This page has been archived and commenting is disabled.

One Of 2011's Best Performing Hedge Funds Sees Gold At $2,500 Shortly

Tyler Durden's picture


While it is early to determine if the ongoing breakout is finally in anticipation of upcoming episodes of direct and indirect monetization by the Fed, ECB, or any of the many other pathological currency diluters in circulation, it is obvious that precious metals have found a new bid in recent days. Is this then, the beginning of the next surge in gold and silver to record highs? It remains to be seen, but one entity, the Duet Commodities Fund which was one of last year's best performers, has already made up its mind. 'Our central forecast in gold remains constructive as our long term view targets $2,500 in 2012. Our core view is that gold will head higher to the $2,500 range driven by consequential USD weakness once the EU crisis dissipates and the US steps into the limelight. A weaker USD is not undesirable in the world order as everyone (especially China) understands that the US consumer is the driver for global consumer confidence and consequential consumption led demand." Wow - someone in this market can actually think one step ahead of the inevitable ECB LTRO/monetization, and realize that the Fed will in turn have to escalate to that escalation. Gold, er golf clap.

From Duet Commodities Fund

Dear Investors,

When written in Chinese the word “crisis” is composed of two characters. One represents “danger”, and the other represents “opportunity”. This is the most accurate way I can express my thoughts and feelings about the coming year in the commodities markets. Volatile, unpredictable yet scattered with times of great opportunity. The prophecy of the world ending in 2012 seems ever more relevant when we look at a world flirting with potential disaster. 2011 saw an avalanche of economic and geopolitical events, as well as natural disasters. All of which had negative impacts for commodities demand. The events of the “Arab Spring” re-invigorated fears of instability in the Middle East, the devastating Tsunami in Japan sent a domino effect along the manufacturing supply chains, the already fragile US recovery appeared to be losing momentum, in China the tightening of monetary policy heightened fears of a hard landing and finally European sovereign debt issues  continued to escalate. So what does 2012 hold in store for us?

2012 stands a good chance of being politically pivotal, both in terms of people and a clash of ideologies. Among the five permanent members of the UN Security Council, Britain’s David Cameron is the only leader who seems certain of still being in power at the end of the year (famous last words). Barack Obama and Nicolas Sarkozy face presidential elections which they may lose. Dmitry Medvedev has already ceded the Russian presidency back to Vladimir Putin. Meanwhile in China, Hu Jintao and Wen Jiabao are due to prepare the handover in early 2013 of the  presidency and prime ministership to Xi Jinping and Li Keqiang. Altogether some 70% of China’s senior leadership is expected to change. What I am trying to emphasise is that the world’s leaders will be preoccupied at home. There will be a large dispersion from which countries will succeed and which will suffer. Emerging markets will for the first time buy over half the world’s imports in 2012 and the “red back” will make faster than expected strides towards being recognised as a global functioning currency.

Of the main macroeconomic events of 2011 the European debt crisis and the “Arab Spring” have the potential for greatest continued impact in commodities in 2012. If we can intelligently prepare and navigate through these factors and overlay them with the respective commodity fundamentals, we will have a good base to forecast future prices. In Europe we do not believe that the situation will get to a point where the Eurozone breaks up. With the respective nations working hard to manage their  situations at home what is very important is they agree on a roadmap on the process of fixing Europe over the next several years. With regard to the “Arab Spring” we have seen tensions re-appear in the Middle East and it seems apparent that this will not be for the last time. Also geopolitical escalation in Iraq and Iran seem likely. The US has removed all troops from Iraq which raises the question whether the country can withstand a potential future attack. In Iran the potential for sanctions appear high and increased political and potentially military action should not be discounted.

In the fundamental world we continue to view the commodities market as navigating between the currently balanced or tight physical markets and the threat that the European debt crisis could in the near future cause a global economic recession, which would lead to a sharp drop in demand. The oil market is pricing at a discount to clear the physical markets and drawing down inventory cover in anticipation of a potential sharp drop in oil demand in the near future. This de-stocking is further tightening the physical markets and leaving the oil market increasingly vulnerable should oil demand prove better than expected, or supply disappoint. These forecasts reflect our view that crude oil prices will need to continue to rise in order to slow demand growth, restraining oil demand in line with limited supplies, even in a relatively poor economic growth environment. For 2012, we believe that the risk is skewed to the upside. However, when we reach the point where demand destruction  has balanced the market a retracement back to lower levels is expected.

Our macroeconomic forecast remains supportive with commodity markets managing to avoid a global economic recession. Economists have lowered their forecast for 2012 world economic growth to approximately 3.2% (from 3.5%) and introduced a 2013 forecast of approximately 4%. This reduced outlook for world economic growth, while not forecasting a global recession, makes it more likely that the commodities market can maintain the central course embedded in our forecasts.

