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Peak Gold

Tyler Durden's picture





 

From GoldCore,

Today's AM fix was USD 1579.00, EUR 1294.05 and GBP 1022.34 per ounce.
Yesterday’s AM fix was USD 1565.50, EUR 1281.10 and GBP 1011.96 per ounce.

Gold fell by 0.3% in New York yesterday and closed down $4.90 to $1,571.70/oz. After a sharp drop and equally sharp bounce higher, silver rose 0.3% or 8 cents to close at $27.17/oz

South African Gold Production Continues To Plummet

After initial falls in Asia, gold traded sideways and then gradually ticked higher later in the Asian session and has seen further gains in European trading. Gold is currently set to finish the week marginally lower in dollar and sterling terms but higher in euro and Swiss franc terms.

South Africa's gold output continues to collapse and fell a further 2.9% in May, according to data from Statistics South Africa released yesterday. The decline in gold production comes despite a 0.8% rise in total mining output in the same month (see below).

Gold is being supported by euro zone currency and contagion risk and inflation hedging diversification.

Merrill Lynch predicted gold would reach $2,000/oz yesterday due to more astute investors fearing inflation due to ultra loose monetary policies. Francisco Blanch, Head of Global Commodity & Multi-Asset Strategy Research Merrill Lynch, said in a CNBC interview that Merrill believe “that $2,000 an ounce is sort of the right number. We believe that ultimately the Fed will be forced to do quantitative easing.”

“If it happens in September, as our economists expect, we will get a rally sooner in gold,” Blanch added. ”If it happens after the election (in November), we will get the rally a little bit later; probably we will touch $2000 an ounce sometime next year.”

Demand and supply factors remain in gold’s favour.

There is strong demand from store of wealth buyers in Europe, China, the Middle East and the rest of Asia – not to mention strong demand from institutions and central banks.

A new trend seen in recent weeks is that of an increase in demand for corporates in the euro zone who are diversifying deposits in order to reduce bank, currency and systemic risk.

While some attention has been paid to the robust, broad based global demand for gold, less attention has been paid to the supply side and in particular the important gold production data.

Supply remains anaemic with the cash for gold craze seeming to have run its course, with central banks now net buyers and with mine supply not increasing sufficiently to meet demand.

 

With regard to global gold production, China, the world’s largest gold producer and now the world’s largest gold buyer, has been the only major producer to see an increase in production in recent years.

The massive increase in Chinese mining supply has raised some eyebrows with some questioning whether the figures are being exaggerated by Chinese mining companies and Chinese bureaucrats.

More recently, there is a concern that gold production in China may actually be declining as older mines reduce production.

South Africa produced over 1,000 tonnes of gold in 1970 but production has fallen to below 250 tonnes in recent years (see chart above). This is a collapse as these are levels last seen in 1922 and happened despite the massive technological advances of recent years and more intensive mining practices.

South Africa's gold output fell further 2.9% in May, according to data from Statistics South Africa released Thursday, despite a 0.8% rise in total mining output in the same month.

 

Recently, the decline in South African gold production has been attributed to national electrical issues and power outages, operational delays and safety issues. However, the scale of decline at a time when there has not been a corresponding decline in base metals mined in South Africa suggests that geological constraints may be leading to lower production.

Other large gold producing nations have seen similar sharp declines.

Peak oil is a phenomenon many will be aware of – peak gold remains a foreign concept to most.

Peak gold is the date at which the maximum rate of global gold extraction is reached, after which the rate of production enters terminal decline. The term derives from the Hubbert peak of a resource.

Unlike oil and silver, which is destroyed in use, gold can be reused and recycled. However, unlike oil gold is money, a store of value and a foreign exchange reserve and gold is slowly being remonetised in the global financial system and indeed may soon play a role in a new international monetary system.

In 2001, the world saw what was believed to be record global gold production of 2,649 tonnes. Production then fell in the coming years despite the rising gold price.

In 2010, despite a 5 fold increase in the prices in US dollar terms, some estimates recorded gold production had risen 1.5% from the record in 2001 at 2,649 tonnes to a new record of 2,689 tonnes.

World Gold Council data for 2011 showed that production had increased by 4% from 2010 to 2,810 tonnes of gold. Much of the production increase was attributed to Chinese production data.

The Chinese production data may or may not be reliable but there is also confusion with regard to the data as there are discrepancies in the gold production data between the US Geological Survey and the World Gold Council.

The USGS has informed us that the discrepancies are due to different estimates of artismal mining data and that the USGS reports each country's reported data.

Paul Tudor Jones’ Tudor Group released a chart using GFMS data in 2010 that showed that global gold production had peaked in 2001 and was falling (see chart above and video).

In 2009, Barrick CEO Aaron Regent claimed that global production had peaked in 2000.

He told The Daily Telegraph at the RBC's annual gold conference in London that "there is a strong case to be made that we are already at 'peak gold'."

"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.

Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa's output has halved since peaking in 1970.

Peak gold may not have happened in 2000. Nor may it have happened in 2011. However, the geological evidence suggests that it may happen in the near term due to the increasing difficulty large and small gold mining companies are having increasing their production.

It is also signalled in the fact that most of the larger gold producing countries (such as Australia, the U.S., South Africa, Canada, Peru, Indonesia) have all seen production drops in recent years.

China and Russia are the two only large producers to have seen production increases.

Peak gold has yet to be considered and analysed by the international financial community but there is a risk that it has happened or will happen soon with a consequent impact on the gold mining industry and on gold prices in the 21st Century.

The fact that peak gold may take place at a time when the world is engaged in peak fiat paper and electronic money creation bodes very well for gold’s long term outlook.

NEWSWIRE

(Bloomberg) -- South African Gold Output Fell 2.9% in May From Year Ago
South African gold production fell 2.9 percent in May from a year earlier, Juan-Pierre Terblanche, a spokesman for Statistics South Africa, said by phone from Pretoria today.

(Bloomberg) -- South African Mine Output Rose 0.8% in May From Year Ago
South African mining production rose 0.8 percent in May from a year earlier, Juan-Pierre Terblanche, a spokesman for Statistics South Africa, said by phone from Pretoria today.

(Bloomberg) -- South African Platinum-Group Metal Output Declined 6% in May
South African platinum-group metal production fell 6 percent in May from a year earlier, Juan- Pierre Terblanche, a spokesman for Statistics South Africa, said by phone from Pretoria today.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

NEWS

Gold headed for 2nd losing week as dollar firms - Reuters

Gold up for first time in four sessions - MarketWatch

Italy Exits Before Greece In BofA Game Theory - BLoomberg

Oil jumps on Iran; corn up on renewed harvest worry - Reuters

COMMENTARY

Jim Grant Discusses The Fed's 'Backward Shooting Gun - Zero Hedge

LIBOR scandal brings gold price manipulation once more to the fore - Mineweb

In Gold We Trust 2012 - Acting Man

Libor and other manipulations are not victimless crimes - Max Keiser

Jim Rogers: Duck and Cover, Your Cash Is NOT Safe; Buy Physical Gold & Silver - ETF Daily News

Why Silver Price Could Double in Three Months - Resource Investor

 


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Fri, 07/13/2012 - 09:03 | Link to Comment Sudden Debt
Sudden Debt's picture

Has anybody seen those show on discovery about those goldminers?

