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Guest Post: Why You, They And — Hell — I Might Just Buy That Parabolic Move In Gold…
Submitted by Gresham's Law
Why You, They And — Hell — I Might Just Buy That Parabolic Move In Gold…
It may be just me, but it seems like majority of market participants are terrible at dealing with one of the rudiments of life as a human being; time. It is almost as if the herding man lives in constant contempt for his former self and dogmatic surety about his current convictions (whether they relate to past, present or even the future). If this hunch happens to be true, then it doesn’t take much to see the folly – for surprise surprise; as time passes the much-loved present conviction joins the realm of past regrets. So to thwart the arrogance of the gold bubble-top callers and the long-for-the-sake-of-being-long speculators here I outline why you, they and — hell — I might just buy that forthcoming parabolic move in gold.
Apologies if I sound like a broken record – but nothing about the future is obvious. However, given that the typical 21st century futureologiest has a tendency to look at the past to guide his actions – gold may be regarded as particularly perplexing. For whereas equities have never (ever) met the widespread expectation that characterises its top (i.e. a ‘permanent plateau’ of abundant delight – a cornucopia), gold has frequently met the widespread expectation that envelopes its market top; hyperinflation. Gold, widely regarded as the objectification of worriment, has no precedent of not meeting the expectation held at its market top. Unlike most other assets on the radar of the speculator, the currency price of gold has often never returned to the levels traded on the eve of the bull run.
So regardless of your current convictions about your future self, I suspect that the great question that will haunt you will be this; what if this is one of those times? Pictorially speaking; will it be this:
The gold price's ascent and descent during the 70s & 80s.
Or this:
The paper mark price of gold... still waiting for it to come back!
The man who takes the time to peruse the history books has the comfort of knowing that the expectation associated with stock market tops has never before come to pass. However with gold there is no such luxury!
The Point:
So why do I mention this? And why now?
You may have guessed the reason but nevertheless I’ll spell it out – recent price action in gold may invite premature I-told-you-so’s from the gold-skeptics:
Daily Gold Futures Chart as of 14 December 2011 - Click to enlarge. Source: FINVIZ.com
Consider the musings of the gold top callers — after a decade of popping bubbles they’ve made a note to themselves and said ‘ Aha! I know how this works now! All I have to do is call a bubble whenever the price of a financial asset rises!’. I would argue that they have no idea about the environment that characterises a bubble-like top in an asset like gold. With the usual irony that is witnessed in the speculative arenas of life; they seek signals that do not correspond to the reality that they deal with (or so I presume). As I mentioned above – the future is not obvious. One implication of this is that it is never ’easy’ as such to accurately call the top of a bubble! To call a bubble top right now really has few consequences – prices today aren’t wildly different from yesterday and all you might miss out on is opportunity. This kind of thinking may make a little sense when you’re shuffling paper titles to assets – but I would argue that it doesn’t apply so strongly to gold. Try calling a bubble when the implication could be that you lose virtually everything just by the ‘risk free’ asset; cash!
The arguments of the gold bubble callers aren’t the only ones that are contemptous towards gold – another set of peculiarities comes from the ‘long-for-the-sake-of-being long’ speculators. Some bizarre communities of investors (MMTers ahem!) really don’t believe that central bank balance sheet expansions debase currencies. But that’s not all – they nevertheless are friends (or perhaps ‘frenemies’) with the long gold trade. The reasoning goes that others foolishly believe in the fairytale that fiat currencies can be debased, therefore they buy gold and so you front-run them. While I admit that the degree to which the market discounts the debasement of fiat currencies (via the bidding up gold) can be extreme – I scarcely acknowledge the premise! Anyhow, leaving this strange mode of thinking aside for a second, the implication is that these people think that they’ll just ride the bull market to the top and then get out. As I said above: – try doing that when you would really (really!) pay for that decision.
And now let me mention the final reason why I’m posting these thoughts right now: these attitudes may have the platform to gain ground over the coming months. We may have reached an inflection point in one of the indicators that people consider to be very important when dealing with gold (note: we don’t necessarily agree 100%) — the real interest rate:
Of course the longer-term picture remains unconvincing for positive real rates on the short-end of the curve
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For a second there I thought someone gave the keys to this place to ace .
WTF was all that about?
I dunno. I thought he was on a roll, then seemed to go in a couple of different directions. Maybe its me, but I reread it a couple of times and didn't get the point.
Is it, You can't call a top or bottom? I can say that in seven words.
It seems to me that there is a paragraph missing at the end, starting with: "Therefore, ................."
That gold run up until 1980 didn't even start until the Fed started raising rates. Once the malinvestments are show, that inflation geenie suddenly pops out and doesn't like to be put back in the bottle. I can't even imagaine how high gold will go from here if the malinvestments are exposed.
TheSilverJournal.com Q&A
Speaking of the inflation genie and Weimar - tonight I saw something creepy. I try to watch prices in the grocery store to get a handle on what is going on with pricing. Same stores and make mental notes. Almost everything is up. Christmas lights, bleach, you name it.
Cereal is a shell game where they have all sorts of box sizes to confuse you. You can usually get 16 to 17 oz of certain brands for just under $3. Well on a bunch of brands that price tonight gets you just over 12 ounces. One brand has 9 ounces though the boxes do not look smaller. Yeah - we need to worry about deflation when the fed is printing like there is no tomorrow.
The people aren't worried about deflation. The people enjoy deflation because it makes what you buy cheaper. It's the bankers and politicians who don't want deflation..not necessarily in the sense that deflation is bad, but if the deflation goes to the point where it breaks the banks, then hyperinflation will quickly ensue as faith is lost in fiat and then they'll no longer benefit from controlling the printing press. Yes, the deflation trade can work for a bit, but it is just a trade and the long term solid play is to expect massive inflation and a steep rise in gold and silver.
well, anyone who was a silverbug is getting a LOT less cereal for their precious stack
I sold at 46 and then again at 48 and used the fiat to buy a farm. I've been broke ever since fixing up the farm but at these prices it's time to start stacking the shinies again and start growing my own cereal.
