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Hinde Capital - Is Gold The Antidote To The Upcoming Monetary Singularity

Tyler Durden's picture


In its November presentation, Hinde Capital presents some observations on why fiat money may be the latest exponential concept on its way to singularity status, with the now traditional implications of what this means for hyperinflation: "High (hyper) inflation is caused by financing huge public deficits through money creation. Even 20% deficits were behind but four cases of hyperinflation. The US government deficit is 10% of GDP, but currently the US deficit is over 30% of all government spending. The world reserve currency is in the red." He also points out the only assets not to join the exponential growth ("Global financial assets have risen 17-fold over the last 3 decades from $12.3 trillion to nearly $210 trillion") in other fiat funded assets and liabilities - gold. To wit: "Gold investor holdings stands at $2.0 trillion (Nov 2011), 0.96% of Global Financial Assets (GFA). In 2000 gold holdings were worth $227 billion, or 0.2% of GFA, but this isn’t the whole story... Today 0.2% would be worth $1.45 trillion ($1800 troy oz. Au) or 0.7% of Global Financial Assets (GFA). Therefore new investment gold only provided 0.26% increase in % gold holdings. In 1968 to 1970 % gold holdings of GFA = 5%, to attain this % at current values of gold ($1,800), $10.4 trillion dollars need to be invested. $10.4 trillion is equivalent to 5.8 billion troy oz at $1,800 or 1.2 x gold ever produced.5.8 billion troy oz. is 3.6 x known gold reserves (based on US Geological Survey). Clearly not only is public ownership miniscule, but to return to the 70s % holdings requires too much gold than these prices can handle. This transfer of gold will take place at much higher prices." And the world's central banks are doing their best to make the transfer happen faster...

Full deck:



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Thu, 12/01/2011 - 11:31 | 1934920 rambler6421
rambler6421's picture

And this will happen when gold gets to 6000/oz.

Thu, 12/01/2011 - 11:35 | 1934936 Carlyle Groupie
Carlyle Groupie's picture

Our 'all in' trigger is $3476.

Thu, 12/01/2011 - 16:44 | 1936179 DoChenRollingBearing
DoChenRollingBearing's picture

EVERYONE should have at least 5% of their wealth in gold.  And that would be now at +/- $1700 (now, or lower if you have bought in the past).  I cannot understand why people should wait around for $3000 + per oz, unless speculating.

And note that I am not at the All Inn.  If gold goes to $3474, and then to $55,000 I am all covered.

Why wait around?  Buy gold now!

And, oh, Hi from Peru!

Thu, 12/01/2011 - 17:03 | 1936240 DosZap
DosZap's picture

Hi DoChen in Peru,

(lucky prick!,as he mumbles below his breath, ahem!)

At least 5%?, that's in 1990,now MINIMUM of 10-20%.......................Next dip (if there is one), I will be in at least at 30-35%.

That is the NEW figure by the Playa's.

Thu, 12/01/2011 - 11:35 | 1934934 sabra1
sabra1's picture

OT: i found j. corzine!

Thu, 12/01/2011 - 11:37 | 1934944 Carlyle Groupie
Carlyle Groupie's picture

Talk about a fox in the hen house.

Thu, 12/01/2011 - 11:55 | 1934992 Long-John-Silver
Long-John-Silver's picture

A Fox only takes one chicken at a time. A Chicken Thief takes them all at once.

Thu, 12/01/2011 - 12:05 | 1935033 rosiescenario
rosiescenario's picture

...and a skunk will kill them all...

Thu, 12/01/2011 - 12:36 | 1935176 Taint Boil
Taint Boil's picture



Speaking of animals - did you see the "deer in the head lights" [well almost] on the lower right front page?

Thu, 12/01/2011 - 11:59 | 1935007 flacon
flacon's picture

I think you found Kevin Davis, not Cortizine...

Thu, 12/01/2011 - 20:29 | 1935029 Reptil
Reptil's picture

nice dig (his name is conspicuously absent from the title)


Thu, 12/01/2011 - 11:36 | 1934938 Ryman1075
Ryman1075's picture

To the moon!

Thu, 12/01/2011 - 11:56 | 1934998 Long-John-Silver
Long-John-Silver's picture

The Moon is only the first stop on the way to infinity (and beyond).

Thu, 12/01/2011 - 16:47 | 1936193 Hook Line and S...
Hook Line and Sphincter's picture

LJS, ultimately I agree, but see Paper Au $ going way down as the kleptocrats need to keep the price as low as possible to get more of it as collateral from sovereigns soon not to be so sovereign.

Thu, 12/01/2011 - 17:24 | 1936348 DosZap
DosZap's picture

 but see Paper Au $ going way down as the kleptocrats need to keep the price as low as possible to get more of it as collateral


Wonderful, sooner the better..........................bring it.

Thu, 12/01/2011 - 17:44 | 1936417 Hook Line and S...
Hook Line and Sphincter's picture

I'm alright with it also. This pains a lot of goldbugs, but it will be good for them once it's over (and provided they have cash/provisions).

Thu, 12/01/2011 - 11:36 | 1934939 tliberty
tliberty's picture

I am a huge advocate of silver and gold. But I don't think it will be the cure they need. One of the phenomenom's taking place is the rising use of decentralized digital currencies, some of which are based on a gold standard. If more poeple move away from fiat currency, all the gold in the world will be meaningless to the power structures.

In the event of their dissolving power, it may be that silver and gold will enter back into the real economy, and people may use it in trade.

Thu, 12/01/2011 - 11:37 | 1934942 PaperBear
PaperBear's picture

Then we have a repeat of the 1933 nationalisation of gold/silver and all the non-insiders will be sucked into the oblivion of this event horizon.

Thu, 12/01/2011 - 11:51 | 1934981 bernorange
bernorange's picture

It's not too late for the voters of this country to steer the ship in a different direction:  HR 1098

Thu, 12/01/2011 - 12:57 | 1935268 LawsofPhysics
LawsofPhysics's picture

What silver and gold?  All mine was stolen after a home invasion.  Filed the proper report and everything.

Thu, 12/01/2011 - 13:34 | 1935378 Doña K
Doña K's picture

That means that you talk too much. Keep the big safe well hidden, tell no one, have a smaller and easier to find safe with very little in it, have many loaded guns, have alarms and cameras, shoot to kill.

