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As Retail Sells, Central Banks Wave Gold In With Both Hands

Tyler Durden's picture




 

As recent entrants in the gold market watched paralyzed in fear as gold tumbled by over $100 on the last FOMC day, on the idiotic notion that Ben Bernanke will no longer ease (oh we will, only after Iran is glassified, and not before Obama is confident he has the election down pat), resulting in pervasive sell stop orders getting hit, others were buying. Which others? The same ones whose only response to a downtick in the market is to proceed with more CTRL+P: the central banks. FT reports that the recent drop in gold has triggered large purchases of bullion by central banks in recent weeks. "The buying activity highlights the trend among central banks in emerging economies to buy gold, even as some western investors are losing patience with the metal. Gold prices have dropped 13.8 per cent from a nominal record high of $1,920 a troy ounce reached in September, and on Friday were trading at $1,655.60." Well, as we said a few days ago, "In conclusion we wish to say - thank you Chairman for the firesale in physical precious metals. We, and certainly China, thank you from the bottom of our hearts." Once again, we were more or less correct. And since past is prologue, we now expect any day to see a headline from the PBOC informing the world that the bank has quietly added a few hundred tons of the yellow metal since the last such public announcement in 2009: a catalyst which will quickly send it over recent record highs.

More on what was perfectly obvious to most except the propaganda pushers:

The Bank for International Settlements, which acts on behalf of central banks, has been buying significant quantities of gold on the international market amid falling prices, traders said.

 

According to several estimates, the BIS bought 4-6 tonnes of gold, worth roughly $250m-$300m at current prices, in the over-the-counter physical market last week, with purchases particularly strong at the end of the week. The total purchases over the past three or four weeks were likely to be as much as double that, the traders added.

 

In a note to clients this week, Credit Suisse referred to “aggressive central bank buying seen last Friday”.

Of course, central banks are well aware what they are doing. In fact, they have been buying up gold pretty much non-stop in the past few years.

As a group, they made their largest purchases of gold in more than four decades last year, led by emerging economies such as Mexico, Russia and South Korea intent on diversifying their dollar-heavy foreign exchange reserves. The World Gold Council has also pointed to the possibility of significant unreported purchases by China at the end of last year.

 

At the same time, European central banks have all but halted a run of large sales.

 

“Central banks have definitely been looking at gold as an asset class much more closely ever since European central banks stopped selling,” a senior gold banker said. “There has been a huge interest."

 

While some countries, such as Russia, China or the Philippines, have traditionally accumulated gold produced by their domestic mining industry, others use the BIS as an agent to carry out purchases and sales on their behalf, preserving anonymity.

 

The central bank buying comes as gold prices have slid in the past three weeks as strong economic data from the US has lowered investors’ expectations of quantitative easing by the Federal Reserve and made other investments, such as equities, appear more attractive.

The irony is that as has been pointed out repeatedly, gold will ultimately do well both in extreme deflation and inflation cases. And anyone who believes the Fed has the situation balanced properly, even as the global liquidity providing machine swings to ever greater exponential extremes, well, they likely also believed Bernanke when he told Maria Bartiromo that a home price decline is a "pretty unlikely possibility... we have never had a decline of house prices on a nationwide basis." And if it wasn't for Bernanke's endless bailouts, they would all be broke now.

 

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Sat, 03/17/2012 - 18:47 | 2265813 JimmyCDN
JimmyCDN's picture

Ironic, for a barbaric relic one can dig up for $5 / oz...

Sat, 03/17/2012 - 19:32 | 2265900 akak
akak's picture

 .

Ironic, for a barbaric relic one can dig up for $5 / oz...
No, you are thinking of silver there (according to Methman, anyway). Gold costs quite a bit more than $5 to mine --- but according to Jon Nadler, there are literally mountains of scrap gold just littering the landscape, so you should be able to pick some up relatively cheaply, especially outside of the Indian wedding season, which as we all know is the sole driving force of gold's price.
Sat, 03/17/2012 - 19:48 | 2265941 malikai
malikai's picture

There literally are mountains of scrap gold all around us. Have a look at your local landfill and you'll see quite a few old pcs, laptops, dead gadgets, etc. That's not to say you can extract from it economically, but given some time things will change.

If you want to make your children/grandchildren rich, buy a landfill.

Sat, 03/17/2012 - 19:51 | 2265953 akak
akak's picture

When they invent nanobots capable of digging around and extracting any given element out of those landfills one atom at a time, then you may be right, but probably not before such a development.

Sat, 03/17/2012 - 20:12 | 2266006 DoChenRollingBearing
DoChenRollingBearing's picture

The Central Bank of DoChenRollingBearing will be buying physical gold soon.

As soon as he gets back from Peru!

Sat, 03/17/2012 - 20:29 | 2266037 akak
akak's picture

Have some chirimoyas and aji de gallina for me while you are still down there!

Sat, 03/17/2012 - 20:34 | 2266056 DoChenRollingBearing
DoChenRollingBearing's picture

Two nights ago: Olloquito!

Last night: Caigua!

You almost NEVER find either at Peruvian restaurants in the USA.  Can´t find the raw materials...

+ 1 akak!  Viva el Peru!

Sat, 03/17/2012 - 20:47 | 2266075 akak
akak's picture

I positively LOVE Andean food!  It is too bad that so many of the raw ingredients are unavailable in the US --- olluco, chuno, tunto, choclo, naranjillas, oca, that dark green herb that is like cilantro on steroids, and so many others I have now forgotten.

Sat, 03/17/2012 - 21:28 | 2266169 Pinto Currency
Pinto Currency's picture

 

 

Ben Bernanke to Maria from above:

...he told Maria Bartiromo that a home price decline is a "pretty unlikely possibility... we have never had a decline of house prices on a nationwide basis."

Never had a decline in house prices on a nationwide basis Ben??

"The U.S. house collapse is now worse than during the Great Depression and is likely to get worse, according to a new report. 

Since the collapse began in 2006, prices have fallen by 33 per cent, more than the 31 per cent drop recorded between the 1920s and 1930s."

http://www.dailymail.co.uk/news/article-2004282/U-S-house-prices-collapse-worse-Great-Depression.html

 

Nice central planner.


Sun, 03/18/2012 - 04:54 | 2266767 jeff montanye
jeff montanye's picture

what ben apparently meant was never a nationwide housing decline since ww2.  didn't want to scare the children or the horses.

housing declined from 1929 to 1942 and during the 1840's and 1880's, at least.  the great inflation of 1942 to 1980/2007 is an anomaly matched only by relatively rare events such as the discovery and theft of precious metals in the new world by spain, et. al.

Sun, 03/18/2012 - 11:23 | 2267016 Pinto Currency
Pinto Currency's picture

 

That is probably what he meant.  We've never had a decline in house prices nationwide since it happened the last time. 

Sun, 03/18/2012 - 14:49 | 2267472 Cadavre
Cadavre's picture

Love Pinto's cite of the Benny "Hill" Berskanki's brain dead rodeo clown response to the question that drooled out Double Chin's 50 psi lips:

"pretty unlikely possibility"

I ain't the smartest or best read witness to all the funny money shenanigans, but could someone explain between the words from Benny:

Exactly what does, "a pretty unlikely possibility" f*cking mean?

Is it laike a ... a ... err .. a "possible"  "impossibility" or do it mean more along de lines of an "impossible" "possibility"? (dis is gonna be way too easy!)

Another Benny jewel a tad too confusing tool:

"we have never had a decline of house prices on a nationwide basis"

As the FED's main man kapo, I'm sure the Benny feels like he be a god given royal stain too busy to read the contraindications on the packing slip that came with his  meds.

Exactly what "nation" was the the "nation" Ben was referring to when he said "nationwide basis".

Up your Ginkgo intake Benny Boy - them bath house poppers done dulled the last two brain cells you got.

