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Macro Guest Commentary: If Gold Is A Barbarous Relic, All Hail Barbarism!
From Brian Rogers of Fator Securities
Macro Commentary: If gold is a barbarous relic, all hail barbarism!
“Gold is money. Everything else is credit.” -J.P. Morgan, testifying to Congress in 1912.
Markets are reacting negatively today, to put it lightly, as the situation in Europe goes from bad to worse. The Mer-Kozy meeting disappointed those clinging to the idea that Germany would agree to increase the size of the EFSF, which was never a very likely scenario, or the issuance of Euro bonds, which is a virtual impossibility. Questions about a liquidity problem in got louder yesterday as a large European bank borrowed $500mm from the ECB’s 7-day liquidity program at a rate of 1.1%. The Finnish Government is also making waves by actually having the temerity to make collateral demands on Greece for their outstanding loans. Imagine that. Meanwhile, hundreds of luxury automobiles were burned in Germany as a protest against the “fat cats”. The net result of all this is a meltdown in stocks, a widening of spreads and the knee-jerk flight-to-quality reaction in to Treasuries (10yr trading at 2.035) and gold which set a new nominal high today of 1821.
Speaking of gold, have a quick read of the article about Hugo Chavez nationalizing Venezuela’s gold industry and more importantly, repatriating his physical gold from storage sites abroad back to Caracas. The worry here is two-fold: 1) that his demands for physical delivery could stress the market given the estimates of somewhere between 30 and 45 paper ounces of gold issued for every 1 ounce of physical. 2) that this action starts a trend amongst countries that aren’t particularly US-friendly to repatriate and even potentially price sensitive commodities in gold. How much longer will Chavez continue to sell his extremely useful, much needed petroleum products and in exchange accept increasingly worthless pieces of paper, ie USD? Some might respond that if he did that, the US would instantly label him a terrorist and take him out. Perhaps. But what if Russia did it? What if Iran did it? If the commodity rich enemies of the US want to cause problems in this country they don’t need to fire a single shot, all they have to do is start selling their products priced in gold. The end of the reign of the USD as reserve currency will follow quickly.
Adding injury to injury was the economic data today that stunk up the place. If you happen to be sitting at a Bloomberg terminal, pull up the ECO screen and try not to panic. The data was almost a complete disappointment from top to bottom. CPI came in 30bps higher than expected, Jobless claims were higher and last months’ data was revised higher (per usual). Leading Indicators came in higher at 0.5% vs 0.2% expected and 0.3% last month, but the housing date was terrible and the Philly Fed number at -30.7 which takes us back to territory not seen since March 2009. Lovely. Which brings us to the word of the day: STAGFLATION. Got gold? -Brian
* Fator Securities LLC, Member FINRA/SIPC, is a U.S. entity and a member of the Fator group of companies in Brazil. The comments below are from Brian Rogers, who is employed by Fator Securities (Brian’s opinions are his own and do not constitute the opinions of Fator Securities or the Fator group of companies).
Fator Securities LLC is not affiliated with Zero Hedge or any third party mentioned in this communication; nor is Fator Securities LLC responsible for content on third party websites referred to in this communication.
This material was not prepared by Fator Securities LLC. U.S. Persons seeking further information must contact Fator Securities LLC in New York at (646) 205-1160. This material shall not constitute an offer to sell or the solicitation of any offer to buy (may only be made at the time qualified participants are in receipt of the requisite documentation, e.g., confidential private offering memorandum describing the offering, related subscription agreement, etc.). Securities shall not be offered or sold in any jurisdiction in which such offer, solicitation or sale would be unlawful or until all applicable regulatory or legal requirements of such jurisdictions have been satisfied. This material is not intended for general public use or distribution and is intended for distribution only to appropriate investors. The opinions contained herein are based on personal judgments and estimates and are, therefore, subject to revision. Past performances are not indicative of future results.