Thu, 12/01/2011 - 14:01 | 1935528 Confused
Confused's picture

Funny. His plan seems pretty solid. And now its on record. ;-)



Thu, 12/01/2011 - 16:49 | 1936203 DoChenRollingBearing
DoChenRollingBearing's picture

Mi modo de pensar igual, Doña K.  Se puede ahorrar oro en otros paises también...

Thu, 12/01/2011 - 13:30 | 1935410 HoofHearted
HoofHearted's picture

Damn we're unlucky. I lost the last of mine in a boating accident after trading most of it for i-junk. I should have learned.

Thu, 12/01/2011 - 11:37 | 1934946 vegas
vegas's picture

It's been a store of value since man got off 4 legs. Nothing compares to it and nothing mirrors mans desires better than a 400 oz gold bar.

Thu, 12/01/2011 - 11:43 | 1934947 SRSrocco
SRSrocco's picture


This was posted yesterday in the SilverGoldSilver Blog.  In 2010 total Net Implied Investment including silver coin & medals was 279.3 million oz. If we take the average price of silver in 2010 at $20.19 we get a total of $5.6 billion.

Just think about that for a minute. Total silver investment in 2010 was $5.6 billion according to the World Silver Survey.

Contrast that to the US Treasury Auctions from the past month:

4 week Bills = $35 B
13 week Bills = $29 B
26 week Bills = $27 B
52 week Bills = $25 B
2 Year Notes = $35 B
3 Year Notes = $32 B
5 Year Notes = $35 B
7 Year Notes = $29 B
10 Year Bonds = $24 B
30 Year Bonds = $16 B


In one month there were $287 Billion in US Treasuries sold. In all of 2010, total investment of silver was $5.6 billion or a lousy 2% of one months worth of US Treasuries.

The BIGGEST BUBBLE IN HISTORY is going to pop. As the air comes out of this bubble it will go into the gold and silver.


Thu, 12/01/2011 - 11:44 | 1934964 tmosley
tmosley's picture

What is the Net implied investment in gold?  I would say that a very large portion of that wealth will pour into gold rather than silver, though silver will certainly rise much more, since the sector is so tiny.  That assumes that this happens after the COMEX collapse.  If it happens before, the paper price may rise, but it can be stopped without much trouble by issuance of ever more naked shorts.

The emperor has no clothes.  The very definition of naked shorts.

Thu, 12/01/2011 - 16:47 | 1936196 buyingsterling
buyingsterling's picture

JP Morgan, Goldman, and Sack are all standing in the silver pit screaming about all the silver they have for sale. Silver they plan to acquire at a later date if by some turn of events they are actually asked to deliver it. How much silver can they promise to potentially deliver at a hypothetical lower future price? Whatever they damn well please.

It's a fraud on its face.

Thu, 12/01/2011 - 11:40 | 1934953 High Plains Drifter
High Plains Drifter's picture

If you wish to determine the character of a generation or a people, look to their heroes, leaders, and role models.
This is nothing new, but a lesson from history that has been unlearned. The entire system of checks and balances, of rule of law, of transparency in government, of accountability and personal honor, is based on the premise that one cannot always count on people to be naturally good and self-effacing. And further, that at times it seems that a relatively small group of corrupt people can rise to power, and harm the very fabric of a society.<<<<<


the lesson we have forgotten is that the talmud is not our book and should not be a document to which anyone gives any credence in our lives, and that anyone who feels this book is important in their lives should not be allowed to be in any position of power or of trust and should be shunned by any respective country.

Thu, 12/01/2011 - 12:00 | 1935013 fuu
fuu's picture

The freedom to practice any religion, asshole.

Thu, 12/01/2011 - 12:40 | 1935191 trav7777
trav7777's picture

wow...antisemite!!!  RAYCISS

next you'll be saying that the MSM message on jews is false too and you will be SHUNNED.

The MSM only lies when it speaks on matters not pertaining to race or ethnicity.  All the myriad hard data demonstrating quantitative inequality is WRONG; the MSM is speaking the truth.

Thu, 12/01/2011 - 12:48 | 1935211 Ghordius
Ghordius's picture

never understood this thing about racism - I mean, if you think or "know" you are superior because you are whatever you are, then, well, you are superior. period. 8-) IMHO it happens to me *every day* ;-)


of course if my niece wants to marry a lawyer it's a different matter (of corpse disposal)


I had once a dinner in China where my charming hostess said: my daughter may even marry a black man, as long as she does not marry a man from Shanghai or Hong Kong

Thu, 12/01/2011 - 13:03 | 1935294 tmosley
tmosley's picture

lol, you think that these people give two fucks about the religion of their grandparents.

Jews or Episcopalians, it doesn't matter.  Judge them by their actions, not by thier bloodline.

Thu, 12/01/2011 - 13:06 | 1935315 XitSam
XitSam's picture


“Hokey religions and ancient weapons are no match for a good blaster at your side, kid.”


Thu, 12/01/2011 - 11:41 | 1934960 orved
orved's picture

For those too young to remember past gold nationalisation projects, can anyone concisely explain how this happens, and its possible effects on prices?

Thu, 12/01/2011 - 11:42 | 1934961 topcallingtroll
topcallingtroll's picture

I hate all you gold buggers because I sold virtually all my gold at 1300 more or less.

However i still think it is hard to push inflation at the zero bound. The world is hungry for dollars, and most of the dollar creation is not being used for current consumption.

I still think gold's best decade is behind us.

Thu, 12/01/2011 - 11:51 | 1934982 Sudden Debt
Sudden Debt's picture

I can't even imagine how stupid you must feel right now.....


Thu, 12/01/2011 - 11:56 | 1934995 Ghordius
Ghordius's picture

he wrote "virtually all my gold", so he might be fine...

Thu, 12/01/2011 - 12:01 | 1935016 Long-John-Silver
Long-John-Silver's picture

Watch what happens when he attempts to take his wife’s gold jewelry to trade for food, before she gets really hungry.

Thu, 12/01/2011 - 13:45 | 1935454 trav7777
trav7777's picture

eff that, get her the yellow ticket

Thu, 12/01/2011 - 12:10 | 1935046 Ahmeexnal
Ahmeexnal's picture

I think he means he sold all his "virtual" gold, aka, paper gold.
Or maybe he is like Bob Dabolina who trades online virtual markets.