Almost always they dig in old rubble piles from the 70's

And now they have these boat gold diggers...

They don't look for the great deposits anymore! Always in the regions where the old diggers MISSED IT!

Fri, 07/13/2012 - 09:04 | Link to Comment cossack55
cossack55's picture

They quit making new dirt a long time ago.

Fri, 07/13/2012 - 09:10 | Link to Comment Comay Mierda
Comay Mierda's picture

what about peak tungsten?

Fri, 07/13/2012 - 09:20 | Link to Comment Dr Benway
Dr Benway's picture

Ha! That tungsten bar photo on ZH was a major eyeopener. But the funniest part was that in the comments section, someone had found a listing on eBay for very similar looking tungsten rods.

Anyhoos in other article it said 51,000 ton reserves could be gone in 20 years. I wonder what the psychological effect on people is when there is no more gold to be mined.

Fri, 07/13/2012 - 10:35 | Link to Comment BigJim
BigJim's picture

That leap in US production from the '80s until the '90s... does anyone know if this was actual production, or the mines selling forward?

Fri, 07/13/2012 - 11:22 | Link to Comment Flakmeister
Flakmeister's picture

It is a reflection of the lead in time for a mine.... Gold at $400 in the 70's stimulated a massive exploration effort which resulted in increased production...

The point being made is that given the recent price increase, the "massive" exploration boom hasn't found any properties that can increase production...

Fri, 07/13/2012 - 13:23 | Link to Comment BigJim
BigJim's picture

Thanks, yes, that makes sense... but it is a huge jump.

I've read that the collapse and continued low price in the '80s and '90s was in part due to central banks leasing it out to bullion banks who then sold it multiple times to unallocated accounts, and also mines hedging price by selling production forward. I'm wondering if any of that astonishing increase in 'supply' is actually due to the latter....

Fri, 07/13/2012 - 13:53 | Link to Comment Flakmeister
Flakmeister's picture

Nope there was a similar frenzy in oil drilling (that did not result in such a dramatic increase) but it sure led to a helluva bust in Texas....

It was all about nailing the low hanging fruit in Nevada....

So between CB practices, falling interest rates and increased supply, it is no wonder that gold was bitchslapped from 800 to 250. Classic market response combined with some manipulation...

I follow a lot of small E+P companies, 1-2 grams per tonne in a open pit is now considered ok ore... The bottom of the gold barrel is being scraped, so while there is still a lot of gold in the ground it is of increasingly poorer grades....

Take note of the South African production and take into account that their motherlode is now ~13,500 ft below the surface and the grade is ~5-8 g/tonne...

Hint: google Anglo Ashanti

Fri, 07/13/2012 - 14:18 | Link to Comment DosZap
DosZap's picture

Take note of the South African production and take into account that their motherlode is now ~13,500 ft below the surface and the grade is ~5-8 g/tonne...

Your dead on, SA deposits are about done for,a LOT of their mines are now at 7 miles deep.

Fri, 07/13/2012 - 14:39 | Link to Comment Flakmeister
Flakmeister's picture

Not quite that deep but your point is taken....

Sat, 07/14/2012 - 03:03 | Link to Comment Bringin It
Bringin It's picture

Flakm -

between CB practices, falling interest rates and increased supply, it is no wonder ...

You mean rising interest rates don't you?  Volker's Saturday Night Massacre killed the party.

 

Sat, 07/14/2012 - 09:13 | Link to Comment Flakmeister
Flakmeister's picture

Gold was rising the same time as the 10 yr yeild for a while and you do agree that in the 80's that interest rates and the POG were both in a downtrend?

Mon, 07/16/2012 - 21:48 | Link to Comment Bringin It
Bringin It's picture

You are cherry picking the time following volker's extraordinary move.  TNX was over 14% for a lot of the 80's.  Nothing like that can happen now.  No one, no state, could make the vig.  Yes people got out of gold when they saw they could get 14%, the expected inverse corelation.

Fri, 07/13/2012 - 10:00 | Link to Comment AnonymousCitizen
AnonymousCitizen's picture

Why do you think they stopped making incandecent light bulbs?

All the tungsten is needed in Fort Knox, KY.

Fri, 07/13/2012 - 09:16 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

As long as gold and silver trade at such enormous premiums to fair value, I'm afraid that global production will continue to rise. Not only this, but people are starting to realize that gold is in fact NOT a safe-haven after all, and that the true safe-haven is and always has been US treasuries.

To those golbugs who think they've missed the treasury boat: DON'T WORRY - IT'S NOT TOO LATE! People were saying the treasury 'bubble' was going to collapse when the 10 year was 3%, and then 2.4%, and then 1.7%. *Sigh* ... I've seen this happen over and over again. This treasury bull market is going to continue for as long as there is any turmoil in the global economy, and sadly most goldbugs will only wake up when the 10 year yield is sub 0.5%. This will be the biggest wealth transfer in history, and it's sad that doomer goldbugs don't want to be part of it.

Fri, 07/13/2012 - 09:18 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"To those golbugs who think they've missed the treasury boat: DON'T WORRY - IT'S NOT TOO LATE! "

It's not too late ... because we havent reached PEAK PRINTING PRESSES!

Fri, 07/13/2012 - 09:25 | Link to Comment tocointhephrase
tocointhephrase's picture

MDB, how are your FB shares doing?

Fri, 07/13/2012 - 10:07 | Link to Comment FEDbuster
FEDbuster's picture

Well I'll be damned, I have to agree with MDB on something.   As long as we have the kind of margins that now exisit in gold, you will see production continue to climb.  Like oil, gold projects become more viable as the price rises and cost of mining stays the same or goes down.   Right now there is an $1,200./oz.  spread between mining cost and retail physical gold.  The new gold projects will cost more to mine and may be less "rich" than past mines, but they will find more gold.

The FED on the other hand, will continue to create trillions in fiat FRNs, as long as the zero key on Bernanke's keyboard works.

Gold will always have value, FRNs will inflate to nothing.

"It took the FED a hundred years to devalue the dollar 97%, the next 97% won't take as long", Dr. Marc Faber

Fri, 07/13/2012 - 10:11 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

There are those who argue that gold is supressed down to the point where its just vialbe to keep mining it. If they could jam it down further and still keep the business alive they would do so but they can't. Plus if they kill the business then supply dries up, price shoots up, self-defeating. You can see the logic.

