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Mark Faber: "I Am Convinced The Whole Derivatives Market Will Cease To Exist And Will Go To Zero"

Tyler Durden's picture


Anyone seeking joyous holiday greetings and cheerful forecasts for the new year is advised to avoid the following most recent Mark Faber interview, in which in addition to his predictions for 2012 (led with "more printing" by the dodecatupling down central planners, and far less prosperity), we get the following: "I am convinced the whole derivatives market will cease to exit. Will become zero. And when it happens I don't know: you can postpone the problems with monetary measures for a long time but you can't solve them... Greece should have defaulted - it would have sent a message that not all derivatives are equal because it depends on the counterparty." And on the long-term future: "I am ultra bearish. I think most people will be lucky if they still have 50% of their money in 5 years time. You have to have diversification - some real estate in the countryside, some gold and some equities because if you think it through, say Germany 1900 to today, we had WWI, we had hyperinflation, WWII, cash holders and bondholders they lost everything 3 times, but if you owned equities you'd be ok. In equities in general you will not lose it all, it may not be a good investment, unless you put it all in one company and it goes bankrupt." As for gold: "I am worried that one day the government will take it away." As for the one thing he hates the most? No surprise here -government bonds.

Full clip:

h/t Scrataliano


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Wed, 12/21/2011 - 18:58 | 2002704 Al Gorerhythm
Al Gorerhythm's picture

Obamma signs NDAA = War declared on US citizens. Will the US military be deployed in the US on the affected doctrin of "spreading democracy and freedom"?

Too ironic!

It sure is needed though (and novel) -- at least half of the equation anyway. Now which part of "democracy and freedom" makes it an oxymoronic equation and one we should should do away with?

Raise the Republic! Good movie in the making.

Wed, 12/21/2011 - 22:07 | 2003167 UP Forester
UP Forester's picture

With their tanks, and their bombs, and their bombs, and their guns....

What's in their heads? (x2) Zombie....

Wed, 12/21/2011 - 17:06 | 2002262 yabyum
yabyum's picture

And happy holidays to you Mark!

Wed, 12/21/2011 - 17:06 | 2002263 Jlmadyson
Jlmadyson's picture

If so, then we are cooked.

Wed, 12/21/2011 - 17:06 | 2002264 CapitalistRock
CapitalistRock's picture

I've been panicking for years. It's not clear what the heck one should do in a panic. Gold and silver? Got it. Real estate? Got it. Cash and stocks? Done. But it's still not going to preserve purchasing power.

Wed, 12/21/2011 - 17:26 | 2002283 TruthInSunshine
TruthInSunshine's picture

Capitalistrock said:

"It's not clear what the heck one should do in a panic."


***NSFW - Language***

You Need To Diversify Your Bonds Nigga

*Blame Chapelle and his writers for use of the 'N' word, and not me, PC Police.

Wed, 12/21/2011 - 17:16 | 2002303 BobPaulson
BobPaulson's picture

If by purchasing power you mean: "A continuous stream of cheap goods manufactured by poor people in exchange for bullshit promises and the odd air raid", yeah, I think you can kiss that goodbye for a while until somebody thinks up a new scam for making people semi-willingly be slaves. Unless of course you are the slave, then your purchasing power is soon to rocket up significantly after the string of wars coming down the pike.

Wed, 12/21/2011 - 17:19 | 2002321 NumberNone
NumberNone's picture

It's going to be allright guys...Ally Bank is advertising 1% a year CD in the banner ad I'm seeing. 

Thu, 12/22/2011 - 01:06 | 2003493 GMadScientist
GMadScientist's picture

Very well. They may deposit cash with me, but only if they provide the first years 1% up-front.


Wed, 12/21/2011 - 18:48 | 2002699 toothpicker
toothpicker's picture

We're all slaves

Wed, 12/21/2011 - 17:22 | 2002337 mmc1968
mmc1968's picture

And what good has panicking done for you?

Wed, 12/21/2011 - 18:00 | 2002482 tmosley
tmosley's picture

I can't speak for him, but the silver I bought with the paper I liquidated when I panicked is worth about 4x what it was when I did it.

Imagine what will happen when everyone panics.

Wed, 12/21/2011 - 18:35 | 2002652 NotApplicable
NotApplicable's picture

Keeps my bowels churning. And my clenched jaw has ground my teeth down so that they appear even now.

I don't refer to it as panicking though, I like to call it optimistic pessimism.


Wed, 12/21/2011 - 17:41 | 2002412 au_bayitch
au_bayitch's picture

Ditto. Examine Maslow's hierarchy of needs. Trade the skiboat for a chicken coop. Divorce the wife of 27 years, cash in the IRA and 401K's and buy 8 acre small farm. Get a shotgun and cut down small trees practicing. Plant a vegetable garden. It is work, but sleeping better. GoodLuck

Thu, 12/22/2011 - 09:27 | 2003770 krispkritter
krispkritter's picture

Chicken coop=check

Wife=N/A (dog)


8 acres=check



Thanks for reinforcing the fact my choices are valid(unlike most people who think I'm nuts)...

Wed, 12/21/2011 - 17:07 | 2002267 SheepDog-One
SheepDog-One's picture

'Derivatives market' never really existed in the first place! So how could it do anything BUT eventually cease to exist?

Wed, 12/21/2011 - 17:37 | 2002399 RockyRacoon
RockyRacoon's picture

Kinda like one o' them particles they create in accelerators?   They only last a miniscule amount of time.   These derivatives created by the mind of financiers has a longer life span but do much more damage!

Wed, 12/21/2011 - 17:08 | 2002271 Dcheeth2
Dcheeth2's picture

Diversify with home grown cabbage soup. Its the bomb!!

Wed, 12/21/2011 - 17:15 | 2002300 Let them eat iPads
Let them eat iPads's picture

Cabbage is cheap as borcht. I love the stuff.