 

 

Sun, 03/18/2012 - 15:08 | 2267519 Jendrzejczyk
Jendrzejczyk's picture

http://budget.net/~herbseed/Quilquina.htm

This is what you're looking for Akak. I used to grow it but lost the last seeds about 15 years ago. Nothing better in fresh salsa.

There's even some seeds on

http://www.ebay.com/itm/15-SEEDS-Quirquina-quilquina-Porophyllum-ruderal...

Sun, 03/18/2012 - 16:03 | 2267636 akak
akak's picture

Wow!

Never thought I would ever find out just what that herb was.

Dzienkuje bardzo, Jendrzejczyk!

Sun, 03/18/2012 - 13:55 | 2267350 KrugerrandFan
KrugerrandFan's picture

Last time I was there I ate cuy, better known as guinea pig! Won't be in a rush to eat it again though. Great country and lovely people though.

Sat, 03/17/2012 - 22:13 | 2266286 Hobbleknee
Hobbleknee's picture

Actually, people are already salvaging gold before it makes it to the landfill.  Check it out:

http://www.ebay.ca/sch/sis.html?_nkw=Gold+scrap+gold+recovery+E+scrap+Go...

 

Sun, 03/18/2012 - 13:07 | 2267238 americanspirit
americanspirit's picture

Let's not forget all that gold in seawater. And in asteroids too!

Sun, 03/18/2012 - 05:14 | 2266773 TWSceptic
TWSceptic's picture

barbaric relic = paper money

Sat, 03/17/2012 - 18:48 | 2265816 Sudden Debt
Sudden Debt's picture

Just look at what the commercials are buying in the pits whenever the price goes down for gold and silver and the manipulation is just so big that inventory is as good as gone for both metals.

Sat, 03/17/2012 - 18:53 | 2265829 I think I need ...
I think I need to buy a gun's picture

i think the central banks haven't sold any to retail the last 3 years they are just converting the "CASH FOR GOLD" from the 99% to the 1%.

Sat, 03/17/2012 - 18:57 | 2265836 Sudden Debt
Sudden Debt's picture

Retail is you and me, the commercials are the traders in the pits, JPM etc... Who can bring the price down and buy the real stuff cheap and run it back up to sell to the retails.
But retails just own about 8 to 9% of the stuff. Even less for gold.

Sat, 03/17/2012 - 21:29 | 2266165 Pinto Currency
Pinto Currency's picture

post deleted

 

Sun, 03/18/2012 - 13:40 | 2267323 blindman
blindman's picture

Ted Butler: How the Silver Manipulation Scheme Works
Ted Butler responds to CFTC Commissioner Bart Chilton
http://www.financialsense.com/financial-sense-newshour/big-picture/2012/...

Sat, 03/17/2012 - 18:52 | 2265827 Spitzer
Spitzer's picture

Kinross gold was below its 2008 low in the same year gold made its all time high. There must be some truth to this miner manipulation. This is fuct up.

Sat, 03/17/2012 - 20:15 | 2266012 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for the thought / idea

But, you know better than almost anyone here that physical gold is a better way to save than the miners...

No miners for me.  I´ll just take the real thing.

Sat, 03/17/2012 - 20:31 | 2266051 akak
akak's picture

Miners tend to bitch when stuffed into safe deposit boxes, as well, and constantly need to be fed --- all quite a hassle.

Sat, 03/17/2012 - 20:36 | 2266060 xela2200
xela2200's picture

I read an article somewhere where they mentioned that traditionally Miners was a good way to play the gold trade. However, since we now have ETF (whatever you might think of them), people use them instead of miners. Additionally, miners have other dangers like expropriation, forced sales to government, strikes, or just not finding as much gold as the had estimated. Also, they are in the FED's shit list, so especial taxation can affect them.

I know every expert out there say they are undervalue including Peter Schiff, but I just don't find them attractive when I can just hold the real thing if one is going for wealth preservation

Sat, 03/17/2012 - 20:46 | 2266086 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

I know very little about gold miners and gold mining.  But, I have read about those same risks you wrote about.

No gold ETFs for the Bearing!

Sat, 03/17/2012 - 23:07 | 2266426 nick elsworth
nick elsworth's picture

Just wrote an article about it and couldn't agree more:

http://assetinflation.com/blog/2012/03/16/another-look-at-gold-and-gold-stocks-seeking-alpha/

Outlook: Physical Gold Shines Brightest

We are revisiting our outlook and focus based on information that has continued to evolve (and summarized above). It is clear to us that physical gold continues to be in great demand relative to derivative alternatives, especially considering the apparent need for central banks to support the world economy. As physical gold continues to be accumulated by individuals and governments worldwide, we believe that a premium will continue to be justified.

Sun, 03/18/2012 - 12:17 | 2267154 Spitzer
Spitzer's picture

Yeah you can come up with  all the reasons you want but it doesnt make any sense.

Agnico Eagle had a problem at one of its mines and the stock fell 30% in one day. When that Carnival cruise ship in Italy capsized and a bunch of people died, Carnivals stock fell by around 8%. 

Every gold producers market cap combined is less then half the market cap of Apple.

Sun, 03/18/2012 - 12:13 | 2267145 Spitzer
Spitzer's picture

Mining stocks are the Worst on earth. Airline stocks are better FFS.

The gold mining industry is being destroyed so that means a reduction in supply of gold. All the better for physical in hand..

 

 

Sat, 03/17/2012 - 18:53 | 2265828 Yen Cross
Yen Cross's picture

 You hate me. Just like " Merve the Swerve"

Sat, 03/17/2012 - 18:54 | 2265832 css1971
css1971's picture

mmm. Central banks don't have good reputations for timing. Or rather, their point of view is quite different from the rest of the world.

Sat, 03/17/2012 - 18:57 | 2265837 CryingBear
CryingBear's picture

China is screwed if the product they endorsed and advertised to the public goes down in value but I doubt they can keep this up much longer.

 

Sat, 03/17/2012 - 20:42 | 2266076 xela2200
xela2200's picture

The mistake that you are making is that You are thinking like westerner. We are more short term, Chinese think in life times.

Indians also seem to have an interesting take on it too. I was watching a wedding documentary on tv, and these people were wearing gold through out. Then as it turns out that part of the gold is just been passed down, so every generation is getting the benefit of the previous one. In a way they are beating inheritance taxes and transferring wealth to heirs.

Sat, 03/17/2012 - 18:58 | 2265840 Floordawg
Floordawg's picture

Walked by a dozen people today wearing, "WE BUY GOLD" signs in NYC.

I think I need one of those signs.

Sat, 03/17/2012 - 19:07 | 2265854 Dr. Engali
Dr. Engali's picture

I was thinking the same thing. Buy up as much scrap gold on the cheap that I can.

Sat, 03/17/2012 - 19:17 | 2265870 yabyum
yabyum's picture

The guy in the pink gorilla will probably give you 50% of spot....and maybe some ky to go with it. Best to aquire than to sell at this point.

Sat, 03/17/2012 - 19:23 | 2265881 Dr. Engali
Dr. Engali's picture

Shit I won't sell for anything. I was talking about getting myself a sign to buy. I might trade some gold for a 50 cal sniper rifle though.

Sat, 03/17/2012 - 19:29 | 2265896 Floordawg
Floordawg's picture

.50 cal, a gift to ones self that keeps on giving... for the man who has everything.

Sat, 03/17/2012 - 19:54 | 2265961 SgtSchultz
SgtSchultz's picture

How about a 20 mm rifle??

http://www.anzioironworks.com/20MM-TAKE-DOWN-RIFLE.htm

 

Features:

  • 3000 yard range
  • 1600 grain bullet
  • 3300 ft per second
  • Only weighs 39 pounds
  • Takes 20mm Vulcan ammo (percussion primed)
Sat, 03/17/2012 - 20:22 | 2266024 DoChenRollingBearing
DoChenRollingBearing's picture

+ 20 mm

I was going to say something nice about the .338 Lapua shooting flatter than the .50, but you had already raised the stakes!  Nice gun!  What is it supposed to take down?  Bradleys?  Body armor at 2 kms?