Our central forecast in gold remains constructive as our long term view targets $2,500 in 2012. Until we see USD weakness and any associated inflationary expectation we may not see gold significantly higher unless there is further geopolitical unrest (Iran, EU, etc…). Our core view is that gold will head higher to the $2,500 range driven by consequential USD weakness once the EU crisis dissipates and the US steps into the limelight. A weaker USD is not undesirable in the world order as everyone (especially China) understands that the US consumer is the driver for global consumer confidence and consequential consumption led demand. Disturbing any improvements in the US growth economy will hurt all of the global trade partners so the Fed will be inclined to protect US competitiveness and growth via USD management. Throughout 2012 I think we will see various currency devaluations across the globe, as individual nations try to reduce the debt burden and also attempt to  increase competitiveness in order to pull out of the recent recession. This debasement in currencies lends well for gold to increase in importance as a store of wealth.

So how do we make returns in such an environment? Our core views will not change often, but our timing, sizing and hedging pattern will become more frequent to take advantage of the volatile market conditions. We have mentioned many times to investors that our strategy puts emphasis on the “path” as well as the “destination” of commodity prices and that market’s seldom move in a straight line. This seems set to continue in 2012 where we continue to see a “tug of war” between physical fundamentals and macroeconomic events. Overall we are not long term bearish commodities. It is still a buy on dips world. The bears in the world will concentrate on three main subjects: lacklustre demand, a hard landing in China and Europe disappearing in a puff of smoke. We do not subscribe to this boundary condition. Demand has the potential to surprise on the upside and we are already seeing better economic numbers coming from the US. Also, commodities are about  demand vs.  supply and we do not need incredible demand when there are worse supply issues in key commodities. Europe is not going to be a quick fix but a long process taking several years. The key is consensual agreement and execution of this process which will neutralise the vast amount of fear and uncertainty priced in currently. When the US agreed on their course of action in early 2009 a risk taking sentiment unfolded. Once the EU agrees and implements their plan we may see similar benefits. China has managed its’ economy very well, containing price inflation and has now slowly taken the foot off of the brake. Overall this creates a picture that, albeit volatile, should trend higher over the course of the next twelve months.

We at Duet Commodities Fund wish you great success in 2012 and look forward to another year of working together.

Yours Sincerely
Tony Daniel Hall
CIO Duet Commodities Fund


Courtesy of Value Walk


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 01/20/2012 - 17:12 | 2082363 francis_sawyer
francis_sawyer's picture


That sucks... I was hoping to have the chance to buy it cheaper...

Fri, 01/20/2012 - 19:20 | 2082747 Bastiat
Bastiat's picture

Then do it.

Fri, 01/20/2012 - 20:34 | 2082913 SWRichmond
SWRichmond's picture

The operant theme is not concurrent depreciation but rather sequential depreciation, as the major currencies take turns being weak and strong.  This keeps the sheep in the currencies longer (look!  USD's strong right now!) and allows more purchasing power to be stolen before everyone jumps.

Fri, 01/20/2012 - 22:36 | 2083222 Uncle Sugar
Uncle Sugar's picture

Seriously, I thought the deflationary collapse will take gold to $500/oz.  That's what I was hoping to fill my boat up.  Hopefully it won't sink in a storm again.

Fri, 01/20/2012 - 17:12 | 2082365 Alea Iactaest
Alea Iactaest's picture

Silver bitchez!

Fri, 01/20/2012 - 17:42 | 2082466 CvlDobd
CvlDobd's picture

Damn, genemarchbanks are you seeing this?

Fri, 01/20/2012 - 19:33 | 2082780 The Deleuzian
The Deleuzian's picture

The Gold/HUI ratio is Wow!!!  Haven't seen a bigger disconnect in a while

Fri, 01/20/2012 - 17:13 | 2082372 Hulk
Hulk's picture


Holy shit! An Angel just got its wings!!!

Fri, 01/20/2012 - 17:15 | 2082376 Turd Ferguson
Turd Ferguson's picture

Works for me.

Fri, 01/20/2012 - 17:15 | 2082380 gothicreader
gothicreader's picture

Yes - bring it on!

Fri, 01/20/2012 - 17:18 | 2082385 Comay Mierda
Comay Mierda's picture

the printing presses are cranking up, why do you think spx is rallying like a mofo?  it will only crash if priced in gold

Fri, 01/20/2012 - 17:18 | 2082387 Elwood P Suggins
Elwood P Suggins's picture

Once the EU crisis dissipates.............

Don't look for this to happen anytime soon .

Fri, 01/20/2012 - 19:22 | 2082750 Bastiat
Bastiat's picture

Maybe he meant: "Once the EU dissipates."

Fri, 01/20/2012 - 17:19 | 2082391 Seditious Blasphemer
Seditious Blasphemer's picture

1.) buy Gold NOW

2.) buy silver NOW

3.) lurk Zerohedge all year

4.) ???????

5.) PROFIT!!