Fri, 07/13/2012 - 09:31 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

This is another thing that 'bugs' me about goldbugs. The Federal Reserve Bank of the United States does NOT "print" money, as doomer goldbugs, nerdy libertarians and silverbug hillbillies like to put it. The Federal Reserve bank actually lends money to the primary dealers - a group of top tier investment banks and elite broker dealers - who then choose to buy treasuries and NOT gold, when presented with a choice of investments. This is because the primary dealers understand that treasuries are and always have been the true safe-haven, a status which is validated by a 30 year track record. Gold is for doomer rednecks who don't know how to invest.

Fri, 07/13/2012 - 09:44 | Link to Comment jesse livermoore
jesse livermoore's picture

wow  thirty year track record.    gold has a 5000 year track record   you mutt

 

Fri, 07/13/2012 - 11:59 | Link to Comment tocointhephrase
tocointhephrase's picture

"you mutt" 

no need for niceties!

Mon, 07/16/2012 - 01:18 | Link to Comment fockewulf190
fockewulf190's picture

Well, my personal stack sure as shit hasn't peaked yet... I just ordered up more shiny Phyzz. I don't know anyone who doesn't sleep better knowing they have Phyzz backing their ass up.

Fri, 07/13/2012 - 09:47 | Link to Comment who-is-john-galt
who-is-john-galt's picture

You are right, they don't "print" money.  They create 1s and 0s that is worth the same as dollars.  

Fri, 07/13/2012 - 09:52 | Link to Comment TWSceptic
TWSceptic's picture

They lend it, but not from their own money, they first have to create money out of thin air. I'm posting this so people new to this understand the difference between normal lending and creating money from nothing to lend. It may be funny for you to troll, but misleading people is not that funny.

 

I also want to warn people new to investing that treasuries are in a bubble, and it will eventually pop. Unlike gold which is still not even close to bubble phase.

Fri, 07/13/2012 - 10:27 | Link to Comment TaxSlave
TaxSlave's picture

Yes, TWS, and it resolves this way:

It's not my debt, and I'm not going to pay it.

Slavery and coercion promised far into the future and far in excess of what is possible to extract from the victims are not safer investments than the subjective value of something real, which will eventually be worth something.

Those who invest in Slavery Bondage will get (part of) what they deserve: They will lose every dime.

Fri, 07/13/2012 - 10:05 | Link to Comment zonkie
zonkie's picture

Lends money from where? From thin air, this is called printing even if a real press may not be involved.
The Fed balance sheet rises.
As for silver hillbillies, has any other asset class risen as much as silver in last 3 years?
Silver will touch new peaks as this lax monetary policy continues, though treasury yields shall fall too because of sovereign risk abroad.
But what happens when sovereign risk becomes apparent here and what happens when USDs reserve status is questioned by more?
Gold and Silver will eventually have a last laugh if the trend continues.

Fri, 07/13/2012 - 11:28 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

"Gold is for doomer rednecks who don't know how to invest."

Man...one day soon you are going to eat those words...

Fri, 07/13/2012 - 22:24 | Link to Comment FEDbuster
FEDbuster's picture

He may have to eat his words, but you can't eat your gold.  Silver and gold are nice, but first buy some rice.

Fri, 07/13/2012 - 10:34 | Link to Comment Blammo
Blammo's picture

I think we know they don't actually print cash paper,MDB. Can you say metaphor?

Fri, 07/13/2012 - 11:57 | Link to Comment tocointhephrase
tocointhephrase's picture

ANSWER THE QUESTION! HOW ARE YOUR FB SHARES DOING?

Fri, 07/13/2012 - 13:15 | Link to Comment High4Life
High4Life's picture

'Lends' --- you mean create out of air, and then multiply by 1000 through the banksters' matrix.  If the so-called lending from the Fed and another central bank involves 'physical' or 'real' instead digital, price on paper will sky rocket to thje moon since you need to print all those trillions...

I think I am high, but this lunatic is at a total different level...The Paul Krugmen Level 

Sat, 07/14/2012 - 16:08 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

you and I both know as soon as money is printed or spent it's as good as the Fed printing even as the electronic ledger is drained to supply the printed side after the lending issuance using electrons.

There is no functional difference.

Paper or electrons are information carriers.

Fiat declared value is the information CONTENT in the carrier-medium - paper or electron.

It is printing but it's electronic printing. The only way it can not be printing is if someone else loses x dollars for every x dollars issued by the Fed. Instantly and immediately.

Treasuries are no safe-haven, they are a high-risk asset. The current use of bonds and especially treasuries is risk-collateral in highly leveraged margin trades in derivatives. That's why over-buying such units with electro-printed dollars is driving up inflation and driving up systemic instability as various levels of rehypothecation in London and leveraged trading at Goldman and JPM get ready to slam inflation over 50% and then slam deflation to get a bailout to the tune of -60%.

Fri, 07/13/2012 - 10:43 | Link to Comment Peter Pan
Peter Pan's picture

It's not peak oil, peak gold or any other peak I am worried about other than the problem of peak society which is where we are virtually at.

There is little in the collective psyche of nations that gives me much hope of an enlightened solutionor at least of an enlightened process that might lead to society regaining traction.

And so that great old saying about death and taxes will have to amended to include debts as well.

Shylock this time round will collect his pound of flesh even if it means destroying the debtor and the system.

 

 

Fri, 07/13/2012 - 09:31 | Link to Comment sdmjake
sdmjake's picture

Sigh, you've "seen this happen over and over again". Damn, you must be old.

Looking at the ^TXN chart, In January 1962 it was at 3.86---for twenty yrs it inexorably slid to 15.84 (Jan1981) and then spent 30 yrs moving back to 3.83 in Jan2010.

If you are seeing 50yr cycles over and over, I'm gonna have to start calling you MethuselahDollarBonus...(and, based on your ridiculous posts, 'Meth Use' explains alot) 

Fri, 07/13/2012 - 10:37 | Link to Comment i-dog
i-dog's picture

LOL!! ... You owe me a new keyboard. Peak insanity is indeed on its way....

Mon, 07/16/2012 - 20:29 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

Premium? Fair value of gold is certainly over 2500 / oz. With a -$900 premium gold is a great value buy.

Fri, 07/13/2012 - 09:21 | Link to Comment WmMcK
WmMcK's picture

So real estate can't go down either.

Fri, 07/13/2012 - 09:23 | Link to Comment LawsofPhysics
LawsofPhysics's picture

depends on what you price it in.  Relative to fiat, everything will always go up so long as there are no real consequences for bad behavior.

same as it ever was.

Fri, 07/13/2012 - 10:38 | Link to Comment FEDbuster
FEDbuster's picture

Priced in FRNs real estate is down something like 35% from 2007 nationwide.  Priced in gold it's down even more.  Everything goes up and down in price and value depending on a number of things.  Gold and real estate are not exempt.  Fiat FRNs have been devalued 97% over the past 100 years, so most things of value have gone up in price when priced in FRNs.   The trick is buying something that goes up in price and value faster than they can devalue the currency.  Manipulations of asset classes are part of the investment equation. 