Thu, 12/01/2011 - 12:18 | 1935090 Captain Kink
Captain Kink's picture

I wish I had not buried mine in the back yard...someone must have seen me...bastards took it!  Every last coin.  what will I do?

Thu, 12/01/2011 - 12:49 | 1935225 Ghordius
Ghordius's picture

pity. hope you are joking

ah, shall I start about my boating accident?

Thu, 12/01/2011 - 12:51 | 1935231 Captain Kink
Captain Kink's picture

My silver is lost at the bottom of a lake in MA...bloody canoe tipped as I was paddling out to an island on which I had hoped to bury it....woe is me...

Thu, 12/01/2011 - 13:12 | 1935337 XitSam
XitSam's picture

Tragic. What lake did you say that was again?

Thu, 12/01/2011 - 15:13 | 1935807 Captain Kink
Captain Kink's picture


Thu, 12/01/2011 - 13:16 | 1935357 terryfuckwit
terryfuckwit's picture


Thu, 12/01/2011 - 16:51 | 1936209 Hook Line and S...
Hook Line and Sphincter's picture

You've got to be explicit around this neighborhood as to whether you're speaking of paper Au or Physical Au, lest one become a target for the rabid.

Thu, 12/01/2011 - 12:04 | 1935023 scatterbrains
scatterbrains's picture

One day I suspect I'll be able to pawn an old tarnished silver salad fork for a month's worth of groceries for a family of 4 and avoid  having to sell any coinage.


Thu, 12/01/2011 - 13:23 | 1935388 Hearst
Hearst's picture

I'm a big fan of sterling wares.  Plates, bowls, cups, flagons, Silver bitchez!

Thu, 12/01/2011 - 16:52 | 1936211 Hook Line and S...
Hook Line and Sphincter's picture

Sounds like we'll be carting around bags of booty like were in a real life Dungeons and Dragons.

Thu, 12/01/2011 - 18:30 | 1936561 Vlad Tepid
Vlad Tepid's picture

Bag of Holding FTW

Thu, 12/01/2011 - 19:21 | 1936694 Hook Line and S...
Hook Line and Sphincter's picture

Yes, a magical bag that allows holding larger objects than can actually fit within!

Thu, 12/01/2011 - 16:56 | 1936230 buyingsterling
buyingsterling's picture


Sterling can be covered by homeowners' insurance. I like it all, but for commerce, flat handled butter knives: essentially a rod of straight sterling on which you can scratch or stamp a weight, message, etc. Last night the tooth fairy left my 7 year old a small sterling silver ring. She tried to pawn it off to me for $3 in FRNs so she could buy some gun oil for her glock. I told her to keep the ring and we disassembled and cleaned our guns together before the sun came up, under light from a sterling hurricane lamp. Life is good.

Thu, 12/01/2011 - 12:05 | 1935030 Theta_Burn
Theta_Burn's picture

Coming out on this board and admitting that is pretty brave in my book.

I hold both silver and gold

I made a very substantial purchase of silver at the basement bargain price of....$44.00 per.


And yes i feel very fucking stupid right now

Thu, 12/01/2011 - 12:08 | 1935044 Sudden Debt
Sudden Debt's picture

Why did you buy it? For short term profit? Or long term profit?


Thu, 12/01/2011 - 12:14 | 1935074 Ahmeexnal
Ahmeexnal's picture

Check out swiss silver coins on eBay.
It's not unusual to see ordinary (neither low mintage nor old dates) half francs going for over $7 a pop. Do the math and that's over $100/oz pure silver.
Would this have anything to do with the reintroduction of the Gold Franc, and rumors that silver CHF coins will be redeemable at face value with the new AuCHF?

Thu, 12/01/2011 - 12:20 | 1935102 Ghordius
Ghordius's picture

you don't mean the not-so-old 5 SFr? no idea how much it weighs, though

Gold Franc not yet in sight, sadly...

Thu, 12/01/2011 - 12:26 | 1935131 Ahmeexnal
Ahmeexnal's picture

No, I mean KM#23. 2.5 gram .835 (2.0875 gram ASW).
All swiss silver is suddenly exploding in price.
5Fr coins are really nice too. Sadly, the last 5Fr (KM#40) was not a very wise coin to hold, as its weight in silver is really only 3 francs (15 grams .835). Nonetheless, it's one of my favorite coins.

Thu, 12/01/2011 - 12:53 | 1935242 Ghordius
Ghordius's picture

mine too, my Swiss GreatOncle gave me them with some interesting prophetic comments

he gave me the reason to research Central Banks since the tender age of twelve

well, the Swiss were "insulated" until The Great EURCHF Floor - now they are waking up

rejoice! still only "buy old gold" signs everywhere... the End is Not Yet Here

are you sure you are well today?

Thu, 12/01/2011 - 15:41 | 1935926 DosZap
DosZap's picture


No wonder, you said the N word, eGay.

Unless you catch a real dumb ass there, you wil get screwed on coins.

Thu, 12/01/2011 - 12:28 | 1935140 SheepDog-One
SheepDog-One's picture

Anyone buying gold and silver for dollar profits has it all wrong to begin with.

Thu, 12/01/2011 - 12:30 | 1935153 Theta_Burn
Theta_Burn's picture

Long term survival

Thu, 12/01/2011 - 13:12 | 1935336 grey7beard
grey7beard's picture

>> I made a very substantial purchase of silver at the basement bargain price of....$44.00 per.

Eh, Turd led a bunch of people down that path.  I know it sucks, but more than likely you'll be ok.  I've always made my purchases incrimentally, no matter how much the desire to to "all in".  I was under water more than a few times, but a bull market does a great job of rectifying blunders.  Which reminds me, I'm still underwater on my last silver purchase.


Thu, 12/01/2011 - 13:47 | 1935462 trav7777
trav7777's picture, don't take advice from pumper shills on ZH.

It's not like you weren't warned, man

Thu, 12/01/2011 - 14:39 | 1935670 tmosley
tmosley's picture

Yeah, take Trav's advice instead, and sink into a world of despair forever and ever.

