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Kyle Bass On Rehypothecation And Other Keynesian Endgame Scenarios

Tyler Durden's picture




 

If readers have the sense there has been a deluge of Kyle Bass reading (and viewing) materials on Zero Hedge in the past two weeks, it is because there has been: and why not - after all, unlike all other cheap talking heads, and know-nothing pundits who merely need a suit to make an appearance on one of the TV's financial comedy channels, Kyle has been consistent in the most important thing - telling the truth. Today, he took his resurgent popularity to CNBC which always knows which way the winds blow, and told David Faber more or less everything that Zero Hedge readers know already about Europe's collapse, on why the ECB will print but only after a default, and about the inevitable global debt restructuring. There was a twist: as most regulars here know, the key topic of the past week, of December, and potentially of 2011, is the limitless "fractional Prime Broker lending" of assets-cum-liabilities (and when it comes to the realization that one's gold itself may be rehypothecated, via GLD, it is no surprise why paper gold is plunging, with the expected delayed effect of slow comprehension) in an infinite loop of daisy chained counterparty exposure, also known as rehypothecation. Which is precisely what what Bass touches on 9 minutes 30 seconds into the interview when the discussion shifts to "shortening collateral chains." Must watch for everyone who enjoys not being lied to.

The most recent Kyle Bass investor letter can be found here, and a far more extended interview is here.

 

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Wed, 12/14/2011 - 12:31 | 1979023 hedgeless_horseman
hedgeless_horseman's picture

 

 

...shortening collateral chains...

Indeed, the whole world is short collateral. 

Same as fractional reserve banking in the old west, when the chest of gold only visible behind bars in the bank's vault was usually mostly filled with sand.

Wed, 12/14/2011 - 12:33 | 1979050 Pladizow
Pladizow's picture

WTF Tyler - Where's his Dec client letter?

Dont give me the lame excuse that it hasnt been released yet.

If Faber can read from it, ZH should have it!

Wed, 12/14/2011 - 12:42 | 1979080 nope-1004
nope-1004's picture

PM paper prices are going to fall hard, as the MF Ponzi has killed the futures market.  There will be a separation between paper and physical prices, and people like Bass know it.  This is the deflation scare, as far as I'm concerned.  Q1 of 2012 is going to be a heck of a ride.

 

Wed, 12/14/2011 - 12:49 | 1979118 hedgeless_horseman
hedgeless_horseman's picture

 

 

Same as fractional reserve banking in the old west, when the chest of gold only visible behind bars in the bank's vault was usually mostly filled with sand....

...The banks would move the only full chest of gold from bank to bank, just ahead of the bank inspectors.  Sometimes they didn't make it in time.  True.

All this reminds me again of another Keynesian Endgame Scenario: The "Repo 105" Scam: How Lehman Fooled Everyone (Including Allegedly Dick Fuld) And How Other Banks Are Likely Doing This Right Now

 

Wed, 12/14/2011 - 12:56 | 1979150 Fukushima Sam
Fukushima Sam's picture

The EU is like an athlete who wants to compete in the Olympics on a diet of only his own poop.

Wed, 12/14/2011 - 13:04 | 1979186 GeneMarchbanks
GeneMarchbanks's picture

That's not fair. We also have urine.

Wed, 12/14/2011 - 13:08 | 1979204 Comay Mierda
Comay Mierda's picture

CNBC - "OMFG, IF EUROPEANS DONT BEND OVER, TAKE IT IN THE ASS, AND GIVE THEIR SOVEREINGTY TO GOLDMAN SACHS, WE ARE ALL DOOMED!!!"

I'd like to see a chart of their ratings.  everyone i know has stopped taking this channel seriously a long time ago.

Wed, 12/14/2011 - 13:38 | 1979313 FEDbuster
FEDbuster's picture

Faber and Santelli are good, the rest are a joke.  I would watch a Kyle Bass interview with Joy Behar, he is that good.  As far as a disconnect of paper and physical gold, I would like to see at least a $100. premium over near month futures for physical to prove it.

Wed, 12/14/2011 - 14:33 | 1979583 redpill
redpill's picture

It's always interesting to see the CNBC commentators expose their skewed world view, basically every question they ask can be distilled to the following:  Why can't the ponzi continue?

And Bass always does a great job of patiently explaining why the unsustainable is unsustainable.

 

You can't hedge against something losing value when no one wants it at all.

 

Of course, instead of further discussing this vital concept that is going to shape the markets of the world for the next several years, they are suddenly "short on time" so they can go to commercial or have one of their inane market updates that pretends to understand why stocks have moved in some direction over the last 5 minutes, or have an absurd panel of clueless idiots describe their "hot stock picks."  Of course this was still a relatively long segment by CNBS standards, but it just goes to show that to these hosts, one guest is as good as another and all their points of view are equal.  All that matters is getting to commercial.

 

Wed, 12/14/2011 - 15:10 | 1979784 twotraps
twotraps's picture

loved the clip, great point about being short on time, pathetic.   CNBC is somewhere between Financial ESPN and the TV version of USA Today....lots of pictures, big print, advertising and nothing else.   Actually, USA  Today has a horoscope.

Wed, 12/14/2011 - 15:57 | 1980055 DollarMenu
DollarMenu's picture

Yes, the CNBS shills are really clueless.

I'm a bit worried about Mr. Bass.

Is it just me, or did the closing few seconds reveal a few shades of

disgust and resignation in his face?

I wonder if there will be a 'next interview'.

I am so grateful for the knowledge that he so freely shares, I hope he continues to offer it.

I can not afford to subscribe to his letter, and he is such a joy to listen to.

Thanks TD for all you do to spread awareness.

Wed, 12/14/2011 - 16:07 | 1980105 twotraps
twotraps's picture

Excellent point, he may curtail visits as he seems to realize he's just part of the circus.  I also enjoy his talks and have learned a lot, funny they give to Faber and that alone was supposed to carry some extra weight or something, He was likely still shaking his head for several minutes afterward, and then remined of the head shaking by friends, hard to hide when he remained patient with Simon darling....  What?  I'm English and I know the Europeans?  Please, just say thanks when a very successful, eloquent person was giving you a private lesson the rest of us pay for.

Wed, 12/14/2011 - 19:31 | 1980999 Town Crier
Town Crier's picture

WHOOSH Don't forget CNBC'S cool sound effects WHOOSH

Thu, 12/15/2011 - 04:03 | 1982386 chyros
chyros's picture

I was particularly irritated at Bass's constantly talking over the whooshies. They're so cool. Shouting down the whooshies really aggravates the under 5yo viewers.