Hmmm....did JPig just offload it's short positions on silver at $28?
@trav7777: We weren't the ones selling. Try to keep up.
I don't think he gets it. Try speaking slooowly and use simple words.
When I started driving, gas was 34.9.
I've got a silver Washington quarter and a Roosevelt dime that are worth over two gallons of gas today.
Those same two coins will convert to more than a gallon of gas as long as I live.
When I started it was just nine pence per gallon......
Only if you put ALL your life savings in at the peak AND realize your loss by selling immediately on price declines. My average price is $24
I want more gold and silver real physical not rehypothecised paper. In this context deflation is great! I did actually buy more gold yesterday.
NOTE: I have purchased gold and silver at their highs $1920 and $49.5 I was thinking damn wish I had more free cash at the time. With the belief we had reached some sort of event horizon on the fiat paper front.
Also I don't trade in and out not smart enough to do that and I always get my grubby hands on physical :)
It's going to hit the dumbest of sheeple very hard when they can't buy their favorite junk food, soda, baby food, diapers, etc at what they did a few months prior
Here's what I have noticed:
1. At my job we have been preparing our budget for a 40% increase in paper (magazine printing) for next year. We will be struggling with the new rules of the post office and their potential demise. Our parent company has already press released Q1 furloughs and potential layoffs.
2. My friend owns a restaurant. the $9.99 jar of mayonnaise he's been buying at CostCo for 11 years just recently went up to $12.50. He just got quoted by his food distributor on how many percentage points everything is increasing in price for the new year. At least 10%, if not more, across the board. Beef will be 15% higher.
Can't wait to see what happens when gas goes over $5.
BB ...who do U work for? just curious...I worked for RRD. for 23 years ...closed our plant in 2009...
Speaking of Mayo, I can't find a brand where the first ingredient isn't Estrogen-mimicking Soybean Oil. Now I'm making it at home from eggs and olive oil. Not only is the price going up and the package getting smaller, it's full of package-shrinking ingredients.
I knew there was a reason I've never liked Mayo...
I concur. I'm one of those gold, guns, and food nuts.
Well, actually I just think there's going to be wild inflation after listening to Beck for several years, (I was just a little kid in the early 80's, but I lived through the 24% rates and put $1000 in of Grammy's money, in a bond for 5 years, @ 19.75%. I think he's right with the information he's presented and what I see in my grocery store in Toronto. I'm not a real finance guy. I never even stayed in a Holiday Inn! But I do know that I've watched food prices going up over the last couple of years. A large tin of Folgers used to be, within the last couple of years, about $5.99.
I bought 36 last spring, when it was on the last sale at that price, of that size (that's a sneaky trick that is a good tell that inflation is happening when they change the sizes. Oh, not bigger but smaller... So you get less, just in case you were curious.
Well, those tins of Folgers are now regularly $10.99 at my store and $13.99 at Costco.
I don't know much about finance, but anytime I can double my money, I think that's a bargain.
I'm buying all I can of everything that can sit on a shelf. As I say to people, "I hope you can all sit around and laugh in 5 years, because everything will be wonderful. But if it turns out that it's not, you're all going to be in big trouble."
Herkimer
Freddie, next time you're in the grocery store, take a look at the half-gallon cartons and jugs of orange juice, grapefruit juice, etc.
If you look closely at the size on the labeling, you'll discover that it's not a half gallon anymore. It's some bullshit like 58 or 59 ounces.
You just know that some fucking ripoff artist marketing consultant got paid $800,000 to figure out the most that the size could be cut without anyone noticing.
Wait till you meet the space management folks.
That gold run up until 1980 didn't even start until the Fed started raising rates. Once the malinvestments are show, that inflation geenie suddenly pops out and doesn't like to be put back in the bottle. I can't even imagaine how high gold will go from here if the malinvestments are exposed.
Its all about perception of real and not-so-real dangers right now it therefore won't matter in the near term... Fact is: Dollar up, Oil and Gold that have moved in tandem over much of the year - down! Cash is king. Expect no definitive answer by markets before mid February. That's how we trade this, wade in and out carefully.
fact is not dollar up, oil and gold down.
Remeber August ? When gold shot up while the dollar went up and oil went down ?
Another US downgrade is coming.
Thanks all, thought my brain had fused.
Actually, the nothing is missing. Everything one needs to know about the piece can be surmized by noting the first two charts.
First chart, an almost 30 year period, is drawn on a non-log scale.
Second chart, covering only 5 year period, is drawn on a log scale.
If you dont understand the importance of the point, then keep buying the BS being fed to you by the Wall Street scumb, and the scumb that like to make money off of calling Wall Street scumb.
I find this much more interesting, and telling... http://youtu.be/huIXs_05H5E
In most things in life, it's always best to go full physical. But only at the right time. Otherwise one ends up going full retard. Never go full retard.
Thanks for pointing that out, but not everyone understands charts and their hidden (or obvious to some) meanings. This article being for our information is well appreciated as long as it is made simple for some of us to understand. And I am not the only one with that opinion.
Many of us @ZH are physical holders anyway.
Oracle, if what I pointed out in those two charts did not immediately jump out at the reader....then the reader is truly playing dice with their capital.
The fact is, log vs non-log is a prime indicator of whether or not the writer &/or reader really understand, or are truly ignorant of, basic applied mathematics.
Btw, how can information that is not understood for the truth and misconceptions it contains be "well appreciated"?
Occam's Razor, it's a biach.