Fri, 01/20/2012 - 20:28 | 2082899 The Deleuzian
The Deleuzian's picture

Gold at resistance levels...The miners aren't doing shit...The general equity markets are at way super bullish levels!!...We need a disconnect... 

Fri, 01/20/2012 - 21:33 | 2083063 slewie the pi-rat
slewie the pi-rat's picture

Haha! good post!

hi & welcome!

Fri, 01/20/2012 - 23:41 | 2083294 The Deleuzian
The Deleuzian's picture

Hey Slewie...I just don't like this setup at all...Something is in the weeds...

Fri, 01/20/2012 - 17:20 | 2082396 Silversinner
Silversinner's picture

Will come a time all of the players wants to

hedge with PM trough the weekend.

We just buy coins and stack.


Fri, 01/20/2012 - 21:59 | 2083141 slewie the pi-rat
slewie the pi-rat's picture

ya know, watching the last hour, i had the same thought!

i'm watching the bonds&notes, but nada

tyler's piece after the close [Gold Matches USD Weakness As Silver Jumps] shows today's spike whether it was "4 the weekend" or not

but, what if it was?  with the technical aspects of the Ts looking a little bleak&weak, "the players"  went w/ paper silver, instead? 

stay tooned!  according to the charts, this may be more than a weekend date!  heluva weekly close!  silver BiCheZ now awaiting confirmation!

Fri, 01/20/2012 - 17:20 | 2082397 Silversinner
Silversinner's picture

Will come a time all of the players wants to

hedge with PM trough the weekend.

We just buy coins and stack.


Fri, 01/20/2012 - 17:21 | 2082398 Dr. Gonzo
Dr. Gonzo's picture

I love gold too but I'm putting all new money into platinum. Just my hunch.

Fri, 01/20/2012 - 17:56 | 2082512 Fuh Querada
Fuh Querada's picture

dr gonzo

I would be interested to hear your case for platinum. I read that it is being replaced by palladium in catalytic converters. Or do you attribute it semi-monetary characteristics like silver ?

Fri, 01/20/2012 - 18:07 | 2082551 A Lunatic
A Lunatic's picture

Historically, platinum has been valued in excess of gold. Platinum is "on sale" from this perspective whenever gold is more expensive that Platinum. Long view: Buy cheap platinum now, trade in for gold later and "profit"..........If there is a later.

Fri, 01/20/2012 - 18:12 | 2082573 Fuh Querada
Fuh Querada's picture

interesting point, Thanx

Fri, 01/20/2012 - 21:15 | 2083022 xela2200
xela2200's picture

I bought some platinum on the basis of rarity. If you want to play the paper game a little, then You can short gold and long platinum. Play the spread until it corrects to its historic ratio.

Sat, 01/21/2012 - 02:38 | 2083591 SilverRhino
SilverRhino's picture

You do actually realize that platinum is MORE common than gold in the Earth correct?

Sat, 01/21/2012 - 11:53 | 2084050 xela2200
xela2200's picture

That is not what my research suggest or what I have heard from "experts". Neither does the historical price relation between gold and Platinum. However, Platinum has an industrial use and sometimes doubles the price of gold during good economic times and likewise lags when the opposite is the case. I was expecting to Platinum to find a floor in the 1-1 relation to gold due to jewelry and investment purchase, and that didn't happened. Food for thought.

Thanks for bringing this up. I will research it further. It might change my investment strategy.

Sat, 01/21/2012 - 22:06 | 2085526 trav7777
trav7777's picture

...which is why its production is like 7% of gold's?  Historically, the amount of platinum mined is 1/27 of gold.  There is only ONE significant source on the planet, in RSA, and a secondary smaller source in Russia.  Everything after that is effin negligible.

Reserves don't matter, production matters.

Sun, 01/22/2012 - 01:44 | 2085905 tmosley
tmosley's picture

Yes, throw out all inconvenient facts.

Then ignore the fact that silver is produced at only 7 times the amount of gold, while it is priced at 1/52nd the price of gold.

Oh, wait, I guess you must have meant that it is only the CHANGE in production that matters.  Which is leads us back to reserves, but you don't care to think about that.

Fri, 01/20/2012 - 18:20 | 2082589 Dr. Gonzo
Dr. Gonzo's picture

It's true that many factories have been retooled to use palladium as their catalyst because of cost and this has caused it to jump while platinum falls for the same reason and this is why I like platinum at this level. Platinum is still best for diesel engines hands down and is better for gasoline however palladium has a higher melting point so can be located closer to the engine so it starts working faster and is seen as a good substitute for the superior platinum. Platinum is 3 times as rare and 3 times as dense. I see it as a prestigious super metal. Beter than gold. I like all 4 of the metals but think platinum is a no brainer after it's been beat down. Wait til it gets past gold again and people have to chase it. They will remember this time and regret not getting it. Physical holders of gold are sure to be physical holders of platinum too and it works in the same scenerio as when their is a squeeze. Try to source platinum in a time of currency crisis. Sorry. Not going to happen. It's basicaly only found in 3 locations in the world and it takes 10 tonnes of the ore to get an oz of it and up to a 6 month process for the final product so yeah. I like platinum at this level. and you can brag to your buddies if they ever confiscate gold again it won't concern you. I view it not so much as industrial but the king of metals. so go get an oz. Maples are the drop dead coolest in platinum form btw.