Sat, 03/17/2012 - 20:54 | 2266107 Errol
Errol's picture

I'm thinking...at only 39 pounds, it might kick a little...

Sat, 03/17/2012 - 22:12 | 2266284 SgtSchultz
SgtSchultz's picture

I would imagine a sore shoulder would be a given.

Three shots with the Anzio 20mm

Shot goes off at the 51 second mark:

http://www.youtube.com/watch?v=7ft2j6J4NcY

 

Sun, 03/18/2012 - 00:07 | 2266508 Dr. Engali
Dr. Engali's picture

Good Lord that's certainly not a gun you can take to the range and play around with all day. The way it moved him I'd say 10 shots would be pushing it.

Sun, 03/18/2012 - 00:28 | 2266541 Conax
Conax's picture

Wait til you try to buy some ammo for a 20 mm. The 50 caliber is about 6 bucks a round. The next time I'm charged by a bull elephant or mebbe a Bradley fighting vehicle, I'll consider a new 20mm.

Get yourself a .308 (or 5.56) rifle, 12 gauge pump, a .45 auto and a hideout popgun and you are as ready as anybody. Spend the excess money on practice ammo and range time. There ya go.

Sun, 03/18/2012 - 11:30 | 2267062 malikai
malikai's picture

Don't try to act like you didn't get a tingle in the pants when you saw that 20mm fire.

Sun, 03/18/2012 - 13:30 | 2267304 Conax
Conax's picture

I did. Ya got me.

But it isn't something you can sneak under your overcoat.

I like good guns with ammo that can be had as surplus. An important feature is that the dead may have some in their pockets.

Sun, 03/18/2012 - 07:33 | 2266827 RoadKill
RoadKill's picture

I now believe in gun control.

Sun, 03/18/2012 - 08:35 | 2266860 nickt1y
nickt1y's picture

Gun control is hitting what you aimed for.

Sat, 03/17/2012 - 22:04 | 2266255 hadriansnightmare
hadriansnightmare's picture

Make friends with a jeweler.  He sends scrap off to the refiner all the time but calls me when coins come in.  I lease space to him and get great deals about every couple of months.  Scored a double eagle for 1500 bucks when gold was at 1730 and last week a 5 dollar gold for 325.

 

Sat, 03/17/2012 - 19:02 | 2265845 bnbdnb
bnbdnb's picture

So, whats the GLD weekly percent gain on the post Bernanke-testimony-to-congress over the last four years?

Sat, 03/17/2012 - 19:04 | 2265849 mayhem_korner
mayhem_korner's picture

 

 

If I picked up a couple oz in the past week, should I be worried I'm turning into a central bank?  This is concerning to me.

Sat, 03/17/2012 - 19:05 | 2265851 Dr. Engali
Dr. Engali's picture

We have trucks that drive around town now advertising that they will buy your gold. It seems that every other radio commercial is advertising gold buyers. It seems to me that there is a long way to run if retail keeps selling like this.

Sat, 03/17/2012 - 19:09 | 2265856 Hansel
Hansel's picture

I wonder how successful the "We Buy Gold" operations are.  Are there really that many people left selling gold to those outfits?

Sat, 03/17/2012 - 19:11 | 2265860 Dr. Engali
Dr. Engali's picture

My guess is they get it at a pretty good discount then sell it to the dealers. I'm definitely seeing some new players in town.

Sat, 03/17/2012 - 19:15 | 2265867 Hansel
Hansel's picture

I don't question the healthy profit margin; I question the volume of business they are doing.

Sat, 03/17/2012 - 19:20 | 2265877 yabyum
yabyum's picture

They have a host of people in animal costume, and folks waving plackards. Somebody is making some dough.

Sat, 03/17/2012 - 19:38 | 2265910 akak
akak's picture

Or could all these "We Buy Gold" people NOT be making money, and not in it for the money in the first place, but merely acting as a front for the government, to pull almost all available gold out of the public's hands prior to "some event"?

As others here have pointed out, there seem to be FAR too many of them, with FAR too deep pockets for all the excessive advertising they do, for all of them to be actually making money given the relatively thin market upon which they are operating.  Something is definitely fishy about all those gold-buying outfits in the aggregate.

Sat, 03/17/2012 - 19:43 | 2265925 Dr. Engali
Dr. Engali's picture

I had been giving that some thought too that seems pretty logical.

Sat, 03/17/2012 - 21:43 | 2266209 prole
prole's picture

In Flyover country they pay 50-65% of spot to the sheeple (for small quantities) and immediately flip the gold to NY refiners for 97 or 98 of spot. (They only buy in large quantititties) The krafty gold buyer will offer 20% of spot if he smell a sucker walking in the door, and sometimes get it.

In  NYC the average gold buyer will probably offer similar 65% but finding a buyer in NYC to pay you 90% of spot should be easy, which is basically a good deal if speaking about scrap jewelry.

(outside of NYC) anyone who sells to these people is retarded, and anyone who sells to cache4gold.com (for 10-20% of spot value) is brain-dead or hates himself.

There is no coonspiracy, and all the au ends up in NYC

Sat, 03/17/2012 - 22:10 | 2266275 hadriansnightmare
hadriansnightmare's picture

Your number are dead on what my jeweler friend told me.  I was amazed that he gets north of 95% on the scrap he sends out.  He replaced the carpet in his work shop two years ago.  Cut up the carpet, sent it in three cardboard barrels and got back 1800 dollars- full of silver, gold, platinum, nickel...hilarious  As long as the sheeple are selling in droves- there ain't no bubble.

 

Sun, 03/18/2012 - 06:48 | 2266810 prole
prole's picture

I would never lie to my sheeple!

BTW I Forgot to mention that the absolute rip-offs and scams, as if offering 50% of spot isn't rip-off enough-\

the absolute rip-offs and scams like picking your most gulliberal-looking victim and offering them 20% of spot with a straight-as-an-arrow face, exuding friendliness and trustworthiness, exist at a much higher ratio at "gold parties" which should better be called "Totally fvcking idiot parties" because the shiksas who attend these parties are the worlds stupidest people, you literally have no idea how stupid some of these people are and the rip-offs that abound. The buyers in this situation are equally savvy to the dumbness of the victims, buyers saying things like "that's todays price" and tossing the word "spot" into the conversation, but not exactly ever saying you are getting spot.

Even they are no match for the fools who send in their gold by the pound and by the kilo (in aggregate) to cache for gold DOT com. This operation is a rip-off that should be considered at the same scam level as Kenyan princes stealing the presid-- oop, wrong scam I mean nigerian email scams. Criminal rip-off like that. Paying 10 to 20 percent of spot to EVERY CUSTOMER, and they get enough gold to pay for Superbowl ad time. It boggles the mind how much $$ they must be making.

Sat, 03/17/2012 - 19:20 | 2265878 Dr. Engali
Dr. Engali's picture

I would think pretty well. It's not cheap to advertise on radio and we have new players in town. I know people who are struggling to with whether or not to sell their gold. I tell them not to but if they feel they have to then give me a call.

Sat, 03/17/2012 - 19:36 | 2265913 Floordawg
Floordawg's picture

I've stopped to talk with some of these guys. The impression I get is that most people are either strapped for cash and are willing sellers (at any price) or are getting rid of their "out of fashion" jewelry from the 80's. Either way most sellers don't seem to have any idea of golds price, or even care. They have no idea what they are giving away.

Sat, 03/17/2012 - 20:07 | 2265997 akak
akak's picture

.

most sellers don't seem to have any idea of golds price, or even care. They have no idea what they are giving away.

For the most part, the average person today has no idea(s), period.

Sat, 03/17/2012 - 20:47 | 2266087 xela2200
xela2200's picture

Or they see a way out of debt or to buy a new toy by selling a trincket that is laying around the night stand.

