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The Imminent $2.5 Trillion Debt Ceiling Hike Will Unleash A Gold Price Surge To $1,950 And Higher
Two weeks ago we presented a chart that shows the uncanny correlation between the debt ceiling and the price of gold. Now that we know the final amount of the next debt ceiling hike, somewhere in the $2.5 trillion ballpark, it allows us to extrapolate where gold will end up as a result of the debt ceiling hike which will likely be voted into law at 7pm PDT. A simple correlation rule of thumb allows us to predict that gold will be at $1,950 by the end of the year if it simply retains it close correlation to the debt ceiling. Should Bernanke announce that he will additionally need to monetize some or all of this incremental debt amount, we anticipate that gold will be well over $2,000 by the end of the year, courtesy of yet another round of accelerated dollar debasement, which also means that real gains in US stocks will be negated courtesy of the devaluation of the currency in which they are priced. The same, however, does not apply for gold, which with every passing day is priced in nothing but itself.
The Bloomberg chart of the day first presented on July 20.
And our revised version including the projected gold price.
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I've been in countries where eating cats and dogs is considered a normal thing to do.
You never see stray cats and dogs for that reason.
wtf is wrong with eating kittens?
I love cats, but I can't eat a whole one. A kitten would make more sense, no left-overs.
The free-range, grass-fed variety is the best, but difficult to raise. I mean, have you ever tried to herd cats?
You are kidding? Spotted OWL, and BALD EAGLE have more protein punch...
Trav why do you always have to be the ( Ring Master)? It's obvious you are within the mental limits....
what are the specifics on the debt deal? (i know, not that it really matters) im hearing 2.1T raise. thats less than i thought.
Its two part 900billion in the first round 1.2 in the second. Of course they can rase it later. The commity seems to be given the task to cuting 1.2 trillion over the next 10 years.
Its all wait and see, kick the can BS. Nothing will stop money from flowing at an ever faster rate.
All discresionary spending increases. Some non-discresionary spending may get cut if the commity aproves..
Its BS Inflation will run wild and so will your next oil change.
if you want to get the full prop-wash, try this from one of my crimex "gold" news pages:Crowley on Passage of Republican Default Bill
here are the first two sentences (Paste):
Aug 01, 2011 (Congressional Documents and Publications/ContentWorks via COMTEX) -- Washington, D.C. -- Today, Congressman Joe Crowley (D-Queens, the Bronx), voted against yet another Republican effort to distract Congress from working toward real bipartisan compromise on the debt ceiling, addressing our nation's faltering economy and creating jobs:
"Speaker Boehner and House Republicans voted to do one thing today and one thing only: waste what little time we have left voting on an unbalanced, partisan and reckless bill.
the big whatever in the big apple.
and remember, we will not pay out on any "whatever" bets until the deal is signed, no matter how many times tyler declares he freaking nailed it
Does it matter at this point?
Im looking at humanity at this point. There must be a way to retain civility. Compasion and simpathy.
I will do my part but i fear so many will resort to violence and anger. We must allow the better angels of our nature show we are more then animals, we must be.
Compasion leads to simpathy, that leads to freedom, that leads to inovation, that leads to progress.
I hope you're right. My cynical self tells me that comapssion will survive the bad times, but you'll have to look for it
Compassion needs to happen NOW. Apart from getting preparatory word out, spending some time "stocking" for others - call it an extended family even if partly anonymous to us now - is an act of compassion.
I have a lot of hard assets within reach, but I'm past preparing for my family and preparing for those who aren't. I figure I can board some folks if they can help garden, split wood, defend the 'stead, etc.
Sympathy......there, just a little fix
Who is that nutty guy that calls 6K ToZ on xau when it bounces 25 bucks? CNBS what a hoot...
Sheesh, let's get to $1,650 first.
The Angels have been gangraped by the Cartel repeatedly.
Let's take it one step at a time.
so this morning the 'tard claims the current situation is a "manufactured crisis." this afternoon he tells us the following:
"I've never seen so many investors get so bold to buy stocks in front of:
- NFP wipeout
- Looming debt defaults
- Cities going bankrupt all over
- Weakening GDP
Especially stocks like FOSL with a PE of 148....WTF???"
finally, he reluctantly accepts he was wrong all along about gold with this post. next thing ya know he'll be saying gentleman jim sinclair was right all along, too. lol!
Robo i like you. I feel you are vary much like i would have been.
Yes the math needs one stupid step at a time. Gold is stupid, but then it was not me who made it valuable.