Wed, 12/14/2011 - 14:45 | 1979682 Pegasus Muse
Pegasus Muse's picture

The banks would move the only full chest of gold from bank to bank, just ahead of the bank inspectors. Sometimes they didn't make it in time. True.

Money Lenders have been wheel'n and steal'n, thiev'n and deceiv'n, long before Jesus threw them from the temple. 

Wed, 12/14/2011 - 14:46 | 1979684 pirea
pirea's picture

Actually at KITCO is more than 100.

Wed, 12/14/2011 - 17:26 | 1980519 RickyBobby
RickyBobby's picture

Faber looked visibly mad, like Kyle was singlehandedly driving down the market, when he asked about why the Europe can't fix the solvency crisis with more liquidity (debt).

In 2007, CNBC would actually tell interviewees that they only want to talk "positives". Don't know anyone that has gone on recently.

Wed, 12/14/2011 - 13:38 | 1979319 slewie the pi-rat
slewie the pi-rat's picture

@ ...shortening collateral chains...

i first saw "shorting..."

L0L!!!

Wed, 12/14/2011 - 14:20 | 1979556 Whoa Dammit
Whoa Dammit's picture

"...The banks would move the only full chest of gold from bank to bank, just ahead of the bank inspectors.  Sometimes they didn't make it in time. "

It's happened more recently than back in the Wild West days. Cecil and Jake Butcher did it in the 80's.

"The Butchers operated 27 banks in Tennessee and Kentucky. The banks collapsed in 1983 under the weight of unsecured loans, paper corporations loaded with debt and a massive shell game in which loans were shuffled from one bank to another ahead of the bank examiners. It was the fourth-largest banking failure at the time."

Wed, 12/14/2011 - 14:45 | 1979648 hedgeless_horseman
Wed, 12/14/2011 - 13:05 | 1979192 Chief KnocAHoma
Chief KnocAHoma's picture

This is correct:

1 - MF destroyed the paper gold market

2 - The smart money got out of CME exposure driving the paper market down even further.

3 - If anyone has the balls to place a large bet now for delivery, the physical will not be available at spot. BIG LOSS for the one having to deliver and even more confidence shaken out of the system.

4 - The MF clusterfuck may have scared a lot of players away, but someone is going to take the chance and ultimately stand for delivery.

When that happens, you banking guys are so fucking screwed. There could be multiple MF Globals!

Wed, 12/14/2011 - 15:37 | 1979912 redpill
redpill's picture

Mises.org Newsletter today describes the practices at MF Global: 

http://us1.campaign-archive2.com/?u=bf16b152ccc444bdbbcc229e4&id=e177f030ff&e=8ed57234d8

Wed, 12/14/2011 - 16:44 | 1980284 unununium
unununium's picture

> someone is going to take the chance and ultimately stand for delivery

Are you saying it's less risky NOT to stand for delivery?  That's ostrich thinking there.

Wed, 12/14/2011 - 13:19 | 1979249 realitybiter
realitybiter's picture

if that is true the miners should start ignoring paper prices as the miners should start looking at real prices in the future...

Wed, 12/14/2011 - 16:18 | 1980156 FEDbuster
FEDbuster's picture

Still wonder what the "price" discovery method would be in an economic collapse.  Will your one oz. gold eagle buy the whole cow or just a 5 lb. roast.  In Cormac McCarthy's book "The Road" (granted the worst case SHTF scenario) gold has no value to the survivors.  Food, weapons, clothing, etc... become the valuable items.  I am still reading "When Money Dies" which provides insight into post WW1 Europe.  They were trading gold watches for sacks of potatoes, grand pianos for sacks of flour, etc...  So who knows what anything will be worth?  I know, my family needs water, food and shelter to survive, so I will keep concentrating on my ability to provide those items in our uncertain future.

Wed, 12/14/2011 - 13:38 | 1979316 BalanceOrBust
BalanceOrBust's picture

I agree that paper prices no longer reflect the prices for the physical, but they are still linked right now, correct?

 

When the system fails and people demand physical, the paper price will have to follow upwards.  That is my understanding.  The issue is that if the upwards correction is too quick, it could force bankruptcies or failures to deliver.  In these cases, some of those holding paper gold will not realize gains because they will be owed by unreliable or no longer existing counterparties.

 

I guess my point is I would like to get some clarification on whether paper and physical prices really separate or whether it is more an issue that some paper contracts take zero value because of counterparty failure.

Wed, 12/14/2011 - 13:56 | 1979371 nope-1004
nope-1004's picture

I'm no expert, so don't pretend to know how it will all finally settle.  But my feeling is that the ponzi unwind at the Comex is currently underway.  And like all ponzi's, their final blow is when the number of suckers exiting exceeds the number of new fools brought in.  So for the Comex to fail, paper price needs to fall hard - a mass exodus over a short period of time.

Once the jig is up, we're talking literally about hours from a functioning paper market transforming into nothingness.  And when there is only paper documentation as a claim (just as in the MF Global case where clients are looking for their initial deposits), owning the physical commodity is the only way to ensure wealth preservation.

 

Wed, 12/14/2011 - 13:59 | 1979430 European American
European American's picture


Integrity, the quality of being honest and having strong moral principles, is disappearing from ALL systems in America and around the world.

THIS is THE proverbial "collapse" that is manifesting on the planet.

When the absence of integrity becomes the norm, as seen by the massive numbers of people in America lying and deceiving to get ahead, then who can we trust?

How can one predict (forecast) the intent, motive and outcome of a system that has lost its integrity?

Stay grounded and established in the Self; it's all you can depend on, and, lay low while the storm passes over.

Wed, 12/14/2011 - 14:31 | 1979610 MachoMan
MachoMan's picture

Integrity is simply the degree of adherence to one's moral code.  In this sense, the only way to act without integrity is to be inconsistent with your own ideals.

Further, every person acts to maximize their self interest, which means not only pecuniary gain, but also "moral" appreciation.

If you want to know who to trust, then you can trust that everyone will act to maximize their own self interest.  Once you figure out their moral code and their integrity (adherence to it), then you can make an educated guess as to their prospective actions.  However, in the vast majority of situations, the only thing you need concern yourself with is what action would maximize their pecuniary interest (especially in the context of business decisionmaking).

It seems like your post is based upon a false premise, that there was some universal moral underpinning to society before some unnamed event (2008?  1913?  1776?).  Unfortunately, there is no such thing.  I'll posit that your observations are erroneous because it is your perception of the world that has changed, not the world or the humans inhabiting it...

In the end, to answer your question, you can trust rational actors...  so long as you're reasonably intelligent, you can think a few steps ahead...  just remember that induction is for lazy minds.  What you have to watch out for are rogue waves...  the people who act without contemplation...  and are fueled by some unknown emotion and passion.  The neat thing is, the latter generally get nowhere of consequence...  so depending on where you are in the game, you probably don't have to worry too much about them.  But, every once and a while they slip in... 