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What is best in life?
http://www.youtube.com/watch?v=6PQ6335puOc&feature=related
In American history there have been 4 bankruptcies:
1791 - America was created in bankruptcy as France helped finance the Revolutionary War - 1st federal currency created
1861 - America's note needed to be refinanced - as prior note was not honored, inorder to refinance - additional collateral or equity was needed.
Lincoln approached the Southern states and after refusal, Lincoln took by force. - 2nd currency created - The Greenback.
1931 - Americas 3rd bankruptcy announced to Congress and another transfer of wealth takes place through a manipulated stock crash (Call of all margin positions) - 3rd currency created - Federal Reserve Notes.
2008 - 4th bankruptcy - Several companies nationalized and countless foreclosures - Deed for Lease program announced.
So, about every 70 years a manipulated crash is created to transfer wealth in an attempt to get out of bankruptcy.
Out of each of the last 3, has come a new currency.
Now, with the dollars degradation and forecasted demise will we see a 4th and new currency?
GOLD BITCHEZ - Reversion to the mean!
geez, man, shit just happens...the collapse was not fucking engineered. Does it give you guys some kick to fall over yourselves for Potent Directors Fallacies?
WTF, was Rome's collapse engineered too?
Well at least we both agree that America will collapse!
barbarism, bitchez!
http://azizonomics.com/2011/08/10/how-high-will-gold-go/
"will collapse"?
What do you mean "will"? It's happening now. It's been going on for a while.
Maybe you are talking about the fast "waterfall" event. Several of those are coming. But hey, wake up and look around, the collapse is already happening.
Take it easy "Robot in Disguise" - when I say "will collapse", I mean in finality!
Yes, in a sense by its own folly, hubris, cumulative entropy effect, destiny; call it what you like.
"pride goeth before the fall" - Herodotus. Trav's point is still legit. We are in a very special place in human history with oil and other vital resources peaking along with the human population. That said, our own greed and corruption kept us from planning appropriately.
Yes, part of it that the "free market" cannot properly discount the future taking into account limitations of the earth. A classic sauve qui peut scenario is the outcome...
you mean we're headed for some Napoleon? or we need to set our "heights" a little shorter?
Nappy and Stalin were short little fucks....
FWIW, a Napolean might the best outcome... At least he was not a genocidal maniac
dem rayle roads n camps arnt fer banryrd anmals
On behalf of the bulk of the army Boney invaded Russia with: We respectfully disagree.
It's all relative, of the historic strongmen that have emerged out of chaos, Napolean has a pretty good record. He also was an above average adminstrator...
And he didn't really plan on exterminating his own army. Compare and contrast the number of Russians executed by Russians at Stalingrad...
Not to mention his belief in gold as money
Nope, backwards, it is precisely scarce goods which the free market accounts for, government fixes prices and causes shortages.
Ok... explain oil to me.
Please explain why CAPEX investement of 3 trillion has not significantly increased supply over the past 8 years?
yes and explain how elected officials and their economic policies create more BTUs and make them easier to extract as they deplete with decreasing EROI. Perhaps it is both politicians AND their economic philosophies that have it backwards presuming fungability and limitless growth in a finite world producing systems that put profit at the highest priority while ignoring elasticity and redundancy.
\hattip
Nah, politicians don't really care about profit as long as they have power. Oil producers don't really mind selling underpriced oil as long as they get protection from US military.
Politicians always tend to underprice "public goods" to appease their precious voters and it always causes shortages. This is happening not only with oil but with oceanic wildlife, forests, water supply to name a few. Privatize natural resources.. Depleting resources in a free market would be met with increasing free market prices. This would allow lower priced alternatives to compete. Problem solved.
Politicians underprice public goods....ok...
Thanks for making the argument for the "Tragedy of the Commons"...
The flip side is that in most cases, private ownership has resulted in the raping of the land...
You also evaded why, despite 3 trillion in CAPEX. we cannot increase oil production. And the declines are happening in those places where the resources are for all intents and purposes privatized....
Do not confuse problem solved with problem simplified
privatize the ocean, all wildlife, all forests and the water.
Sure you don't work for Debeers?