Paper is burning all those trillions and billions are going away. If they stay then billions of real people with reall dieing children will become vary angry, even violent.
Humans need purchesing power not robots. Humans need to eat and give girlfrends presants and tokens of affectins or they dont make more people and service this great expansion of debt.
Even you must see this to be true. There are limits to debt because of its impact on life and girlfriends.
Kids have needs CDS/Stocks/Bonds and other paper trash hoave no limits. But women have limits.
Without women we have nothing but old men angry maids.
Ahnold's maid seems happy enough about everthing . . .
lol for now. Just wait for the grand kids. Ill be back.
WTF? Past tense Ronnie,.,.
BBQ you are invited to my WEBER ANY TIME! I love that Avatar... You talk the walk... Tall hat/ small cattle..
Good on ya YEN... sarc/on
Why does everyone hate on Robot so much? Sure his views are mostly contrarian but he is at least respectful in his approach and not an idiot troll like Hamy Wanger. I hardly agree with Robot but find his views to be worthwhile. Let's keep the meaningful information rolling pplz. Just saying... I'm sure I'll get junked for this.
I can't speak for others, but I despise RobotTarder for his consistent pattern of making flippant, willfully antagonistic and speciously shallow one or two-liner flyby stock-pimping posts without virtually EVER being willing to defend them, respond to criticisms, questions or challenges, or to engage in any sort of meaningful dialogue with anyone here.
There is actually a word for that kind of flaming, hit-and-run behavior in an online forum: "trolling".
you don't have a sense of humor. Most that junk robo do so anonymously like coming in third man to kick someone on the ground
What does a massive deficit have to do with gold? How does that metal correlate with deficits? I notice oil back up over $2 a barrel AH.
Can anyone 'splain?
Gold is the bedrock of all money its the end game its the "everything".
Gold is the point from stealing and useing fiat money. Why would you to to the trouble of setting up a central bank if not to steal every last ounce in the universe.
Gold is the point of all money because all money is gold.
Kings and their thought process doesnt change becuse they have the gold and you dont.
No matter how much gold is mined its never enough. All the gold in the universe is not enough for these crazy's.
Its the end game chips it's the reason you print money for free. Gold is everything. Why would you print paper if you couldnt by gold with it?
See ? Stupid is as stupid does. Yes forest those in power with armys and with the ability to print paper are stupid. and so are we for letting them buy our gold.
Gold had me at hello
Just in case you are not kidding.
There is a law in economics called the Law of Supply and Demand. It says if the supply goes up or the demand goes down, prices fall. If the supply goes down or the demand goes up prices rise.
Now here is the tricky bit, the part most people miss. The law applies to both sides of the equation.
Everyone can see if the supply of goods goes up the price goes down. Not everyone can see if the supply of dollars goes up the price of goods goes up. Not because the goods are more valuable but because the dollars are less valuable.
A massive deficit means more dollars in circulation which means a general rise in prices.This is what they want. Bernanke has been pumping out dollars hoping to counter the huge loss of money caused by the real estate crash 4 years ago. He has succeeded too well. The result will be more inflation, while the economy stays stagnant.
Inflation means that all other things being equal the price of gold and oil will go up along with everything else. Excet that some things like gold are known as a good infltation hedge. That means when everyone gets wise to what is going on they are going to buy gold and silver to protect themselves. Then gold and silver will go up an over added amount.
Hope this helps.
Silver, Bitchez
Things can go parabolic.
Or unparabolic.
This one looks like a good old fashion cliff hanger! Where is Wiley-e-coyote?
http://finviz.com/futures_charts.ashx?t=GC
Just strapping in to my brand-new ACME Deluxe Rocket Propelled Hang Glider. Nothing can possibly go wrong this time.
Hey, toys for tots! Got a repo sheet for me?
Like the RBA today? Or the fudge packed PBoC /CPI?
.
Putin: "The US is a parasite on the global economy"
Biden: "The more we spend, the richer we are. No, really!"
The politician agents for the banking class are irresponsible spenders and crashers of the global economy. Those not protecting themselves with hard assets and PMs are being robbed.
Need to clarify here:
Biden: "The more we (the sheeple) spend, the richer we (TPTB) are. No, really!"
Export-banning motherfucker says what?!
http://www.wtfnoway.com/
apologies if this has been posted many times before, unforunately I have been unable to read ZH as much as I would have liked recently. I feel totally and completely uninformed as a consequence
But Harry S. Dent Jr. says commodities will tank?
sorry connection problem... double post
They have been SCREAMING GOLD for MONTHS!