Wed, 12/21/2011 - 18:50 | 2002708 toothpicker
toothpicker's picture

Can you print cabbage? / Ben

Wed, 12/21/2011 - 17:47 | 2002437's picture

Try some tree cabbage aka collards. Nice leafy greens sticking out of the snow. Can't beat that.

Thu, 12/22/2011 - 08:23 | 2003713 Snidley Whipsnae
Snidley Whipsnae's picture

Don't forget Kale, it's also a winter hardy veggie.

Wed, 12/21/2011 - 17:08 | 2002273 JustObserving
JustObserving's picture

All $707 trillion will go to zero?  Austerity to eternity?  Who will attend Obama's $35,000 a plate dinners? Who will buy Roubini's $5.5 million NY apartment?

Wed, 12/21/2011 - 17:49 | 2002446's picture

This Diamond Ring Doesn't Shine for Me Anyone.

Wed, 12/21/2011 - 17:10 | 2002276 youLilQuantFuker
youLilQuantFuker's picture

"Saudi Prince in Night Club spends one million dollar"

Camel Jockey makin' it rain with the joo confetti.

Wed, 12/21/2011 - 17:30 | 2002372 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Jews didn't invent fiat

Wed, 12/21/2011 - 17:50 | 2002452's picture

Just like everything else, fiat was invented by the Chinese.

Wed, 12/21/2011 - 17:55 | 2002468 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Funny, that

Wed, 12/21/2011 - 21:17 | 2003084 youLilQuantFuker
youLilQuantFuker's picture

Historians.... WGAS, I was just introducing the Prince.

Thu, 12/22/2011 - 02:13 | 2003566 GMadScientist
GMadScientist's picture

Is it less frustrating if he gives it to some schmuck who buys BAC with it?


Wed, 12/21/2011 - 17:11 | 2002280 Odin
Odin's picture

How he thinks the market won't crash like a heroin addict on monday if derivatives go to zero is beyond me...

Wed, 12/21/2011 - 17:28 | 2002368 Citxmech
Citxmech's picture

Because when folks are sifting through the wreckage - there's actual value in certain companies.  It's all about real asset value based upon human need.  No matter what happens to the monetary system, folks are going to need energy, food, water, etc.

Wed, 12/21/2011 - 17:31 | 2002376 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Corporations rely on people, people do not rely on corporations.

Wed, 12/21/2011 - 17:37 | 2002398 chunga
chunga's picture

Corporations ARE people. Too bad so many of them are evil.

What kind of person would Monsanto be?

Wed, 12/21/2011 - 17:46 | 2002435 NumberNone
NumberNone's picture

Corporations literally are people via Corporate Personhood.  And be nice or you'll hurt their feelings! 

Wed, 12/21/2011 - 17:55 | 2002461's picture

Corporations rely on people, people do not rely on corporations.

How many products that you will use today were not made, marketed or distributed by corporations? You're not making your own breakfast cereal or having your toothbrushes produced through local cottage industry, are you?

Wed, 12/21/2011 - 18:00 | 2002483 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I made my own breakfast and the ingredients were made locally.  My toothbrush is not made from one of the leading "brands". 

And the point is that corporations should not be deemed persons.  They do not think or feel.  They should be treated as businesses.  The only reason for the Rockefeller/Morgan corporate coup was so they could get away with murder and not be held accountable.  They were pissed that the unions were getting the better of them, and they needed a way out.

I will write it with a slight tweek that maybe is a more accurate tatement. 

Corporations rely on people, people do not need to rely on corporations.

Wed, 12/21/2011 - 18:24 | 2002599 chunga
chunga's picture

I didn't have any breakfast...or lunch. I did brush my teeth; honestly I don't know who made the brush I just hope to hell it wasn't Monsanto.

Thu, 12/22/2011 - 00:47 | 2003165's picture

How are you using a computer to access the Internet without relying on corporations? Are any of the local products you use produced using electricity or transported by internal combustion engines running on gasoline?  Does your place of business use energy and equipment that is produced by corporations? Do you travel to work or to shop in a corporate built vehicle using corporate supplied oil? Do you ever read books, watch TV or movies or listen to popular music? Should all economic activity be limited to that which can be performed by sole proprietorships and partnerships?

I could keep going forever because anyone who is not living naked on an island depends on a complex economic system which must be able to organize itself in order to operate.


Thu, 12/22/2011 - 01:11 | 2003504 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I wouldn't be online if it wasn't for ZH.  I haven't had cable for close to a decade.  I don't watch movies unless that's what a friend wants to do.  I would rather play guitar and write.

I sold a car after the Fall of '08, and only recently bought one, but the car cost me a few hundred dollars.  I rode my bike everywhere for the three years inbetween, and I have likely put more miles in on bikes than cars (excluding long trips I only do every once in a while) during the last decade.

I have noticed lately that many of the books I buy are from small publishers, and I always shop at local bookstores.  The computer I am using is from 2001- it doesn't get youtube. 

I would love to live on an island, naked.  But instead I am choosing to participate in this crazy world until the wheels fall off. 

But.....none of this is my point.  We don't need corporations, and they don't make us any happier.  It's not like people are happier now than they were during the last decade, century, melenium.  Technology just gave us a different lifestyle.  It didn't change who we are.  We are the same people that hunted and gathered, the same people who have lived and loved, sang and traveled, all of it.  It's all the same as it ever was.  Wake up.

Thu, 12/22/2011 - 01:39 | 2003535's picture

Petrochemicals allow humans to expend 10 calories of fuel in order to produce 1 calorie of food. Without petrochemicals the  food supply would only support a small fraction of Earth's present population. Billions would die. Please explain how vast quantities of petrochemicals can be discovered, extracted, refined and transported without corporations.

Thu, 12/22/2011 - 01:43 | 2003543's picture

I always hated that song.