Sat, 03/17/2012 - 19:34 | 2265907 HungrySeagull
HungrySeagull's picture

What struggle? Just buy and never sell. One day it will come out alright.

One thing I learned... the more you are spammed by advertising for something, the nearer is the day it all collapses.

Sat, 03/17/2012 - 19:46 | 2265926 Sandoz
Sandoz's picture

OMG central banks are buying, Gold is going to 5k!  Sorry ZH, but this article is a sloppy sales pitch.

You note that Credit Suisse referred to "agressive central bank buying," yet the FT article also states that Credit Suisse sees gold "falling below $1600" due in part to lackluster demand in Asia. Furthermore, the articles quotes a UBS metals strategist as saying, "It's clear that the market trend right now is an unwinding of safe-haven exposures, like gold, and a preference for growth assets."

Also... a "senior gold banker" says "There has been huge interest." A "senior gold banker," c'mon, seriously? Where's this "senior gold banker" from? What's his name?

And what about the fact that these purchases of "significant quantities" have come amidst falling prices. Are they significant only in that they prevented total free fall? Obviously they weren't significant enough to lead to higher prices. Maybe if these CBs keep purchasing "significant quantities" we'll soon see $1300. 

Sat, 03/17/2012 - 19:53 | 2265939 akak
akak's picture

That is all, at best, nothing but short-term noise.

As long as every major Western government (and Eastern ones, too) continue to recklessly pile up the debt in such a grossly unsustainable manner, and monetize it whether openly or by stealth (as they must, and are, and will), the price (and most likely the value) of gold can and will only continue to go higher. 

NOTHING has yet been fixed with the world's failing financial and fiat monetary systems, and yet you think that the price of gold is going to begin to permanently fall?

Sat, 03/17/2012 - 19:57 | 2265973 Sandoz
Sandoz's picture

All I'm saying is that the source artice from FT paints an entirely different picture than what ZH appears to be concluding through cherry picked quotes.

However, now that you mention it, you should realize that your idea about where the price of gold should be is nothing more than a theory. From my personal experience, theories usually leave you holding the bag.

Sat, 03/17/2012 - 20:02 | 2265982 akak
akak's picture

.

However, now that you mention it, you should realize that your idea about where the price of gold should be is nothing more than a theory. From my personal experience, theories usually leave you holding the bag.

No, it is not just a "theory" at all, not unless you are willing to disregard both common sense and several thousand years of monetary history.  Actions have consequences, and out-of-control governmental spending and indebtedness, and central bank monetization of that exponentially-rising debt, are actions that have predictable and inevitable consequences, namely, the debasement of the (fiat) currency.

Sat, 03/17/2012 - 20:16 | 2266013 Sandoz
Sandoz's picture

That's true, and where does gold come in? Your theory is that the value of gold will rise, which may or may not be the case. What happens when every major economy in the world does the same thing? I'm not saying I have an answer, I'm just saying that you should not presume to have the answer lest you lose your shirt. What I do know is that price of gold rises and falls and that its price right now is pretty high in historical terms.

Sat, 03/17/2012 - 20:40 | 2266067 akak
akak's picture

.

Your theory is that the value of gold will rise, which may or may not be the case.

Again, it is NOT a theory --- it is an observation of iron-clad historical fact, which has NEVER seen an exception.  Ignore that at your own peril.

What happens when every major economy in the world does the same thing?

Every major fiat currency is therefore debased and/or collapses in value.

What I do know is that price of gold rises and falls and that its price right now is pretty high in historical terms.

That is merely a reflection of the unprecedented worldwide fiat money creation and governmental debt monetization.  Also, don't forget that gold began this "bull market" from an unprecedentedly low price/value; looking back many decades if not centuries, its current value is not all that unusually high at all.

Sat, 03/17/2012 - 21:57 | 2266238 prole
prole's picture

Sandoz- Goldbug in America is a extreme minority postion. For every one to three gold and silver buying investor(S), there are 97 TO 99 PAPER BELIEVERS, who think "What I do know is that price of gold rises and falls and that its price right now is pretty high in historical terms."

Earlier posts in this thread referenced Indian gold owners who hold the metal through generations (and have never lost ever in history, unless through theft)

We had to overcome the advice of 97% of dumba$$es like you who warn against buying gold. Thank God I didn't listen to your ilk ever.

Apologies for the personal nature insult, but the insult is aimed at all 97% paper-bugs not you.

BTW if the price of gold "rises and falls" could you please let me know when it is going to fall back to 20$?

Sat, 03/17/2012 - 22:00 | 2266247 akak
akak's picture

.

BTW if the price of gold "rises and falls" could you please let me know when it is going to fall back to 20$?

Touche!

Sat, 03/17/2012 - 22:23 | 2266314 prole
prole's picture

heheheh...

BTW I am making a defense for the "long term" holding of the precious metals. Short term nothing would surprise me, though it would hurt my feelings, but I would not be surprised at all if gold went back to 1300 per Sandoz, or even silver back to 5. Silver back to 18 would seem normal to me.

I am not predicting it and I don't short or anything like that I'm not clever enough. Buy and hold, if you are as dumb as me, that is the best you can do.

But if gold goes back to 1300 it's going to really hurt. They say you only hurt the ones you love.

/I mean that all was my plan before the ill-advised ocean kayaking misadventure

Sat, 03/17/2012 - 22:29 | 2266333 Sandoz
Sandoz's picture

I don't care what you do with your money. If you want to buy gold, then go right ahead, there are PM dealer advertisements all over this page, with an article about how gold is going to go up due to all the CB buying....get it? 

Sat, 03/17/2012 - 22:35 | 2266352 akak
akak's picture

I hold identical sentiments towards your investments myself.  It is simply frustrating to hear and read grossly erroneous information and ideas constantly being disseminated in regards to precious metals, fiat currencies, and our inevitable financial and monetary fates.  But that is to be expected, as the VAST majority are ignorant of precious metals and monetary history (purposely so, due to our national brainwashing system, er, "public school system"), and have been and continue to be propagandized by the political and financial establishment into taking precisely the WRONG actions with their savings and investments to protect them from the coming financial and monetary firestorms.

Sat, 03/17/2012 - 22:40 | 2266364 Sandoz
Sandoz's picture

Sounds like you've got gold wrapped up in your whole outlook on life. 

Sat, 03/17/2012 - 23:53 | 2266475 akak
akak's picture

And you have .... what?   Ben Bernanke's word that the US dollar is "sound and strong"?

With thousands of years of monetary history to guide us, and to demonstrate what happens in EACH AND EVERY such case of profligate governments running willy-nilly into debt, it is a no-brainer to hold gold (and silver) at this point --- well, a no-brainer for those who are willing to think for themselves, and who refuse to buy into the government's self-serving propaganda against the precious metals.

So tell us, Sandoz, what are you alternatives regarding savings and investments at this juncture, and just what exactly do you have against gold (which you clearly are against)?  Is it because "it is a sterile investment that does not generate a yield or dividend"?  Is it because "it is a barbarous relic"?  Or maybe even "because you can't eat it"?

Sun, 03/18/2012 - 00:30 | 2266543 Sandoz
Sandoz's picture

I don't have anything against gold except that it's too expensive. If it were $300 I'd be right there with you. To me gold is just another investment, I don't see it as a political/social statement.

Sun, 03/18/2012 - 00:34 | 2266554 akak
akak's picture

To me gold is just another investment, I don't see it as a political/social statement.

Well, if you value your savings at all, you better come to understand its historical role as a lifeboat in a sea of debasing, collapsing goverment-issued fiat currency, and see it as "a political/social statement" --- our out-of-control federal government certainly sees it as exactly that, and so should everyone who is awake and who gives a damn.

Sun, 03/18/2012 - 00:50 | 2266584 Sandoz
Sandoz's picture

I'm not familiar with the historical context you're referring to. Can you elaborate? Are you talking about the 1930's, the Great Depression?