Fri, 01/20/2012 - 18:32 | 2082624 Fuh Querada
Fuh Querada's picture

Many thanks for the info. In my neck of the woods physical Pt coins unfortunately have 19% VAT imposed, but I have a small position in an ETF. The Au- confiscation issue is a good point. Gerals Celente stated that he diversified from Au into Ag for that reason.

Fri, 01/20/2012 - 21:31 | 2083059 Dr. Gonzo
Dr. Gonzo's picture

No problem. You gotta figure out all the angles in this crooked world to stay ahead. Plus Zerohedge never mentions the noble metals in their silver/gold reports so somebody's got to get this discussion going. As for Palladium the CEO of Kay Jeweler's was trying to get a market going for jewelry a few year's ago when it was $200 an oz.but I don't think his campaign took off with the public. In theory with it's properties it would do well for jewelry but I view it exclusively as an industrial...yet a very rare (much more rare than gold) and important element for a modern world..and oh yeah I was loving it at -$200 an oz. That's practically giving the stuff away. I do not view platinum as industrial. I view it as the premier prestigious metal. So what if their is not a cartel in the form of World Central Banks hording it? IT'S TOO RARE! and you don't want them to be able to manipulate it. If they do lose all control the PM's will find their "true" value anyway and that will be set by the physical market. Russia won't give us any. South Africa Probably won't.(not for U.S. dollars anyway) Canada will tell us to get it from our Montana border with them. Then you can try to buy a Platinum Eagle. Hint. They don't any meaningful quantity anyway. Part of the reason for it's journey to $1350 was a scramble for dollars during this euro crisis and the dollar isn't going to get bid in perpetuity. Sooner or later it should go through it's own crisis.  You just can't be without a budget and hike the debt ceiling every 3 months and say you are the world reserve currency.In case you haven't heard their is an FX war going on. When it's over there's going to be a lot of pissed of nations and some things are not going to be easily sourced with toilette paper currency. That's why if you want it I would buy it now and not sneeze at this price tag just in case. Oh. It costs a lot to get it out of the ground too. Not like silver which only costs $5 to get out. (just kidding)  Disclosure: My PM holdings go in this order. 1.Silver. 2.Gold. 3. Platinum. 4 Palladium. Place your bets everyone. 

Fri, 01/20/2012 - 19:00 | 2082694 Acidtest Dummy
Acidtest Dummy's picture

If Pt were as easily recognized and verifiable as gold it would have never been priced lower than Au. Gold is pretty non-confusing to identify, whereas platinum looks like silver, palladium or even molybdenum which could make for an expensive confusion. If there were a foolproof street test for platinum the price would be up from gold.

Sat, 01/21/2012 - 22:11 | 2085531 trav7777
trav7777's picture

yes...a quirk of relativity is why gold is gold.  The other metals are pretty indistinguishable.  Gold gets a premium.

Iridium and osmium are also pretty rare; rhenium and rhodium.

Sat, 01/21/2012 - 22:07 | 2085527 trav7777
trav7777's picture

Palladium is about as rare as platinum...both are produced at a fraction of the rate of gold

Fri, 01/20/2012 - 18:10 | 2082568 tmosley
tmosley's picture

I am personally hesitant to invest in platinum, as I know a person who has developed a new method of producing catalytic converters with half as much platinum as is currently used.  

Fri, 01/20/2012 - 19:07 | 2082716 Seer
Seer's picture

and... auto sales will soon HALVE.  So, mathematically speaking, platinum's future demand is looking quite weak (1/4 of what it is/was).

Fri, 01/20/2012 - 21:09 | 2083002 Long-John-Silver
Long-John-Silver's picture

The average vehicle is now 11 yrs old and as long as it's running they are keeping them. In a sane world vehicle sales would be 4 times higher than what they currently are. I remember a time when car loans were paid off in 3 years and most people purchased A new vehicle every other year.

Fri, 01/20/2012 - 19:11 | 2082723 A Lunatic
A Lunatic's picture

Besides, you can't eat platinum.

Fri, 01/20/2012 - 19:27 | 2082762 Nozza
Nozza's picture

Oddly enough, you can. Platinum anti-cancer drugs are a major market for platinum, something that palladium cant do. Combination of pharma and platinum seems bullish for me. Bitchez. lol

Sat, 01/21/2012 - 12:54 | 2084186 HungrySeagull
HungrySeagull's picture


Prove it. We are cancer survivors who faced the red devil.