Fri, 07/13/2012 - 09:40 | Link to Comment anarchitect
anarchitect's picture

Gold's high stock-to-flow ratio means that peak gold isn't all that important. Under the gold standard, the trend was gradual deflation, 1%-2% a year, because increase in the gold supply didn't keep up with economic and population growth. If a gold standard returned along with peak gold, this gradual deflation would be slightly higher, say 3% a year.

Fri, 07/13/2012 - 09:07 | Link to Comment Rich Bagg
Rich Bagg's picture

What a crock of BS.

When will there be a Peak in calling things a Peak?

 

 

Fri, 07/13/2012 - 09:14 | Link to Comment drivenZ
drivenZ's picture

I'm predicting 10% growth in calling things Peak over the next 3-5 years.  

Fri, 07/13/2012 - 09:28 | Link to Comment greggh99
greggh99's picture

You're right. It gets much harder not to call a spade a spade, when that spade is finally shoved in your face.

Fri, 07/13/2012 - 11:40 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Peak bubblez

Fri, 07/13/2012 - 09:15 | Link to Comment greggh99
greggh99's picture

When the human species falls back into a state of ignorance and believing in magic. But don't despair. You may indeed get your wish.

Fri, 07/13/2012 - 09:22 | Link to Comment narapoiddyslexia
narapoiddyslexia's picture

"falls back into...?"

That's a joke, right?

Fri, 07/13/2012 - 09:25 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Exactly what I was thinking, peak stupidity.

Fri, 07/13/2012 - 11:45 | Link to Comment Overfed
Overfed's picture

I wish there were such a thing, but alas, there is not. We're going to find that stupidity is virtually inexhaustable.

Fri, 07/13/2012 - 12:49 | Link to Comment hidingfromhelis
hidingfromhelis's picture

Sadly, it is accepted, shared, indoctrinated, and re-hypothecated.  I wish there was a peak!  Wait, there is.  Too bad about the, "On a long enough timeline..." part that follows.

Fri, 07/13/2012 - 09:10 | Link to Comment swissaustrian
Fri, 07/13/2012 - 09:16 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

"Has anybody seen those show on discovery about those goldminers?"

The money is being made by the owners of the gold claim leases...and, the companies selling the wannabe gold miners broken down and worn out equipment.

Of course money is also being made by those filming the fools and selling the film to tv... so we can all get a laugh as the wannabes learn the hard way how not to run a gold mine. 

No sooner do one group of wannabe gold miners go broke than another group shows up to take their place.

Aint capitalism great?

Fri, 07/13/2012 - 09:35 | Link to Comment Sudden Debt
Sudden Debt's picture

yeah... everybody should know by now that the real gold is to be found in the storage box auctions...

for those miners on tv it's just sad...

they make a few thousand if they're lucky with a crew of 7 other suckers who are tapped out and than comes the downpayment of that equipement and the one living in a trailor who owns the dirt get's to take half.

Even a hotdog seller makes more in a month!

Fri, 07/13/2012 - 09:51 | Link to Comment Ness.
Ness.'s picture

YUUUP!!

Fri, 07/13/2012 - 09:57 | Link to Comment Long-John-Silver
Long-John-Silver's picture

The Cable/Satellite company's have reached peak subscribers. After my son gave me a ROKU Box I was on the phone 10 minutes later with DirecTV discontinuing my service. The last price increase pushed my DirecTV bill over $80 a month. Now I have an $8 a month Netflix subscription and thousands of other "channels" that are free. For a couple of months DirecTV called me asking if I was ready to re-subscribe to their service. I told them their service had become obsolete and no, I no longer had any interest  in watching idiots digging for Gold, Cajuns shooting Alligators, Red-necks cutting down trees, or a show about a cancer ridden School Teacher that spends his remaining sorry life cooking and selling Meth and murdering people in the process. The Viacom - DirecTV debacle is a prime example of peak cable. Viacom has reached the point where they have priced themselves out of a dying market.

Fri, 07/13/2012 - 14:14 | Link to Comment DosZap
DosZap's picture

The Cable/Satellite company's have reached peak subscribers

Not really, it has more to do with 6.8 million subscribers stopping service,because they can no longer afford the $80 a month.

This is latest US stats.

Netflix, sucks,the longer you have it you will see what I mean.

They show foreign crap,movies made in the 40-50-60's, and kids shows, new releases come out 2-3 at a time, and mostly its crap.

Blockbuster STILL gets the new releases 28 days before anyone else.

But if you want to stream it, they charge per movie now.

The 3 disc deal is around $30.00 per mo, and is the only way to go.With either Netflix or BB.

There is no free ride for decent programming,heck most of the best progs are on reg TV free.IF you dont record them, you will sit thru 30-45 mins of commercials for a 2hr program, that is only 45 real minutes long.

 

Fri, 07/13/2012 - 09:03 | Link to Comment cossack55
cossack55's picture

Fortunately we do not have to worry about "peak bullshit" from politicians and banksters.

Fri, 07/13/2012 - 09:16 | Link to Comment AUD
AUD's picture

Nor unfortunately peak gullibility & ignorance of the masses.

Fri, 07/13/2012 - 09:03 | Link to Comment Peter K
Peter K's picture

Until someone brings to gold meteor down to earth:)

Fri, 07/13/2012 - 09:18 | Link to Comment Sudden Debt
Sudden Debt's picture

BUT EVEN THAT WON'T BE ENOUGH WHEN THEY MINE THAT GIANT DIAMOND AT THE CENTER OF THE WORLD!!

Not enough gold to make the rings to hold those!!

Fri, 07/13/2012 - 12:54 | Link to Comment Broomer
Broomer's picture

You are confusing Earth with Jupiter, Sudden.

Elements cluster in planets big enough in layers according to their densities.

Carbon is lighter than most of the matter molten inside the Earth, so the carbon layer would be floating over the other stuff.

In Jupiter, a gas giant, there is a hydrogen layer, then inside it, inner layers of other elements grouped according to density.

Deep inside Jupiter, there is indeed a carbon layer much bigger than Earth. Due to the pressure, yes, it would be a giant diamond.

And inside this diamond there are layers with the elements heavier than carbon.

Sat, 07/14/2012 - 04:38 | Link to Comment Reptil
Reptil's picture

most likely, yes...

certain is, Earth has a high metal content in it's core.

but then again, what do we know exactly? https://www.youtube.com/watch?v=qzL194jiTyY

Fri, 07/13/2012 - 09:04 | Link to Comment Chief_Illiniwek
Chief_Illiniwek's picture

Makes sense...

Once the Berkshire-Hathaway "brain-trust" advised us that gold "just sits there", why continue mining?

Fri, 07/13/2012 - 10:18 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

The old tosser was on CNBC again this morning, chortling away in a grandad stylee...that POS should burn for his crimes, schilling for his buddies on WS.