Have you considered the possibility that all this money printing has already been priced into gold?  

If it's inflation you're worried about, why not short treasuries? That seems like a purer way to accomplish your goals. 

Also, I hope you realize that gold is a pretty poor hedge against inflation. What should the price of gold be in inflation adjusted dollars? Get my point?

Sun, 03/18/2012 - 01:19 | 2266634 akak
akak's picture

 

I'm not familiar with the historical context you're referring to. Can you elaborate? Are you talking about the 1930's, the Great Depression?
Please stop being so provincial, and look beyond the borders of the USA --- gold has preserved savings during inflationary upheavals and monetary collapses HUNDREDS of times in just the last century, and in the majority (if not most) of the nations of the world --- in some of them multiple times.  Perhaps my former hobby of coin collecting inherently taught me lessons about monetary debasements and collapses in which most Americans' noses have not (yet) been rubbed --- but they increasingly are now, and will be much more.
Have you considered the possibility that all this money printing has already been priced into gold?
That is a ludicrous statement --- do YOU believe you know when all the current debt monetization is going to end, and down to what levels our fiat currenicies are going to be driven as a result?  I don't --- but you can be sure that it will be MUCH beyond most people's imaginations today.  The vast majority of Americans have for many years almost prided themselves on their ignorance of history, even their own; well, that ignorance is going to bite them in the ass in a major way over the next five to ten years.
If it's inflation you're worried about, why not short treasuries?
To be paid in what exactly ---- a debasing/collapsing fiat currency?  This would be like jumping from the Titanic directly into the sea in order to avoid the fate of going down with the ship --- either way, you are dead.  Plus, I can easily imagine a time when the shorting of US Treasuries will be considered "unpatriotic" and then shortly thereafter an act of "financial terrorism".  Don't laugh --- we have seen worse already.
Also, I hope you realize that gold is a pretty poor hedge against inflation.
According to whom?  That is an absurd statement on the face of it --- by that "logic", the value of gold would have FALLEN consistently over the decades of fiat currency debasement, and that most certainly has NOT happened, nor could it logically be expected to have done so.  Where did you come up with this one?
Sun, 03/18/2012 - 01:53 | 2266663 Sandoz
Sandoz's picture

It doesn't take much to look at a chart and see that gold hasn't preserved savings during inflationary times. Inflation's been on a virtual non-stop climb since the 1940s while gold has had more than its fair share of ups and downs. If a person had bought gold at the height of the 1980 peak they would still be in the red in inflation adjusted terms. That certainly doesn't sound like wealth preservation to me. 

Sun, 03/18/2012 - 02:27 | 2266681 akak
akak's picture

You know, I have been giving you the benefit of the doubt, but your specious anti-gold arguments have gone from veing merely naive to verging on disingenuous.

What the Hell are you talking about, "gold hasn't preserved savings during inflationary times"?  It has done EXACTLY that, in every nation and in virtually every period of fiat currency debasement one cares to examine --- except of course the ONE favorite example the anti-gold propagandists always love to trot out, the period between 1980 and 2001 in the USA.  So what?  Why don't you broaden your horizon and look at the BIG PICTURE --- say, from 1950 to today?  Or from 1900 to today?  Or from 2000 BC to today?  In each of those cases, gold held its value.  Your disingenuous argument is based on cherry-picking a particular period and trying to discredit gold by measuring it from an extreme price peak to an extreme price low.  That is called anecdotal data, and it means nothing.

Inflation's been on a virtual non-stop climb since the 1940s while gold has had more than its fair share of ups and downs.

And gold has been on a virtual non-stop climb sine the 1940s as well --- what's the problem?  And did you ever consider all the nations which have experienced currency collapses, high inflations or hyperinflations since the 1940s, in which those who held gold managed to preserve their savings while those who held fiat currency were ruined?

If a person had bought gold at the height of the 1980 peak they would still be in the red in inflation adjusted terms.

And if I were standing on Tagish Lake in the Yukon on January 18th, 2000, I would have been hit by a meteorite.

Cherry-picking an extreme value and then trying to make a general argument based on a highly specific and localized datum is the sign of a weak argument and a dishonest arguer.

Sun, 03/18/2012 - 02:39 | 2266690 Sandoz
Sandoz's picture

OK, lets take 1934 to 1970...oops, that doesn't work either. So we've got 1934-1970 and basically 1973 or so to 2003. That covers 66 years of wealth destruction in a 78 year timeframe. I'm sure there are countless other examples, but 66 out of 78 years should suffice shouldn't it? Get real man. 

Sun, 03/18/2012 - 02:48 | 2266698 akak
akak's picture

So what's your point? Are you trying to claim that gold did NOT hold its value between 1973 and today?  I utterly fail to see what you are trying to say above.

Or are you trying to imply that the artificially low price of gold between 1934 and 1971, due to the woefully flawed and highly manipulative Bretton Woods monetary system, was somehow the "fault" of gold and not that of the corrupt and criminal US government, desperately trying to maintain a fraudulent and unsustainable dollar-based, fixed-rate world monetary system?

You keep cherry-picking highly unrepresentative data points to try to make your anti-gold case --- at this point, it is pretty clear to me that you are a dishonest, anti-gold, pro-Establishment troll pumping disinformation to further a  malicious pro-fiat agenda.

Sun, 03/18/2012 - 02:55 | 2266703 Sandoz
Sandoz's picture

Go look up inflation adjusted gold prices. The data speaks for itself. Just as your character attack and name-calling speaks for itself. 

Sun, 03/18/2012 - 04:04 | 2266707 akak
akak's picture

So, what, are you trying to say that gold is CHEAPER today, in real terms, than it was at almost any point in the past?  If so, you are an egregious liar.

Go look up inflation adjusted gold prices. The data speaks for itself.

I have, and it DOES speak for itself --- gold has held its value for MILLENIA, with minor fluctuations, of course.

Your laughable anti-gold arguments are full of shit, you disgusting troll.

Yes, I looked up your ZH record, and the ONLY comments you have ever posted here have been to attack, ridicule and attempt to discredit gold, gold buyers and gold holders.  As I suspected, you are nothing but a dishonest troll, and in light of having disingenuously strung me along as far as you have when I was all the while posting in good faith, I find you utterly contemptible.

Sun, 03/18/2012 - 06:30 | 2266805 prole
prole's picture

lol it starts with reasonable discourse and ends with calling Sandoz a disgusting troll!

I agree of course. I suppose these establishment trolls know they are never going to sway the

true believers in the precious, but they probably are effective if some newbies or potential new gold buyers are just browsing the web and considering buying some gold, considering both viewpoints (goldbug and paperbug) reading a few posts they see no unanimous viewpoiont even on a goldbug blog like ZH.  I would assume he is getting paid otherwise he's just an idiot proving it here with every post.  If someone were not getting paid what possible motive (would a paperbug)  have to be on a chat board and informational blog like ZH which holds a minority viewpoint  (goldbugs)

Assuming you are getting paid to troll Sandoz, I conclude you are a savvy chap, stuffing money in your pocket, so you must laugh at us who ultimately pay you. Do you get full federal benefits package? like the gold-buyer who offers 20% of the value of gold to walk-in customers-- he is getting paid also, but I find what they do to be slimey.

If you are not getting paid, which I find highly unlikely, you are just a retard.

Sun, 03/18/2012 - 03:52 | 2266734 centipede
centipede's picture

Actually Sandoz, you are dead wrong. Just check CPI since 1914 when the gold price was 20$ and the FED started to print fiat not backed by gold. You will find out that gold price is more than 3 times higher than it should be according to CPI2012 / CPI1914. That makes gold a very good hedge against inflation.

And I can answer another question of yours. How do we know that gold is still undervalued to fiat. Just check historical monetary base (St. Luis FED) and you will find out that in 1918 when gold was still 20$ it was 4.8 bil and now monetary base is 2.7 tril and rising. The world stock of gold has roughly quadrupled since 1918 so the price of gold should be according to that about 2700$ now and higher soon after another dose of fiat from helicopter Ben.