If that is true the Market should be stacking with bids and asks.
I am staying in Silver ASE for now. There is a one hell of a ASK list with pricing going to the moon before Gold gets out of the gate.
While Gold Bugs foam at mouth and feverishly write about the coming boom, they should feel pain from Platimum wacking them on the head. Plat has been moving upwards slow and sure.
The problem with the five trillion platinum coin is Putin being tempted to reproduce it...worker vs parasite bitchez.
I invested in Platinum it moves up to mid 1800's back down to the low 1700's. It has happened about three times since I got in.
I keep adding bullion to my safety deposit box and last week I had to get help to lift it.
I am a happy man....
What are you going to do when the bank door is locked without anybody telling you?
You mean gold is going to stall out there until the next ceiling hike in 2013?
This is like watching paint dry.
So! Gold doesn't lie. Trouble in the fiat monetary bubble.
It is because of this chart Tyler.
http://nationaleconomist.blogspot.com/2011/07/soros-keynes-and-buffett-v...
Global M0 vs. Gold Stock
Easy as Pie, fairly value gold at any time!
"Gold is a store of wealth. Gold is an element, abbreviated as Au, with an atomic number of 79. Gold is an industrial commodity. Gold is sought after for its use in jewelry and other lavish decoration. Gold is a monetary metal. Monetary can be defined as: of or relating to money (synonym: pecuniary). Monetary comes from the Latin word mon?ta, which means money, and the word mon?t?rius, from Late Latin, which means, minter, coiner or of money. "
Gold is a metal which is very much inert. It does not Oxidize, corrode or deteriorate over time so, retains its value. The piece of gold you hold in your hand may have a bit of gold held by the King Tutankhamun. Don't be afraid to leave this for your sons, grand sons and great great grand sons.
Why do so many here find it hard to believe Gold can hit $2000? Ask yourself how many ever thought it would break $1000 or $1500. Shit I remember back when gold was stuck at $300 and not many ever believed it could get back to its then all time highs of $800. Well we know better now don't we. With all the economic world in a pile of deep shit, where else would you want to put your money now then in Gold?
Geeee. I don't know. Sometimes I like to invest in undervalued asshats!
Invest or divest? You tell me.
I have a perferred share of a company that today is worth billions and that share is worth nothing.
I keep it for two reasons:
1) its the only signature of my great great grandfather.
2) it shows that paper markets are not to be trusted. Otherwize i would have had a proper education, and would be working for MIT or NASA on gravity well engines or studying geologic hot spots and mesureing their gravity. Flying cars... maybe.
But for now im forced to invest and position my limited saveings based on stupid and crazy.
Life is a hell of a thingl.
I'm in the same boat, amigo. If by some miracle I can pull it off, Big Brother'll find a way to steal it all back from me anyway. Yeah, a hell of a thing......
I started buying gold at $350. Bought heavy at $450 to $800. Continued to accumulate up to $1200. And at no time, except possibly the
sell-off during the 2008 market crash, have I felt that gold was more of a bargain than it is right now.
I was around in those days. Silver too. 15% CD deposits etc.
Those days are over.
Once in a while I wonder if I live long enough to see something REALLY neat.
That is why I got into the Physical recently. The discovery of all the neat ways to make a dollar has now worn off, and it's a mental nerves fighting other traders who know the same spread as you do to make a profit.
I hope that safe deposit box isn't in a bank . . .
The first book I ever read on gold was written over 2,000 years ago - it was called "The Holy Bible". Religion and gold go hand-in-hand because the elders forced the masses to pay for their sins by giving up their gold. Somewhat like taxes...
We have intel that this website is owned by the Vatican. Jus sayin...
Father Guido Sarducci is not a reliable source.
I played the UDS/JPY pump for a 90 pip gainer, and rolled it straight over to the GOLD stuff......time to ride the gold train to $2000, the world economies are a complete mess....especially the US and Europe.
Sooner we need to measure Gold in different measure, like "Grain of Gold" like US$3500 a grain of gold. because "ounce" will be a too big to measure gold in US$s.
Does anyone here have what they feel may be a minimal amount of gold and silver to have in one's possesion to be somewhat secure when the shit hits the fan? Also once currencies hit the zero or close to it mark, what is the next thing to do with our pm's. What do we turn it into? Looking for some info to help guide me through.