Thu, 12/01/2011 - 16:06 | 1936017 suckerfishzilla
suckerfishzilla's picture

When Nelson Bunker Hunt lost his first million bucks speculating on comex Silver futures he said "You have to pay to learn".  I bought most of my inventory between 4 and 8 bucks an ounce.  I also bought in at $44/oz only I don't feel stupid about it.  I think you made a good buy.  Are you buying the dip now?  Occupy Silver Dec.9

Thu, 12/01/2011 - 16:43 | 1936166 Theta_Burn
Theta_Burn's picture

I bought most of my inventory between 4 and 8 bucks an ounce.

Lucky bastard

I started @ about 21 an oz and yes i do buy the dips. my thing lately is gold

Talk about top-ticking it wasn't 1 week after buying property in SC that the whole market collapsed

I'm in for the long haul, but it's just my shitty luck

Thu, 12/01/2011 - 16:55 | 1936222 Hook Line and S...
Hook Line and Sphincter's picture

Theta, you only should have regret if you've sold it since. 

Thu, 12/01/2011 - 11:55 | 1934993 SheepDog-One
SheepDog-One's picture

'The world is hungry for dollars', the world is hungry for a bit of sanity and to get rid of this maniacal central bankster cabal .001% lunatics who are trying to save their own worthless skins by killing all the rest of us.


Thu, 12/01/2011 - 12:15 | 1935082 LongBalls
LongBalls's picture

The world is not hungry for Dollars. The world is hungry for purchasing power. They are "stuck" with having to use the dollar. But the smart one's see through the magic trick. Gold has out performed all currencies for over 10 years now. This is not going to change anytime soon. The debt issues of the world are only just know being exposed to the light of day. There will come a time to dump your gold for land which is real wealth. But that time is not even close. The MAJOR debasement is currencies is YET TO COME. Gold going up, fiat going down, and real estate is still going down. When this cycle starts to correct it will then be time to cash in on your intelligence!

Thu, 12/01/2011 - 11:56 | 1934994 High Plains Drifter
High Plains Drifter's picture

the only time to sell gold is when the ruling elites (whoever they are, ha ha ha )  fix this big financial mess we are in. so i ask you. do you see any progress in this area?  will it ever be fixed?   if it is fixed, then how will they do it?  do they have our best interest at heart?  etc etc etc.........

Thu, 12/01/2011 - 13:38 | 1935429 HoofHearted
HoofHearted's picture

The time to sell my gold will be when a couple of those beautiful St. Gaudens will buy me a farm and 10 acres. I'd rather trade all of my silver Roosevelt dimes, because I hate that motherfucker. But someone wise enough to have a farm will probably want the gold instead. (I only buy Mercs now, but there's still a ton of the Rosies left. Anyone want to trade my old Rosies for your Mercs? )

Thu, 12/01/2011 - 13:55 | 1935495 Seer
Seer's picture

Careful about sitting on that pile as things collapse.

The time to buy is BEFORE things turn to shit.  Afterwards it's all going to be a big crap shoot, and, frankly, how certain are you that you'd be able to find someone willing to part with productive land for your gold?

I for one won't be parting with my land, as it addresses ALL the fundamentals: Food, Shelter and Water.  Your gold isn't one of these.  You can be assured that the value of the fundamentals will be far more valued (as a percentage of one's "wealth") than currently.

NOTE: I DO advocate holding PMs, it's just that people need to understand that they're really for exchanging for things of value FOR life.

Thu, 12/01/2011 - 21:29 | 1936927 Vlad Tepid
Vlad Tepid's picture

I'll bite.  I've got a $5 roll of Mercs (or mostly Mercs, I'll have to check).  I'll swap 'em out for the Great Confiscator.  "VladQTepid" is at gmail.

Thu, 12/01/2011 - 16:57 | 1936238 Hook Line and S...
Hook Line and Sphincter's picture

Ever get a sneaking suspicion that the right time to sell gold will only be after we've been done away with?

Thu, 12/01/2011 - 17:21 | 1936332 DosZap
DosZap's picture

Hook Line and S...

that the right time to sell gold will only be after we've been done away with?

You going somewhere you do not want to go?,the only way I will BE done away with is by GOD, or massive firepower,or a biological release(which I fully expect).And not done by our SO called enemies.

Otherwise, I plan on being the one doing the taking out.

A fatalist view, will not win you any wars, or help your odds.

Thu, 12/01/2011 - 17:50 | 1936434 Hook Line and S...
Hook Line and Sphincter's picture

I have a Celtic point of view, likely passed down through family generations. On earth, the heavenly Valhalla utopia eventually falls. Over and over again this game plays out. It's the fight that matters. 


Thu, 12/01/2011 - 11:57 | 1935000 kk1532003
kk1532003's picture

The $'s best decade is behind about 100 years....


The only thing "behind us" now is Uncle Sam...and he's sodomizing you via the printing press....

Thu, 12/01/2011 - 12:01 | 1935014 Hulk
Hulk's picture

For the record, I have never,ever, buggered any of my gold...That privilege is reserved strictly for cell phones on vibrate...

Thu, 12/01/2011 - 12:05 | 1935032 Long-John-Silver
Long-John-Silver's picture

I must admit to a single incident of spreading my Gold and Silver on the floor and rolling around in it naked. This was before it was carefully packaged and and safely stored where heavy equipment is required to retrieve it.

Thu, 12/01/2011 - 12:16 | 1935087 Ahmeexnal
Ahmeexnal's picture

I think I've seen that video on yourtoob.

Thu, 12/01/2011 - 12:38 | 1935184 Belarusian Bull
Belarusian Bull's picture


Thu, 12/01/2011 - 13:49 | 1935468 trav7777
trav7777's picture

so if you have to run in the middle of the night because of an industrial accident or some other catastrophe, wtf are you gonna do?  I mean, wtf is this, time capsule for anthropologists or something?

Thu, 12/01/2011 - 13:57 | 1935509 Seer
Seer's picture

LOL!  Yeah, there's that issue of whether you can take it with you when you go.

At some point the sane morphs into the absurd.  The line is hard to pick...

Fri, 12/02/2011 - 01:20 | 1935493 fuu
fuu's picture

Every week I buy 10 rolls of mercury dimes. I take them home and shove each dime up my ass. Then I sell the dimes on ebay.

20 years x 52 weeks x 500 dimes = 520,000 dimes out there.

I like to think of all those other silver bugs out there with my ass-dimes in their stash.