Oh yes, funny, but the humor parading as truth is a major factor why the world is where it is... http://www.youtube.com/v/kO8x8eoU3L4 ;)
He's been drinking too much coffee. Like his enthusiasm but calm down.
That is 3 minutes of my life I'm never getting back.
Article Fail
You actually watched more than 30 seconds....
Did you notice his T-shirt...
DUDE.......don't confuse me with your confusion!?!?!?!? This would have been the proper headline.
it'll be overnight...period
WTF was all that about?
Dude, someone who was betting that Gold would go up indefinitely in a deflationary environment is worried and on the defensive right now... The market has topped despite massive central bank buying...
What was that Mr. Sprott? Miners should hold back their produce? That line could have been from Chavez of Venezuela urging OPEC to hold back production!
I know I will, I've seen me do it.
we know you will too. And you will shamelessly pump it on the internet, costing some people 40% of their life savings after telling them to "back up the truck" and "buy with both fists" at $49.
How does it feel to be such a loser?
Give it ten years.
I am willing to bet the return on silver bought right at the top will beat a savings account.
I see my cost average still hasn't penetrated that thick skull of yours. $18, bitch.
You must have had a black grampa.
Doesn't change that buying at $49 was still stupid.
Remember all that bashing you gave me for buying slv puts? You still cannot admit it was the right call at the right time. And that is the hallmark of a loser.
Trav didn't you say oil was going to go up or something? Price at the pump seems to be about 50 cents a gallon cheaper than 8 months ago. Why are you a ignorant braindead racist?
well... from 1980 to 1997, there was a market that wasn't mathematically absolutely broken.
today we have smoke, mirrors and illusions.
I pick the weimar chart.
Of topic but I wanted to point out one thing which is not mentioned here very often:
LIFE IS BEAUTIFUL!
I agree. As long as you have food, shelter and not too much contact with other humans.
How can anyone downrate that?
Prepare if you feel the need.
Learn to grow a garden mainly because it is fun.
Fuck a lot.
Laugh a lot.
Find your emotionally supportive social group. Support them to.
Hey Topcallingtroll!
Actually I put the message on because I wanted to see how many + and - it gets. Let's call it a social experiment to check what kind of people are here on ZH.
It is interesting, I should try it on a gardening website on a ZEN-website, teenager-dating website too. And publish the results.
By the way dating and teen-ager! I find your answere really interesting. We like the same things ... gardening, laughing ... and what was the other one?
I mean ... are you a girl? how old? ... maybe we could grew some ... corn?? - mainly because it is fun (I liked this one)!
;)
Have a nice day!!!
I think I'm in love............with this article.......I need some alone time......
My take on this post and others along the same vein today (subject to change as I learn more):
1) gold (& silver) are stores of value. Always have been and always will be (until alchemy perfected. Remember that old Twilight Zone episode?).
2) gold (& silver) can be traded for goods/services, but [favorably] only under certain circumstances.
3) therefore 50% of my emergency-double-secret dystopian crash bag of tricks is FOOD, and the means to cook it. (and supplies and medicine and seeds)
4) some of that 50% are redundant quantities to be offered for barter
5) must not forget dangers of relying on only gold (&silver). Possible scenario:
a) government makes gold (& silver) illegal to own. Perhaps confiscates for the patriotic purpose of backing a new currency
b) lest you try and barter with gold (&silver) on the grey/black market, government offers reward to your neighbor for turning in such a 'terrorist'. Reward is an offer the neighbor 'can't refuse', like increasing their food ration. How so? Monthly threshold on their safeway (albertson's, ralphs, costco, kroger, et al) will be bumped. How so? All food purchases, do to shortages, and to be 'fair', will require these cards. No hoarding! That is an act of terrorism and we have a place for such types.
6 No way around acredited grocery stores because all mom/pop farms will be illegal (we are actually just about there now on that one).
7) Go ahead and protect your stash with a gun, if you so choose…..but you damned well better have walked through that scenario and be absolutely clear you are prepared to take a life to protect you and yours… or you would be better off trading the gun for food/supplies. Gun or no gun, keep your mouth shut about your stashes, whatever they are, and do some favors for your neighbors, starting now.
8) inflation vs deflation: I refer to some rules I have learned in the school of hard knocks: a) to the degree you are absolutely, positively sure it is going to be ‘A’, by that same degree it will more likely turn out to be ‘B’. b) the longer a prediction is in effect, and the more people that buy into that prediction… the less likely that prediction will manifest as predicted.
9) Inflation: Printing money (monetary inflation) does not in and of itself cause price inflation. The trillion dollars you print in your basement (if u could) has zero effect on inflation if it stays in the basement. It must circulate. A key factor to price inflation (or deflation) is ‘money velocity’; how often money exchanges hands in a finite period of time. This is why Helicopter Ben has threatened to circumvent the I-don’t-trust-you-enough-to-loan-you-money banks, and hand the money out directly. You must get people to spend.
Hyperinflation is more a psychological event than a monetary/political event. It happens when a critical mass of the populace become fearful that they must spend TODAY, because prices will be higher TOMORROW. Once at critical mass the fear feeds on itself until the currency is fully consumed. I have a Zimbabwe 100 Trillion dollar bill on my mantle to remind me of that. Best as I was able to figure it bought 2-3 loaves of bread at the end.
But, timing is everything! We will likely get both, but in which order? Inflation is an unstoppable force meeting an immoveable object (deflation). The grand tug of war. We can take a good guess at the end game, but we don’t know how this will play out in the meantime because there are too many moving parts. For example, if people stop spending will we enter spiral deflation, or will direct government spending on food stamps and war overtake the downward momentum of trillions of dollars in derivatives and loan defaults unwinding? I personally am planning for biflation; the things we absolutely need will cost a lot more… and the things we don’t absolutely need will call cost a lost less. But as a wise old man once said, “Difficult to see the future is. The dark side clouds everything”.