If Buffet had to work for a living instead of insider trading and pump-n-dumping with official mandate he would be stone broke within a fortnight.

Fri, 07/13/2012 - 09:05 | Link to Comment Jolly.Roger
Jolly.Roger's picture

Don't worry.

They can turn mercury into gold in nuclear reactors.

Also, 'we' will soon be mining gold on the Moon / asteroids.

if that doesn't work there is always extracting the gold which is dissolved in the sea (15,000 tons)

We'll all soon be zillionaires.

Fri, 07/13/2012 - 09:09 | Link to Comment Flakmeister
Flakmeister's picture

Don't bogart that joint, buddy....

Pass it along...

Fri, 07/13/2012 - 09:19 | Link to Comment WmMcK
WmMcK's picture

Hg to Au means $20k an oz minimum, just saying.

Fri, 07/13/2012 - 10:27 | Link to Comment Flakmeister
Flakmeister's picture

At the absoulute minimum, me thinks..

Based on the costs for artificiallly produced  elements, it would be anywhere from $600 to $4000 per gram.... i.e. from ~$18000 to ~$125000 per oz...

Fri, 07/13/2012 - 13:12 | Link to Comment Jolly.Roger
Jolly.Roger's picture

Yes, but technology scales fast.

By this time next year most people will have a miniature nuclear reactor beside their toaster churning out gold dubloons.

Fri, 07/13/2012 - 11:22 | Link to Comment Diet Coke and F...
Diet Coke and Floozies's picture

I had a fun discussion about that. The other guy figured we could make AG from fusion reactor. Bullish...

Sat, 07/14/2012 - 04:40 | Link to Comment Reptil
Fri, 07/13/2012 - 11:14 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Ah'm a gonna git me one of them new-clear-re-acters. Sounds like a doozy n beats the sheet outta werking fer a livin. Dunno why ah dint thunk of it befur. Yee-haar!

Fri, 07/13/2012 - 12:47 | Link to Comment Broomer
Broomer's picture

I don't know how much gold is dissolved in the sea, but if my memory serves me well all gold ever mined amounts to less than 200,000 tons.

If all sea gold was extracted it would increase supply by only 10%.

Fri, 07/13/2012 - 09:06 | Link to Comment SheepRevolution
SheepRevolution's picture

Don't forget that not too long ago, gold used to be the banksters money while silver was the people's money. It's not about what money is backed up with. It's all about who has the power over the supply of what money is based on, whether it be fiat or gold.

Fri, 07/13/2012 - 09:06 | Link to Comment disabledvet
disabledvet's picture

it all still looks like "peak default" to me. of course gold is of extraordinary value...so is silver...indeed all hard assets matter. but so do soft assets (look at the price of corn and wheat in the past few weeks!). these things haven't "peaked"...there's just too much DEBT chasing too few ...is it goods and services? or is it the other way around? Friggin' Alice in Wonderland economics.

Fri, 07/13/2012 - 09:06 | Link to Comment midgetrannyporn
midgetrannyporn's picture

This is idiotic. Gold is not consumed like oil or coal. Besides, when all that abiotic gold hits the market it will drive down prices. [/sarc]

Fri, 07/13/2012 - 09:32 | Link to Comment francis_sawyer
francis_sawyer's picture

I thought all the gold came from dinosaur wedding rings...

Fri, 07/13/2012 - 09:06 | Link to Comment youngman
youngman's picture

In Colombia where I live they  are digging..panning..whatever to find gold and silver....they are....what is wierd to me...half is done legally...paying the government to do so....the other half sneeks across the border..they always catch a few guys in the news.....what I do not understand is why they do not sell gold here as an investment..coins or bars.....why not..I think those mints make quite a bit of money on coins..premiums...

Fri, 07/13/2012 - 09:20 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Youngman... Why do the Columbians bust their asses mining gold when the coca biz is sooo much more lucrative?

Fri, 07/13/2012 - 09:29 | Link to Comment swissaustrian
swissaustrian's picture

Follow up:

Coca farmers are switching to gold / silver in colombia

www.youtube.com/watch?v=cRX1kAIzJz4

Fri, 07/13/2012 - 09:06 | Link to Comment Sudden Debt
Sudden Debt's picture

AND EVEN THE TUNGSTEN MINES IN ENGLAND ARE HAVING A HARD TIME TO KEEP UP WITH DEMAND!!

soon:

Tungsten will be as rare as silver!

Fri, 07/13/2012 - 09:28 | Link to Comment tocointhephrase
tocointhephrase's picture

(when the fed decide (are ordered) to audit the books)

Fri, 07/13/2012 - 09:28 | Link to Comment spentCartridge
spentCartridge's picture

One needs tungsten to weld stainless steel together, and it is running out.

 

That's why they stopped making tungsten filament light bulbs.

Fri, 07/13/2012 - 12:08 | Link to Comment GeezerGeek
GeezerGeek's picture

Now I wish I'd saved all those incandescent bulbs that I've gone through over the years. Getting the tungsten out is relatively easy. I'm having a tough time extracting mercury from all those dead CFLs. Anything to supplement my monthly SS.

Fri, 07/13/2012 - 09:06 | Link to Comment AnAnonymous
AnAnonymous's picture

US citizens offloaded South Africa at the right moment.

They transfered the bulk of gold to themselves through IMF and are letting a territory on the path to depletion to reinforce their belief that negroes can not govern themselves or their usual song.

US citizen business.

With proper US citizens at the wheel, the outcome would have be the same but US citizens would have had to endure the responsibility of it.

But unleashing their grip and transfering control, US citizens can pretend it is another sign of the negroes unproficiency while actually, US citizens ate at the trough and only left enough to cover for their leave.

Fri, 07/13/2012 - 09:13 | Link to Comment Jim in MN
Jim in MN's picture

I say old chap, was that written in 1955? 

Fri, 07/13/2012 - 12:54 | Link to Comment akak
akak's picture

What, don't you recognize famous quotations from Mousy Dung's Little Red Book?

Fri, 07/13/2012 - 09:17 | Link to Comment Bohemian Clubber
Bohemian Clubber's picture

Oh man, how I love your hatred haha

Fri, 07/13/2012 - 11:49 | Link to Comment akak
akak's picture

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

"US Citizenism!"

"US Citizens!"

I just loves blowing on my one-note flute and grinding my anti-American ax!

Toot toot toot toot toot!

Fri, 07/13/2012 - 11:58 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous, patriot number one of US citizenism, blithered:

US citizens offloaded South Africa at the right moment.

You make it sounding like a Chinese citizenism citizen offloading on a roadside. Very telling, being the way of your eternal nature to transmogrificationating Chinese citizenism into synthetic US citizenism the plainly.

They transfered the bulk of gold to themselves through IMF and are letting a territory on the path to depletion to reinforce their belief that negroes can not govern themselves or their usual song.