Silver Bitchez!

Thu, 12/01/2011 - 12:02 | 1935022 Uncle Remus
Uncle Remus's picture


Thu, 12/01/2011 - 13:11 | 1935335 trav7777
trav7777's picture

best decade in what, FRN terms?

Dollar creation can be effected very easily.  I shop for groceries and I don't see FRNs getting more worthful despite the cries of deflation.

Thu, 12/01/2011 - 11:44 | 1934965 Henry Chinaski
Henry Chinaski's picture

Channeling WB7 on some of those slides.

Thu, 12/01/2011 - 11:49 | 1934972 Sudden Debt
Sudden Debt's picture

Clearly they'll need to include silver and also price it at 8000$ per ounce and combined they might make it.


Thu, 12/01/2011 - 12:05 | 1935034 terryfuckwit
terryfuckwit's picture

and i'll buy you a pint LOL

Thu, 12/01/2011 - 13:42 | 1935442 HoofHearted
HoofHearted's picture

I'll sell you as much as you want at $1000 an ounce right now. Then you can make 700% profit by selling to someone else. (And APMEX will be on speed dial for me.) Of course many people would say we're just buying into the greater fool theory. I like to think of it as the "greater sized stack" theory.

Thu, 12/01/2011 - 11:49 | 1934977 SRSrocco
SRSrocco's picture

Gold's best decade is behind us???  After everything that we are witnessing in front of us, there are still some that think GOLDS BEST DECADE IS BEHIND US?

China just bought a 6-fold increase of gold in SEPT... and some still believe GOLDS BEST DECADE IS BEHIND US??

It is amazing that people think this way.  On one hand, I am completely surprised to see such a statement.... but on the other hand, it proves that Americans got the worst yet coming

..And they don't even know it.



Thu, 12/01/2011 - 12:00 | 1935012 SheepDog-One
SheepDog-One's picture

Americans, so far, have been kept insulated from feeling the pain everyone else is feeling. Even the UK is getting hit hard, where theyre now openly cutting the hell out of pensions, raising tuitions and fees out the wazoo, benefits cuts, etc...

I believe part of it is that americans do own a shitload of firearms, and theyre not quite sure what they can do with those people who just bought 5 million guns just in the last year alone.

BUT, it is coming to the US soon, theyll likely just have a shock and awe event and hope to catch most of them by surprise, and take their losses that their wargaming models show. 

Thu, 12/01/2011 - 12:56 | 1935264 Pete15
Pete15's picture

Time to leave yahoo is already promoting retiring outside the states

Thu, 12/01/2011 - 14:02 | 1935533 Seer
Seer's picture

Any odds on how the natives in those places will react when it really all goes into the toilet?

Suppose there are odds that those "escaping" will be kept alive for any income that comes in.

Suppose that there are odds that those "escaping" will be killed, in which case the tax burden in their departed countries will be reduced.

Thu, 12/01/2011 - 13:03 | 1935295 gdogus erectus
gdogus erectus's picture

Exactly. The second amendment has been indirectly attacked for decades. Recent frontal attack has not been good for the politicians pushing it. This is why the US has to be manipulated through newspapers and TV. The media was a lot easier to gain complete contol of here as compared to Europe where there were too many languages and moving parts to subvert as easily. Combined with Hollywood's social engineering - This is why Americans seem so utterly stupid when they are met by foreigners. I've had cabbies eyes tear up when I mention 9/11 was an inside job. "Oh my god. You are the first awake American I've ever met. I have to keep my mouth shut...." wiping his eyes.

I'm rambling now!

Thu, 12/01/2011 - 13:13 | 1935343 trav7777
trav7777's picture

stfu moonbat.

The media is controlled here and not there because of the Holocaust.

As if the endorsement of a fucking cabbie is a sign you're on the right

Thu, 12/01/2011 - 15:09 | 1935777 DosZap
DosZap's picture


Agreed, those STUPID IDIOT CHIMESE HO's, and Indians, the audacity, of only TWO Soverigns purchasing 55% of the entire production of the world in gold !!!!!!!!!!!.

Leaves a lot for we lil fellas......................huh?.

I cannot fathom why its not already at $5,000.(cept I know why).

Thu, 12/01/2011 - 17:01 | 1936256 Hook Line and S...
Hook Line and Sphincter's picture

Nominal thinking is one of an American's worst disease, and confirmation bias is an STD only removed by the penicillin of real austerity.

Thu, 12/01/2011 - 17:14 | 1936297 DosZap
DosZap's picture


Thu, 12/01/2011 - 11:56 | 1934997 unky
unky's picture

Actually Moores Law is wrong,  the computing capability does not double after 18 month if you also consider the devaluation of the currency.

It should be much quicker.

For example you can buy a 1  GHz processor for $500 and 18 month later you can buy a 2 GHz processor for the same price. But since the dollars devaluated about 20-30% (when compared to real money like Gold), the doubling of computing power takes place quicker. Moore did not consider this!

Thu, 12/01/2011 - 12:07 | 1935038 tmosley
tmosley's picture

Yup, and that equation is a major contributing factor to our ability to put off the collapse even this long.  The ability to continuously do more with less counteracts government's waste of resources.  We feel like things are much the same, but in reality we have been robbed of our future.

We should be able to maintain our current lifestyle with some 20% of the labor we do now, if not less.

This, combined with a much higher savings rate would lead to an exponential compounding of capital which would rapidly lead to a transformation of the physical economy into a model of plenty, rather than one of scarcity.

Thu, 12/01/2011 - 13:28 | 1935404 trav7777
trav7777's picture

yes, because these computers can just spit out oil with some spare CPU cycles

Or did you mean plenty of garbage, which is what all of this processing power leads to?

I will grant that solution of a fusion containment problem would be more probable with significantly increased computer power, but we're FAR too busy blowing up shit to be bothered putting research into carbon semiconductors.  And we've got to increase diversity in the government as Job 1.

Thu, 12/01/2011 - 14:44 | 1935688 tmosley
tmosley's picture

You're right Trav, we are no more efficient than we were 50 years ago.  Computers don't allow us to access any type of information we desire, or need for our work, thus saving hours of extra oil consumption.

The ability to access banking information onine has no impact, as we all still go and inquire about account balances, and pay all of our bills in person, driving to each and every office to make the payments.