Wed, 12/21/2011 - 17:11 | 2002285 WhiteNight123129
WhiteNight123129's picture

Well if you have stocks and you are record holder, some of those stocks will reprice inflation. You have to be record holder though.


Wed, 12/21/2011 - 17:15 | 2002296 Odin
Odin's picture

Yeah I understand his premise that they will just print and print and print, but if the derivative markets goes to shit, there will be a lot of counter-party systemic risk that would send the whole house of cards crashing down... But what do I know I'm no "doctor"...

Wed, 12/21/2011 - 18:13 | 2002544 Papasmurf
Papasmurf's picture

Not easily done these days now that brokers refuse to deliver your property.

Wed, 12/21/2011 - 17:12 | 2002289 AngelFace
AngelFace's picture

Saw this clip on YouTube a week ago.  MF rocks. MF for czar of ECB and head of the US Fed!

Wed, 12/21/2011 - 17:12 | 2002290 AngelFace
AngelFace's picture

Saw this clip on YouTube a week ago.  MF rocks. MF for czar of ECB and head of the US Fed!

Wed, 12/21/2011 - 17:15 | 2002297 New American Re...
New American Revolution's picture

Zero out derivatives, agreed, there is no other eventual option.

Wed, 12/21/2011 - 17:27 | 2002364 NotApplicable
NotApplicable's picture

Ahh! There's that word, eventual.

Until then, there's always infinity.

Wed, 12/21/2011 - 17:16 | 2002306 JR
JR's picture

Capitalism is owning the means of production; owning the government is not capitalism.  The bankers from within are destroying America from within. Just as bankers such as Jacob Schiff, Max Warburg, and Paul Warburg inserted themselves into the Bolshevik Revolution to become key benefactors in the political and economic rape of Russia, these very bankers inserted themselves into the American economy in 1913 by bringing their money and techniques into America to create the Federal Reserve System. The same cabal as then rules the Fed today.

Bill Bonner writes on Lew Rockwell’s site today that the Fed's collectivist “depression-prevention” system “is protecting the insiders at the expense of the outsiders.”  In “Collectivist Action to Prolong a Depression,” Bonner writes,

"Have  yourself a merry little depression…

"What’s this? Christine Lagarde, IMF chief, said last week that the world’s nations needed to work together to avoid a 1930s-style depression.

But seeing the way they work together…and where they seem to be headed…we’d prefer a depression.

"The idea of the world’s authorities is not to solve the debt problem, but to make it larger. One bank goes bust; they get a bigger bank – a central bank – to bail it out. One country goes broke; they get a bigger country to bail it out.

"The US bailed out its financial sector. Europe has had trouble getting together to bail out its fringe nations. But gradually, in fits and starts, the pieces are coming together. We will all bail each other out. Then, we will all be bailed out. Together.

"We need to act 'as collectively as possible,' says Lagarde.

"She means that we all have to accept more debt…in order to prevent depression. That is, all the feds’ horses and all the feds’ men are supposed to make sure that 1) stock holders don’t lose money…2) bankers don’t go broke…3) speculators don’t get wiped out…4) business executives don’t lose their jobs… Daily Reckoning readers will note, with a wry smile, that these are precisely the things that OUGHT to happen.

"Which also happens to be what a depression would accomplish… It’s why we have depressions…and why we need them. They don’t have to be long, drawn-out disasters. They can be short and sweet. But they have to get the job done.

"On the other hand, let us look at what all this collective, depression-preventing action is accomplishing. In a word or two, it is protecting the insiders at the expense of the outsiders.

 And, oh yeez. Says Bonner: “America’s highest paid executive took home more than $145.2m, and as stock prices recovered across the board, the median value of bosses’ profits on stock options rose 70% in 2010, from $950,400 to $1.3m.” ...

Wed, 12/21/2011 - 17:30 | 2002373 NotApplicable
NotApplicable's picture

Isn't collectivism great?

Will somebody please tell Christine that I'm still waiting for my pony ride?

Wed, 12/21/2011 - 17:50 | 2002449 MrNude
MrNude's picture

History has demonstrated by now that Socialism is a scam that ultimately benefits the banks. 

There is no logical or possible way to 'equally redistribute' finite resources amongst a exponential quantity such as human populations. It is designed to fail from the start.

Who ultimately benefits from having all the seized assets of the state collected into one place,

Who ultimately benefits from the inevitable failure and crash built into the system.

Who ultimately benefits when the one place all the state assets where collected decides what gets divided out to new shell banks.

Who ultimately benefits from everything in the country that has just crashed now being for sale and dirt cheap to boot.

I'm not really a big ideological guy but look at the Gosbank during the USSR and try and tell people with a straight face it wasn't a small time version of the Fed and how it pulls the worlds strings today.

Thu, 12/22/2011 - 02:20 | 2003578 GMadScientist
GMadScientist's picture

History has shown that banks are a scam that ultimately benefits banks.

You might want to start with the definitions of socialism and oligarchy, Tex.

Just watching you try to think makes me tired.

Thu, 12/22/2011 - 21:45 | 2006065 MrNude
MrNude's picture

And skipping past your boring bullshit like you skipped past mine, Was the USSR Gosbank a fed lite or not cry baby?


Yeah thanks for inadvertently proving my point for me chief. 

Wed, 12/21/2011 - 17:17 | 2002311 sgt_doom
sgt_doom's picture

Now, consider this: the top four US banks (JPM Chase, Citibank, Bank of America and Goldman Sachs) control nearly 95% of the US derivatives market, which has grown by 20% since last year to  $235 trillion. That figure is a third of all global derivatives of $707 trillion (up from $601 trillion in December, 2010 and $583 trillion mid-year 2010. )

Breaking that down:  JPM Chase holds 11% of the world’s derivative exposure, Citibank, Bank of America, and Goldman comprise about 7% each. But, Goldman has something the others don’t – a lot fewer assets beneath its derivatives stockpile. It has 537 times as many (from 440 times last year) derivatives as assets. Think of a 537 story skyscraper on a one story see-saw. Goldman has $88 billon in assets, and $48 trillion in notional derivatives exposure. This is by FAR the highest ratio of derivatives to assets of any so-called bank backed by a government. The next highest ratio belongs to Citibank with $1.2 trillion in assets and $56 trillion in derivative exposure, or 46 to 1. JPM Chase's ratio is 44 to 1. Bank of America’s ratio is 36 to 1.  