Somehow you the thinking can do govern their usual song being the better? Waooo, that big the being Chinese citizenism arrogantation muchly. So now you do the vastly boastful Chinese citizenism strutting as saving of humanitary Albert Schweitzer reincarnationment? Made me laugh.

US citizen business.

Ah, ah, do now the proper sequentialized follow of:

Chinese citizenism business -> AnAnonymous monkey business -> US citizen business.

You should apply patently your process, as to stand the gain prosperously.

With proper US citizens at the wheel, the outcome would have be the same but US citizens would have had to endure the responsibility of it.

But unleashing their grip and transfering control, US citizens can pretend it is another sign of the negroes unproficiency while actually, US citizens ate at the trough and only left enough to cover for their leave.

Ah, inventingness you on the roll on top of this day. Another the patently apply to your steering wheeled trough firmly the dangdang. Much profitably will you judiciously.

Fri, 07/13/2012 - 09:07 | Link to Comment Flakmeister
Flakmeister's picture

Well, duh....

What else would you expect in a finite world?

Fri, 07/13/2012 - 09:08 | Link to Comment csmith
csmith's picture

"Peak oil is a phenomenon many will be aware of..."

 

Not to mention one which was totally WRONG.

Fri, 07/13/2012 - 09:09 | Link to Comment Flakmeister
Flakmeister's picture

Oh?

Please elaborate, we are all ears...

Fri, 07/13/2012 - 09:10 | Link to Comment Jim in MN
Jim in MN's picture

 

MY PEAK PRECIOUSSSSSSSS>>>>>>>>>>>>>>>>>>>>>>>so shiny

Fri, 07/13/2012 - 09:11 | Link to Comment casey13
casey13's picture

Gold supply and demand are far less important then in other commodities. Gold is money and as such is mostly hoarded. The mine supply on a yearly basis is a small percentage of the total gold available for trading. The willingness of people to part with their gold at a given price is a far more important factor. 

Fri, 07/13/2012 - 11:25 | Link to Comment Flakmeister
Flakmeister's picture

True...

Now consider the following: how big is the world oil market, ~60 mmbpd of  freely traded oil at ~$100 on an annuallzed basis, what is the value of all existing gold? Now compare the the two quantities....

Fri, 07/13/2012 - 12:12 | Link to Comment GeezerGeek
GeezerGeek's picture

Speaking of oil and gold, I just today read that Turkey is trading gold for oil with Iran.

Fri, 07/13/2012 - 12:41 | Link to Comment Flakmeister
Flakmeister's picture

Source??

Is this the same rehashed story circulating that actually said that Iran was willing to accept gold for oil?

Seriously, who the fuck would trade gold for oil, if you could come up with fiatcos of the right flavor instead?

One day that may change, but not today....

Fri, 07/13/2012 - 13:00 | Link to Comment Broomer
Broomer's picture

http://www.turkishweekly.net/news/138360/turkey-iran-trade-revolves-arou...

Key quote:

"Meanwhile, poor management of Iran's economy combined with Western sanctions has boosted Turkish gold exports to Iran. During the first five months of the year Turkey exported $3 billion in gold to Iran, an 800% increase, according to Turkey's state statistical agency Turkstat. In May, Iran was Turkey's largest export market at $1.6 billion, $1.4 billion of which was gold."

Fri, 07/13/2012 - 13:27 | Link to Comment Flakmeister
Flakmeister's picture

Interesting.... the amounts involved are larger than Turkish production:

http://turkishgoldminersassociation.com/statistics/turkeys-gold-production

Fri, 07/13/2012 - 09:22 | Link to Comment AUD
AUD's picture

Not just hoarded, the demand for money is, more or less, infinite. You can't have to much money. Thus it makes no difference how much gold their is, which is a lot. There can never be enough money to satiate the demand for it.

Fri, 07/13/2012 - 09:59 | Link to Comment Citxmech
Citxmech's picture

You also have a still increasing population chasing a diminishing rate of available above-ground gold.

Fri, 07/13/2012 - 12:06 | Link to Comment AustriAnnie
AustriAnnie's picture

Casey13 is correct.  The rate of gold production has 1) kept up with population growth, 2) has very little influence on price, as the stock-to-flow ratio is high.

The supply of gold consists of every ounce ever mined, and the production rates annually are far less important than the willingness of gold owners to part with their gold.

See Erste Group Research Gold Report posted on ZH this week or Robert Blumen for explanation.

http://www.zerohedge.com/news/gold-report-2012-erstes-comprehensive-summ...

 

Fri, 07/13/2012 - 09:12 | Link to Comment Onohymagin
Onohymagin's picture

If it was not subject to peaking it would not be worth having.;-)

Fri, 07/13/2012 - 09:13 | Link to Comment LoneStarHog
LoneStarHog's picture

The daily DUMP from CLUELESS GoldCrap

Fri, 07/13/2012 - 09:12 | Link to Comment swissaustrian
swissaustrian's picture

WGC says miners will need $3000/oz gold in 5 years to be profitable:

http://www.reuters.com/article/2012/05/15/peru-mining-wgc-idUSL1E8GF0AR2...

Fri, 07/13/2012 - 13:55 | Link to Comment DosZap
DosZap's picture

WGC says miners will need $3000/oz gold in 5 years to be profitable:

http://www.reuters.com/article/2012/05/15/peru-mining-wgc-idUSL1E8GF0AR2

 

In 5yrs it wont matter, we do not have that long.We will be lucky to have 2yrs before the SHTF big time.

As soon as the banks start being forced to lend by the Fed,the inflation into the system is going to unscrew our heads.

Fri, 07/13/2012 - 09:25 | Link to Comment PaperBear
PaperBear's picture

Forget about peak gold because the banksters have lots of gold, what about peak silver because the banksters don't have any silver ?

Fri, 07/13/2012 - 09:33 | Link to Comment francis_sawyer
francis_sawyer's picture

The rule is that if the banksters don't own it, they'll tell you it isn't worth anything...

Fri, 07/13/2012 - 10:19 | Link to Comment Citxmech
Citxmech's picture

Not true. CBs only hold gold out of "tradition." They are doing you a favor by taking it off of your hands in exchange for FRNs. . . no really.

Fri, 07/13/2012 - 09:17 | Link to Comment Doode
Doode's picture

And then there were asteroid mining robots and then there was Ripley! Anytime you think there is peak of anything just think of Maltusians in the 1800 (clearly not enough food for 500 million folks) and then peak oil - clearly shale gas, oil sands etc would not be discovered. Now peak gold - they will find a way!

Fri, 07/13/2012 - 09:21 | Link to Comment Jim in MN
Jim in MN's picture

Of course, gasoline was thrown away as a useless refinery byproduct into the 1920s....engineers can do anything, the question is, how much money do you have? 

 

Oh, sorry, no credit :*)  as that has been shown to be faulty.

 

Got Assets?

Fri, 07/13/2012 - 10:37 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

+100 ... yeah why invest in R&D in this paper-strewn environment.