Even with automated service lines, we all wait for human operators to do basic inquiries.

Technologial advance of all types is for naught.  Nothing changes, therefore we will all die next thursday of PEAK OIL.  Thank you so much for edumacating us, Trav.

Thu, 12/01/2011 - 17:13 | 1936307 Hook Line and S...
Hook Line and Sphincter's picture

On the other hand, I've started quite a few businesses in the past 15 years, and can tell you that the money spent on technology, the commoditization of the software purchased, the $ spent training employees, computers/servers/network trouble shooting etc added up onerously in unquantifiable headaches, and time spent learning new technology that would be replaced in 2 years. Add the difficult to quantify and the obvious expense of all this hardware and software...and the whole 'efficiency' quotient really comes into question. I'm slowly turning into a Luddite.

Thu, 12/01/2011 - 18:16 | 1936504 Dave Thomas
Dave Thomas's picture

Yeah the next technology salesman that utters the term "ROI" is gonna get their nut tapped. These plastic tiki light heads are usually employed a year or two tops at each sales position. It's like being a big rotating clowns head that has shitty expensive buggy software spweing from it's mouth. By the time their "solution" has completed a complete "lifecycle" they've had about 8 different sales jobs.


Thu, 12/01/2011 - 19:23 | 1936697 Hook Line and S...
Hook Line and Sphincter's picture

It's clear you have purchased the same brand of ibuprofen that I have. ; )

Thu, 12/01/2011 - 11:58 | 1935004 undercover brother
undercover brother's picture

I don't see why all the confusion.   The writing has been on the wall in big bold letters for years.  As long as Bernanke and his henchman are running the Fed, they will continue with their present monetary policy and it will not change until they are removed.   Pick your spots and buy gold, silver and other assets as you're backstopped by the Fed. 

Thu, 12/01/2011 - 15:06 | 1935765 Seer
Seer's picture

The writing on the wall was WAY before the Fed, it was there when we all decided that we'd just grow to infinity on a finite planet: go forth and multiply? (ah, for HOW Long?)

How can people not understand this dichotomy?  On one hand everyone seems to get that virtual/made-up fiat isn't based on the physical and that gold works because it's all about physical, but on the other it's the fault of government or whatever for not promoting MORE growth.

Trav, with each passing day my appreciation for you bringing up the Downing Effect increases.

Thu, 12/01/2011 - 11:59 | 1935010 San Diego Gold Bug
San Diego Gold Bug's picture

$5,000 gold some day.......I wonder how much my .308 ammo will be worth then?

Thu, 12/01/2011 - 12:04 | 1935024 SheepDog-One
SheepDog-One's picture

1,000 rounds .308 Prvi Partizan for $680 today, in rubber battle packs at bad! PM's.

Thu, 12/01/2011 - 12:20 | 1935104 rosiescenario
rosiescenario's picture'd be better off with 223.....far greater demand for it......I'd go with the Varmint Grenades, too....they are non-lead and make you 'politically correct'.....

Thu, 12/01/2011 - 12:26 | 1935133 SheepDog-One
SheepDog-One's picture

I used to own a .223, was never much impressed with the high powered .22 ....go with the .308 much more useful.

Thu, 12/01/2011 - 13:30 | 1935409 trav7777
trav7777's picture

5.56N is a decent round, but it's not going to cut it without the rest of the force pyramid behind you.

SOCOM has already up-calibered after being saddled in too many losing firefights with M4s. 

Thu, 12/01/2011 - 15:37 | 1935916 DosZap
DosZap's picture

SOCOM has already up-calibered after being saddled in too many losing firefights with M4s. 

Yep, never understood why the dumb asses went to 14.5" tubes, and expected good results.(OR, changed the twist,change it to a 16" and a 1-11, and you would be BAD ass, to at least 200-300yds.

7.62 ball is not a ton better,except for penetration,tad more range (put the 175 M118 LR config on it,heh,heh,), and it will kick ass.

Out to a 100-150yds, a M193( neither in use anymore,new solid core design took place of 855, and,is a MUHTA), is a bad ass  round with proper twist, or an M855,will break at the cannelure and tear shit up......past that,  they make clean  .22 holes.

But, LOTS of them.


Thu, 12/01/2011 - 12:02 | 1935019 terryfuckwit
terryfuckwit's picture

i think it's necessity being the mother of invention... Historically man made currencies always fail the store of value aspect of their design..How much we humans use what nature most excellantly provided is up to us. Electronic money will never go away and possibly notes will never go away but my vote for the store of value is with the metals... If bitcoin proves as mathematically sound as linux it sure is a runner too.. time will tell..

Thu, 12/01/2011 - 15:10 | 1935789 Seer
Seer's picture

"Electronic money will never go away and possibly notes will never go away"

So, you're saying that EMP will NEVER be used?

Map the techno world to the production of oil, if you don't see the correlation then all the best to you and yours.

Thu, 12/01/2011 - 12:06 | 1935035 SheepDog-One
SheepDog-One's picture

'Monetary singularity'...hmmm so another way to say '1 world govt, 1 world bank, 1 world currency, New World Order', without seeming to be one of us 'kooks' who have been warning about this for many years?

Thu, 12/01/2011 - 12:26 | 1935135 Tsunami Effect
Tsunami Effect's picture

Yo, Dog,  Soros has been nudging us to an "open society" for decades.  don't forget soros was a huge supporter of obama before anyone knew who he was....

Thu, 12/01/2011 - 12:07 | 1935039 fourchan
fourchan's picture

they had me until swiss bank, if its not nazi gold from jews teeth,

its claiming ill gotton gains, fuck the swiss, i'll be my own swiss banker thank you.

no fillings in my reserves either.

Thu, 12/01/2011 - 13:33 | 1935417 trav7777
trav7777's picture

I'm not getting the problem here...antipathy towards jews by germans would have been justified after the financial collapse and bolshevik incursions which divested nearly the entirety of Germany into jewish hands, no?

How many germans starved to death or died of disease as a result of the actions of a few jews?  How many souls are on the Warburgs' tabs?

Thu, 12/01/2011 - 14:43 | 1935684 DogSlime
DogSlime's picture

How many germans starved to death or died of disease as a result of the actions of a few jews?