Wed, 12/14/2011 - 15:46 | 1979973 prains
prains's picture

Macho, you got the nachos

Wed, 12/14/2011 - 17:30 | 1980540 JimBowie1958
JimBowie1958's picture

Integrity is not simply relative to a persons moral code. Stalin did not have integrity because he killed, stole and imprisoned anyone and anything he desired and was justified by his own sense of morality.

Integrity is the true currency of any society. Well before silver and gold were convenient comodity to store value, economies could move ahead solely on the basis of a man keeping his word that he gave you. If he defaulted he was considered to be a dishonorable person and his bad reputation would punish him.

This word of mouth is still the dominant marlket making currency, despite what the bean counters may tell you and rightly so. If you cannot a trust a person, no contract will bind him today as the lawyers can turn legal shyte into gold these days. But it is still shyte.

The underlying rot to our whole society is the prevalence of this belief that there is no such thing a honor or moral behavior. When people cannot make a deal on the basis of a handshake, that economy will see its cost of doing business sky-rocket, fraud become common-place and the defrauded derided as fools for trusting a market player.

We past this stage probably twenty years or so ago from what I hear, and all this collosal foolishness that surrounds us is the product of that bankruptcy of integrity. Normally the corrupt would have been replaced by now in a competitive market where the losers are purged, but today they rely on their ability to corrupt to convince those in power to save them from their own folly time and time again; the perpetual moral hazards.

Integrity is a fundamental requirement to any society that does not otherwise depend on savagery and fear.

Wed, 12/14/2011 - 19:51 | 1980850 Rynak
Rynak's picture

Actually, he is "technically" correct, but leaves out some important infobits, which totally kill his argument.

In theory, integrity simply is "internal consistency".... so, THEORETICALLY, it just requires that one's one beliefs, actions, decisions, everything are consistent.

Problem is: For reasons of how logic works, that is almost NEVER the case for dishonest and self-deceptionary people. Why? Because logic is a bitch, and very often only achievable in a consistent way, if one ALSO is "truthful" (more on that german-specific term further down).

To put it in laymans terms, even though integrity "only" requires internal consistency, internal consistency cannot just be achieved by "believing really hard".... it requires that your concepts ACTUALLY are according to your best available knowledge, do not contradict each other IN SPITE of information from the real world! In other words: For "integrity" to match your behaviour, it is not enough to just lie to yourself and cheat yourself - because that implies an internal contradiction! You must be able to actually honestly explain everything to yourself logically consistently with your own rules, WITHOUT HAVING TO CHEAT.

And THIS typically is not achievable by mere stubbornness, but requires oneself to have a "model of the world", that matches the world, so that the model can without contradiction integrate new information.

As for that earlier mentioned term "truthfullness".... german language not only has a distinction between true/untrue and right/false (as opposed to the US-typical "true/false"-concept which makes little sense)... it has a similiar counterpart to integrity: Where integrity is meant to imply internal consistency, truthfullness is meant to imply external consistency (in other words, not just "inwards" consistency, but also "outwards" consistency (acting consistently to reality)).

 

 

 

Thu, 12/15/2011 - 11:20 | 1983079 MachoMan
MachoMan's picture

Your post is pretty outside the boundaries of what I discussed and is not mutually exclusive with my post...  I agree that integrity is an elusive goal and seldom achieved by humans...  however, it is not insurmountable.  There are many competing "models of the world" sufficient enough to pass reasonable academic muster (possibly limitless)...  which none of their practitioners have any idea whether they are correct.  To a large extent, the stoics got this issue right.

And yes, the objectivists got it right also...  it is truly rare that someone can steal another's lunch and at the same time feel perfectly comfortable when someone else steals his or hers.  Clearly, this would be inconsistent and abounds in political decisionmaking, but I digress.

In short, integrity is useless as an external decisionmaking tool because humans do not generally have much integrity...  much better to be cynical and presume that (pecuniary) self interest motivates us, at the expense of all else.  The neat thing about good stereotypes is that they're right most of the time...  just don't bet the farm on an exception.

 

Tue, 12/20/2011 - 22:23 | 1999772 Rynak
Rynak's picture

Well, my post really was meant to only explain the typical basic misunderstandings. Your post instead, goes deeper into the not so obvious issues.

And yes, i agree that a model apparently working without contradiction, does not guarantee that it is "true". Actually, if one only declares some levels of understanding irrelevant (by for example, judgeing only in terms of maths, while ignoring conceptual consistency)... it is possible to create a model of the world, that is the exact INVERSE of the probable truth, yet the model by itself working without any flaws at all (that was the big "achievement" of einstein, lol).

For those who couldn't follow the above, here's the short version:

- Yes, achieving integrity requires at least considering reality, so that one can integrate new information

- Yes, most people and models are not integer

- But also, no, a model merely apparently working without internal contradiction (so, it being integer), does not guarantee truth - especially if that model restricts what kind of tests/checks the model needs to pass (after all, you can always make something seem to work, if you just declare all the contradictions irrelevant :)

Thu, 12/15/2011 - 11:15 | 1983149 MachoMan
MachoMan's picture

You're confusing morality with integrity... 

Yes, all groups of people (even individuals) develop a moral code...  I wouldn't have much disagreement for you to say that "morality is the true currency of any society."  The trick of course is agreeing on what is "moral."  [hence why individuals can more easily determine their own moral codes, but why the process becomes much more convoluted when attempting to determine a group's.  There's even a decent litmus test for when an individual acts without integrity, guilt...  not so much when his or her actions with integrity conflict with the moral code of the group].

Your post is also inconsistent.  You claim that you can't trust people to behave a certain way because they don't have integrity, but if you know that they will cut your throat to benefit themselves, then you can trust how they will behave...  try out the philosophy for a day or two...  see how many times it is right and wrong...  and if more right than wrong than your present philosophy, adopt the new one...

Wed, 12/14/2011 - 16:44 | 1980285 giddy
giddy's picture

Don't forget trustworthiness. It's very underrated. Much different than trust.  Like water seeking its own level, one trustworthy party will recognize another trustworthy party.  Kyle is trustworthy.  Doesn't get better than that...

Wed, 12/14/2011 - 14:34 | 1979628 francis_sawyer
francis_sawyer's picture

I guess my point is I would like to get some clarification on whether paper and physical prices really separate

How's this for clarification?

I've already walked into 3 local coin shops today...

Nobody... NOT ONE was willing to sell me anything today, (rounds, bars, junk, NOTHING)...