Wed, 12/21/2011 - 17:34 | 2002382 NotApplicable
NotApplicable's picture

Only 20% derivatives growth? I'd think they could at least double that rate if they want to have a respectable looking ponzi.

Wed, 12/21/2011 - 17:42 | 2002416 Badabing
Badabing's picture

Hay lets re-hypothecate derivatives!

Wed, 12/21/2011 - 19:59 | 2002919 lotsoffun
lotsoffun's picture

how does any of that make any difference about goldman not having assets?  when the counterpary isn't there - it's worth about one of those little hairs hanging off your .....  infact - i think it may be better for me as a tax payer - because they won't sweep my savings deposit account.

but of course - this is all total nonsense as to how it plays out.  we are ants and they are just playing back and forth with each other.




Wed, 12/21/2011 - 17:23 | 2002316 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Not all derivatives are created equal.

 Agreed, Faber.  I think I summed up how I feel about it on this post.

David Rosenberg On The Difference Between The Buy And Sell Sides, And What He Is Investing In Right Now:

Wed, 12/21/2011 - 17:18 | 2002319 AtomicWarhead
AtomicWarhead's picture

Have you guys noted that Faber usually has a huge grin whenever he is interviewed, ... I think the regularly has his Thai booze ...

Wed, 12/21/2011 - 17:19 | 2002322 Neidhammel
Neidhammel's picture

There is no money but gold and silver. Will PM really lose 50% of weight within next 5 years? Those who consider printed paper as money deserve to lose 100% at least.

Wed, 12/21/2011 - 19:01 | 2002741 Moe Howard
Moe Howard's picture

I had to re-weight everything to check, but no, it's all still 100%.

Gasoline around here just dropped to 1.4 90% silver dimes a gallon - a bargain. In case you are math challenged, that is 14 cents face value.

Wed, 12/21/2011 - 17:20 | 2002332 Yen Cross
Yen Cross's picture

 Tyrannosaurus / Bullshitimous

Wed, 12/21/2011 - 17:21 | 2002334 quasimodo
quasimodo's picture


Wed, 12/21/2011 - 17:25 | 2002352 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah, the derivatives market going to zero...boring!

Now time for some Latino Idol with Hennifer Lopez~

Wed, 12/21/2011 - 17:22 | 2002341 ebworthen
ebworthen's picture

I too, fear that governments will confiscate or outlaw PM's and institute electronic transactions only.

They would have complete control, especially over taxation.

Their ultimate goal has to be to get rid of any underground economies, and thus, means of exchange.

Hopefully, everything will collapse before we all become automatons.

Live free or die.

Wed, 12/21/2011 - 19:02 | 2002748 Moe Howard
Moe Howard's picture

That does seem to be the goal.

Thu, 12/22/2011 - 06:10 | 2003655 Temporalist
Temporalist's picture

Yes but System D is the fastest growing economy in the world and it's essentially a black market.

Wed, 12/21/2011 - 17:22 | 2002344 Yen Cross
Yen Cross's picture

 Lets talk as I enter Asia! Bitches,

Wed, 12/21/2011 - 21:02 | 2003048 Jendrzejczyk
Jendrzejczyk's picture

Asia is LARGE. Narrow it down for us.

Wed, 12/21/2011 - 17:24 | 2002346 lolmao500
lolmao500's picture

Yeah what is going on today has never happened in history. This is the biggest bubble/scam in history, even bigger than the tulip mania.

Predicting what's gonna happen based on history is kind of a waste of time.

And yeah gold is gonna get seized. Money will go digital... to protect the children from the evil drugs and black markets of course.

Wed, 12/21/2011 - 17:27 | 2002363 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Who is going to seize gold?

Wed, 12/21/2011 - 17:37 | 2002396 ebworthen
ebworthen's picture

We could see another FDR confiscation scheme.

And, making the buying or selling of gold illegal (i.e. - drug status, meaning, if you are found with it in your posession it is confiscated).

Sure, you could have a black market of gold and PM's, but that would hurt their currency/barter/exchange value.

If it was done in the 1930's, it could be done with greater efficacy today because of all the electronics; cameras, transaction tracking, TSA scans, etcetera.

Wed, 12/21/2011 - 17:43 | 2002421 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

So first off, let's say they pull it off:  the price would sky rocket and all of the gold I lost in a boating accident would increase dramatically.

But the government can't wipe its own ass, so I don't think they do pull it off.

Wed, 12/21/2011 - 17:52 | 2002454 ebworthen
ebworthen's picture

I hear you.

There is a lot of gold they would never get their hands on; and as RockyRacoon points out is was forced redemption not confiscation and only 10%-15% effective.

Their goal, however, was and would be to force the obedient sheeple to hold fiat, or buy equities, or not take their "money" out of the bank.

They work to defeat alternate currencies and forms of barter and exchange to keep assets under their control for taxation/confiscation and to prop the ponzi.

Believe me, I am holding gold and alternate assets, I just would not doubt that the FED and TPTB will try to defeat everything that is not trackable fiat.

Wed, 12/21/2011 - 17:44 | 2002422 RockyRacoon
RockyRacoon's picture

Gold wasn't confiscated, it was a forced redemption.  The owners were paid for their gold at the current price.   Just a minor quibble but it does reflect on the discussion.   None of it was fair, and the re-valuation of gold was criminal, of course.