It is exactly these global "private" interests who have corrupted the "politicians" to work against the public good, lie about the coming resource problems, and direct remaining resources to the most inefficient solutions and very entities causing these problems.
Thinking a completely "unregulated" market will solve these problems is just as naive as thinking a giant government will do the same. They are two sides of the same coin and they lead to criminal destructive behavior.
And as Flak said, you haven't answered or identified the "alternatives" question
Speaking of the future, I have read volumes on what was going to and is now happening. Of them all the one that illustrates what could happen to Amerika is Stalingrad by Antony Beevor.
The only folks with a healthy glow were the ones who had no qualms about eating their dead friends and ememies.
My fuck, wasn't that a book?! It is probably the best summary of the battle in print...
For the crime to come, there iis always his Berlin, lots of raping and pillaging.
Kinda like now, only different!
Berlin was a tad disappointing, pehaps my expectations were too high.... Ryan's version, now 40+ yo, is still a good read and for its time, very shocking.
Berlin: The Sequil - Merkel's revenge!
Good post citing the "Father" of history. he post itself was succient and dead on. Milestones
if the thesis is the $ will collapse because of the inevitable failure of central planning, and central planning is design... then, yes, the $ will collapse because of (not by) design.
I remember reading a paper from a neo-con think tank back when Baby Bush was first elected. It described the best way to eliminate social welfare was to bankrupt the country by spending and spending until it all collapsed. The paper disappeared off the Net, but it's exactly what BB did. Now Obama is carrying the torch, maybe for all the wrong reasons, but the effect is the same.
Regardless of who might be doing the engineering, some very sharp minds have put this forth before.
As for Rome, I tend to think it was inevitable considering the economics at the time, but they didn't let a crisis go to waste, and turned it into the Catholic Church. Nicea was a political stroke of unimaginable historical genius.
Exactly. Just because you didn't recognize the grift doesn't mean you weren't the mark...Why would the monied interests want to do all the heavy lifting when they can simply have their political puppets paint the public coffers an ever brighter shade of red to do the real work, then proclaim "things have gone too far" and usher their masters in to pick up publicly realized assets for pennies on the dollour?
Happens all the time; it's a very old tried and true elitist social engineering gambit.
Where the hell have you all been, you lot that haven't noticed it?
Regards Bucket
Your golden avatar boobs say the same thing as my walk down french history lane above (or below). I hope you realise you owe me one, not you, your avatar!
Our Risk On/OFF Model has been sniffing recession triggering a risk-off trade 6/30 so we've missed the entire move down in SPY and are now +8% YTD vs negative SPY. We are opening up our weekly commentary to those on ZH emailing me at eclark@breakaway-partners.com. Just send me your email and I'll add you to our weekly market update with risk-on/off signals. Got gold?
TD, is there nothing sacred? -- if you are going to expose all these shenenigans, what will the PTB do?
So Fator group of companies is not involved in this article?
In 1356 when Jean le Bon, king of France, got badly licked at Poitiers by the Black Prince, Plantagenet pretender, he paid his ransom in a newly coined money called the Franc. He died in Jail as his son reneged on his promise to replace his father in emprisonment. So out of disaster was born a new money.
Well, is this a 'Jean le Bon' moment for the green back and its European surrogate son, the Euro?
Ever read "A Distant Mirror"?
Now that was a happy go lucky time to be alive...
read this : Its my little contribution to writing an antidote to Dubya's 'clash of civilizations' in novel form w/o betraying the geo political history of the times. (To the best of my knowledge).
http://www.falakpema.com/buythebook.html
Thx... I'll check it out sometime...
always thought wwIII would be fought by one side bombing paper and the other side lighting it up
this is getting scarier and scarier for non-physical holders gazing openmouthed into the abyss.
Openmouthed as they are trying to eat gold? You can't eat gold.
Not to mention if the new currency is digital only, (cashless) what good is gold? Maybe if the PTB are feeling magnanimous, they will put 42 Quatl00s per oz. on our chip or Quatl00 debit card.