1. they had plenty of inventory

2. they'd be willing BUYERS today

3. Out of chance, I casually mentioned that if I paid YESTERDAYS margin over YESTERDAYS spot, would they deal? They said 'maybe', but only for a small purchase (less than 10 oz.)...

That's 'boots on the ground" TODAY... Where she stops nobody knows...

Wed, 12/14/2011 - 15:02 | 1979757 fonzanoon
fonzanoon's picture

I just called my place. Gold eagles $1,660 (about 4.5% over spot) Silver eagles were just under 32 bucks. They had plenty of both.

Wed, 12/14/2011 - 16:31 | 1980213 francis_sawyer
francis_sawyer's picture

I think that's basically what I'm saying...

There's NO PROBLEM with inventory... But they WERE NOT selling (SE's for example) at what was their traditional $1.50 over spot...

All the guys I talked to were just in a "wait & see" mode... But they WERE NOT going to sell a SE for under $30...

So yeah... You could 'offer' $32 to some guy & he might take it or he might not... But the feeling I get is that the PAPER PRICE could drop to $20 bucks tomorrow & you'd still be bartering for around $32 - $33...

We'll see...

Wed, 12/14/2011 - 15:19 | 1979827 Vagabond
Vagabond's picture

I had the same experience this past weekend in Springfield, MA.

Wed, 12/14/2011 - 17:02 | 1980383 Rynak
Rynak's picture

Depends on geography too i guess. At my local dealer in germany, i have no problem getting maples, philharmonikers and krügerrands at near paper-spot price....

...however, anything else rapidly goes up in price at that shop, and they do have a notice on their website, that larger quantities even of the earlier mentioned coins may take a month or longer.

May be specific to the order-strategy of my shop, or by local market specific. Just putting the data here.

Also, everytime i'm visiting them, i'm chatting with them, and among other things also talk about their market situation. And the repeated impression i get, is that the amount of people buying is much higher than those selling.

So, at least regarding local dealers in the area of germany where i'm living, my impression is that there are signs of shortages... but not shortages strong enough to disrupt the local market yet.

And you need immediate shortages, to make physical prices seperate from paper prices. As long as this kind of full-frontal scarcity does not happen, you can point at fundamentals all day.... they won't matter, until there are immediate shortages.

Wed, 12/14/2011 - 13:01 | 1979174 Jay Gould Esq.
Jay Gould Esq.'s picture

"Got Nickels ?"

Wed, 12/14/2011 - 12:34 | 1979054 johnu78
johnu78's picture

What's the going cash value for food stamps these days?

 

-John
http://www.johnu78.com

Wed, 12/14/2011 - 12:44 | 1979106 LFMayor
LFMayor's picture

LOL, my M. I. L. is getting paid in them from one set of renters, if that's any clue.

Wed, 12/14/2011 - 12:56 | 1979153 stant
stant's picture

ive heard liqour or dope

Wed, 12/14/2011 - 13:08 | 1979203 fadgadget
fadgadget's picture

truthfully, you can use somebody's EBT card at a 30-40% discount.  next time you go to the grocery store, start making eye contact with people near the checkout lines and in the parking lot when you're going in.

Wed, 12/14/2011 - 14:28 | 1979598 RafterManFMJ
RafterManFMJ's picture

truthfully, you can use somebody's EBT card at a 30-40% discount.  next time you go to the grocery store, start making eye contact with people near the checkout lines and in the parking lot when you're going in.

 

Yeah I did that and got a black eye.

Wed, 12/14/2011 - 15:32 | 1979893 cgbspender
cgbspender's picture

I recently met someone who does this exact same thing. He told me that the going rate was 50% of the face value of the card. Crackheads are apparently the best "mark", as you can often times purchase a $600 card for $200 cash.

Wed, 12/14/2011 - 14:11 | 1979502 chubbar
chubbar's picture

Cash, grass or ass! Nobody rides for free!

Wed, 12/14/2011 - 12:42 | 1979091 Hmm...
Hmm...'s picture

I watched this interview a few minute ago.

Perhaps the time to buy PMs would be early next year when the big banks start to collapse?

or is that too late?

Wed, 12/14/2011 - 12:49 | 1979123 Global Hunter
Global Hunter's picture

The moment the command ship crashes will be hard to predict so might as well save up what you can now next week the week after...

Wed, 12/14/2011 - 14:37 | 1979643 francis_sawyer
francis_sawyer's picture

see my above comment

Wed, 12/14/2011 - 13:04 | 1979187 Duffminster
Duffminster's picture

Yes, short on collateral and what collateral is remaining may well be rehyothecated or is just pure crap.   I wrote this earlier:

Liquidation by the European Banks and others suffering from the gathering category 5 derivatives driven liquidity/credit hurricane is accelerating. With rehypothecation, unknown counterparty solvency, mountains of sovereign debt which can never be repaid under the current currency regime of (currency backed by debt backed by currency backed by debt and so on), even with the ECB and Fed increasingly willing to take almost anything as collateral and the sound of the Fed's QE printing presses getting ready to fire up in 2012, we learn that the housing numbers are significantly worse than the national association of realtors (NAR) reported.

As part of the liquidation process, the European banks are selling off their best assets first, gold and silver. None the less, they only have so much to sell and the cash rich entities seeking to preserve their wealth can see that both gold and silver remain in a strong uptrend and have made close to a normal healthy 50% retracement off their most recent highs and are likely going to take advantage of these once in a life time bargain basement prices as the liquidation of the existing European bank gold begins to diminish in the coming weeks and months. Gold looks good for a one year futures entry point around the $1550 level and silver at about $25/$27 in my opinion.

The Fed needs political cover to re-engage QE and they know they need to time it right to help the President. If Gingrich or Ron Paul wins the election, the "End the Fed" mantra will grow louder and louder and the TBTF banks and in fact the global financial (international network) will not be able to survive the actualization of that extreme form of libertarianism, although for the long term economic health of the citizens of the world, it would be worth the short term pain, in my opinion, to get the central banks out of our economies and make sure that in the futures banks do the boring but essential function of old school banking.

In the meantime the liquidation will continue across all asset classes, despite the fact that the usual suspects in the various exchange stabilization funds are using repo and other Fed based manipulation tools to keep a very light market propped just barely above support. We'll see how much longer that lasts. A wise and deeply experienced associate of mine recently said, "markets go down when there are no buyers and markets go up when there are no sellers." Well, the situation is a little different from times past that today, at least in retail, there are very few buyers but there is one set of buyers that is exploiting that and those are the exchange stabilization index option and futures manipulators who work for the quasi governmental entities that are members of the US ESF.