Wed, 12/21/2011 - 17:55 | 2002465 ebworthen
ebworthen's picture

You are correct, and I agree.  I would not put it past them to do it again and get the BATF inolved.

Thu, 12/22/2011 - 15:39 | 2004990 swoop72
swoop72's picture



Wed, 12/21/2011 - 18:08 | 2002521 Papasmurf
Papasmurf's picture

That would improve the value, just like prohibition improved the price of alcohol.

Wed, 12/21/2011 - 17:38 | 2002402 NotApplicable
NotApplicable's picture

Since there isn't much in private hands, I doubt they'll bother. Instead they'll just make the buying/selling of it illegal, with digital exceptions that they have full control over. Since they own everything anyway, it will eventually percolate back up to "them" as we consume the wealth is stored.

Wed, 12/21/2011 - 17:44 | 2002428 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Buying/selling gold is illegal because....?

There is no reason, justification.  It won't fly, and the government will not be able to enforce it.

Wed, 12/21/2011 - 18:35 | 2002656 lolmao500
lolmao500's picture

You think a criminal government needs reasons? LOL You think Stalin needed reason to kill his own people?

Hell they'll just say that gold owners are conspiring to kill the US economy... and off to the camps!

Wed, 12/21/2011 - 20:04 | 2002931 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Armed Americans won't go for it.  Not now, not ever.

Thu, 12/22/2011 - 17:09 | 2005318 swoop72
swoop72's picture

YUP. economic terrorism.

Wed, 12/21/2011 - 19:03 | 2002751 JoBob
JoBob's picture

Who says they need a reason? All they have to do is declare the personal possession or use of gold as an act of terrorism against the sovereign USA. Anyone caught even thinking about gold can visit a "detention center", have all of their assets confiscated, and kiss their futures goodbye. The bad news is that it could be done today with the laws already on the books. Unconstitutional laws, but adequate for the guys with the big guns.

Wed, 12/21/2011 - 20:06 | 2002937 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

They will have to pry the gold from the same hands that hold my gun.

400 million guns want to see your theory in action.

Wed, 12/21/2011 - 17:23 | 2002348 spekulatn
spekulatn's picture

The Ron Paul Portfolio


”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,”

Wed, 12/21/2011 - 17:42 | 2002415 NotApplicable
NotApplicable's picture

I gotta get more groceries. (and spit on the WSJ when I pass by the news stand)

Wed, 12/21/2011 - 17:48 | 2002444 RockyRacoon
RockyRacoon's picture

Rep. Paul appears to be a strict buy-and-hold investor who rarely trades; he has held many of his mining stocks since at least 2002. But, as gold and silver prices have fallen sharply since September, precious-metals equities have also taken a pounding, with many dropping 20% or more. That exposes the risk in making a big bet on one narrow sector.

Whaaaat?  What dropping 20%?  Having owned since 2002 is not a "dropping" of any kind.  Where do they dig these hacks up?  

At our request, William Bernstein, an investment manager at Efficient Portfolio Advisors in Eastford, Conn., reviewed Rep. Paul’s portfolio as set out in the annual disclosure statement. Mr. Bernstein says he has never seen such an extreme bet on economic catastrophe. ”This portfolio is a half-step away from a cellar-full of canned goods and nine-millimeter rounds,” he says.

Anything to make a sound investment strategy look like a tin-foil hat routine.  This sucks.

Thu, 12/22/2011 - 06:21 | 2003660 Temporalist
Temporalist's picture

Rocky I wish I could vote you up more...apparently that happens sometimes but I bet you'd have a lot more than two greenies right now.


Anyway I was going to say that this "article" was a ridiculous hack job and commented on at Ron Paul sites.  The funny part is that they first tried to tear him down for his portfolio doing so well in another article, that he's a big time investor and want to know how he's done so well making him out like a fat cat, and then the very next hack attack is that he's not invested properly.


It's amazing how the media snake eats itself.  They'll attack the people who were prepared for a flood as being end-of-the-worlders and then after the flood it will be wrong to have saved themselves and family because they'll point out they lost their car and didn't help every person that was drowning.


Ron Paul was wrong for investing in what he thought was right because he was successful and he's wrong because his investments lost some in the past few month.  Clearly there is no winning for him...that's how you know he's solid.

Thu, 12/22/2011 - 17:12 | 2005322 swoop72
swoop72's picture

+1 for you sir.

Wed, 12/21/2011 - 18:34 | 2002480 sitenine
sitenine's picture


I read this with disgust a little earlier today. The quoted comment is about a half-step away from calling Paul a terrorist. We were warned about this, and we've seen examples from the administration as well (remember when Napolitano said vets were potential terrorists?). Patriots, stand firm. The time has arrived, when you will be accused of subversion and crimes against the State. Let your banner be the Constitution, and fight these mother fuckers with every last ounce of strength (or gold) that you have in you. Whether or not the financial system can be saved is not nearly as important as saving our families, our friends, our freedoms, and our souls.

Wed, 12/21/2011 - 17:25 | 2002354 sgt_doom
sgt_doom's picture

Oh yeah...and speaking of something else worth reading, but some may have missed:


Wed, 12/21/2011 - 17:34 | 2002385 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Got cliff notes?

Wed, 12/21/2011 - 17:55 | 2002470 Thisson
Thisson's picture

I do.  I wrote a memo summarizing the FCIC report.  If you want a copy of it, contact me at



Wed, 12/21/2011 - 18:01 | 2002491 NotApplicable
NotApplicable's picture

Hopefully, as I can't imagine any commission headed by Phil Angelides creating anything worth reading, and I'm not going to wade through 662 pages (couldn't fit 4 more in?) of whitewash to find out.

Wed, 12/21/2011 - 17:27 | 2002362 XRAYD
XRAYD's picture

Surely he means the CDS market, and not the exchange traded derivatives such as index options, futures, etc.