Jeez, never heard that one before, you must be from Harvard!
Ben would be proud
Does Chavez start the end-game,
We were just discussing that!
We are thinking the Chavez move yesterday IS driving todays drop...
The big question is will the banks actually ship his gold to Venezula? I doubt it...
Its lose-lose. Either Chavez gets his gold and a bunch of banks have empty vaults exposed, or the banks refuse and the reality that all this paper gold\silver is exposed as bogus.
We will be looking for a follow up, hoping that its buried deep so the charade can continue.
yes. vive la barbarian! and i will also continue to eat with both elbows on the table.
But you can't eat gold, even with both elbows on the table.
And that barbarous relic is gonna kick their banker asses right back to the stone age.
It's about to get medieval on those folks.
Ben davies, of Hinde Capital see's $2100.00 on Gold by December...............
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/8/18_Ben_Davies_-_Expect_$2,100_Gold_by_the_End_of_December.html
BUT.................
I hope to hell he's wrong.............................
What is the politest way to say to people "I told you so"?
Become wealthy, but refrain from being a snob.
Agreed... and warn your fellow citizens even if they don't listen to you, eventually they'll watch the news and think back to what you told them and hopefully it will click, if not, at least you tried... but by all means... don't be a douche just because you had foresight. Be an asshole.
You can use the gold/suit example. It seems to resonate. "Back in the day 1 oz of gold bought you a fine suit, or about $35 US dollars. Today, 1 oz of gold will still buy you a very nice suit, but you can't really buy anything with $35 US dollars. What happened? Gold didn't get more expensive, did it? No. The money became worth less and less over time. How did that happen? Money printing via the Federal Reserves boom/bust business cycles and inflationary monetary policy."
90% of the time they'll look at you like you're crazy, then you have to move into "You should move all of your paper savings into tangible assets such as gold, silver, food, land, guns, seeds, water purification systems, home security, x, y, z," then they usually tune out, OR they're interested and you can get into the nasty details, also, TELL THEM TO READ ZERO HEDGE.
"Money is money, and paper... is paper."
Inflation is Austerity and the Federal Reserve creates the inflation. It is is simple as that. The sooner the American public realizes this, the sooner we can get on track to prosperity for the productive.
You should also be telling them to read tfmetalsreport.
I will never stop telling people to read ZeroHedge.
One might say 'i told you so' by informing those who have discovered that you were correct that you also know what else is coming. Then, inform them that you will never tell them what it is.
Chavez has no choice but to sell his petroleum products for $$. His main non-western trading partners (except Cuba, LOL) don't have any need for his product, so it's not barterable. This "move" is nothing more than posturing and muscle-flexing. On the other hand, he's painfully aware how Quaddafi's gold position has helped him along with the pinch he's in.
his product is in demand no matter what is used as exchange. Cuba reduced its oil demand after russia pulled out and they took most of their agriculture production off the fatal industrial blueprint
Of course his product is in demand; perhaps I didn't phrase that right. However, it's still not barterable as no major buyer, including China, will barter for it. Far easier for them to pay Chavez in fiat. He doesn't pull enough market power to drive any significant deals. China is interested in securing its oil supply, so they are extending loans to Chavez, creating a relationship of dependency.
As to Cuba, its oil supply was cut off when the Soviet Union fell apart but was later replaced by its new sugardaddy and Fidel sycophant, Mr. Chavez. The Castro bros essentially trade doctors for oil, which helps Chavez buy votes domestically. The only reason this transaction exists is because Cuba has a chronic currency shortage and is small enough for Chavez to engage.
China's loans may be closer to bartering or an added purchase cost than an interdependency. It's sort of the reverse of the vendor financing they provide us so we keep buying their stuff. While the US adds termendous costs to each barrel through its military and those escapades, here they loan so they can buy a product with an inelastic demand that is harder and harder to get. China can sell their crap to the rest of the world if the US stops buying it. They have fewer and fewer places to buy oil and a lot of tractors, cars and mouths to feed. Venezuela can always find buyers.
