dollar as the reason for gold’s price drop. But, that was not the case yesterday, was it? Nor was it the case this morning when gold was flying.
The gold price was up $4 while the euro was down a point or more. That is a fact. The price drop was nothing more than an orchestrated hit job by The Gold Cartel, one that was advertised to other gold traders in advance.
Again, this is just what Andrew Maguire revealed to the CFTC about JP Morgan years ago … and told them in advance also.
And still, the lightweights at the CFTC have done nothing about it. They have been investigating Morgan for 45 months and done NOTHING.
Who can investigate for all that time and have it go nowhere?
If there were nothing to the charges, they would have closed up shop and let it go years ago.
www.lemetropolecafe.com
calm down, sir. the gold mafia boys and the Gold Cartel Traders and the (cowardly) gold press sycophants can hurt you no more. you are free. free gold.
i think it's safe to say that at 45 months, it's not an investigation anymore.
After 45 months of living together it's practically a legal marriage where one party cannot testify against the other.
Point 2 - $ rising should be bad for gold, no? Hence the reason for the long gold short EUR pair trade...
Gold doesn't exist in a vacuum. Like every other market that is traded, it goes up and down. Wow, real news here. Besides the issues raised there are other reasons as well, including but not limited to Central Bank manipulation to force out weak longs.
http://vegasxau.blogspot.com
Gold does so exist in a vacuum. It's just not surrounded by air.
Fuck all that...
It's Euro:Gold as we speak...
The Euro is the "NWO" poster boy currency... If it fails... Then the NWO gets dealt a setback (How could the illuminati have ever figured that FORCING intimate cross cultural boundaries that have HATED each other... & have been at war with each other... for more than 2 millenia... to share a common bond under a Zion based usury system... would be a bad idea)... After all... They're the 'Illuminati', right?
The Euro can't fail... WELL... OF COURSE IT CAN, but bear with me... If it DOES... Then it deals a setback to the NWO in their NEXT PHASE of a single world currency...
Gold is tethered to that as we speak... & as we speak, there is little faith in the Euro... Gols WANTS to break out, but the Euro is holding it back...
I can't rightly say that the Euro will survive... But rest assured that if it does, it will only be in a way to bring it together with the dollar in the next step... There's too much risk in letting the Euro fail (which would temporarily strengthen the dollar, which would make it TOO EASY to acquire gold in dollars - which the Chinese & Russians would do in a heartbeat)... The end result would be a Sino~Russian partnership which would obliterate the dollar...
The NWO is TOO INVESTED in a Euro/Dollar hedgemony at the moment to permit a "Plan B" to happen...
For those who are interested in why gold is down, I proposed a theory this morning on how and why this may be happening. I would be curious to hear what you think.
http://tradewithdave.com/?p=8993
Dave Harrison
www.tradewithdave.com
i give it the big bow wow! seriously, very informative. actually this was a fine break down of the manipulation. every dave i know is pretty astute with the Au. thanks
I suspect the selling came mostly from European banks who had been "lent" gold by their central banks to keep them from going bust. I suspect such selling waves will continue whenever bankruptcy threatens. These will be buying opportunities, because Asians will buy the dips.
Why has gold been down? My theory - European central banks have been liquidating their gold holdings in order to stay afloat, thus flooding the market with gold.
My theory - European central banks have been liquidating their gold holdings in order to stay afloat, thus flooding the market with gold.
**********
I think you might be right--either lending it or swapping it for USD's-
They made a large gold/usd swap in 2010 with the BIS when credit started to lock up-
Gold is down because deflation's claws have ripped into the skin of the hyperinflationistas!!!
retarded. embarrassing. the skin of the hyperinflationistas"? put down the comic books.
If by comic books you mean the wsj, Forbes, Money magazines...they went out the window a long time ago. Maybe you should take a peek at the dollar...whoa, it's gained strength over the past few years! But, but, Ben is printing they say...why, silver is at 29, how can that be if PMs are a proxy for the debasement of currencies?.. Gasp..........could it be ongoing deleveraging that will ravage the world, including gold?....?..
There's some truth to that because earnings and sales are back down in the pits.
But mostly it's down becauase it needs to be down cause it's going up and if it starts from down it won't go as high as if it starts from not down.
There's some truth to that because earnings and sales are back down in the pits.
---
Perhaps sales are down because people can't afford the price of things in the store???
I guess you never go shopping. What a moron. Also the fiat paper becomes more worthless each day especially with the muslim printing with The Bernank.