Sun, 03/18/2012 - 04:48 | 2266759 Sandoz
Sandoz's picture

My point is that there are several multi-year and even multi-decade periods where gold did not keep up with inflation. That's a fact. 

Actually, investing in a DOW index fund would be a better inflation hedge. 

By the way, you can add 1913-1931 to the list of periods where gold did not keep up with inflation. 

Sun, 03/18/2012 - 05:18 | 2266765 akak
akak's picture

And you can fuck off and go to Hell, you dishonest and contemptible troll.

My point is that there are several multi-year and even multi-decade periods where gold did not keep up with inflation. That's a fact.

That is a flat-out fucking LIE!  It is ONLY true in one highly selective instance: that of a person who bought gold at its very peak in early 1980 and held onto that gold for 20 years.  For those who bought even ONE YEAR before that price peak in 1980, the situation is radically different, and not even remotely as bad as you suggest.  For those who bought gold 18 months or more before that 1980 price peak, they actually showed a profit over most of the following 20 years!  That bullshit lie of yours has got to stop!

Furthermore, MY point is that overall, stocks have gone nowhere but DOWN in the last 12 years --- and that is a fact.  More than that, with the giant and growing federal budget deficits, governmental debt, and the monetization of that debt, capital is thereby being destroyed along with the fiat currency, heralding a long-term shrinking economy and therefore, falling stock values as well.  Bernanke and the PPT can manipulate and play their hidden games to prop up the stock markets all they want, but their efforts will soon come to grief, and all be for naught.

Have fun with all those paper dollars when your savings disappear in the hellfire of currency debasement and collapse --- I will be there laughing at you, and at the pain and bewildered grief of all the disingenuous anti-gold trolls like you.

We are all going to suffer greatly in the coming fiat currency collapse, but I sincerely hope you suffer more than most.

Sun, 03/18/2012 - 11:55 | 2267107 ljag
ljag's picture

OK....lets put a stop to this nonsense. Investing in a DOW index fund......means you bought a 'fund'.......with what? Dollars? Define dollars, Mr. Sandoz. Is it the note with 'silver certificate' printed at the top or is it the one that says 'federal reserve note'? You know.......the FED....that agust entity that said we the people of the USA were/are too stupid to manage their money so we would be better off letting the FED do it..............at 6%. What a joke you are, sir.

Sun, 03/18/2012 - 14:09 | 2267383 centipede
centipede's picture

Well, I think that you kind of modified "your point", didn't you? :-) Moreover it is hard to find an investment that kept up with inflation all the time. Had somebody bought DOW index at the end of 1929 he would have had to wait more than 20 years to catch up with inflation. In 1967 it would be more than 15 years. And in the case of japanese Nikkei index bought in 1990 you would be losing money even today big time.

But I have to agree that DOW has been a better inflation hedge so far. That's a fact. That has not been the case last 12 years though and I suspect that due to the huge debt burden and with that associated economic hardship DOW is not going to perform in the years to come. On the other hand gold has still some room to grow to catch up with the already printed paper fiat and with the prospect of all those inevitable QEs in the future.

Sun, 03/18/2012 - 16:39 | 2267710 BooMushroom
BooMushroom's picture

http://goldnews.bullionvault.com/Goldbug/gold_buying/zimbabwe_increases_...

The central bank of Zimbabwe has increased the price of gold by a massive 757 per cent in order to cover rising production costs and curb smuggling, Thomson Financial reports.

Gideon Gono, the bank's governor, said: "With immediate effect, the support price has been increased from the current 350,000 Zimbabwe dollars per gram ($1,400 on the official market, but $2 on the parallel market) to three million Zimbabwe dollars per gram.

"As a country, our gold production levels have lately fallen victim to escalating costs as well as elements of indiscipline, sidemarketing and smuggling."

An economist said the previous price made no sense, but added that production of gold in the African country - which has fallen rapidly in recent months - is not likely to increase quickly.

"Despite the price review this does not mean production will suddenly increase since the gold mining industry does not have control in the supply of electricity," he said.

Low production levels have been blamed on factors such as a lack of vital materials such as cyanide, as well as people smuggling the yellow metal out of the country where it can be sold at a higher price.

The Zimbabwe Herald reported that three illegal gold dealers were arrested in Kadoma last week, after they were caught with around 270 grams of the metal.
Goldbug, 26 Jul '07

Sun, 03/18/2012 - 01:20 | 2266635 prole
prole's picture

Gold my frenemy is the only hedge against inflation.

Could you please esplane for me: What should the price of dollars be in inflation adjusted dollars? I do not get your point so please help me understand this. Why was gold 20 dollars an ounce when my father was born, and now it's 1600 dollars an ounce? Are dollars some kind of joke?

And since holding gold is an extreme minority position, why would you bother throwing water on us, seeing as we are so few anyway?
(Not that we care what you say, we have been ignoring the self-defeating advice of the paperbugs our entire lives)

Sun, 03/18/2012 - 04:00 | 2266738 centipede
centipede's picture

Gold price is now more than 3 fold higher than it should be in the case of only catching up with inflatiaon. It is trivial to find out from historical CPI numbers. Sanzo has absolutly no idea what he is talking about. Gold is an excellent hedge against inflation.

Sun, 03/18/2012 - 04:06 | 2266740 akak
akak's picture

Oh, this Sandoz bastard knows what he is talking about all right -- he is a troll on a mission to try to discredit gold, as I now find he has been in many other threads as well.  The only thing is, all the facts deny his specious case against gold, and support those of his opponents.

 

Sun, 03/18/2012 - 05:58 | 2266788 ffart
ffart's picture

Measuring inflation in terms of CPI numbers = tail wagging the dog

Sun, 03/18/2012 - 07:14 | 2266816 prole
prole's picture

I think I agree with you fartman. IMHO CPI numbers are a joke on the scale of a Sandoz post. I compare the price of gold through the years against things like the price of a car, the price of  little paper-portrait that says "ONE" on it, the price of a house, the price of a hundred acres of land, and the price of a "undetermined period of time" in Pattaya.

My conclusion is that, all those things go way up and way down against gold over time, but essentially remain the same inside the up/down. Except for the paper-portraits, they just go down/down against gold not much up/down.

As for the research in Thailand, yes it is expensive and time-consuming, but one must never waiver on one's quest musn't he?

Sun, 03/18/2012 - 17:39 | 2267813 BooMushroom
BooMushroom's picture

Why was gold 20 dollars an ounce when my father was born, and now it's 1600 dollars an ounce? Are dollars some kind of joke?

Yes. In 1912 bread was 5.6 cents per loaf, for handmade, organic, whole wheat. Now it's two or three bucks. You do the math.

Sat, 03/17/2012 - 20:41 | 2266072 DoChenRollingBearing
DoChenRollingBearing's picture

@ Sandoz

You ain´t seen nothin´ yet.

fofoa.blogspot.com

His is just a theory too.  But, I think he´s got it...  Be prepared for a long read.  I suggest starting in October 2009.  I believe that akak is NOT on board with FOFOA, but the three of us believe Gold is the King of investments now...

Sat, 03/17/2012 - 20:53 | 2266100 akak
akak's picture

DoChen,

My mind remains open to FOFOA and his Freegold hypothesis, but let's say that I have reservations about his utter certainty that events will play out precisely as he outlines.  My biggest stumbling block with him, to be honest, is his condoning if not actual encouragement of the continued and future use of government-issued fiat currency --- I believe that we need to, and should, entirely separate government from money altogether, and from ANY currency-issuing function, leaving it to the free market instead.

Sat, 03/17/2012 - 21:00 | 2266120 DoChenRollingBearing
DoChenRollingBearing's picture

Yeah, he IS pretty certain!  I am NOT certain.