So at most it would be about 10% of the derivative market that might go to zero, from its current $70 trillion dollars - nothing to sneeze at, because it will decimate the rest of the market but not zero it out!


Wed, 12/21/2011 - 18:08 | 2002518 NotApplicable
NotApplicable's picture

Why would it be limited to the CDS market, when the issue is sanctity of customer accounts, specifically margin accounts? If you can't trust your broker to not hand over your assets to JPM in the middle of the night, how can you responsibly place any money there?

Corzine has fired the next "shot heard 'round the world." It will take time, but short of making all parties whole (which isn't going to happen, because it can't) there is no going back.

Wed, 12/21/2011 - 17:29 | 2002370 Yen Cross
Yen Cross's picture

 If & I said if!  Don't catch falling knifes.  I like that ( cable) , reload under the 23.6 fibi on that last move . I like the swissie taking out the 50 area.  I like the reload on aud/jpy.


Wed, 12/21/2011 - 17:33 | 2002381 jcaz
jcaz's picture

Oh cool- trading advice for 3rd Graders.....

Wed, 12/21/2011 - 17:42 | 2002419 Yen Cross
Yen Cross's picture

KOOL Got any better IdEaS?

Wed, 12/21/2011 - 17:32 | 2002379 bill1102inf
bill1102inf's picture

Is anyone on here smart enough to know what the counterparty risk gold has??

Wed, 12/21/2011 - 17:41 | 2002411 Yen Cross
Yen Cross's picture

 That trade was done 2 days ago. South Park @ %5 Cali time.  $th grade (4th) exams.

Wed, 12/21/2011 - 17:42 | 2002417 Godisanhftbot
Godisanhftbot's picture

1) easy to steal

2) you cant eat it

3) no one will be able to afford it, so you wont be able to sell


Wed, 12/21/2011 - 18:03 | 2002498 tmosley
tmosley's picture

You don't even know what counterparty risk is.  I suggest you learn at least that definition before you pester us with your inane questions again.

But you won't, because you want to mischaracterize facts to fit your view of the world.

Physical gold in hand has NO counterparty risk.  It has theft risk and price risk, which you conflate with counterparty risk.  Something I suspect you do on purpose.

Thu, 12/22/2011 - 06:29 | 2003663 Temporalist
Temporalist's picture

Ttmos his premise, which I tried to respond to and I'm sure that trollpuppet didn't read, is that NOTHING has value if someone doesn't want it.  He thinks everything has counterparty risk.

I would explain further but...let's not waste our time.

Wed, 12/21/2011 - 17:35 | 2002389 jcaz
jcaz's picture

Good luck with that idea, Fabes- woulda made more sense BEFORE equities were a fraction of the derivatives market.......

Wed, 12/21/2011 - 17:38 | 2002403 Amused2Death
Amused2Death's picture

If you listen and read Faber, you know he's talking about a time horizon of 5-10 years from now, in the meantime he thinks that governments will print, print, and then print some more...

Wed, 12/21/2011 - 17:41 | 2002410 Godisanhftbot
Godisanhftbot's picture

 Huge Exacta just hit at Tampa in fla,  


 Bear Always

 Gold Castle

Wed, 12/21/2011 - 17:42 | 2002413 Sudden Debt
Sudden Debt's picture

I told ya you should have bought silver!

Wed, 12/21/2011 - 17:45 | 2002434 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I did last week.  Oh, and that reminds me, I was going to buy some more today. 

Wed, 12/21/2011 - 17:42 | 2002420 working class dog
working class dog's picture

Bernanke , Big Banks, Soveriegn wealth funsds, Hedge fundes, private equity groups Cargill, Saudis, anomonous billionaires ,Wargburgs, Rockefellers,Rothschilds, Royal family wealth funds, wealthy trust funds,Boehner, Frank, Dodd, Summers, Paulsen, Geithner, Central bank members world wide, IMF child molestors,  and Obama all say we will save you (from us!). We will do this MR Middleclass!! We will save you from us by giving more money at the nozzle to us, and than charge you interest on imaginary money, over and over and over again, until your standard of living is less the a Yemen ordinary seamen on a ship. When this happens we will all move to Singapore and hope the govt their doesn't take the wealth we stole from you!!, Meanwhile keep watching ESPN and American Idol ye fools!!

And remember to pay your taxes you filthy greedy 99%.

Wed, 12/21/2011 - 17:43 | 2002425 working class dog
working class dog's picture

I am not smarter than a fifth grader excuse my spelling!

Wed, 12/21/2011 - 17:45 | 2002431 mayhem_korner
mayhem_korner's picture



I think Marc-o downed a fifth of anti-hopium for that rant.

Wed, 12/21/2011 - 17:47 | 2002440 midgetrannyporn
midgetrannyporn's picture

It doesn't matter if the world eCONoME blows up as long as J. Dimon gets rich in the process everything is kosher.

Wed, 12/21/2011 - 18:08 | 2002520 Silver Pullet
Silver Pullet's picture

My ex-boss lived by the rule;

"It's not how much money you have, it's how much more money than other people you have."

Wed, 12/21/2011 - 17:53 | 2002456 Note to self
Note to self's picture

Ummm . . . so wtf happened to IBM today?

Wed, 12/21/2011 - 18:02 | 2002493 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The HFTM needed a profit.  They scalped the suckers in that one.

Wed, 12/21/2011 - 17:53 | 2002457 Godisanhftbot
Godisanhftbot's picture

 Ya'll dont feel the least bit silly thinking a hunk of metal will save you?

Wed, 12/21/2011 - 18:02 | 2002495 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold is money

Wed, 12/21/2011 - 20:51 | 2003021 WoodMizer
WoodMizer's picture

Tradition Bitchez

Wed, 12/21/2011 - 18:14 | 2002545 NotApplicable
NotApplicable's picture

As compared to unlimited IOUs issued by criminal cartels?