What the FED probably needs in order to turn the printing press up to 110% is a market panic and all they need to do that is to turn off the ESF buying algorithms for the next few days and they'd have. My guess is that (if they can), they'll wait until just after the new year or perhaps until Friday of this week or some time next week. They want maximum emotional impact so that even the Tea Party members and their constituents are crying "give." The timing is tough here.

Wed, 12/14/2011 - 14:14 | 1979524 chubbar
chubbar's picture

That all seems plausible Duff. My only quibble would be that Gingrich is not going to be calling to end the FED, he's as big an insider as they come.

Wed, 12/14/2011 - 15:25 | 1979856 Mike Cowan
Mike Cowan's picture

That is my big fear, chubbar: that Newt may betray the conservative movement.

Wed, 12/14/2011 - 15:37 | 1979914 cgbspender
cgbspender's picture

He betrayed the conservative movement a long time ago.

Wed, 12/14/2011 - 15:59 | 1980062 CClarity
CClarity's picture

Will the FED and ECB accept GLD shares as collateral soon?  If not, game over.

Wed, 12/14/2011 - 14:14 | 1979506 ilion
ilion's picture

Just recently, these guys were laughed at when over the last couple of months they went massively short gold/silver by shorting every available call option. Track record speaks for itself:
http://bit.ly/vBNHfH

 

Wed, 12/14/2011 - 14:27 | 1979592 chipshot
chipshot's picture

...the rarest of all commodities.......the Truth

Wed, 12/14/2011 - 15:05 | 1979765 Silver Bug
Silver Bug's picture

Some continue to trash Kyle Bass, simply because he is in the Hedge Fund industry, well at aleast he is one of the few that actually tells the truth.

 

http://ericsprott.blogspot.com/

Wed, 12/14/2011 - 17:44 | 1980597 ajax
ajax's picture

Just exactly who is trashing Kyle Bass? I love it: Hedge Fund "Industry", that's brilliant. 

Is Mr. Bass circumcised or is he all-natural? I hope he's still got all his skin in the game.

 

http://www.c-spanvideo.org/program/MarketPa

As for the "shocking" revelations about food stamps for sale: that's as old as the hills.

 

BTFD wherever you can get it.

 

Wed, 12/14/2011 - 15:29 | 1979881 slaughterer
slaughterer's picture

It is nice that Kyle is doing this real-time MSM.  You canot count on Michael Burry to do this kind of doomsaying prophecy with his illnesses.  

Wed, 12/14/2011 - 12:28 | 1979027 Badabing
Badabing's picture

I think because of re-hypothecation the gold paper market is over. And crashing now!

Wed, 12/14/2011 - 12:32 | 1979045 GeneMarchbanks
GeneMarchbanks's picture

Good.

Wed, 12/14/2011 - 12:37 | 1979068 Badabing
Badabing's picture

I say good also, look at the price of phyisical

http://www.usagold.com/gold/price.html

 

Wed, 12/14/2011 - 12:40 | 1979081 Hmm...
Hmm...'s picture

your link shows yesterday's pricing, not today's.

Today Tulving is still selling 2011 AGEs for 66.95 over spot... same as last week. 

"Dates our choice" is out of stock, but was last week as well.

Wed, 12/14/2011 - 13:02 | 1979178 SHEEPFUKKER
SHEEPFUKKER's picture

Yeah, I haven't noticed the phyzz prices blowing out yet either as they did in '08.  Does that mean some of the sheeple are selling their bullion? 

Wed, 12/14/2011 - 13:13 | 1979227 Big Corked Boots
Big Corked Boots's picture

What this means is that there is NO disconnect between physical and paper. In fact, paper is wagging the dog. Tulving and Apmex have no change in premiums for eagles, and if you think you aren't getting killed because you hold the real thing, you're wrong. Also, you're getting killed by holding the allocated funds like CEF and GTU as well. I am getting killed right now and I'm not too happy about it.

Wed, 12/14/2011 - 14:23 | 1979552 tmosley
tmosley's picture

Uh-huh, sure, whatever you say.

Wait until spot hits $15 and tell me there is no disconnect.  APMEX has already had to modify their silver eagle sale.  Must have been getting a shitload of orders for 19 or fewer of those, causing them to raise the price on that category, while the rest remain the same.

Even back in 2008, there was a disconnect.  Anyone who thinks there won't be one this time is nuts.  Anyone who thinks this time won't be much worse than last time is also nuts.

Paper gold and paper silver to zero, bitches.

Edit: Just checked again, and they cancelled their sale.  Looks like Christmas is cancelled, bitchez.

Edit 2:  Checked the number they had in stock, it's down 30,000 from where it was when I checked it at 8:00am.  Run on silver, btchz.

Wed, 12/14/2011 - 14:59 | 1979741 tarsubil
tarsubil's picture

Yeap. I checked into APMEX yesterday and I could get ASEs for 33.40 (small count with CC). Spot has dropped 2.50 and the price right now is 33.88. APMEX has been doing all manner of gymnastics in the last 24 hours regarding their 12 days of Christmas special.

Wed, 12/14/2011 - 15:24 | 1979839 Vagabond
Vagabond's picture

I think that's because their 12 days of Christmas sale ended yesterday.  The 2011 eagles were on special which is why they were cheaper to buy singularly than in rolls of 20.  I can't even check the prices right now at Apmex... "Server too busy"

Wed, 12/14/2011 - 15:32 | 1979892 tmosley
tmosley's picture

Well, I got on to check the status of my last order, and found that even though they received the payment two days ago, they have an estimated ship date of 12/26.  Scrolling back through my history of completed orders, this wait time is almost without precedent.  The only other time that there was that much delay between a check clearing and their ship date was in December of 2008, where I had payment cleared on the fourth, and they didn't ship until the fifth of January.  It's not quite that bad, but that order was placed well before today's craziness.

Wed, 12/14/2011 - 23:37 | 1981974 tarsubil
tarsubil's picture

Was it planned to end yesterday? It was still partially on this morning with only the fewer than 20 orders not getting the flat rate. Then it was different rates for every quantity category. I call shenanigans.

Wed, 12/14/2011 - 16:35 | 1980235 francis_sawyer
francis_sawyer's picture

mosley you're totally correct...

I went into 3 local coin dealers today...

Read my story above...

 

Wed, 12/14/2011 - 19:18 | 1980950 delacroix
delacroix's picture

in 08 there was a 8-12 week wait to take delivery of 100 0z bars, from pan american- northwest terrirorial mint

Wed, 12/14/2011 - 14:40 | 1979658 francis_sawyer
francis_sawyer's picture

Absolute bullshit... I've already been to 3 coin shops today...

read my comments above...