That's it right there - a few - not the entire fucking race.  Antipathy to the entire race (or any entire race) is not justified.

I'm asking to be junked into oblivion, I know, but the generalisation that it was/is the entire race leads to a really bad place.


Thu, 12/01/2011 - 15:16 | 1935827 Seer
Seer's picture

You're not going to get junked by any sane people.

I detest broad brushing, which is almost 100% of the time no more than propaganda and ignorance.

I get Trav's point, but, as is usual, it morphs into racist commentary.  Must have been an awful childhood experience for Trav...

Thu, 12/01/2011 - 16:21 | 1936092 Doubleguns
Doubleguns's picture

Umm...can we at least use the broad brush on bankers still.

Thu, 12/01/2011 - 16:24 | 1936100 Seer
Seer's picture

Yes, but only with a liberal helping of tar.

Thu, 12/01/2011 - 12:08 | 1935042 Crash N. Burn
Crash N. Burn's picture

 Pyramid (page 57) omitts "safest" - in your posession. If you can't touch it, ya don't own it!


Thu, 12/01/2011 - 12:13 | 1935067 loveyajimbo
loveyajimbo's picture

Ben Davies is one sharp cookie... as are Jim Rickards and Jim Sinclair.  Notice the recent massive money printing for Europe?  How come the damn ECB couldn't print, why did the Bernanke have to step in?!?    Think that is bad for gold?  Fiat (paper) money is a tool of the elites and guess what?  They are trying to steal the worls's wealth, including YOURS.  Ron Paul gets it.

Thu, 12/01/2011 - 15:19 | 1935843 Seer
Seer's picture

"They are trying to steal the worls's wealth, including YOURS. "

The world's wealth was an ILLUSION to begin with!

Now we whine, when we've been doing this to folks in third world countries for eons?

The growth music stopped.  Find your seat...

Thu, 12/01/2011 - 12:38 | 1935167 devo
devo's picture

Is it me, or has gold been trading in direct relationship to margin call probability?



Thu, 12/01/2011 - 17:15 | 1936311 Hook Line and S...
Hook Line and Sphincter's picture

It is you. Nope, it's trading in direct proportion to how it's chart has been painted by the syndicate and effected in marginal ways by margin call probabiity.

Thu, 12/01/2011 - 13:08 | 1935324 floor
floor's picture

Gold is a parking lot for money that has no where else to go, but economies can't run on Gold if everyone would rather have the gold.(Bretton Woods II)

Thu, 12/01/2011 - 13:18 | 1935365 Alchemist
Alchemist's picture

The fear mongers at ZH have very poor concept of what drives inflation and what created money.  I have news for you - we are in a DEFLATIONARY evironment.  The money creation has taken place through credit and leverage over the past 10 years. Central banks cannot create or print money - they can only create monetary base.  The only institutions that can create money are private banks which they do through lending. We have many years of delevering of both, private and public balancsheets ahead of us.  The only conversation that is takign place in the policy circles is about austerity.  Austerity in the age of overlevered consumers is deflationary and contractionary.  Central banks are merely supporting the economy to prevent the deflationary forces of austerity from spiraling down. Hyperinflationists are delusional.  Weimar style hyperinflation is only possible when fiscal authorities massively ramp up spending relative to GDP and use central banks to finance it. With government spending going down - central banks are powerless in creating inflation.  Gold is an emotional vehicle. Its rally is driven by investment flows and not by an evidence of inflation pressures.  We might yet see more upside in gold in the next year or two but it will be well below 1000 within 3-5 years

Thu, 12/01/2011 - 13:34 | 1935413 devo
devo's picture

You are right to some degree--there is biflation. Needs go up in price, wants go down. Good luck telling my girlfriend, who commutes and hour per day and buys our groceries, that the inflation in those commodities is cyclical. Anyway, at the end of this logjam when that pent up money flows once you think raising interest rates will be enough to stop it? I don't. As the Fed makes more and more people aware of their negative savings rates, they will move into PMs to just maintain what they have and eliminate the counter-party risk. Do you think people will keep faith in the dollar? I don't. What happens then? Do dollar denominated equities appeal when dollars don't? Wouldn't people move to PMs instead of other fiats? Logic says so, but maybe not. I am not sure investing will ever be the same. There was never a lot of trust, but it's been destroyed this time around...probably an entire generation will look to alternative investments. Your assumption is that PMs only track inflation, but they also track trust, faith in currency, counter-party risk, independence, etc. These things are all on the rise. It is also good to own some in case of a doomsday scenario. I don't understand an argument against PMs. What, they seem too expensive? Is that it? Look at what your dollars have done the past 10 years, then assess if they're expensive.

Thu, 12/01/2011 - 15:56 | 1935982 Alchemist
Alchemist's picture

There are a lot of IFs and sure if all of a sudden demand for credit will skyrocket and credit standards loosen up - we will have high growth in money suply with inflationary side affects.  But with the world delevering, these IFs will never materialize.  One can come up with all kinds of scary scenarios but the ingredients to catalyze them are just not in place. As one saying goes "If grandma had balls - she'd be a grandpa".  Not all IFs are made equal and not all of them have meaningful probabilities.

Thu, 12/01/2011 - 13:43 | 1935447 trav7777
trav7777's picture has its own fundamentals of supply and demand which affect price.

Gold's production peak was in 2001.  As oil grows in scarcity it will become necessarily MORE expensive in real terms to extract gold from the ground to meet whatever demand there is for it.  At the same time, gold reserves in ground are subject to depletion along a decreasing supply curve.  What this means is that gold production risks (like any commodity) falling off a freaking cliff at any point.

You cretins simply DO NOT understand deflation.  Deflation does not mean that your stupid FRN gets more worthful.  It may against SOME things, but other things will simply NOT BE PRODUCED.

I have counseled morons like you and Douchinger repeatedly to get off your couches and to go to places like Brazil, where IRRESPECTIVE of demand, the prices of things remain high.

When the car dealers worth through their inventory in a liquidation, they will not continue to just operate and sell at a loss!  The FRNbugz can't seem to grasp this.  All the excess inventory will go and then prices will reset HIGHER, and permanently.  There will be LESS people with money to spend on stuff like this, less products sold, less less less.