*picks self off of floor, fighting uncontrollable laughter*

Yeah, I'm silly all right. You?

Wed, 12/21/2011 - 22:45 | 2003238 Dr. Engali
Dr. Engali's picture

I have a few thousand hunks of lead that will.

Wed, 12/21/2011 - 17:55 | 2002469 0ppenheimer
0ppenheimer's picture

Derivatives are a viable creation of the free market. I don't see why they would disappear....

Sure, they are overused, overlevered and overextended today... but doesn't mean they have no place in a financial system (even one based on metals, if that's your flavor)

Wed, 12/21/2011 - 18:18 | 2002567 NotApplicable
NotApplicable's picture

That's not the point. They've been undermined (like everything else) by Wall St., and cannot be held without exposing yourself to Corzine's (et al.) follies. When one steals billions, yet there are no arrest warrants or indictments for the theft, there is no longer a market.

It might still look like one now, but step away for a couple of milliseconds...

Wed, 12/21/2011 - 18:01 | 2002488 Cone of Uncertainty
Cone of Uncertainty's picture

"Hi, this is ammo direct how can I help you?"

"Yes, I would like to buy 100,000 rounds of .223 please"

Wed, 12/21/2011 - 19:50 | 2002878 Moe Howard
Moe Howard's picture

"so sorry, we only carry military grade FMJ 5.56."

Thu, 12/22/2011 - 09:53 | 2003812 krispkritter
krispkritter's picture

"Honey, the UPS guy is here and he looks PISSED!?" (12.5k 5.56)

99 barrels of ammo on the wall, 99 barrels of ammo...

Wed, 12/21/2011 - 18:03 | 2002497 Esculent 69
Esculent 69's picture

I need to redefine how i see the word today

A President that's failed to a government derailed

I hate the shitty economy it might as well be sodomy

I know that in the end I'm expected to pretend

But I cant relate to your liberal idiocy

No one's in control when the governments the enemy

So light the fuse impose your views


Complacency is your demise

Wed, 12/21/2011 - 18:03 | 2002503 Caviar Emptor
Caviar Emptor's picture

Faber has often made this call. He believes, based on German 20th century history, that the right hedge for inflationary policies will be gold and stocks. He does mention two caveats: that individual companies will go broke and their stock go to 0. Of course. And that you still lost money with equities compared with inflation. My own calculation based on the German stock exchange 1920-24 compared with the dollar-rate of exchange of the Mark shows that the magnitude of losses was enormous: one trillion versus 26 million. And the number of bankruptices were enormous making stock picking extemely perilous

Best returns by far were for gold and for stable foreign currencies or bonds denominated in those currencies. 

Wed, 12/21/2011 - 18:16 | 2002561 the grateful un...
the grateful unemployed's picture

the US is against the gold standard because they would be at a distinct disadvantage to countries with small currency floats relative to their gold reserves. so if country A and B have the same amount of currency in circulation, and B has twice as much gold, then B's currency is worth twice as much regardless of GDP. and anytime you take currency out of circulation, which A would have to do to bring its currency to par with B, that is deflationary.

and i like the gold miners after the crash, as in a gold standard race countries will count gold still in the ground, just as countries count oil still in the ground as part of their reserve. and the beauty of that is the gold never has to be mined to make it viable. (so i see all sorts of mining technology to verify the gold, but little real mining, while the cost of mining gold will go through the roof and defeat the rise in the value of the metal, just as it is doing now)

so i would rather own the miners than the physical metal, which the government will confiscate as national treasure, and perhaps even bury it back in the ground.

but first we have to take the paper value out of gold, and go from there.

Wed, 12/21/2011 - 18:22 | 2002592 NotApplicable
NotApplicable's picture

They'll nationalize the miners (sans the biggies (to maintain the facade, as they are effectively nationalized anyway)) long before they go after the metal in private hands.

They produce money, after all, which is unwanted competition.

Wed, 12/21/2011 - 19:31 | 2002832 the grateful un...
the grateful unemployed's picture

the government will buy it all, and there will be no market in gold if we go on the gold standard. ultimately an oz will be worth an equivalent value in cash backed by gold, so there is no point in owning gold once you go on the standard. there will be no purpose to mining the gold, once the value of the gold has been estimated and verified, and who knows what the value of discovering new gold will be, although it will probably be against the law to mine gold since all gold is part of the national reserve, it would be like cutting down one of their trees in a national forest. people have this belief that gold is somehow magic, but the government can render it down to a useful product by setting up a gold standard. and they probably won't have a choice once the competition to create gold backed currency begins, you could see plays like Zimbabwe get rich overnight. crazy as that sounds.

Wed, 12/21/2011 - 18:25 | 2002607 chump666
chump666's picture

Keeping it real Marc. What a f*cking legend! 

Wed, 12/21/2011 - 18:43 | 2002671 Yen Cross
Yen Cross's picture

 Derivitaves will cease to exist? I can't stop laughing.

   Has anyone looked @ Hollywood #'s ?   Hey Chuck ya " bone head", bury the hatchet and bring Charlie back!

      I'm tired of 2 & 1/2 of that worthless camera guy.  He should be doing ( SLINKEY COMMERCIALS)!

Wed, 12/21/2011 - 18:49 | 2002701 Spigot
Spigot's picture

It is obvious we are at the end of the line where corruption reigns with a crown and plenty of public appearances, even if to mute audiences.

People are just starting to turn away. What can they do? Riot? Pout? Curse? Nah, they are just turning away.

They are spending down their savings, IRAs, 401k's et al trying to feed themselves. No public lies will feed you or clothe you or put a roof over your head.

Does anything matter? Since the 1% or 0.1% or the 0.01% are the only real actors in this mental hospital, what does it matter what the others do? How is watching TV or "winning" at Warcraft3 different than wringing one's hands over things you have no control over?