But a Bearing with only two and a half working neurons (ZH-er ¨sgt_doom¨ gave me that one) likes his logical case.  Every time I have found a problem with his ideas, I would email him with my my ¨problem.¨  He always stroked it back over the next like a pro...

Sat, 03/17/2012 - 21:04 | 2266126 Motley Fool
Motley Fool's picture

akak

hmm. I do not see encouragement as such. What I see is recognition of reality, in that government theft will occur one way or another because that is what some people want, and that it is better for that loss of value to be shown in a continuous incremental change in the price of gold, than for the government to cover it with lies and cause a huge adjustment to be required concurrent with a economic collapse, similar to the one we are heading towards.

 

The important takeaway being that some part of society will always demand that 'somebody in power' intervene to 'cure' their misfortune...whether that misfortune is due to their laziness, or eg. the collapse of a bank ( with no backing) and the loss of their savings, or a natural disaster, etc

Sat, 03/17/2012 - 21:02 | 2266127 Motley Fool
Motley Fool's picture

.

Sat, 03/17/2012 - 19:45 | 2265931 gwar5
gwar5's picture

Von Geyerez mentioned what Marc Faber said, which is to direct our attention to the diminishing returns of stimulus and credit growth.

 

Back in 1870, V.G. says $1 of credit expansion (real money) created an astounding $5 worth of economic growth.  Today, it creates just $ .06, and going negative (if not already). More, V.G. says the world created $120 Trillion worth of money since 2000, $80 Trillion to $200 Trillion, and we basically have nothing to show for it.

V.G. is bullish gold, says downdrafts will soon be seen as mere blips.

 

Sat, 03/17/2012 - 19:45 | 2265934 firstdivision
firstdivision's picture

Too bad for the US that the banks are the ones that end up with the gold.

Sat, 03/17/2012 - 19:49 | 2265945 HungrySeagull
HungrySeagull's picture

They are "Ginning up" (as we say here in the south) the paper shares of gold and silver so fast and confusing everyone.

The stark reality is this:

Unless you are a OWNER in POSSESSION of said gold and/or Silver etc in your home (Or lost, sunk etc) you own nothing and spinning money isnt going to make your life any better.

The inferno will come one day and it's going to really light things up.

Sat, 03/17/2012 - 19:57 | 2265970 CryingBear
CryingBear's picture

What if the U.S. says gold is $35 again?

Sat, 03/17/2012 - 20:55 | 2265991 akak
akak's picture

They get several hundred million middle fingers, and little more (except even more contempt than they already engender).

Sat, 03/17/2012 - 20:08 | 2265999 dogbreath
dogbreath's picture

what do most people do when they hear a joke?    laugh of course

Sat, 03/17/2012 - 20:54 | 2266108 xela2200
xela2200's picture

Then I will ask them to sell me all they got.

Sat, 03/17/2012 - 22:04 | 2266258 prole
prole's picture

"What if the U.S. says gold is $35 again?"

You can feel free to sell someone your gold for 35, but you will be the only one doing so. The only way to make gold 35$ an ounce is to SELL gold for 35 dollars an ounce. I welcome the day someone, anyone, does this, and I will be first in line benny bux in hand.

If you know anyone in power please make it happen.

Sat, 03/17/2012 - 22:34 | 2266348 WmMcK
WmMcK's picture

You mean with the blue (100:1) money? $3500 benny bux will still sound low in the not too distant future.

Sat, 03/17/2012 - 20:13 | 2266008 uno
uno's picture

anyone see Carter Worth trashing gold yesterday on Options Action, said the 150 dma is pointing down and it's going to go all Nasdaq post bubble.  Then on the Currency show Peter Schiff had to tolerate the muppets attacking gold.  Full court press from CNBS.

Sat, 03/17/2012 - 20:47 | 2266089 disabledvet
disabledvet's picture

he's just reading the charts...not "trashing gold." the problem with all the high prices (allowed by government no less!) is that scarcity issues are starting crop up everywhere. High taxes, high oil prices, huge state, unfunded wars: made to order shortages and price spikes "as all the other commodities start catching up with gold."

Sat, 03/17/2012 - 21:30 | 2266179 akak
akak's picture

You evidently have a far stronger stomach than I.

By now, I cannot even bear to hear all the bullshit and gross propaganda from those court jesters and central bankster lackies even for a minute

Sat, 03/17/2012 - 20:13 | 2266010 dogbreath
dogbreath's picture

That the central banks are stocking up on gold is extremely bullish.   Why would they.   If they have gold when the reset comes it doesn't matter what currency they used to issue be it, euro, dollar, yen, whatever   When the rest comes they will have real researves to back the new euro, new dollar, new yen, new whatever.     BTFD

Sat, 03/17/2012 - 20:29 | 2266040 luna_man
luna_man's picture

 

 

Tell me, MY MAIN MAN...Are they (CRIMINALS), really allowing China to buy up our precious, fort knox gold?...If so, it's time to take up arms!

IT'S OUR GOLD!...THIS AIN'T GREECE!...Just 'cause most Americans are broke and unemployed, doesn't give the CRIMINALS the right to sell our fort knox gold to China or any other country!...Right?

Sat, 03/17/2012 - 22:08 | 2266268 prole
prole's picture

I have long held that it does not matter if fort knox gold is real or vanished, because regardless, it is held by the natural enemies of the American sheople, held by people who are not even American nor loyal to America.

It's like sheep before they are slaughtered and prepared for a feast, arguing about the conditions of the farmers tractors.

Sat, 03/17/2012 - 20:51 | 2266094 ekm
ekm's picture

I love that Bernake link each time is played.

Seeing the "I saw the light" Greenspan about face, I've come to the following conclusion:

- Becoming a voting member of the Fed debilitates your mind

- Becoming a chairman of the Fed makes you utter psychopath as long as you own the position.

The fact that Greenspan is speaking the reality now proves my "temporary psychophathy" thesis. Anybody remember Arnold Schwarzeneger saying that he "used to be addicted to being governor"?

 

Sat, 03/17/2012 - 21:01 | 2266124 devo
devo's picture

Remember when that 999 pizza man said Greenspan was a great Fed Chairman?

Comedy gold.

Sat, 03/17/2012 - 21:15 | 2266132 ekm
ekm's picture

I read your post too fast. Thought you talked about a commercial.

I know what you mean and yes it is gold.

Editing my post again. The more I think about your Cain-Greenspan metaphor the more it impresses me.

Sun, 03/18/2012 - 00:36 | 2266555 Yen Cross
Yen Cross's picture

 tHOSE Darn cania`dians?

Sat, 03/17/2012 - 20:49 | 2266095 eddiebe
eddiebe's picture

I would be curious to know what the BIS's interests are in buying up gold and what constitutes their membership.Looks like the bank of bankers is plenty interested in that ancient relic even publicly as of late.

The beast will not go down without a fight, that's for sure and maybe it won't, but is there really any other game? They say that money is the root of all evil, but if there is any money that can be said to be noble, it surely has to be gold.

Sat, 03/17/2012 - 20:51 | 2266097 devo
devo's picture

It's hilarious people would be afraid of a drop in (dollar) price more than the dollar itself.

Sat, 03/17/2012 - 20:52 | 2266101 toadold
toadold's picture

Let me take off my tinfoil for a minute.  HooooKay, whe say Central Banks are purchasing gold and speculate as to why.  Well I'm suspicious that whoever is authorizing the purchase of gold by the bank is not doing it for alturistic reasons.  A group is planning to profit from it some how.  So I kind of wonder where does the gold that the "central" bank purchae ends up?  It would be nice if they were planning to have something to back up a currency but would they do something that helpful? Where's the pay out for the people who run the banks, their families and their freinds??? 

Sat, 03/17/2012 - 21:02 | 2266128 ekm
ekm's picture

I just read on another blog that one of the holdouts of the greek debt is the Norwegian Sovereign Wealth Fund. Their reasoning is that since ECB gets a good deal, they want a good deal also. 

Can ZH confirm this? It looks big.