Whatever we do let us be sure we are prepared for the endgame. Don’t let this day-to-day crap throw you off your game (gold (& silver) seem to thrive in either environment (inflation/deflation) in terms of purchasing power, so it seems they should be part of a complete breakfast regardless).
And, even the end game is uncertain. We may be living at the most ‘interesting’ time in this round of human civilization. We are rolling over to a new age, and that means that past history may be less of a guide then some people think.
On top of everything else we must try to convert our fear to love, as we are able (fear is the ‘mind killer’). Those are the two options that are REALLY in play here.
--------------
PS – All of the above could be wrong. That is why I picked the avatar that I did. I look to ZH to ‘make me smart’… ‘make me strong’.
'Store of value' my ass on a crappy day. Hows your 'store of value' done since 9/1/11??? Lost ALOT of value eh? Meanwhile, my WORTHLESS FIAT has earned me a PREPOSTEROUS amount of REAL profit in the same time period.
Hey dum-dum, a store of wealth implies a longer time horizon then 3 months!
Jobless folks treasure cash. It is natural.
Mathman is back!
Hey dum-dum, a store of wealth implies a longer time horizon then 3 months!
... and what is he going to eat over the next three years? Where is the pricing power of say Coca Cola in your Gold trade? Does owning loads of shiny rock still pay you a dividend when it goes down?
I don't mind having some Gold in my personal portfolio but it does not earn money!
9/1/11? I've been accumulating since 9/11/1. Would you like to compare your preposterousness with mine? On second thought, who cares?
Anytime
You wrote a fine piece up there. Those who will denigrate your thoughts are usually those who have none of their own. They trash your words on the basis of their shortsighted, short term, fiat paper based theology. I welcome your future comments.
Ah. a veteren. You honor me sir. Darn, now I have to go to iTunes and see if they have the song because the tune is playing in my mind. Still recall most of the lyrics, but got a hankering to hear them set to music.
cheers
Oh wait. Have you seen this!?
http://www.youtube.com/watch?v=nucSvl7VXVM
Oh wait. Have you seen this!?
http://www.youtube.com/watch?v=nucSvl7VXVM
@pakled
"accumulating"
"preposterousness"
You need to speak to him slooowly and use simple words, simple words.
Hope that helps
I take your guidance sir.... Mr. Fred he-who-comes-late-to-the-party-with-always-something wise-to-say. Or ask. Always tuned into your comments.
;>
@pakled
well said .. Most only think about wealth gian in the moment.
Lessee, we're down to 1560 as I write this. That takes us back to what, July 10th? Helluva tumble, eh? How many Japanese wish they could get back the prices they paid for stocks and property in 1989?
It's a good thing that US stocks, bonds, and property don't fluctuate that much.
Gold is a store of value. For all the recent fall off it is back to the same price it was a few months ago. Hardly catastrophic. The point of gold is not to get rich; it is to maintain your purchasing power over the long run. It is at its shiny heart an insurance policy. Like most insurance policies, you really don't want to die or have your house burn down. Should gold steady or fall in the long term, it means (against all odds) the economy has stabilized, interest rates are rising and currency dilution is over. Frankly, I hope that's the case since the majority of my (and most people) accumulated assets are not precious metals -- just a good sized nugget (pun intended).
Don't fret the gold actions. Short term perturbations are meaningless. And frankly, I'd rather a loss in gold holdings then have a dystopia around. In that case the preferred metals are lead, wrapped by a full metal jacket.
And remember -- in a depression, the winner is he who loses the least.
Gold has systolic and diastolic moves, just like anything else. As of this time gold is "down" a minor percentage in the long view. That's not even half a heart-beat. Those looking for the tragic heart attack should perhaps get something better to do. Gold is healthy as a horse as long as morons run the government, financial institutions, and banks. That should cover the foreseeable future.
I'm back in town and going shopping tomorrow Rocky!
Yet there is usually a clear reason for the corrections. This one is perplexing. Gold goes down either because they holders (of paper) don't want it or because they have to sell. The only reason I can think of for why they wouldn't want it is because they are front running some unseen deflationary event or margin rise.
Margins are unchanged so the only reason I can see for the holders being forced to sell is an acute need for cash. Why? Euro banks are about to fail? France is about to be downgraded? Someone found the tungsten bars in the GLD vaults? Iran is about to be attacked?
Someone is front running something big and I can't puzzle it out. Something is up.
Margin calls on paper speculators, same as 2008.
It could be people getting out of paper gold (due to the re-hypothecation scare) but not yet ready for the mental switch to physical.
Anybody has the figures on cash leaving GLD?
The value of gold hasn't changed, only its price.
Well said.
Bill
Before you trash intelligent comments you need to learn that there is no such word in English as "ALOT". It is two words: a lot.
Don't forget that the government does not have to confiscate gold. All they have to do is pass a law to tax all you evil speculator negative people out there at 50% on any sales. Game, set, match.
Or maybe announce that they are going to do it in 2 months. Imagine what that will do to the price!
Timmy G will be singing "Come to Papa!"
Indeed.
I look at like this... central banks are hording gold becuase its worthless
The zionest bath in it.
And in those days just before the taxation measures, guess who would be buying like muthafuckers. And then guess who would be taking his gold across the border with him...
Is that you Reginod?
you can't make love out of fear, but with love, you can turn fear into determination
+ 1
I love my kid. I will turn any fear I have, in a determined manner, to buying gold.
Mr. LaForge can program the replicator to manufacture all the gold I want. You are not smaaaart.
Sukath, his eyes uncovered!
;>
I can say without any doubt, that fear *is* the mind killer!