Fri, 01/20/2012 - 19:14 | 2082727 Solid
Solid's picture

Last time I checked, central banks are not buyers of platinum. Stick with gold people!

Fri, 01/20/2012 - 19:34 | 2082783 smiler03
smiler03's picture

Perhaps insuring his life could provide a quick return?


Sat, 01/21/2012 - 22:13 | 2085532 trav7777
trav7777's picture

of course, that will NEVER happen with industrial usages of silver, right?

Sun, 01/22/2012 - 01:52 | 2085913 tmosley
tmosley's picture

The producers of vehicles don't really care about the price of platinum.  It adds maybe $400 to the price of a given vehicle.  Demand is inelastic, jsut like silver.  Thing is, platnium's primary use is in catalytic converters, meaning that it is vulnerable to a downturn in a single sector.  Silver is used EVERYWHERE.

Further, silver is produced as a byproduct of base metal mining, meaning industrial downturns are counteracted by decreasing production.  80% of platinum comes from native deposits.

In short, once again, you have proven yourself stupid.

Fri, 01/20/2012 - 17:21 | 2082399 Canadian Dirtlump
Canadian Dirtlump's picture

Sounds good to me.. I'll keep knocking off parking meters and buying silver maples with the proceeds and when the silver gold ratio comes back from retardville I'll get mad bitches with my loot bag full of welfare metal.



Fri, 01/20/2012 - 17:25 | 2082407 EL INDIO
EL INDIO's picture

…once the EU crisis dissipates…

That’s a big IF

And it sounds like hopium

Fri, 01/20/2012 - 17:39 | 2082457 NotApplicable
NotApplicable's picture

Yeah, I think the word should've been concentrates.

Fri, 01/20/2012 - 17:59 | 2082523 kito
kito's picture

This fund got lucky. Anybody who thinks ben is going to print to help the great american consumer, which is a RELIC, is just a broken clock....

Fri, 01/20/2012 - 19:26 | 2082759 fonzannoon
fonzannoon's picture

Kito you said they would not downgrade France....just sayin.

Fri, 01/20/2012 - 21:32 | 2083057 s2man
s2man's picture

Yeah, I don't see how printing helps the American consumer.  Smaller doller means I can buy less goods. That part whacked me out.  Otherwise, I liked the article.

Sat, 01/21/2012 - 10:57 | 2083993 Captain Kink
Captain Kink's picture

Help the consumer?  they want to rape the average guy with inflation... and help themselves.

Fri, 01/20/2012 - 17:26 | 2082410 Perpetual Burn
Perpetual Burn's picture

Milk out preformed gold in 2011 biches!

You can drink it too.

Fri, 01/20/2012 - 17:33 | 2082440 zerotohero
zerotohero's picture

Got Milk?

Fri, 01/20/2012 - 18:43 | 2082647 Yamaha
Yamaha's picture

I just want tits.....

Fri, 01/20/2012 - 17:47 | 2082487 Quintus
Quintus's picture

Long term storage can be a problem though.  Unless you like very aromatic cheese.

Fri, 01/20/2012 - 21:36 | 2083069 s2man
s2man's picture

My latest self-suffiency book says I need a cow.  Sure, I'll have to import most of its feed on my meager 3 acres, but the milk and beef will more than make up for it. I'm not sure I buy that for crisis self-suffiency.

OTOH, I'll have to import a lot of manure if I don't have a cow...

Fri, 01/20/2012 - 17:26 | 2082413 tmosley
tmosley's picture

I could do without it, myself.  I prefer for the system to collapse, not to try to right itself at this late hour.  Paper of all descriptions can and should go to zero.  Buy physical, sell paper.  It's as easy as that, if you can survive the slingblades and arrows of the trolls.

Fri, 01/20/2012 - 17:28 | 2082422 zerotohero
zerotohero's picture

Here I sit all broken hearted

Ran like hell and only farted

Second day I took a chance

Saved my dime and shit my pants


That dime was SILVER BITCHEZ.........

Fri, 01/20/2012 - 21:11 | 2083007 Long-John-Silver
Long-John-Silver's picture

Most people here have never seen a pay toilet with it's dime slot.

Fri, 01/20/2012 - 17:31 | 2082426 HungrySeagull
HungrySeagull's picture

I don't know. We will have to watch and wait. Hold on to your Bids carefully as I say.


There will be a few falling knives to catch before 2400 gold.


*I own no gold except in the CPU of my computer.

Silver will need to bust through and stay above 50 before I will believe in the 5th Turning.


In the meantime I stack em and fold the fiat for the next coin.