Wed, 12/14/2011 - 15:05 | 1979763 fonzanoon
fonzanoon's picture

Your coin shops suck. Keth Hernandez won a gold glove but I would not buy coins from him. My place has plenty of supply. See above. Stop scaring people. It's bullshit.

Wed, 12/14/2011 - 15:22 | 1979835 tmosley
tmosley's picture

What's your coinshop?  Give us the phone number.

Too many lies coming from anti-PM trolls.

Wed, 12/14/2011 - 15:27 | 1979871 fonzanoon
fonzanoon's picture

Whitman Jewelers. (631) 673-0111. I expect an apology for that tmosley

Wed, 12/14/2011 - 15:41 | 1979939 tmosley
tmosley's picture

Ok, so your shop has some, and for a good price (30.55 when I called).  All they have in silver rounds is "miscellaneous", but they have at least 200 oz.  Anyone who is in the area should consider going to pick some up: http://www.whitmancoinandjewelry.com/contact.html

But sorry, you don't get an apology.  There are a lot of anti-PM trolls coming out of the woodwork, and they do spread lies wherever they go.  You don't get a cookie for not lying.

Wed, 12/14/2011 - 15:42 | 1979953 fonzanoon
fonzanoon's picture

whatever dude, go look for trolls elsewhere. Apology accepted. And you're welcome.

Wed, 12/14/2011 - 15:53 | 1980031 tmosley
tmosley's picture

What am I welcome for?  The phone number of a coin shop that is 2000 miles away?  Yeah, that's real useful to me.

Look, the point is that many coin shops are shutting down, just like they did in 2008.  APMEX is open, but delivery is being delayed, just like 2008.  All signs point to this being a massive repeat of 2008.  In fact, it looks to be so massive that the COMEX might just shake apart.

Wed, 12/14/2011 - 16:00 | 1980066 fonzanoon
fonzanoon's picture

My point is this tmosley. I am a believer in physical as you are. And I am putting my "money" where my mouth is. I did not like being called out. I don't like these coin dealers. But I guess if they bought at spot when spot was 1,700 they don't want to sell at spot when spot is 1,600. Is that the definition of the markets seperating?

Wed, 12/14/2011 - 15:31 | 1979886 fonzanoon
fonzanoon's picture

Did you call? They pick right up. Nice people too.

Wed, 12/14/2011 - 16:41 | 1980265 francis_sawyer
francis_sawyer's picture

Great fonzanoon...

So you're not a troll... That's been established... & now everybody on ZH knows where they can go to get Silver eagles for $1.50 over spot when the paper price crashes down into the teens because fonzanoon believes the market should be determined by levered paper transactions even though it has no clue as to whether there is underlying physical to support the assumption...

We've learned a great lesson here today...

Wed, 12/14/2011 - 16:46 | 1980297 fonzanoon
fonzanoon's picture

Yup Francis_Sawyer. Thats exactly what I said. Well done.

Wed, 12/14/2011 - 16:47 | 1980307 francis_sawyer
francis_sawyer's picture

I checked the website...

All I got was a "PAGE UNDER CONSTRUCTION" notice with a pretty picture of some some jewelry...

On the COINS link, all it had was another link button to SPOT PRICES (which, when I clicked, went to a dead server link)...

So I guess I'm SOL...

Wed, 12/14/2011 - 16:53 | 1980335 fonzanoon
fonzanoon's picture

I give up. tmosley backed me up. You on the other hand think i am some idiot that believes in the paper market.  I don't. Sorry you misunderstood me.

Wed, 12/14/2011 - 18:25 | 1980752 tmosley
tmosley's picture

They aren't an online seller.  The website just has their contact information.

Wed, 12/14/2011 - 19:39 | 1981023 SilverRhino
SilverRhino's picture

if you think you aren't getting killed because you hold the real thing, you're wrong.

- 1 becuse you're a moron who doesn't understand buying something for long term investment.     Do you sell your fucking ranch when beef prices dip YoY?  My ten year charts still look pretty fucking good.

Wed, 12/14/2011 - 13:11 | 1979217 Badabing
Badabing's picture

Hmm,

That's yesterdays close+ $100

Wed, 12/14/2011 - 14:54 | 1979715 DosZap
DosZap's picture

Hmm...

Well as usual, he is screwing his customers.....................and anyone else who is selling over $50.00.

Wed, 12/14/2011 - 13:55 | 1979331 rufusbird
rufusbird's picture

How weird, the Yahoo Finance page shows Gold prices from December 11th.

1,744.50
+84.60
+5.10%
While the rest of the Market stastistics are accurate...
Just figgured it out by looking in more detail at their commodies page. Some of their other prices reported from CBT are one or two days old, except for the Main page. Still weird.

Thu, 12/15/2011 - 04:15 | 1982395 chyros
chyros's picture

.

Wed, 12/14/2011 - 12:29 | 1979031 GeneMarchbanks
GeneMarchbanks's picture

'Must watch for everyone who enjoys not being lied to.'

So the Zerohedge loud minority then.

Wed, 12/14/2011 - 12:30 | 1979034 Caviar Emptor
Caviar Emptor's picture

The paper empire is crumbling:

Jeffries to shutter two ETFs

http://www.indexuniverse.com/hot-topics/10453-jefferies-to-shutter-two-e...

Wed, 12/14/2011 - 12:33 | 1979051 GeneMarchbanks
GeneMarchbanks's picture

It's allright you alarmist. In the end JEF will always have... dick.

Wed, 12/14/2011 - 12:42 | 1979093 Caviar Emptor
Caviar Emptor's picture

It shows that demand for paper has dried up (especially stocks). The 'golden age' never materialized. It was only a dream....

Wed, 12/14/2011 - 12:30 | 1979035 citrine
citrine's picture

As an avid ZH reader, I am always looking forward to learn Kyle Bass' opinion, so please, continue with the deluge.

Wed, 12/14/2011 - 12:52 | 1979135 Global Hunter
Global Hunter's picture

I like his demeanour and delivery, he's a nerd but when it comes to inner fortitude he'd kick the shit out of almost everybody on the planet.

Wed, 12/14/2011 - 13:10 | 1979213 i-dog
i-dog's picture

 
  "he's a nerd"

 
Is that sheeple-speak for "someone who knows what he's talking about"?

Wed, 12/14/2011 - 13:17 | 1979241 Global Hunter
Global Hunter's picture

consider myself one so I didn't mean it as an insult.  But yes, somebody who is analytical and trying to use facts rather than emotion to make decisions.

Wed, 12/14/2011 - 14:43 | 1979675 tekhneek
tekhneek's picture

Personally I think he's a financial terrorist.

How dare he use sound logic and reason with factual analysis to make his decisions?

What a nerd.