I think you're overestimating Chavez's leverage. It is laughable to call the China-Venezuela relationship "interdependency". The word is "dependency". China's loan is more akin to an IMF loan to an African dictator than to a barter transaction. As to China's ability to sell unlimited quantities of their crap to anyone - good luck. China has a baked-in 8% growth requirement. Watch them meet it with demand from Chavez's constituency, LOL.
An African dictator without oil? I doubt it. Agree that China will implode on its own growth requirements. Guess I'm just disputing your minimizing every one's "dependency" on oil. China is huge but that is as much a weakness as a strength when it comes to oil and the economies built on top of them
From what I know, China does not need to buy Venezuelas oil, China is already a Partner of Venezuela in oil exploitation. China has already acquired a big participation in Venezuelas oil company years ago.
good point and smarter than invading, cheaper too
Aren't you forgetting about China?
and south asia where most of the driving demand is growing
You forgot Chavez' huge deal with China.
With all due respect, this was not a barter transaction.
it's more than that...the only refineries on earth capable of refining the taffy he calls "crude" are on the Gulf Coast
"MOZYR, Belarus, May 13, 2010 (UBO) – Belarus’ Mozyr oil refinery has begun refining its first shipment of crude oil imported via ship from Venezuela with land transport through Ukraine by train. Belarusian officials have said it sees the Venezuelan crude as an experiment that could allow it to develop further sales and distribution on the European oil market.
"The [Mozyr] refinery has received half of the oil shipment from Venezuela and has started the refinery process," an official told RIA Novosti on Tuesday."
Case in point. Another attempt by Mr. Chavez to engage a smaller economy running a chronic "hard" currency shortage.
Diversification, Bitchez!
So are you long chicken coops, Young Buckethead?!
I'm ok with the radiation. Did you hear the one about the three legged chicken?
He knows the banks would steal everything that's not tied down
good on him
Well, good for the Venezualen people assuming Chavez doesn't abscond with the gold once he loses power. He is, after all, just a two bit dictator.
Keep telling yourself that
The Revolution Will Not Be Televised
http://video.google.com/videoplay?docid=5832390545689805144
Well I wouldn't give ya a nickel for the one we got. Milestones
*because that's what he would do.
Chavez is making intelligent moves at this point ONLY because he knows that the entirety of the West is actually socialist/fascist, and as such, can be expected to in much the same way that he himself would.
Not much commentary needed to explain gold. I'm glad that many still believe it's a bubble. It's a new catch-phrase: "I'm a bubble-You're a bubble".
bubblicious
Thats the one.
All Hail, uh hell... Should have bought more last Friday.
check out the monthly chart, its gone completely parabolic, maybe its different this time...
Those tiny bubbles, make me happy, make me funny....
This is just the first in a long line of nationalizations. By the end, with the exception of a few privileged firms, I expect to see them all under the thumb of all of the desperadoes attempting to cling to power. If they are not seized directly, they will be windfall taxed to death (from a capitalist POV).
The murder of self-sufficiency continues.
you could always trade if off for food like the Zimbabweans did out of the back of pickup trucks away from gov. agents. At the very least you might not starve if you don't get shot and killed by rogue cops for your gold first.
Just waiting to cash it in and buy farm land. Gonzo told me to:
Like Rothschild said, “Buy when there’s blood on the streets.” The thing to do to prepare for hyperinflation would be to invest in a diversified hard-metal basket before the event—no equities, no ETF’s, no derivatives. If and when hyperinflation happens, and things get bad (and I mean really bad), take that hard-metal basket and—right in the teeth of the crisis—buy residential property, as well as equities in long-lasting industries; mining, pharma and chemicals especially, but no value-added companies, like tech, aerospace or industrials. The reason is, at the peak of hyperinflation, the most valuable assets will be dirt-cheap—especially equities—especially real estate.
From his his Aug, 2010 post:
http://gonzalolira.blogspot.com/2010/08/how-hyperinflation-will-happen.html
Farm land will be a great investment one day (don't forget to include water rights with it), but gold is a better investment right now.