Funny, because I look at the Rogers index of agricultural and general commodities and they are all well below their 2011 highs. And last I checked, commodities are used to make stuff, which we buy when we go shopping....jackass
Disingenuous bullshit answer, you clueless deflationary flat-earther. Go kiss Karl Denninger's ass.
(Sorry, but you asked for it.)
The last time I looked, prices at the grocery store did not swing in direct relation to any commodities index, nor do they EVER fall to any meaningful extent, if they fall at all --- on the contrary, they virtually always continue to RISE. If we were really experiencing your supposed "deflation", and its accompanying mythological appreciating fiat currency, shouldn't we be seeing just the opposite --- and in spades?
You can believe the claptrap and lies emanating from the BLS and Bernanke's lying piehole about "low inflation" and the laughably manipulated and absurdly lowballed CPI all you like, but I will continue to put trust in my own real-world experience and the evidence of my eyes (and shrinking pocketbook), thank you.
Ever notice the amount of people in a grocery store during a "Doorbuster" sale compared to normal?
How many are using coupons, compared to, say, five years ago?
Everything is going up except wages.
A lot more using EBT cards.
Icorporations look to exploit profit margins by maintaining high prices even though their costs drop as deflation begins to rear its head.
Any of you bitchez ever hear of lags in different economic time series? Now the real key is to figure out which is the driver and which one follows. You might be able to figure this out from your graphs. Now take the red crayon in one hand and the blue one in the other hand...oh shit, nevermind. You're both so fucking convinced that you're right that there's probably no use in talking to either one of you.
Yes, you are correct, I AM convinced that I am right, because I have the evidence of my own eyes and everything going on around me to convince me that our sociopathic government and their central banking fuckbuddies are depreciating, and will continue to depreciate, our God-cursed fiat currency in the face of their insurmountable and mounting debt. In addition, I have the historical evidence of HUNDREDS of episodes in which overspending central governments found themselves in EXACTLY the same financial situation as ours is today -- and there is not ONE example of an appreciating fiat currency to be found in any of them.
On the other hand, the deflationary flat-earthers have .... the assurances of Karl Denninger and Ben Bernanke. Enough said.
The same psychopathic PTB that enacted NDAA to ensure that in the aftermath of (obviously feared/anticipated) economic collapse, 'terrorists' (code for rebellious Americans) will be thwarted from usurping power.
Gold is down because deflation's claws have ripped into the skin of the hyperinflationistas!!!
On 9-30-08 gold closed at $725 / oz.
In October Bernanke started printing and bailing out banks (September was TARP - congress).
Now 3 years and trillions of printed dollars later, USD has lost 1/3 of it's value.
To compensate for 1/3 loss of currency value, prices must rise 50% ...about what we've seen since '08 (except housing where prices are falling from severe demand collapse).
Gold rising 50% would put the price at $1,087 / oz.
But gold is around $1,600 / oz now.
Doesn't sound like any deflation to me.
And no, it's not hyperinflation either. In my book hyperinflation is around 50% inflation per year. We're not even close to that ...yet.
All it takes is a few facts and simple math to put you fiat currency cheerleaders in your place :)
Hi all.Thank you Tyler(s)and all blogers for the great site.One pint of beer for everyone here.
neat graphic on gold .....
http://www.numbersleuth.org/
Nice. Thanks Greg!
Gold usually goes down during a crisis (see 2008/early 80's). This leads me to beleave we haven't reached the bottom just yet. Still, even though it might drop some more gold is gold and we can only mine so much whereas dollars can be printed infinitely.
Exactly. This gets to the heart of what makes gold a form of money par excellence.
Gold has almost zero industrial demand-the jewelry industry uses less than new production supplies-in fact the top in jewelry demand was in 1999-the depths of the bear market for gold-it's been in decline since then-
So--"something else" is driving gold-
Could it be simply money demand?
I think this crisis is fundamentally different. I think that when major banks begin to go bankrupt, we're going to see hyperinflation because all of that sequestered bailout money which exists only on balance sheets today will be released into the consumer market once banks are required to liquidate their holdings.
we're going to see hyperinflation because all of that sequestered bailout money which exists only on balance sheets today will be released into the consumer market once banks are required to liquidate their holdings.
************
So how will they deliver that money to us?
With unemployment climbing-wages falling-how will it end up in our hands in order to crank up the velocity that is always present with hyper-inflation?
Unless they just give it to us-how is hyper-inflation even possible?
The Yakuza in Japan are still going door to door looking to buy gold. I'll start thinking about selling when that changes.
Regarding the recent US dollar "strength": Charmin is Brawny in the empire of toilet paper.
Thanks for the beer valkir.