/sarc off

Wed, 12/14/2011 - 15:29 | 1979879 Vagabond
Vagabond's picture

Agreed... what's he trying to do, unglue the system?  He needs to report to commander Bernanke for new marching orders rather than make things up willy nilly based on "facts" and "critical thinking".  What a nerd.

Wed, 12/14/2011 - 13:34 | 1979305 Miss Expectations
Miss Expectations's picture

I like his demeanor and delivery, too. Nerd never occurred to me. I think he's more like a surgeon who just performed 6 hours of exploratory surgery on your mother and is sitting down to tell you exactly what he saw. Best pay attention, the news isn't good.

Wed, 12/14/2011 - 12:30 | 1979038 HarryM
HarryM's picture

FAZ stuck under 43 ???

Wed, 12/14/2011 - 12:39 | 1979076 SwingForce
SwingForce's picture

FAZ has a heavy REIT makeup, when IYR isn't following the trend, this is what you get. Its also unfortunate that Beserkshire- Hathaway is such a heavy weight too. Rarely does FAZ do triple (inverse) of XLF, that R1FIN index is the least volatile of XLF or BKX.

Wed, 12/14/2011 - 13:33 | 1979304 HarryM
HarryM's picture

Thanks

Wed, 12/14/2011 - 12:30 | 1979039 DonnieD
DonnieD's picture

I think Tony Montana invented rehypothecation in Scarface when he told the Columbians in the hotel, "I don't have the money, but it's close by." Of course, that got Angel chainsawed to death in a shower.

Wed, 12/14/2011 - 14:02 | 1979450 Badabing
Badabing's picture

My favorite Scarface line is

 

“Your pussy is polluted”

Wed, 12/14/2011 - 14:24 | 1979575 Vergeltung
Vergeltung's picture

close.

 

he said "you're womb is polluted"  :-)

 

Wed, 12/14/2011 - 14:34 | 1979629 Badabing
Badabing's picture

Lets not argue over a stink finger

Wed, 12/14/2011 - 12:31 | 1979043 Josh Randall
Josh Randall's picture

keep sinking my PM's - gift horse just looked me in the eye and told me "I had a purty mouth..."

Wed, 12/14/2011 - 12:34 | 1979055 konputa
konputa's picture

Circular reference indeed.

Wed, 12/14/2011 - 12:35 | 1979058 Miss America
Miss America's picture

As I wrote to Bruce Krasting the other day...

Hello Bruce,

Hyp/Re-hyp is the market.  While we're at it, why not say that Leverage and fractional reserve banking can't be done either? 

Look, I get where you're coming from, but the truth is Hyp/re-hyp is something people have on their resume's.  It's not some obscure thing or concept.  It just needs strict, straightforward (and punishable) regulation. 

Elimination would collapse the market.  plain and simple.  (there are like 30+ working financial mechanisms, if stopped, would collapse the market.)  The market, being a living thing, needs all it's current parts to survive.  Like a body, it wouldn't function without the lungs.  ...or heart.  ...or bones.  ...nervous system.  ...or skin.  etc.

I've long railed against so many bad parts of our market, but not the market as a whole.  Abuses are what needs to stop.  Regulations need to be strict and punishable. 

All the best, MA/RH

Wed, 12/14/2011 - 13:05 | 1979193 prains
prains's picture

 Abuses are what needs to stop.  Regulations need to be strict and punishable. 

 

and you've also explained why the market as a whole cannot work, enforcement is beyond the realm of ponzinomics. Its a turd with two ends>>Greed/fraud pushes it out, rules and enforcement pinches it off, right now the bankers are going purple trying to keep the push going trying to avoid the pinch.


Wed, 12/14/2011 - 13:37 | 1979314 topcallingtroll
topcallingtroll's picture

Ok. I am a mid forties professional erudite white male here.

And turd humor still makes me laugh.

More turd jokes please.

Wed, 12/14/2011 - 15:49 | 1980001 prains
prains's picture

Ditto

Wed, 12/14/2011 - 19:21 | 1980957 Temporalist
Temporalist's picture

Why'd the turd cross the road?

Wed, 12/14/2011 - 13:47 | 1979351 ebworthen
ebworthen's picture

Elimination would collapse the market?

Isn't that an admission of the need to not use hypothecation/re-hypothecation, along with CDS's and MBS's?

Honestly, at some point, sane adults need to admit that 40:1 leverage unbacked by collateral is not "captial" or "investment" or a "market" but the selling of black tulips and shares in the South Seas compnay.

Wed, 12/14/2011 - 15:31 | 1979888 Hacksaw
Hacksaw's picture

Bingo

 

Wed, 12/14/2011 - 17:03 | 1980407 giddy
giddy's picture

Agree.  But in a rapidily expanding and PRODUCING market -- leverage is consistent with the pace of growth.  When growth is illusion and the market is based on consumption not production then leverage is atomic.  Never known a modeler who could actually see the forest for the trees.   

Thu, 12/15/2011 - 10:56 | 1983069 Miss America
Miss America's picture

@ ebworthen.

Ummm....   exactly???   That's what I said. 

"I've long railed against so many bad parts of our market, but not the market as a whole.  Abuses are what needs to stop.  Regulations need to be strict and punishable."

Hyp/re-hyp is a common standard in the banking industry.  Just because everyone never heard of it doesn't mean it needs to be eliminated.  Just like CDS, IT NEEDS STRICKTER REGULATIONS!!!!!!!!!!!!!!!!

Similar to a a car's breaks, just because a person doesn't know how the hydraulics in a disc break works, doesn't mean hydraulics should be eliminated from the car. 

Hyp/re-hyp is a new "fancy" term to most people, but if your in the industry, it's not this evil thing.  It's part of the business.  When Lehman collapsed, it's how creditors were partially recapitalized.

It needs tighter rules.  Not elimination.  Same as CDs.  Same as Leverage, Same as Frax-res.

I've written many articles about these abuses.  I couldn't be more familiar with them.  I wrote those YEARS AGO!  From 2005-2008, I was one of the economic worlds biggest blogging voices that was trying to wake the public up about this.

All the best, RH/MA 

Wed, 12/14/2011 - 12:35 | 1979060 SwingForce
SwingForce's picture

Mario Draghi has been refreshingly different than The Benbernank. Kyle Bass is a very smart man, I remember at Jacksons Hole, there was a David Faber interview of Kyle when he asked, Italy and Spain are donors to the bailout fund, yet they will be needing money too. "How does that work?" Kyle said to DAVID! BRILLIANT!

Wed, 12/14/2011 - 12:40 | 1979079 Life of Illusion
Life of Illusion's picture

 

Draghi policy was formed few years ago via FSB.

Open to anyone who could read.