The precious FRN is transient and in only certain asset classes, like disposable consumer goods and such shit.  Businesses HAPPILY operate at far LOWER volumes in the 3rd world.  The single focus is a PROFIT.  If deflation halves the volume of cars that can be sold in the USA, or halves the number of TVs, do NOT expect the manufacturers to drop prices far enough to try to "make up a loss" on "volume."  It won't happen.

They will dump inventory and close capacity down.  Then prices will go up to whatever their profit point is.  If you don't like it, fuck you.  That's how business works.  Production falls in a contractionary environment, not just consumption.

Again, as I have said repeatedly, reality is backwardating.  Things in existence NOW will command a premium compared to promises of them down the road. 

Thu, 12/01/2011 - 14:22 | 1935610 eurogold
eurogold's picture

Thanks for taking the time to explain the simple concept of economics to the sheep who just don't get it. Maybe they will this time!

Thu, 12/01/2011 - 15:51 | 1935966 Alchemist
Alchemist's picture

Sure, there is inflation in Brazil and in China and in India, places that experienced high credit growth and wage growth.. However there are no ingredients of inflaiton in the developed world since money is getting destroyed through deleveraging, unemployment is high and there are no wage pressures that could create demand push inflation.

There is indeed a commodity based inflation but its dricing relative prices not the general level of prices.. Since wages and credit are not growing, higher prices for some commodities results in lower demand for other goods and services as poor wage growth and empoyment picture is keeping the funds availble for spending under pressure

Thu, 12/01/2011 - 14:14 | 1935585 7point62
7point62's picture

My "emotions" tell me my FRNs are becoming worthless.  I can't wait for gold to go back under $1000.

Thu, 12/01/2011 - 15:36 | 1935913 Seer
Seer's picture

As The "Seer" I highly recommend that you stick to Alchemy.

If, as seems the case, a credit contraction is happening, then, yes, in a classical sense we've got contraction of the money supply- deflation.

However, there's also a strong argument FOR inflation, that the money supply IS, in fact, being increased.  I'm not all that educated on economics, I don't know what the great economic minds said about conditions where money is increased yet its velocity decreased (due to credit contraction), but one can hardly ignore all the talk about QE.

It's all confusing at best.  These are uncharted waters*, and anyone who professes to KNOW the outcome (other than growth WILL stop) is a fool. * Other collapses in currencies happened with currencies that were NOT recognized as the world's reserve currency; their collapses were mostly contained within their own countries (well, that is, excluding the exporting of war).

As "Seer" I WILL say that the essentials will be less affordable.  Whether one views this as inflationary or deflationary is really just mental masturbation.

Thu, 12/01/2011 - 14:14 | 1935587 dillinger14
dillinger14's picture

Great presentation!

I love the fact that someone has applied the Singularity theme to the monetary, eh, "situation" these days. So appropriate.

One thing though, I'm a huge Ray Kurzweil fan and all of those technical singularity graphs are from his book. Wish Hinde Capital would have given him credit and sourced him in the presentation...

But loved the conclusions drawn anyway!

Thu, 12/01/2011 - 16:01 | 1936004 Black Friday
Black Friday's picture

He is cited.

Thu, 12/01/2011 - 14:30 | 1935633 Badabing
Badabing's picture

"High (hyper) inflation is caused by financing huge public deficits through money creation."


The world banks are public?


They must think we be dicks!

Thu, 12/01/2011 - 16:57 | 1936239 Alchemist
Alchemist's picture

Money has been created in the past through debt.  Right now the focus is on austerity and debt reduction everywhere in the developed world which is deflationary.  Inflation is what you see in the rear view mirror.  No wonder gold has been acting like a risky asset and actually trading down with BTPs at times

Thu, 12/01/2011 - 23:25 | 1937196 janxeh
janxeh's picture

Yes credit is contracting but the physical money base is expanding due to the deperate attempts of the FED inflate.

Where do you think all the budget deficits are going? It is leaking in to the economy through wages, purchases and payouts.

This is where the inflation will come from. The consumer tis tapped and the bernank and co have taken over.

When the credit contraction and physical base expansion intersect you will have hyperinflation as there is not enough new credit to pay for the existing debt.

There are only 3 end game ways out of this mess, default, inflate and stagflate. Every action so far has pointed to death by inflation. Until i see massive austerity in america and the axing of 1/2 the govenment, gold is still viable.


Thu, 12/01/2011 - 23:36 | 1937194 honestann
honestann's picture

Make no mistake.  Gold is the answer, the only answer.


Make no mistake.  ABSOLUTELY EVERY fractional reserve practice must END.  Not mostly, not sorta, not except x, y, z, not for everyone except government or central bank, but EVERY ONE.

No "gold certificates".  No "gold receipts".  Only real, physical gold.  PERIOD.  And no "selling" or "lending" what you do not have (simultaneously a form of fraud, ponzi and fractional reserve).

Yes, it is perfectly fine to have "gold debit cards" or normal "checks" denominated in real, physical gold held at the bank.  But there must never be any more "gold credits" than there is "physical gold" held at the bank that operates the "debit cards" or "checks".

Fri, 12/02/2011 - 04:08 | 1937613 boogey_bank
boogey_bank's picture

A question for zhpeople,

from a j6p point of view, what is the best option to own some gold overseas (far away from government hands)? (and given that phys in your possession is better option)

In particular what do you think about the followings:

1) buying perth mint certificates allocated (via goldcore dealer)

2) starting a gold accumulating plan with goldcore

3) buy some gold eagles on (maloney) and have it stored in HK vaults? I don't trust anymore the swissy

I have previously discarded:

1) gold etc (show me where is the gold issue)

2) bullionvault (timeshare gold issues)

3) goldmoney (Tyler said it's going to be raided by government in nederland)

Fri, 12/02/2011 - 04:32 | 1937636 boogey_bank
boogey_bank's picture

One more question, some light about gold miners (apart from nationalization fear issues that are an indipendent variable), in particular:

1) explorers (given that I think is pure gambling)

2) juniors (the next big thing or the tech bubble redux)

3) big miners like nem, yamana and apart barrick, which is in bed with gov. (the next '80s microsoft?)

Using TA and in particular the P&F vodoo, I see only bearish price objectives and risk on risk off behaving stocks


have you explored the field of correlation between gold stocks and the rest of the rigged market?,

I guess that if something big is going to happen in the gold miners, we could see changing in correlation factors.

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