Fri, 07/13/2012 - 10:32 | Link to Comment Flakmeister
Flakmeister's picture

Doode...

Could you explain to us the difference between the size of a resource base and the rate at which it is extracted?

And was there anything that came along in the 19th century that might have been a one-time deal that Malthus didn't know about? In other words, what allowed increased food supply?

 

Fri, 07/13/2012 - 13:11 | Link to Comment Citxmech
Citxmech's picture

I think the argument goes like this:  "Malthus was wrong once, therefore, Malthus will be wrong always."

Or, put another way, "technology will alway save us - forever!"

JFC, you're a scientist - quit wasting time, get the fuck off this board, and get to work inventing workable thorium reactors, cold fusion, artifical gravity, ftl drives, perpetual motion machines and other cool stuff so we can continue inflating. . . er, growing the economy again and we can continue borrowing ourselves to prosperity!

And make it snappy, we've got shit to do, Jack.

Fri, 07/13/2012 - 09:19 | Link to Comment sdmjake
sdmjake's picture

I believe that the USGS claimed  [yrs ago] that Silver would be the first element on the periodic chart to go extinct.

(I know, technically it won't be extinct... but the reachable supply will become so small as to effectively be gone. Production will "peak". Where is mr LennonHendrix? Maybe he can verify this one...)

I don't necessarily buy into the peak gold BUT lumps of it used to be mined with a pan in our mountain streams and now they dig up entire mountains of dirt and leach it through arsenic pools just to find a few grams. Seems it might be gettin harder to get to...

Fri, 07/13/2012 - 13:15 | Link to Comment Broomer
Broomer's picture

According to data I collected reading through lots of USGS reports, in 2011 (last available data), antimony reserves economically extractable at current prices (167,000 metric tons) will be depleted in 10 years, considering current consumption (167,000 tons consumed in 2010) growing 2% per year.

Making the same calculations with USGS silver data I get 12 years (reserves 270,000 metric tons, consumption 20,500 tons).

But there are lots of other things to consider.

This isn't a realistic extraction model. You don't extract all reserves with a growing 2% rates and then in the last year it is over. Extraction follows a model called "Hubbert curve", look for it.

A lot of silver is a byproduct of production of other metals. As the production of those is still growing, if price raises, more will be available.

So this data should be taken with a ton of salt. Also consider, if energy production peaks soon, the remaining production of everything will decline and most of it will stay buried in the ground.

Fri, 07/13/2012 - 09:21 | Link to Comment david_a_levastre
david_a_levastre's picture

I agree with Flakmeister : Duh! And seeing peaks everywhere is getting old too. Then again our species has been around and mining gold for quite a while now, we just might be the ones getting old.

What I find interesting is that if gold is -has many of us believe- getting back it's -rightful- place among currencies and there is a coming shortage of it, that just might be the start of another silver craze.

Fri, 07/13/2012 - 09:24 | Link to Comment Flakmeister
Flakmeister's picture

Gold is unique in that very little is consumed, so even post-peak, the world supply is still increasing, however, the total amount above ground is approaching an asymptote...

Fri, 07/13/2012 - 10:21 | Link to Comment blunderdog
blunderdog's picture

I think you mean the opposite of an asymptote, a "maximum."

Fri, 07/13/2012 - 10:38 | Link to Comment Flakmeister
Flakmeister's picture

Beg pardon?

An asymptote is, essentially, a line that a graph approaches, but does not
intersect. For example, in the following graph of y=1/x, the line approaches the x-
axis ...

Lets define a line to be the amount of gold that can be pratically extracted from the the earth, and the curve to be the cumulative amount extracted to date...

Fri, 07/13/2012 - 11:12 | Link to Comment blunderdog
blunderdog's picture

I stand corrected.

Fri, 07/13/2012 - 11:28 | Link to Comment Flakmeister
Flakmeister's picture

No prob...

I only wish more people here would publically fess up when appropriate...

Fri, 07/13/2012 - 09:21 | Link to Comment proLiberty
proLiberty's picture

The difference between peak gold and peak oil is that there are substitutes for oil such as other hydrcarbons that can be converted into liquid fuels.   The only mitigation for gold is that innovation will provide new sources or change the economics of extracting from sources that are presently uneconomical to exploit.  One new source is to harvest minerals from deep sea volcanic "smoker" vents.  An extreme new source would be asteroids.  But for asteroids to be economic for gold, what does that imply for the per ounce price? 

Fri, 07/13/2012 - 10:49 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

Let's dispel this space mining batshit insanity once and for all ...

  • It costs $22,000 per kg to lift an object into orbit.
  • The kind of equipment you need to mine a fuckin asteroid MIGHT JUST BE A WEE BIT HEAVY AND A SMIDGE BULKY.
  • You need to send the craft out to the ASTEROID BELT, THAT'S BETWEEN MARS AND FUCKIN JUPITER.  KIND OF FAR.
  • You need to survey and wild cat WHICH FUCKIN ASTEROID OUT OF TWO BILLION HAS THE GOLD.
  • You need to bring it back home from the fuckin ASTEROID BELT.  THAT'S BETWEEN MARS AND FUCKIN JUPITER.  KIND OF FAR.
  • You need to control and guide a vessel containing ONE OF THE DENSEST MATERIALS KNOWN TO MAN down from LEO and like 200 gagillion MPH into the atmosphere, making sure IT DOESN'T COME DOWN TOO FAST BECAUSE ANY APPRECIABLY SIZED AND DENSE OBJECT OF ANY APPRECIABLE VOLUME WILL LEVEL SIBERIA.

 

Fri, 07/13/2012 - 11:09 | Link to Comment Diet Coke and F...
Diet Coke and Floozies's picture

Thank you...

Fri, 07/13/2012 - 11:33 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

now we just need to make sure it lands on Wall Street ;o)

Fri, 07/13/2012 - 09:25 | Link to Comment PaperBear
PaperBear's picture

http://business.financialpost.com/2012/07/12/sprott-physical-silver-trus...

That's 7.4 million ounces of silver coming out of the claimed 38 million held in the Comex.

Fri, 07/13/2012 - 09:28 | Link to Comment Swarmee
Swarmee's picture

Just to nitpick, silver is not destroyed by use, it is dispersed. Sometimes by the gram here or there in landfills, other times literally atomized and dusted across whole countries as in munitions use. But rest assured, it's still silver.

Anyone who is destroying silver please return to your orbit outside of our atmosphere as you are most likely a star or other massive gravity well, thanks!

Fri, 07/13/2012 - 09:33 | Link to Comment david_a_levastre
david_a_levastre's picture

That is nitpicking, but being funny and all you are pardoned.

Fri, 07/13/2012 - 09:33 | Link to Comment MFL8240
MFL8240's picture

This article fails to take into account the illegal actions of this crime circus that is artificially manipulating Gold.