But I will tell you this, once the bus gets over turned, there will be blood. It will not stop. There will be vengence pursued by those who formerly had no say.

Why is it that the biggest sale items this Christmas season are weapons and ammo? You figure it out, chum.

Wed, 12/21/2011 - 18:59 | 2002729 ClassicalLib17
ClassicalLib17's picture

I would appreciate some advice here.  I'm sorry for asking these questions, but I don't know anyone who can advise me honestly.  My mother has 26,000 in U.S. Savings Bonds and I suggested she cash them in and pay the taxes so I could buy some gold and silver instead?  And I have a small IRA Roth that I am considering cashing in w/penalty and doing the same with that.  I'm wondering what the down side would be.  I also have an annuity with my union and I am 18 months from withdrawing that without a penalty.  .  I have benn a member for 60 some odd weeks and a reader for about 80 weeks.  Any help would be greatly appreciated.  Thank you

Wed, 12/21/2011 - 19:27 | 2002821 AC_Doctor
AC_Doctor's picture

I will guarantee you that your gold and silver (held in physical form) will outlast your Mothers US Savings Bonds and especially your Union pension.  Metals are on sale...

Wed, 12/21/2011 - 19:49 | 2002876 the grateful un...
the grateful unemployed's picture

your mother will get killed on taxes if she redeems those bonds in one year. start doing some tax planning now, get some professional help, you may have to find a few writeoffs. if the bonds don't mature leave them alone, the interest is probably far better than anything you are looking at. just imagine this, your mother gets nailed with a huge tax bill selling those bonds, then you buy gold and it drops in half the next year. not sure how old your mother is, but the older she is the more careful you need to be. she needs that money to live.

don't pay attention to those TV idiots like Suze Orman. she is a complete fool who preys on old people who are fearful. if your mother wants you to help her, and she has assets which she can use without a huge tax penalty look for something which produces income. maybe you can buy old duplex and you can fix it up and collect the rent and be the landlord.

my mother just bought a complete solar system, which is a return of somewhere between 5 and 8% on her money. logical, smart thing to do for her. your mother can also take out a reverse mortgage if she needs money to live, in order to avoid selling those bonds if the tax bill is too steep. housing values will probably drop further.

i might leave your annuity alone, but check and see if they ever allow you to buy time toward retirement? not sure how old you are. gold is such a tricky call, if you just want to speculate, and you can fool yourself that this isn't what you are doing, but from here anyone buying gold thinks they are going to get rich or they wouldn't do it.

Wed, 12/21/2011 - 20:48 | 2003018 Yen Cross
Yen Cross's picture

 Good on ya.

Wed, 12/21/2011 - 23:13 | 2003300 ClassicalLib17
ClassicalLib17's picture

Thank you, tgu,  I have a duplex, free and clear, and my 91 yr old mother shares half at 350 a month.  I appreciate and will heed your advice.  Thank you, sir

Thu, 12/22/2011 - 12:52 | 2004272 the grateful un...
the grateful unemployed's picture

350 a month? I'm going to move in with you!

Thu, 12/22/2011 - 03:40 | 2003614 dolph9
dolph9's picture

Withdraw all of your money from bonds and retirement accounts, keep some physical cash, a healthy checking account, and gold and silver.  Lots of different ways to own gold and silver, but physical in your own possession is the best.

Other than that, spend the cash on stuff you need, make defense/water/food preparations, etc.

Wed, 12/21/2011 - 19:22 | 2002802 tony bonn
tony bonn's picture

i will not mourn the demise of most derivatives

Wed, 12/21/2011 - 19:27 | 2002817 NoLongerABagHolder
NoLongerABagHolder's picture

Those darn government bonds. All they did was outperform gold by almost double this year.

Even after the historic run, gold still hasn't caught the long bond in long term returns:

"Warning of dire financial consequences, the White House urged Congress today to raise the national debt ceiling before the Government runs out of authority to borrow money this Friday.

”We cannot overestimate the effect of such a dereliction of duty,” the President’s spokesman, said.

"But a number of conservative Republicans refuse to heed the Administration, and White House legislative strategists say they do not have the votes to assure passage of such a measure."

Sound familiar? That was written in 1987

Just wait! Disaster is right around the corner...... still!

Wed, 12/21/2011 - 19:30 | 2002831 AC_Doctor
AC_Doctor's picture

Yeah and when the US defaults your can make paper airplanes and wipe your ass with them...

Wed, 12/21/2011 - 19:35 | 2002839 NoLongerABagHolder
NoLongerABagHolder's picture

Care to put a date on that? Been waiting for a few decades now.

"A major depression is inevitable for America because decades of growing debt-financing by consumers, businesses, and state and (especially) federal governments have undermined the health of the economy, giving the appearance of wealth when in fact there is poverty. The enormous private and public debts bring the law of compound interest into play, and it takes no great mathematician or economist to figure out that those who live beyond their means for too long must finally reach the point at which they not only cannot pay off their debts, they can't even pay the interest on them—or find anyone willing to lend enough to cover the interest." (

That was written in 1990 when the debt was at $4 trillion Maybe I have to wait another 21 years and see the debt at $60 trillion with the US GDP at the same?

Oh no! Not that quickly!!! PLEASE!!!!

Wed, 12/21/2011 - 19:43 | 2002848 NoLongerABagHolder
NoLongerABagHolder's picture

Kill the FED! They have only made recessions over the past 50 or so years LESS severe!

Wed, 12/21/2011 - 19:44 | 2002853 NoLongerABagHolder
NoLongerABagHolder's picture

The Hyperventilators...... errrr, I mean the hyperinflationistas on this site would do themselves a lot of good in trying to understand the current monetary system in which we live and understand why America will not end anytime soon:

Do NOT follow this link or you will be banned from the site!