;-)
First post here. And that was well said, sir. Even though I hope things won't get out of hand, I think there is a really good possibility that things could go very badly... so in addition to my more conventional investments I also own food, ammo, guns, PM's, etc. I also happen to live in a small neighborhood, in a rural area where I have lots of family. Neither me or my wife farms or gardens, but with wild game supplementing our diet we could last quite a few years on what we have, obviously less if we have to support anyone else, which is probable. I also do know any number of people that will have produce to barter. Aside from total strangers on the internet, I don't talk about my preps to anyone but close family, and even they think I'm kinda throwed off, I reckon. Way I see it, they're the ones that are crazy for ignoring all the warning signs that seem, to me at least, to be everywhere these days. And not in a crazy cooter "signs" way either, plain old geopolitics does it for me just fine. Closing platitude: The only thing worse than being overprepared is being underprepared.
Also: Dune references ftw
Good post but you broke your own rule 7. "Keep your mouth shut about your stashes ..."
Lets suppose that someone bought gold and silver at their recent highs.
Silver at $48.70
Gold at $1,895.00
Even with today's market Monkey Hammer, you still lost less money than anyone who bought NFLX at $304.79, or Uncle Warrens BAC at $15.31
And, gold/silver is still worth a bit more than 10,000,000 shares each of Circuit City, Borders, Pets.com, Enron, etc.
WOw, thats a great comparison, not. Lets compare those that SOLD NFLX SHORT at $304.79 vs holding gold long from $1900 since everyone wants to cry about 'pricing everything in gold' I DO, AND IM KILLING IT, BY NOT OWNING GOLD!!!!
Right on! The think what Zero Hedgers never remember is that every *single* one of them bought *all* their gold at $1960 (they used the Asian markets to lock in prices that were never available in North America).
Don't let them feed you some cock and bull story about year over year performance relative to the stock market. My senile grandfather is the only one concerned with what happened over elevin freaking months ago. Some of them want to go back 2, 5 and 10 years as if that could be relevant somehow.
I could name a few people here who were *pretending* to own gold a few years back. Shamefully pathetic trolls all of them.
Me: acquired 100% of my stash in 2006-07, not an ounce bought or sold since then. I'm 42.
I hear you. Just blowing off some rhetorical steam.
I have enjoyed gold since 08 myself (managed to buy at that time's counterpart to $1900).
What worries me these days about the gold bugs though is their whole "paper will divorce from physical" and "they're gonna start QE3 any day now ANY DAY NOW!!!!" schtick hasn't really materialized yet.
http://finance.yahoo.com/q/bc?t=5d&s=PHYS&l=on&z=l&q=l&c=gld
You can see here that GLD has done better than PHYS once again during this latest selloff (ok, so its only very slightly, but still).
It really seems like the central bankers are standing back now and, other than making sure US dollars are available for a high price in an emergency, letting the chips fall where they may. I'm not sure why gold is gonna go zooming up to $2K in, say the next month or so in this environment...
I was buying gold and silver heavily since 1999. I made my mom buy silver bats 10 oz at 65 bucks.
But no one rides a bull market all the way.
Steadily accumulated then sold it all around 1325 and 21.
I am not a gold bug. I bought a tiny bit recently close to the top for diversification and insurance. So little that it could go to zero and i wouldnt care.
I have been trading a little but sitting mostly in cash. Looking for the next big thing. I doubt it will be gold this next decade. It might be value stocks or emerging market stocks or bonds.
If I were gonna guess it will be emerging market corporate bonds with a rating of baa average and duration ten plus years.
Not sure if you're being sarcastic or not, but I've been long gold for my nephew since $330 an ounce 2003/2004 (he doesn't know and won't until his education is finished) and long silver since $9 an ounce.
So, I guess I'm a troll.
DavidC
I'm at the point where I can't even talk normally anymore :)
http://www.youtube.com/watch?v=qykzFSF0q14
Doesn't this all cancel out?
Anti-establishment: PMs
Pro-establishment: "education"
Mr. Bill. Many of us don't own gold to "take profit" but as a hedge against complete financial system meltdown. Sure, if that was eliminated out of the equation, we would probably think of it more as a trade. But my man, if the shit hits the fan and I mean really hits the fan, would you be comfortable with not owning any gold? And dude, how many times in the last couple of years has a stock been up 10% one day only to be down 10% the next? If you can time that right more times than not, then you are the man. Good luck.
that's definitely the sheep talking this time.
I'm perfectly fine owning $0 gold or silver if SHTF. If SHTF you won't be able to trade your gold or silver for jack. You will be far better off with stocks of refined petroleum products, spare generators, stockpiles of food, water distillation machinery and offgrid power generating capabilities.
If gold and silver retain ANY value, you wi have made yourself a target by telling people how long you are for the last 5 years.
It's total mallarky. Gold and silver have no intrinsic value, just imagined.
And if you believe I'n hyperinflation and SHTF then your gold will buy the same number of shares in companies that create and produce goods that people will need I'n your post apocalyptic world.
I have to agree with the guy saying using your fiat to short things on the way down is far more profitable right now. We will have to have staggering deflation before the world is willing to accept hyperinflation. By the time hyperinflation hits, you'll be more worried about securing your secret passage I'n the underground railroad then you will be about taking your gold with you.
Wow, you really don't know anything about monetary history, do you?
tmosley, read his post again and then realize you are wasting time.
The sheer idiocy of some of these comments is breathtaking!!
DaddyO
But it's a slow night and the cookies aren't out of the oven yet.
Hey, T-Mo, his name fits: He will be road kill!
+ 1 to my friends Rocky and tmosley
While no one can predict the future, ALL the likely scenarious ahead in my view all look very ugly. Gold (and silver too) shoud be a prt of everyone's assets, especially if they have children.