Fri, 07/13/2012 - 09:34 | Link to Comment AU5K
AU5K's picture

There are probably a lot of gold and rare earths on the moon and mars ("rare mars" elements?).  In 100 years, robotic drones will be mining it, with unmanned cargo ships transporting 1K tonnes at a time.  Bullish on celestial mining stocks.

Until then, supply will fall fall fall !!!

Fri, 07/13/2012 - 09:37 | Link to Comment spentCartridge
spentCartridge's picture

I hope so.

 

I own a couple of acres of the Moon :)

Fri, 07/13/2012 - 09:51 | Link to Comment Praetor
Praetor's picture

Bad news AU5K, if the Moon creation hypothesis is correct and the Moon formed from a collision of proto Earth with a Mars sized object ejecting Earth's outer crust into an orbit that coalesced to form the Moon, then there will not be much gold or rare earths on the Moon at all!

Fri, 07/13/2012 - 10:08 | Link to Comment Flakmeister
Flakmeister's picture

Yep... I don't think peak silicates is coming anytime soon so as to make the moon interesting...

The only thing that may prove feasible for moon-mining is He3 and that is a real stretch...It is probabaly cheaper to make Tritium here on earth and let it decay for any foreseeable future...  

Fri, 07/13/2012 - 13:22 | Link to Comment Broomer
Broomer's picture

Well.

The metals in the surface of the Moon exist via the same process that made them available in Earth: something called the Great Bombardment.

However, there is something to consider: most metals were concentrated in Earth through action of water. There's no running water in the Moon and it never was.

Some metals might be available, concentrated by volcanic processes. But anyway, it wouldn't be economically feasible to extract them, cost would be too high (out of my ass, I guesstimate 1/6 of 10,000 USD per pound, based on cost of lifting material from Earth into orbit, reduced by the smaller gravity of the Moon).

Fri, 07/13/2012 - 12:26 | Link to Comment Raymond K Hessel
Raymond K Hessel's picture

There is also the problem of the Outer Space Treaty that makes private property illegal in space. You can't damage the environment of Mars because it's illegal.  You can take apart an asteroid because it's illegal.  Something to think about while you're in the crapper.

Fri, 07/13/2012 - 12:53 | Link to Comment Citxmech
Citxmech's picture

When has a little issue like "illegality" ever stopped anyone from trying to make a buck?

Fri, 07/13/2012 - 09:34 | Link to Comment Judge Arrow
Judge Arrow's picture

I think we might get 'surprised' by gold from the ocean floor - a bit harder to mine of course, but there in big deposits.

Fri, 07/13/2012 - 10:56 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

The problem with mining the ocean floor is that GOLD DOESN'T FLOAT.  Good luck moving that kind of tonnage with modified nuclear sub where above ground mining requires a CATERPILLAR and fuckin conveyer belt!!!!!

The insanity continues!! 

Get it while it's monkey hammered you dummies!!!!

Fri, 07/13/2012 - 11:09 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

The only gold on the ocean floor got there through "boating accidents".

Particularly big Spanish ones, a few hundred years old...

Fri, 07/13/2012 - 09:43 | Link to Comment katchum
katchum's picture

Gold production is only 2% of total gold in the world. Peak gold is just completely irrelevant and just doesn't have any influence on the price of gold.

Fri, 07/13/2012 - 10:06 | Link to Comment onebir
onebir's picture

Well said. But not completely irrelevant. With given money supply growth, gold production at 2% of above ground stocks a year vs 3% should mean ~1% faster trend appreciation of the $ (or whatever) gold price...

Fri, 07/13/2012 - 09:39 | Link to Comment Raul Duke
Fri, 07/13/2012 - 09:50 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Anecdotal and self-referential I know but here's the skinny from someone who actually trades PMs on a daily basis:

I started trading PMs in Feb '09. I trade mainly on eBay (UK) and through auction houses; also some private client stuff where I have made contacts through my trading.

When I started out it was easy to find scrap gold on eBay. It was normal for there to be around 200 lots per hour. Now I look at eBay and I'm lucky if there are 100 lots in a day. The volume just is not there. Neither is the quality - too many tiny lots, mis-descriptions and outright bullshit. Even where a lot is worth bidding on, too often it turns out to be mis-described, underweight, fake, whatever. Essentially eBay UK has dried up.

For examples; I used to buy a lot of 1/5th 9ct rolled gold on eBay. I could easily accumulate a kilo a month and melt it at a profit. Now there's virtually nothing out there and its mainly 20/50 micron stuff - not worth the bother and often over-bid by muppets. There were bulk lots of mixed .925 and .500 silver coins on eBay - now its just a few or single coins.

Auctions are better but not much better. The volume is way down and the prices are way up due to the quality having gone up. I put this down to a shortage of low-value scrap with most of the available 9ct already having been traded through the system. Recently (the last six weeks or so) the bids have been coming in way over the scrap, even on items which are only fit to melt. At the last auction I attended, ten days ago, new bidders suddenly popped up; definite pros hitting all the lots with a 20% over on silver and slightly less on gold. There are bargains to be had but mainly where the quality is above scrap (I can sell these thriough to private clients) or a specific maker E.g. Omar Ramsden, Georg Jensen, Bateman family, Charles Horner, etc.

On my private client side; I used to buy pre-47 (.500 silver) coins by the kilo - that dried up about a year ago. I could barter 22ct coins for 9ct scrap and make a margin after postage and travel costs - not any more.

People I used to deal with have given up trying - these are hard-core dealers who have been at it for decades and now can't make it work any more. Giving up has been a life-changing decision for them - some are happier now they finally made the decision, other not so happy. One guy I know who has given up has been bitching about the situation for a year so its not a sudden thing - its been building up for a while now and I can't see it as a glitch. things will not suddenly get better.

Essentially, the market is dead and I've thought more than once about giving up. I console myself that I'm still learning and as long as I'm breaking even it still worth the effort but its getting harder to motivate myself. Who knows, maybe I will give up in the next months and just trade a little to keep stacking. We will see.

Anyway, thought I'd share this in case it helps anyone. I'll be interested to hear from others in the same game. Also comments from anyone on what this means for the market. Personally I think it screams of high demand coupled with a shortage of physical metal, which is only hidden from the public at large by interventions in short ETFs (for gold) and/or short futures/options (JPM on the silver).

Comments?

 

 

Fri, 07/13/2012 - 10:27 | Link to Comment blunderdog
blunderdog's picture

It may be time to get a job doing something productive.

Fri, 07/13/2012 - 10:36 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

FYI: I also have a full-time day job, importing retail goods; breed horses, dogs,poultry and parrots; sell eggs, meat and plants; deal in antiques and collectables; dabble in property development.

Productive enough for y'all?

Oh, and my gran once left me £50, otherwise its all my own effort. The only silver spoon I ever handled, I bought and traded. How 'bout you?

Fri, 07/13/2012 - 10:40 | Link to Comment blunderdog
blunderdog's picture

Well aren't you touchy.  I leave it to you to fantasize about all my inadequacies and failings.

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