Fri, 01/20/2012 - 17:30 | 2082429 punxsutawney phil
punxsutawney phil's picture

    Monthly Total           
    (millions)    SPX return       
May-10        0    -7.99%       
Jun-10         0    -5.23%       
Jul-10          0    7.01%       
Aug-10     9,285     -4.51%        QE2 started
Sep-10     27,527     8.92%       
Oct-10     25,519     3.80%        QE2 announced
Nov-10     77,728     0.01%        QE2 officially starts
Dec-10     103,681     6.68%       
Jan-11     114,672     2.37%       
Feb-11     97,665     3.43%       
Mar-11     107,794     0.04%       
Apr-11     83,829     2.96%       
May-11     104,296     -1.13%       
Jun-11     91,261     -1.67%        QE2 ends
Jul-11     16,129     -2.03%        Maintain balance sheet size
Aug-11     11,062     -5.43%       
Sep-11     12,374     -7.03%       
Oct-11     43,741     10.93%        hmm,,,,did we start something again
Nov-11     44,930     -0.22%       
Dec-11     44,227     1.02%       
Jan-12     25,320     4.00%        QE3 will be announced

Fri, 01/20/2012 - 17:31 | 2082434 RSDallas
RSDallas's picture

Sounds bullish.  Better get my DOW 14,000 cap out.  Quite a reverse from Bob J's article the other day.  I don't think these guy's are factoring enough risk via Europe into their predictions.  This market just feels like it's being artificially pumped up.  I think they are right about things getting better in the US.  I see it where I live.  But again, Europe is the 10 ton gorilla in the room.

Fri, 01/20/2012 - 17:36 | 2082442 HungrySeagull
HungrySeagull's picture

Old Europe... *Dismissive wave.

They will be fine. Have been round longer than we have here in the Americas.

It was not until last year that the US Government started talking about bailing out Europe.

Hell Greece is the size of Illinois economically.


Typical stupid American habit of taking care of others and paying thier way overseas rather than taking care of our own at home.


We deserve what we get coming.


One more thing.


Gold hits 2500, People sell hand over fist for profit and the price plunges to 1700 overnight. Or within hours.

Dont be the one stuck buying into this bullshit. If you are going to buy, buy and never sell you dumbkoft!


Of course I might buy a ounce soon before 1800 with my silver and ride it to 2500, sell and buy silver back with more in hand than before.

Fri, 01/20/2012 - 21:09 | 2083001 Babushka
Babushka's picture

What do you mean never sell, like never, never. ....fuck that , it sounds like to be billioner and happily dead.....

Fri, 01/20/2012 - 21:40 | 2083074 xela2200
xela2200's picture

Never sell really means the LAST thing you sell. It has many benefits as a storage of wealth (portability, easy to hide, traditionally valuable, etc). Compare it to other investments (land, negotiable instruments, tools), and You will see why it is really considered by many as the SHTF insurance. A little working capital and whatever skills/trade you have acquired can buoy you up in a hurry.

In Argentina after the crisis, everything went on the shopping block. Anybody who had the money or valuables made a KILLING. A friend of mine living in Argentina during that time mentioned how some foreigners coming in the airport with briefcases full of money. Many properties went to 25% the value that they had just a week before. The point is if there is more pain to come, you want to store your wealth to use it as dry powder. At the end of this mess, the 90% of the middle class might be poor and 10% will go up. Which side do You want to be on?

Fri, 01/20/2012 - 21:41 | 2083084 s2man
s2man's picture

Don't sell when gold just goes up due to curreny devaluation; you're just preserving your wealth.  Sell when everything goes to shit and everyone and their brother is jumping on the PM bandwagon out of fear or greed.  Sell the bubble.

Sat, 01/21/2012 - 10:17 | 2083924 Babushka
Babushka's picture

I shell confess I still don't get it. My logic is:

1) Money is medium of exchange.

2)Money is how your work being payed.

3) Wouldn't be logical to spend the money(result of your work) for the thinks you might need or want, I mean now ...?

Your logic:

1)Buy gold for already debased currency (meaning expencieve) instead a whatever stuff avalible now which is underpriced (if I get it right) due to currency manipulation.

2)Wait untill SHTF.... and prices jump up to ze MOON "and everyone and their brother is jumping on the PM bandwagon out of fear or greed" and than what? Sell your gold for a 1trillion ZWD and be happy? or what wait untill its all get settled und currency devaluated or reset and pegged to Gold/Silver, so now you would be exchanging your gold for the currency which will start to be debased again from the moment of exchange? But isn't it a deal with a loss when you buy an asset for a high price wait until price dropped and than sell?

Just somebody could elaborate what is a purpose of the scam....Is it a bet that after SHTF event buying power of gold is going to be much higher than it is now (meaning that after reset you could buy more stuff with a OZ of gold) Is there any data which might support such a claim?

I am comlete at loss!!! Help!!!