Yes, I am also in full agreement with havfing other survival preps as possible. But, the condo-dwelling Bearing does not have much space (or Mrs. Bearing's consent) for too much...
called the top to the penny 'eh?
dont give billinf11otgif a hard time. bullies tried to force gold bars down his throat when he was a kid.
First of all, I am/was a 'top caller' of gold at 1900. Second, it does not MATTER if I was right (and gold does not see $1900 again) OR if I am WRONG. I am RIGHT either way. Here is how, GOLD peaked Mid August- beginning Sept at 1900 or so. It is now around $1550 and has been at 1550 back in September. So, we have had about 120 days worth of TIME that has gone by where, if you went long since the 1900, your down. I went to cash but continue to trade (thats what I do) every trading day since. Now, I mostly trade ES,GC,CL,etcetc but over that time I have made MONSTROUS profits trading Netflix/FocusMedia/Jeffries and HBC. I mean stupid, rediculous profits. Now, if I was just a gold 'holder' I would want to kill myself. Seriously. While this is not MY site, I believe it is a GREAT site for TRADERS, not gold hording longs, who, as of right now in this moment in time, are losers. Also, I don't want to hear from those that claim to own gold for $200/oz. GOOD FOR YOU!! I could not afford gold when it was 200/oz, but I have more money now than I EVER thought I would from doing the complete opposite of the gold horders (adding to my 'position' all the way up). My point is that gold is NOT the glorious no brainer investment that everyone WISHES they had bought into 15 years ago. Sure, I wish I had money then, but would have sold out LONG AGO and moved onto BIGGER AND BETTER THINGS. Sure, gold can go parabolic if the country decides to just 'PRINT', but I dont see that happening, and EVEN IF IT DOES, it will mean NOTHING.
Calm down Einstein!
Copy this, Infinite Herd:
Einstein was once asked about his intelligence and he said, "I'm no more intelligent than the next guy. I'm just more curious." Now, we can grant Einstein that little indulgence, because we think he was a pretty clever guy. But let's take him at his word and say, what does curiosity mean? Well, maybe curiosity means trying out all sorts of ideas in your mind. Maybe curiosity is a passion for trying out ideas. Maybe Einstein's ideas were just as random as everybody else's, but he kept persisting at them. And if we say that everybody has some tiny probability of being the next Einstein, and we look at a billion people, there will be somebody who just by chance is the next Einstein. And so, we might even wonder if the people in our history and in our lives that we say are the great innovators really are more innovative, or are just lucky. Now, the evolutionary argument is that our populations have always supported a small number of truly innovative people, and they're somehow different from the rest of us. But it might even be the case that that small number of innovators just got lucky. And this is something that I think very few people will accept. They'll receive it with incredulity. But I like to think of it as what I call social learning and, maybe, the possibility that we are infinitely stupid.
http://edge.org/conversation/infinite-stupidity-edge-conversation-with-m...
many innovators, are motivated, and committed, it's more than luck, it requires persistent effort, in spite of resistance
First of all, I am/was a 'top caller' of gold at 1900.
*************
Do you realize how many assholes we've heard that from all the way up?
Killing yourself was the best play i heard out of that long winded shit drivel
http://www.acting-man.com/blog/media/2010/05/Gold-vs.-Oher-Assets.png
Dude! Bill you are a pimp!
Can you start a newsletter?
I'm super impressed! I mean MONSTROUSLY impressed.
Uh-huh, make a new user name every few weeks. Call tops until you get it "right".
We know your kind.
2 posts above he stated he was in cash.
Brian Sack is that you?
Dude, you are HILARIOUS! I especially loved this: "I could not afford gold when it was 200/oz, but I have more money now than I EVER thought I would" - that is sheer comic genius! Please keep posting!
"it is a GREAT site for TRADERS" , I totally agree. I have been averaging about 30% a month since giving up buy and hold.A very short time of 4 months , like 4 months out of a POW camp, freedom to use my brains and what I read. Reading ZH is my bread and butter in this bear market. Having said all that , I also have about 10% in PM idle in a safe deposit box (a good sized one) that is very soporific.
Hey what about me? I'm smart too. Look at me! My time is so valuable that I spend it bragging in blog comments.
The DXY was spiking in late '08 into early '09. Now, it's just barely catching a bid while AU and AG are tanking. Yeah, we don't have real markets with true price discovery, but it's frustrating nonetheless. An entire year of "gains" gone in silver, yet debt levels skyrocketing. At some point, sanity will be re-established, just not sure when.
people need to recall that the collapse of 2008 was preceeded by a collapse of oil and gold. TD did "go wobbly" back in August i think...and was wonderfully and beautifully "mercilessly attacked" for it--thus causing some type of..."retraction." i find it odd i must say. this site has always been deadicated to..."taking it to the man on Wall Street"...a sentiment i think not only the entirety of Planet Earth by even "The Man who is Wall Street" even subscribes too. Still..."this is real" too...and thus now we have...real. This is not the time to succumb to...shibboleths.
Gold Horders, the same people that think their $495,000 MCMansion is still worth $495,000 instead of $150,000 and going DOWN
You nailed it buddy?
Really? Must be a lot more buyers of gold out there than we thought! That's extremely bullish for gold.
Because you see, unlike houses, which can be slapped together, it is hard to mine more gold.
BS, it only costs $5 to get it out of the ground!!!
DaddyO
A paler shade of MethMan ;)
His mom must've locked him in his room!!!
Haven't seen hide, nor hair of him for quite sometime.
DaddyO
Bill, I'm happy for your success. However, I cant follow this 24/7, cant afford to be wiped out while I'm at work, the banks, FDIC and basically the developed world are broke, financial crimes go unpunished, the markets and gov't issued data are bullshit -so I buy metals. Not really as a profit motive, but as insurance. If the SHTF I dont need to sweat it. And yes, land, lead, food, garden, power etc...are covered as well. The way I see it, if your ases are covered - you get to LIVE while waiting for the eventual reset, and enjoy your family. Good luck to you, but I really hope you have a plan B, $50,000,000 in MF Global or SLV wont save you when this breaks!