Wed, 12/14/2011 - 12:36 | 1979067 monopoly
monopoly's picture

YES! Tyler, you are awesome. Watch this all. I was amazed the idiot channel brought him on. I mean, telling the truth on cnbc. Wow.

Too bad, 60% of the viewers do not have a clue what he is talking about.

Wed, 12/14/2011 - 12:44 | 1979103 Caviar Emptor
Caviar Emptor's picture

On CNBS regular programming is an infomercial. So viewers actually skip any real interviews 

Wed, 12/14/2011 - 13:40 | 1979325 topcallingtroll
topcallingtroll's picture

Omg so true!

I always turn off the interviews. Just a bunch of CEO's and hedge fund managers touting their product.

Wed, 12/14/2011 - 12:38 | 1979071 LookingWithAmazement
LookingWithAmazement's picture

Endgame? Wait a minute. Did the French Franc, the Lira, Peseat or Drachma ever crash? Hyperinflation? No, only devaluations. Euro the same. There is no such thing as an endgame; even fiatmoney always keeps some attraction. The $$$ proves it.

“Gold at a 7 weeks low down to 1635. Where is 2000 gold dear gold bugs?”

Indeed, what endgame? The folks on KWN were, hmmm, slightly toooo optimistic. They have any interest in PMs, maybe?

Wed, 12/14/2011 - 14:46 | 1979685 tekhneek
tekhneek's picture

December 14th, 2011 !== January 1st, 2012

Not saying that it's going to happen, but I am saying that it's not over... yet.

Wed, 12/14/2011 - 14:46 | 1979686 francis_sawyer
francis_sawyer's picture

"Where is 2000 gold dear gold bugs?”

The more relevant question is... Where is [enter today's SPOT PRICE] gold?...

read my comments above... I've been to 3 coin shops today & I'll tell you where the gold is... It is sitting in their inventory... They are sitting on it & won't sell it at PAPER MARKET prices at the moment...

The scary thing is that if they won't even part with a little of it today, what's going to happen if the paper price REALLY crashes...

Oh but if I was in there to SELL some, they were willing buyers...

Wed, 12/14/2011 - 12:39 | 1979073 ucsbcanuck
ucsbcanuck's picture

"If you get out a blank piece of paper and look at it, that's the plan they're working from"

ROFL!!

Go KB

Wed, 12/14/2011 - 14:00 | 1979435 CrazyCooter
CrazyCooter's picture

I fell out of my chair when he said "First, would you enter in a joint and severally liable relationship with your extended family ..."

That was fucking CLASSIC! It absolutely nails why the Euro is a doomed system from the beginning. I can't wait to zing that one by my old man the next time we talk...

Regards,

Cooter

Wed, 12/14/2011 - 12:39 | 1979075 youngman
youngman's picture

It seems Farber has done a uturn..he used to be a big dot com pusher...then he probably got burned..then burned again in 2008..now he sees it coming again and is not going to get burned again..he has become more negative than before....IMHO

Wed, 12/14/2011 - 12:55 | 1979149 Global Hunter
Global Hunter's picture

I agree he's open to people with new ideas and he's trying to figure out what's going on.

Wed, 12/14/2011 - 14:47 | 1979689 tekhneek
tekhneek's picture

What a nerd.

Wed, 12/14/2011 - 12:40 | 1979082 glokk26L
glokk26L's picture

As I recall, Kyle Bass went long on nickels, gold, and firearms.

Wed, 12/14/2011 - 13:09 | 1979208 Jay Gould Esq.
Jay Gould Esq.'s picture

Paired trade of 2012:

Short GRPN

Long Glock

Wed, 12/14/2011 - 13:26 | 1979267 Chief KnocAHoma
Chief KnocAHoma's picture

He's a wise man. The dollar is soaring now because there is no where else to go. Gold is being sold in a mad dash to stay liquid.

When this turns, it is gona be violent to the upside for PMs. The HOT MONEY is driving everything now, and it will eventually betray the USA too.

 

Wed, 12/14/2011 - 13:43 | 1979338 topcallingtroll
topcallingtroll's picture

He is short beavers.

Wed, 12/14/2011 - 14:02 | 1979443 CrazyCooter
CrazyCooter's picture

LOL!

On that note, does anyone have a link handy for the footage of the beaver dams being blown up ... ?

Regards,

Cooter

Wed, 12/14/2011 - 14:48 | 1979692 chdwlch1
chdwlch1's picture

I agree. I remember reading that a good sign of the nearing collapse is the dollar and gold going up simultaneously. The thought being that these would be the last two "stores of wealth/safe havens" left standing in the ponzi. With gold being the eventual champ over the non-backed, paper fiat dollar. Looking forward to the violent PM move up!!

Wed, 12/14/2011 - 14:49 | 1979695 francis_sawyer
francis_sawyer's picture

yeah, that's what's hilarious...

Forget about the 'melt value' for now (or whether it means anything or not)...

If the DOLLAR is about to become KING... 20 of his nickles = a dollar...

He wins again...

Wed, 12/14/2011 - 12:44 | 1979099 JW n FL
JW n FL's picture

 

 

I don’t know a lot of people who will be accepting print outs with some used to be in business banks letter head at the top. But Good Luck with that!

 

Kyle has a lot right.. I dont see printing as a whole for Europe.. meaning I dont see the Euro marching forward.. I see me protectionism coming..

Dont get me wrong.. there is an army of bankers who are working towards Europe being one big happy family..

but working diligently to turn chicken shit into chicken salad will still not yield the desired result.

Politics will eventually take over.. and I dont mean the top down spin machine kind of politics.. I mean the People are going to start burning shit more often and in more places.

The Euro is DEAD! and once again.. yes! I understand how many people are working to exactly stop that from happening.

 

Wed, 12/14/2011 - 12:45 | 1979110 JW n FL
JW n FL's picture

 

 

http://www.ft.com/intl/cms/f072688c-22a2-11e1-8404-00144feabdc0.pdf

Contagion in the Time of Austerity (from the Financial Times)

Wed, 12/14/2011 - 13:47 | 1979360 topcallingtroll
topcallingtroll's picture

Glad to see you back to your almost manic exuberant selfagain. Your last depressive phase worried me J.E.W.

Acohol depletes your b vitamins too. Stay on your prozac and take your vitamin every day. You used to be the funniest guy here back about a year ago.

Wed, 12/14/2011 - 12:44 | 1979107 Global Hunter
Global Hunter's picture

Did the CNBC guys get a few lump in their throat moments?

Wed, 12/14/2011 - 12:46 | 1979113 azzhatter
azzhatter's picture

The europhile journalist Simon seemed to disagree. Had no basis, just disagreed

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