Thanks
Turn your gold into land.....something that is always worth something..preferably farm land where you can grow some food. Use what is left over for some nice automatic guns and ammo.
First, fill the cupboard with dry goods and canned stuff you'll eat and a case bottled water for each family member. Pretend that your favorite grocery is the only store in town, and it's gonna close for renovations for 6-8 weeks. Nearest store's 100 miles away, what would you stock? THEN I'd say 10% of net worth in metals...buy over say 6 months(I'd at least make a few purchases over a 30 day period to)...then do it... if gold's running, buy silver first month, silver's running, buy gold, I'm no financial analyst, these are my opinions only. I've got more than this %age of my worth in PMs, personally, but feel it's a good start, and there is a peace of mind, if you've the slightest idea how quickly this economy could go to crap. JMOs
You would turn it into another HARD ASSET!
"South Korea's central bank bought 25 tonnes of gold over the past two months in its first purchase in more than a decade, saying the time was ripe to boost its gold holding, but markets barely moved on the news."
http://www.reuters.com/article/2011/08/01/korea-economy-reserves-idUSL3E...
So, going behind my wife's back to load up on food, ammo was a bad idea???
This is my first comment on ZH. Been reading it for 9 months now and, wow this is by far my favorite site in the whole world. An eye opener. And also i love reading the comments from all of you they are so educational. I been buying gold and silver every since i started reading ZH. i have lived through hyperinflation in early 90"s in Yugoslavia and it was the worst time of my life. Prices were going up 3 times a day, electricity block outs 2 times a day, empty store shelfs, gas stations out of gas all the time, people were working whole month for a pack of cigarettes. i live here in US now, and I believe like many of you here, we will have hyperinflation here since they run printing presses like there is no tomorrow. I remember back in my country German Mark was like gold, whoever had it, he prospered. Who had German Marks, gasoline and food those people did very well during those times. Gold will be like German Mark. I stuck up on food, guns, gold, ammunition. Thank you ZH and all of you with your comments for opening my eyes. Sorry about my grammar its little bit off, English is my second language.
Thank GOD i clipped eur/aud with a small profit.... Alll time lows are coming.
Try to familiarize yourself with what gold and silver will buy in goods and services, which has remained fairly constant throughout history, so you will know the value regardless of fiat inflation. A silver dime, a tube of tooth paste, a silver qurater, a gallon of gas etc. I think 1964 values should serve as a pretty good base. In 1964 the average income was $4576 per year. If you convert it to silver dollars it comes out to over $135,000 per year, therefore, we are not even making 1964 wages on average in terms of purchasing power.
In 1964 you could buy a cheeseburger for a quarter. Today, same silver quarter buys you 5 cheeseburgers, small french fry, and
small soda on McDonalds' dollar menu. Silver was undervalued in 1964.
silver might be a bit undervalued in 1964, but in this example you give, you need to also take into account that the cheeseburger in 1964 was made from actual meat and cheese, as opposed to the fatory processed dogshit they sell these days. If you want a real cheeseburger today, well, you can get one for a silver quarter, or so.
This touches on a more general theme of the past few decades... weve had inflation in prices of things, that even the commoners can see, but weve had a subtler progression of degrading quality of damn near everything during the same time. Nowadays you have to buy some fancy premium organic hoo-hah whatever you want to call it stuff just to get what was considered the minimum basic standard 50 years ago.
not just food, but across the board. everything. clothes you wear, the house you live in (even millionaires in america live in these plastic and drywall boxes, it is like they dont even know any better!) , everything. What passes for normal today nobody would even look at a couple of generations ago, except perhaps to sweep it into the trash. If you still want something of the same quality today... you find out just how poor we have gotten.
but dont feel bad! now you have ipads and 500 channels on cable tv!
Indicators still warn of a USD rally and Gold/Silver/ EURUSD weakness.
http://stockmarket618.wordpress.com
@ Temporalist. I saw the Bank of Korea note. Compare with http://www.zerohedge.com/article/south-korea-sets-expand-gold-hodings-ch... 10/18/10 when careful consideration was being given to gradually increasing reserves........ 63%
It seems that one problem with this correlation is that the oustanding debt has hardly ever remained level long enough for the gold price to catch up with it. The lines touched in 2008 briefly, and obviously the choice of origin and scale for the two graphs would affect the relationship, but I still think it's a valid question: If the debt ceiling were to remain level (or heaven forbid go down), how would the price of gold behave? We don't have enough data to really know at this point.
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