Vodka typing - so peasle excsue my gnilleps
bill, you still don't seem to get that the gold price will really only matter after the collapse. even gold bulls like rickards have stated time and time again to expect swings like this in the coming months.
they way you are phrasing your posts makes me believe you think the world ponzi can go on forever?
my guess is you just like to whip people up in a frenzy for attention. i'm not chasing tops and bottoms in this heavily manipulated market anyway. it's a rigged game, so best of luck with that.
I do like to agitate.
Post collapse eh? Ok, ill buy that gold will be better than fiat. Maybe
If gold is at $233 what will bread be at?
If gold is at 233 newbux (with one newbuk=1,000,000 dollars), then bread is 0.005 newbux a loaf.
Bill sounds like the kind of guy who claims to have had a lot of women, but actually goes hitless.
You can still get about 1,000,000,000 Zimbabwe $ on ebay for a few Bernakes. Who needs metals?
What seems to be ignored across the board by everyone including the Almighty David Gartman is that Gold does not trade in a fair market. The CME has raised margin rates on Gold 6 times and 8 times on Silver. How many asset classes would still be up for the year with that sort of manipulation by Mr. Ben Bernanke? The answer: NONE but Gold because by and large people understand that the dollar is a hoax, stocks are a joke, treasuries are a joke and the entire globe is loaded with debt it cannot repay.
So to you Mr. Gartman, the next time you make a claim like the bull market in Gold is dead, which we all know is outright bullshit, at the very least tell the people that you are trading Paper Gold and you own no bullion and you are a trader not investor.
Buy Gold and Silver and hold it, it is the only asset class that will withstand the coming collapse. If you believe Mr. Bernanke or the liar in chief that this economy is getting better, you too might want to put some cookies and milk out on the eve of the 24th for Santa Claus.
PAINTING THE TAPE... Year End Edition
Here we go again, an old phrase, but so appropriate to appreciate at this point in time. How many times have gold and silver been taken to the cleaners only to come back and make new highs? How many times has the death of the bull market been called by various pundits?
This correction will end up like all the others.
That is when it is over, which is tough to call right now due to the extraordinary efforts of The Gold Cartel and central bankers of the world to break the price down. It is the most massive and collective effort by the anti-gold crowd seen over the last 13 years. The correction will have to run its course and the market will have to tell when that is.
What is most scary is what gold and silver might do if the European stock markets and other stock markets really get battered. Right now the DOW is not that far from recent highs, yet look at what The Gold Cartel has done to gold and silver. The bullies don’t need algorithm traders to do what they just did. This is no time to be overextended.
Gold and silver continue their orchestrated waterfall drill to the downside. While it is unclear what was accomplished regarding Europe’s vast fiscal problems at their recent summit, it is very clear the call went out to mobilize gold and bomb the market. The BIS, Fed and European rumors were surely not rumors, but were out there because they were true. In addition, no doubt there was a great deal of gold borrowing (leasing), which was sold into the marketplace. Word was spread by the likes of the Dizards of the world it was to raise dollars. That was done to bury the price of gold.
The reasons are obvious. Little progress was made in Europe at the end of last week. A five year Italian bond auction was done at record highs today as a result. Italy’s widely followed 10 yr bond had its yield rise to 6.89%. The Europeans are going to have to print money. All the central bankers want gold in the dumpster as a signal inflation is not a problem, which might inhibit implementation of what they have in mind … or are in the process of doing already.
This selling sure has worked. Once again, it was vintage Gold Cartel which kicked it off. Gold was capped in London around 3 AM NY time and then sent sharply lower not long after, which fits right into their PLAN A drill. Gold fell all the way to $1562 during the Comex trading hours. It really picked up momentum to the downside when its 200-day moving average was taken out at $1614.
As bad as these past days have been, we are only back to where the price was in September.
www.lemetropolecafe.com
DP said Gold and silver continue their orchestrated waterfall drill to the downside. While it is unclear what was accomplished regarding Europe’s vast fiscal problems at their recent summit, it is very clear the call went out to mobilize gold and bomb the market. The BIS, Fed and European rumors were surely not rumors, but were out there because they were true. In addition, no doubt there was a great deal of gold borrowing (leasing), which was sold into the marketplace. Word was spread by the likes of the Dizards of the world it was to raise dollars.
As it was DP-----------------what many do not know is that the CME is the Comex and who has to backstop those segregated funds that were stolen. Here is some history. Last line of this paragraph is most important.
COMEX, founded as Commodity Exchange Inc in 1933, introduced gold
futures contracts in 1974 and gold options in 1982. In 1994, following a
merger with the New York Mercantile Exchange (NYMEX), founded in
1872, gold trading was undertaken by the COMEX Division.
In 2007, the CME Group was formed when the Chicago Mercantile
Exchange (CME), founded in 1898, merged with the Chicago Board of
Trade (CBOT), established in 1848.
When the CME Group acquired NYMEX in 2009, gold trading was
consolidated to take place as “Designated Market Contract: COMEX”.
basically they move to combine all of these units so that they are easier to control........less levers to pull etc.............besides it is silly to extend the absurd notion that there actually is a thing called regulation and competition, which there never was anyway and now as can be seen, they don't care what we think about it anyway. they do in your face and laugh at you. then they have their guy stewart make jokes about it every night on national tv.......with this hypothecation nonsense now, in full view of anyone who cares to know, it is painfully clear to me that most of the baby boomer money has been stolen already. they just don't know it yet. i was saying this in 2005. i thought it would be stolen. i didn't know how. now i do. that fact will hit home for some, when they try to make their withdrawals of what they consider to be their money.. so far so good here because most of the sheep still believe in the overall system and still have trust this could change. the people in the former russian republics though have a history of fear and suspicion in them , that was born from them having to live under communist regimes, so they don't trust banks, so they pull their money out..........this is not happening here yet. no one is reading. no one is paying attention. they all think it will last forever just like it always has in their generation.