Sat, 01/21/2012 - 10:21 | 2083926 Babushka
Babushka's picture


Sat, 01/21/2012 - 12:20 | 2084113 xela2200
xela2200's picture

You would probably better off as thinking of gold as a place to store your wealth, so you can have it when you need it. Which is one of the characteristics of REAL money and the one most of us are interested at this time. Aside from retaining value, other properties are portability, easy to hide, universal value, and liquidity.

Just to give you an idea, in Argentina when the SHTF Fiat money in banks was frozen and converted to the "new" peso at the rate the government saw fit. Land lost 50% its value over night. Land is still tangible, but it anchors you to a place. Probably why the government gives so many incentives for you to buy it. Easy to tax, value and it is fixed. In Argentina, bartering for goods and services became the norm. Scarcity in all products. You could not even get aspirins. Everything became a commodity (medicine, guns, dry goods, etc). However, among all that was going on many places were accepting scrap silver as a medium of trade or it could be converted to fiat for immediate needs. It was accepted because it met all the qualities of real money.

To your point, It is true that you can use gold and silver to buy stuff. Think of this, when the SHTF in Argentina, the people with money or valuables, made an absolute killing (store of value). Once in a life time opportunity. So that is when you want to transfer your wealth to other assets. Want to buy a home on the cheap? a farm? stocks?

Sat, 01/21/2012 - 12:58 | 2084193 HungrySeagull
HungrySeagull's picture

Debt is your enemy.

Do you need to commute by car, bus and rail to hang onto that 120,000 dollar POS job because you live beyond your means?

Take out the debt from your life. Then you are literally liquid and ready to buy when the time is right.

Everyone else applies for credit.

Remember, the Bank smiles to you when you have funds. Otherwise YOU smile at the bank when you owe them.

Sat, 01/21/2012 - 22:37 | 2085604 trav7777
trav7777's picture

TSHTF, what do you do?

Go to the grocery store and while people clean out all the milk and food, you stock up on painkillers, first aid shit, TP, matches, and lighters.  Clean out the liquor.  Shit like that.

The argentines said to buy a bag of gold rings, linked chains, shit like that.  Speakin of which, I need to hit the pawn shop lol

Sun, 01/22/2012 - 01:56 | 2085916 tmosley
tmosley's picture

Yes, I'm sure you need to sell a great number of things to make your alimony payments, since you raged yourself out of a job.

Fri, 01/20/2012 - 17:35 | 2082445 Silversinner
Silversinner's picture

This big wave of gold manipulation has been

going on from the time the swiss tied their

currency to the euro. 

They just had to because of the risk of worldwide

fiat implosion.

Despite the little drop in gold prices,all the monetairy

developments in the market has been very bullish

for gold.

Be clever and buy yourself some coins.

Fri, 01/20/2012 - 21:16 | 2083027 Babushka
Babushka's picture

If I was swiss I would hook up me swiss fronks to ze gold  becouse ze gold iz gonna go to ze mooooon... how stupid for zam to do it ozther way.....


Congrads mate you really cracked it!!!

Fri, 01/20/2012 - 21:44 | 2083099 s2man
s2man's picture

-1 for hitting Enter every time you think you hit the end of the line.  Let the freaking browsers do the formating for you.

Fri, 01/20/2012 - 17:41 | 2082461 pakled
pakled's picture

Always want to hear what a winner is doing...


but they also are a very young fund. I would have a more warm and cozy feeling about their AU forecast if they had used the "deleverage" word, and accounted for how that possibility might fold into the events of 2012.

More background on Duet

Fri, 01/20/2012 - 18:03 | 2082536 Fuh Querada
Fuh Querada's picture

Correct, and in the fund leagues this year's winner can be a stinking bummer next year. Nassim Taleb recommends asking your cab driver.

Fri, 01/20/2012 - 17:49 | 2082494 apberusdisvet
apberusdisvet's picture

While I am a PM bug, I'm realistic that under this new American fascism, the PTB will find a way to klepto our stashes.  Keep in mind that no warrants are needed anymore.  There very well may be house-to-house searches for "contraband" (to be defined by Executive Order).

Fri, 01/20/2012 - 17:56 | 2082513 trav7777
trav7777's picture

things like that don't go over well here or in Fallujah

Fri, 01/20/2012 - 18:19 | 2082585 saints51
saints51's picture

Prepare to defend it. Never allow a regime to take your personal belongings. If you hold PM's you better be ready to die for it. Thats why I believe gold and silver is worthless without guns and ammo. Defend it at all costs.

Fri, 01/20/2012 - 19:45 | 2082808 smiler03
smiler03's picture

I too advocate suicide by cop, or you could just hide it.

Fri, 01/20/2012 - 21:26 | 2083046 Babushka
Babushka's picture

Or even better to dig yourself a bunker...fill it up with gold/silver and canned beans....lock yourself in and live happily everafter....

Sun, 01/22/2012 - 18:25 | 2087081 DanDaley
DanDaley's picture

You are defending your liberty first and foremost, and your stuff is just part of that.  