Not after the rain makes it radioactive.
Farmland is an income-producing asset, while gold is money, which, by itself, is not income producing and has a carry in the form of storage costs. Farmland has historically yielded low single digits, i.e. 2%-3%. As long as the land is propertly managed, it is not a depreciating asset. However, it does carry jurisdictional risk that physical gold does not (we hope).
Farmland can easily outperform gold if it is advantageously purchased and professionally managed. Definitely a good diversification strategy, but requires a lot of diligence on the part of the acquirer, whereas gold does not.
Midtowng, I'm with you on PM's and land.
Land affords privacy and is tangible. It also may also offer water, wood, minerals, animals to harvest and berries and fruit tree's. Did I mention privacy?
In some cases, what used to be stock market monies are now Precious metals and land equity. And more directly under individual management and ownership.
Note, however, that land may or may not be productive, and may, under some circumstances, be a net liability to the titleholder. Land is also not portable, i.e. you can't take it with you, presenting a host of jurisdictional/legal risks to the titleholder (excessive taxation, seizure, attachment of liens, etc.)
Everyone is using that word "Stagflation", a word that was coined in the 1970s to describe the economic picture from back then. Which has nothing to do with today's economic mess. This ain't your father's recession (clue, it's a depression, for a start).
I will continue the lonely battle against this mis-comprehension of what ails us. It's misleading and risks that the wrong medicine gets applied to the problems and makes them worse. It's also a potential disaster for investors to see things the wrong way. Lonely are the brave.
And those without the precious in hand.
Yes. Indeedy. We of the barbarous persuasion will soldier on through the fog of global confusion
And please, don't anyone bring in that dumbass "biflation" bullshit.
It's INFLATIONARY DEPRESSION.
Call it what it is for christ's sake.
Thank you for stating what we are actually experiencing: STAGFLATION.
About time someone called it like it is.
If that's what you think, you're on the wrong track. Good luck.
I guess food is getting cheaper as is gold, right?
and that's the overt obvious shit.
Did Soros beat him to the punch? It looks like Soros took delivery on his GLD last quarter...
GLD and SLV are bonified scams. They do not have the metal. They are also used to short the metal, and as settlements at the comex. Garbage you should not invest in. If you are Soros and you own GLD, as long as the music does not stop, you can get delivery for your shares. It's more than any small time investor can afford, who will just get cash trash for their GLD and SLV shares. When Soros sold gold, (and I do not think is was much physical) he bought mining shares. Just like Eric Sprott sold shares and bought the Miners. These are not dumb people. GLD and SLV investers are.
Wow, looks like the shit is getting real. I thought the CBs would at least try to hang on until 2012, out of respect for multiculi and the Mayans.
"The worry here is two-fold: 1) that his demands for physical delivery could stress the market given the estimates of somewhere between 30 and 45 paper ounces of gold issued for every 1 ounce of physical."
What's the big deal? Same thing happened to houses and that worked out just fine.
Barbarism Bitchez!
Question - Which country (including its people) holds the most gold in the world.
Answer: India ( ust heard some gold council guy on TV) - Of the approx 66000 tonnes of gold in the world the indian families own about 18000 tonnes which is in addition to the approx 1000 tonnes owned by the govenment of India. Thats >25% of the worlds gold mined over the ages.
Just for Kickers The US FED owns about 6,000 tonnes of gold.
The Fed does? Prove it.
Products priced in gold, what a joke. go ahead, i dare you
At one point you could trade a few tulip bulbs for a HOUSE. Lets do this, lets be able to trade a few OZ for houses. We ALL KNOW what happens next though.
What we all get to plant tulips in new gardens of our new homes?
Are you seriously trying to compare tulips to money?
People also liked beanie babies once and pogs and cabbage patch kids.
Please don't buy gold.
So sayeth the Blythe.
bill1102inf,
I'll make sure to throw some twinkies down to you when you're living under the bridge.