HPD that is the excercise.....keep those simple minds occupied simply. The more sophisticated investor and those with a little extra thinking capacity need something xtra, such as I said - she said -they said- I didnt say that----reminds me of Confucius-- when they are in doubt keeps them running in circles as they scream and shout. Stay 360 at all times is my motto.
first off there's nothing wrong with the CME raising margin requirements...it might be wrong for YOU...but there's no violation of any "rule or regulation" when they do it. Moreover if you'd listened to Mr. Gartman you would have saved a bundle of dough. I told him "oil was in a bubble" and he listened and responded that he was still long oil. that appears to me to be wrong since gold and oil trade so closely to one another and oil has VASTLY outperformed gold since their respective lows of 12 bucks a barrel back in the late 90's and 400 bucks and ounce at around the same time frame. Indeed if we use a "gold price rule" vis a vis oil...oil should be half the price it is right now. I must say the time to start investigating what these hedge funds are really up to is long past due. the damage that these clowns are doing to our financial system...in conjunction with a completely out of control media i might add...looks to me to be permanent and long lasting. i'm not sure i'd want to be the one in charge when these clowns "detonate a financial weapon of mass destruction on Connecticut."
Would love to see a chart of AU and AG with margin hikes indicated and options expiry.
I see a pennant, probably a weekly close above the 34-week EMA.
I wonder how many Bennie bucks N.Korea has already printed? CHINA? IRAN? ...all your ass wipe are belong to us.
Thank you Shineola; this is a topic rarely discussed anywhere. During WW2 Germany made such good pound notes for its spies that a sample packet sent to the Bank of England for certification (via a Swiss bank) came back certified genuine. I would imagine that any decent country can counterfeit any fiat currently used.
There's also a lot of both genuine and counterfeit FRNs out here in the rest-of-world. I live in Italy. One day I needed a $100 bill to send to the US as a graduation present for a young relative. I went to my bank, in my small village (4K population, I never meet any other native English speakers here) and asked if they had any US cash. The guy pulled out a tape-wrapped stack of 100s about 3 inches high and said "How many do you need?". He had small bills, too; even had a stack of old $2 bills, which I hadn't seen one of since the 1970s.
Now take all that and multiply it by all the local banks in Italy, Europe, the world, and by all the stuffed mattresses in countries where the local currency is unstable. Most of it goes unchecked for counterfeits.
Finally, imagine a run on the dollar. A lot of this cash will find its way back to the USA, with or without capital controls.
because this is 2011, not 1980, big difference. besides they were manipulating the shit out of it all along anyway just like they do now. they created gld and slv for that specific purpose and finally. the fed was created in 1913. no fiat money system has ever lasted longer than 100 years. kabbalistically speaking, the number 2013 sounds pretty good to me...........so i shall not be moved. one more thing. it is amazing how so many writers seem to forget and ignore the debts involved here. does this man think somehow that this old world will just keep on chugging along like it did from 1969 to 1997? i say it will not. it cannot and it won't ..........we are in unchartered territories now. the contrarian play is to buy physical and keep buying it. it always was the contrarian play because most of the participants in these markets simply do not understand real money and all they know is paper.......its like ron paul said, most amerikans simply do not understand what real liberty and real freedom are........long ago i took a look at what was going on and i made up my mind. i stand where i have stood for many years. i shall not move or be moved ..........if you want to know how i feel about these issues you don't have to ask me , you already know. i am a bug and always will be.
louise yamada...
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/6_Louise_Yamada_-_Special_Gold_%26_Silver_Technical_Update.html
case dismissed....
you simply do not have even the most basic understanding of what the Fed does nor how it functions in actuality. You THINK you do...but you do not. I know for a fact that I have NO idea how the current Fed Chairman is able to do what he does...but as much as i am the greatest of admirers of magicians...the law of unintend consequences cannot be repealed...and i think Chairman Bernanke would be the first to agree with that statement. When your unintended consequence is..."Europe"...IN IT'S ENTIRETY...then this is beyond anything any institution outside of..."the institution of Petraeus"...can even fathom, let alone deal with.
unintended consequences. oh please.............
Today all commodities fell on deflationary fears. If these fears persist beyond a few Weeks, The Fed and perhaps other Central banks will annouce more QE to prevent deflation. I really just wish they would like deflation take hold enough so Gold drops below $1000 and Silver back in the teens for some great buying opportunities. That said it's extremely improbable. Just wait a bit for the announcement.
Yeah, well, I dont know who the fuck you are, but if you're just now coming to considering gold, you can fuck off. Let me know when the USSA, EU or anyone else actually FIXES any of the problems with debt and money printing. Then and only then will gold run risk of a significant (real/longer term) downturn. Until the system is fixed (which is sure to happen any day now, right, folks??? - HA!), I, like lots of ZHers, will look at this big-ass DIP as a good buying opportunity. Let's compare notes again this time next year and see who's right.
Asshat...
Lets compare notes and see who's right and who's happier? (or even who's happy)
Well, that last graph is a fucking joke in convincing anyone about anything.
why the hell did the spot price just stabilize...?
The Giants want more gold and they want it cheaper. That is all the Ants need to know. Follow the money... matters not if fiat only has another year or two of life left. Nobody here is on Ben or Timmay's speed dial or knows the date or the hour of collapse. But collapse it will.
THIS shrimp is also following in the footsteps of Giants.