Fri, 01/20/2012 - 17:57 | 2082517 mayhem_korner
mayhem_korner's picture

Our central forecast in gold remains constructive as our long term view targets $2,500 in 2012.


When is 2012 going to detach as part of the "long-term view?"

Fri, 01/20/2012 - 18:09 | 2082561 jimmyjames
jimmyjames's picture

China has managed its’ economy very well, containing price inflation and has now slowly taken the foot off of the brake. Overall this creates a picture that, albeit volatile, should trend higher over the course of the next twelve months.



The only reason China has taken their foot off the brakes-is because they know there are no brakes-

China is a real-estate/credit hyper-inflated wreck-

Sat, 01/21/2012 - 22:37 | 2085608 trav7777
trav7777's picture

they have no brakes...they only have MORE GAS

Fri, 01/20/2012 - 18:12 | 2082571 KingdomKum
KingdomKum's picture

We few

We happy few

We band of silver holders  . . . 

Fri, 01/20/2012 - 18:16 | 2082579 saints51
saints51's picture

Time to buy more ammo.

Fri, 01/20/2012 - 18:42 | 2082645 dumpster
dumpster's picture

better ask karl dennenger ..

need his premission for any raise in gold price  or he will cut off your internet .  Karl believes in free speech lol

a sopa lover

Fri, 01/20/2012 - 19:19 | 2082720 Dave Thomas
Dave Thomas's picture

Karl hates gold!

And even Mish has better doom than you: I almost died when I heard this lol.

Fri, 01/20/2012 - 19:18 | 2082739 TradingJoe
TradingJoe's picture

Good luck with that 2500 level... not just yet hedgies, not just yet :))) !!

Fri, 01/20/2012 - 19:44 | 2082810 rawsienna
rawsienna's picture

He may be right about gold but he is wrong about Europe and the dollar.  

Fri, 01/20/2012 - 20:35 | 2082876 hyper-critical
hyper-critical's picture

Today's market action, especially into the close, provided a lot of information. This whole week has, really. Stocks, metals, the softs, EM currencies,..bullish price action and surprisingly well-bid the last few hours of trading.

Most intriguing to me is it looks like gold/silver stocks, the ferts, EM currencies, and other beneficieries of money-printing have considerable upside left (sell side just catching on the MXN trade, for example), while some of the best performers of late (dividend paying stocks, some of the momo's, blue chips) are either getting stretched, or have started to break down, i.e. GOOG. The former account for a relatively small portion of the broad indices (save for financials), which means they could be setting up to significantly outperform for the first time in a while if we get a sharp pullback in markets early next week. I smell an inflection point.

Treasuries finally sold off the last two days as well. If I had to guess, we get a significant increase in Operation Twist from the Fed and/or new measures to finance the mortgage principal write downs that are in the pipeline. Can't let the Obama administration's re-election campaign get in the way of bank capitalization. Fresh money printing, but they're going to put it to work in something other than treasuries. Pop-and-drop early in the week on any number of news stories (w/ qe-equities holding their ground for once) then it's off to the races? As good a base case as any in this Alice in Wonderland world we live in.

Good for risk-assets, good for prudent, gold-owning investors who have been absolutely ass-pounded until a few weeks ago, and cataclysmic for all of us in the long-term.

Fri, 01/20/2012 - 22:10 | 2083170 mofreedom
mofreedom's picture

I think the fert's spike is a consequence of a delayed reaction to the increase in corn planting intentions itnimated by the fradulent USDA meant to provide a better price to the Chinese corn buyers.  More reaserch to come later...physical fert is a buy (cheap).

Fri, 01/20/2012 - 21:47 | 2083104 s2man
s2man's picture

Why am I wasting my time reading comments from the weekend crowd?

Sat, 01/21/2012 - 00:54 | 2083405 CuriousPasserby
CuriousPasserby's picture

The plural of market is markets, not market's. Market's is possessive.


Sorry, but to me a lack of basic English skills is a warning not to believe anything else that is said. 

Sat, 01/21/2012 - 10:22 | 2083950 Oro
Oro's picture

DUST v. GLD, anyone working a short in US with a long post US closing?   Is working for me.

Sat, 01/21/2012 - 13:02 | 2084197 HungrySeagull
HungrySeagull's picture

The Gold charts that I see are already approaching 2K and Silver already at 50 dollars off tape.

If this keeps up today, it will be fucking 2500K by the time the person who wrote the prediction wakes up monday morning.

The bids have no choice but to raise prices if they want to buy stuff.

I am watching this very closely this weekend. If a whale clears the ASK column I may scoop up the last few turds and convert off Tape price to accumulate.


I do worry though, This activity is going to cause the tape to be vertical upwards at open. Alot of people are going to shit themselves.

Sun, 01/22/2012 - 16:56 | 2086954 youngandhealthy
youngandhealthy's picture

Beacuase of paper gold or inflation?

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