Tell me you didn't just compare gold to tulips and beanie babies. Not very "temporal".
You obviously didn't read my reply to the person comparing gold to tulips.
At one point you could buy a decent new house in the U.S. for $10,000. We all know what happened next.
What happens next in this situation is that houses get more expensive as the fiat adjusts to its intrinsic value.
Critical Point of Instability
I guess Chavez is just making sure that he has access to all that gold. His dear friend Gadaffi's holdings in European banks are given to the opposition by order of governments.
Chavez will have his ass handed to him, he will be as famous as Gordon Brown; Gordon Brown sold at the bottom, now Chavez is buying at the top! Soul mates, they should meet up one day and discuss they're wanking technique.
Chavez is being treated for cancer... Maybe he wants to pass away as a martyr and not due to a disease. Better to be remembered as the great President who fought the US Empire to the end...
LIVING THOUGH A CURRENCY DEVALUATION AND WHAT IS WAITING FOR US
I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion.
One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.
http://lonerangersilver.wordpress.com/2011/08/13/living-through-a-curren...
LIVING THROUGH A CURRECY DEVALUATION AND HOW TO COPE
I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion.
One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.
http://lonerangersilver.wordpress.com/2011/08/13/living-through-a-curren...
Gold should not be judged in value by the level of future hyperinflated FRNs that will buy you nothing. It should be judged in relative purchase strength to what you intend to trade for that Gold when the currency is defunct.
best think bernanke could do for us at this point is to print enough paper to keep the yanks warm over the winter
no distn to manfatcaten
I don't disagree, but if we get maargin calls gold will drop as well
If margin rates for gold are raised substantially enough to slow the money into gold, what is the 10 year Treasury going to go to?
The new ipad to gold ratio is 3.64: 1 Shalom!
BARBARISM BEGINS AT HOME
http://www.youtube.com/watch?v=JDkDiC0BxGQ
Unruly boys
Who will not grow up must be taken in hand
Unruly girls
Who will not settle down
They must be taken in hand
A crack on the head
Is what you get for not asking
And a crack on the head
Is what you get for asking
Unruly boys
Who will not grow up must be taken in hand
Unruly girls
Who will not settle down
They must be taken in hand
A crack on the head
Is what you get for not asking
And a crack on the head
Is what you get for asking
No, a crack on the head
Is what you get for not asking
And a crack on the head
Is what you get for asking
A crack on the head
Is just what you get
Why? Because of who you are
And a crack on the head
Is just what you get
Why? Because of who you are
A crack on the head
Because of those things you said
Things you said
The things you did
Unruly boys
Who will not grow
They must be taken in hand
Unruly girls
Who will not grow
They must be taken in hand
Everyone should have been slapped out of thier dreasm when U of Texas demanded physical possession of thier gold. The dominoes start falling faster now as more will demand thier physical.
If I am in Chavez's place I would definitely consult Russia and Iran before making this move.
....living in a van down by the river!!
Interesting, NPR (I know, my wife listens) is now reporting the price of gold as part of their business news/market report. I never heard that before.
So, there is a method to the madness.
After Germany comes Israel, and the Jewish are not God's chosen. Intelligent children are God's chosen. Israel is the stick stirring the crap pot, America has largely become home to whores, first selling their children to the government and then standing on the heads of their parents to avoid drowning for one more day, and the intelligent children have made themselves indistinguishable to the global IC chip from the hoard of consumption whores surrounding them, for lack of decent examples in their environment.
The truth at the end viral consumption is harsh, as will be the die-off, which is emerging from the small towns and gaining momentum toward the big cities, globally. It's not like everyone didn't get notice of where this was all heading.
Socialism/fascism always ends the same way, for lack oxygen, making fuel a non-performing asset. Don't go to war with the people providing the technology.
Gold is not a barbarous relic. It's like the tide.
You can remove the oyster from the sea nonetheless it will open and close with the tide...
...becouse the tide doesn't came from the sea... it comes from the Moon....
.... and you can't remove the Moon.
Understood you Nixon, fucking moron?