Sun, 03/18/2012 - 00:38 | 2266559 Yen Cross
Yen Cross's picture

 Still buying the 200sma usd/cad?

Sat, 03/17/2012 - 21:27 | 2266168 digalert
digalert's picture

2005 hmmm,

Mr. Bernank, you are a lying bastard!

2004 FBI warns "Rampant fraud","epidemic" of financial crimes in the mortgage industry. You, Bernank and all your theiving bastard bankster buddies, with bought and paid for government knew it!

http://articles.cnn.com/2004-09-17/justice/mortgage.fraud_1_mortgage-fra...

 

Sat, 03/17/2012 - 21:48 | 2266219 Jim B
Jim B's picture

Black Swans don't  exist! LOL

 

The Chairman Emperor has no clothes! 

Sat, 03/17/2012 - 21:56 | 2266230 Gunther
Gunther's picture

The BIS buys some 5 tons of gold for other central banks in a week. That is less then one day of mining output. With gold being under 1700 for almost two weeks the number sounds not important. To compare, in the supposedly physical London trading the average daily volume was 713 tons a day in January, the last published data.
Aggressive buying of 5 tons does not make sense in this context, either the buying was much bigger or not aggressive at all.

Sat, 03/17/2012 - 22:04 | 2266254 Venerability
Venerability's picture

There is now an Idiot Piece out at Seeking Alpha that in essence says the entire model of Exploration Companies is not a valid one.

No, I am not making this up. And the last time anybody on the Short Side DARED to broadcast so utterly ridiculous an article was at least fifteen years ago, before the Sea Change that occurred with Washington Agreements One and Two - or a bit earlier than that, actually, with the 1997 turnover of Hong Kong and the beginning of the Modern Gold Bull Market.

So either 15 years of history and every Gold Bull on the planet has suddenly evaporated over a period of a few short days.

Or this is one more headfake in the series of headfakes we get every two or three months in this sector.

Technical Analysis of Propaganda signals the latter - strongly this time.

On a purely mechanical level, for four years now, the Ninnies have simply been unable to sustain any sort of general market rally without "permitting" the pesky Gold and Silver stocks to join in, as well as the Brent stocks, the auto stocks, the heavy industrials, the Loonie, the Aussie, the other Resource Currencies, and even the Euro - no matter how much they hate it - and the Yen - no matter how much it is manipulated.

I happen to believe the various PPTs still want to stage a normal Spring Rally into the beginning of May.

And they are just not going to be allowed to do it while focusing so much negative firepower on the Miner ETFs and via them, on the Miners. 

There's a Squelch Suspicions element to all this, too, at this point. The XAU, TSX Gold and HUI are now at multidecade! - maybe multicentury - low ratios to the underlying metals.

That gets people seriously wondering - I am already - whether Van Eck and other administrators of Miner ETFs might not be in some sort of serious difficulty, a la the Jefferies and Harris rumors after the MF Global collapse.

I'd say at this point, every ETF administrator or ETF supporter in the bunch should very much WANT the Miners to reverse course upwards again, before market participants around the world begin to clamor for answers. 

 

Sun, 03/18/2012 - 00:47 | 2266577 Yen Cross
Yen Cross's picture

 Proud Seeking Alpha Member.

Sat, 03/17/2012 - 22:15 | 2266291 WilliamShatner
WilliamShatner's picture

I just finished listening to Jim Puplava's weekend show.

Not sure how, or if it's possible, to contact Tyler here, but I think he should sticky post a link to the discussion Jim had with Ted Butler on silver manipulation.

http://www.financialsense.com/financial-sense-newshour/big-picture/2012/...

 

Very well worth listening to.

Sat, 03/17/2012 - 23:32 | 2266461 digalert
digalert's picture

+1

Good interview, reinforced my belief in silver eagles, keep stacking. I'm not looking to get rich, be nice, it's about wealth preservation.

BTFD

Crash JPM buy silver

Silver Liberation Army

Contact Bart Chilton, raise hell

Sat, 03/17/2012 - 22:26 | 2266322 Cadavre
Cadavre's picture

It ain't dat complicated, or is it?

From de perception here it seem they just be running de old plain vanilla run of de mill expirey date short squeeze.

Datz all - or de pont missed?

They be dumping their inedible paper and hungry for de "real" food dis monday.

Given the school boyish petty coat pirate sophomoric mentality and the obviousness of their oligarchical-fascist shenanigans dey been a stinking da commons up with us with for de last decade, at leaeteses, or so, weze gotz to knows a) we have no idea what our gold reserves are b) we have no idea what the quality of our claimed gold reserves is b) and that a reckoning demon rides to this moment on a fast horse as sovereigns repatriate their gold trusted to low iodine hand puppets , like our very famous Teeny Weeny Turbo Tim.

Look at M2. Look at the alleged physical gold inventory. Gold, if it be gold, is cheap. When the sovereigns back their trucks up to the NYC FED's shipping dock, you know dey gonna being doing a most thorough assay and be carrying a big bag of dem tungsten sniffing multi-meters. I mean, it ain't like dose euro assay guys eat a turd when you tell `em it be choclate, Dey ain't dem gullible merikons sucking the pimply saggy twin breastesses of evil and freedom hater al kada wmd still hidden 3 zillion miles under the sands of Iraq.

Anybody here be interested in an opportunity as an "Instant Water" Franchisee. Ain't got many left. Call while supplies last. It's "Change You Can Believe In"!

Bullion gold is overstated. Tungsten paper weight bars are understated. What it mean? It mean go buy some more silver bullion - screw the collector bling - bullion can be had - and if you be buying .5K to 1K, you can get it from some dealers below market (they make da real fat margins off the shiny coin shoopers).

Time Jersey Shore Bi Polar Nose Job Bitchez "Special Edition Remix" (i only saw it twice before - after that - i'll replay de super bowl vide and relive what i can remember of that that Madison Avenue glory of a self made macho guy bling queen - but i haven't watched or recorded de super bowl for years - i know - i just pretend it be real and it be pure - except for the msg. aluminum dichlorate, pcvs, omega 6 fatty acid, pink slime, Millie Vanillie, chromium 3, yada yada yada  - fuk dat due diligence crap  - time to live dangerously).

Sun, 03/18/2012 - 07:36 | 2266830 JoBob
JoBob's picture

Cadavre: very poorly written.

Sun, 03/18/2012 - 09:34 | 2266912 prole
prole's picture

Technically true, but this is probably only concerning this series of cadaver posts only, and I excuse these poor posts as being due to:

A- Sandoz/Sunsteen hijacked his ZH account and popped roofies prior to maliciously posting

B- Some other similar explanation

I am sure cadaver will get back on his game shortly (his posts are usually plus alpha)

Sun, 03/18/2012 - 16:24 | 2267683 Cadavre
Cadavre's picture

Please accept my sincerest appology - can only say: guilty, but with an explanation: heavy derivative code hashes, hard deadlines and sleep deprivation (maybe wal mart been cutting the ginseng with baby laxatives - either that - or my membranes ginseng receptors need a visit from the roto-rooter man),

Guug "Forward pricing implied volatility" for the meat of it all  if ya want.

Can synthesize options across deltas for a given intra-day play.

However, kludging the synthesis across theta range is a tad hairier than hoped.

Short story: Synthesize means synthesizing a strike price for expirations on a market chain, and then interpolating (slope interpolation works but de cubic spline guy be  tighter) off the market ivs of the market strikes corresponding to the synthesized strikes,

Two basic hash humps:

SEX: hashes a Stock Equivalent Strike

XES: (or excess) hashes a Strike Equivalent Stock

Was frustrated when some of the interpolated IVs were off more than a nickel to the [actual] market iv - But then happy cause it didn't matter - the synthesized nickel off "iv" forward priced the option inside the market bid ask. Back tested intra-day chains and the delta forward stuff for intra-day OTM->ATM->ITM; and ATM->OTM->ITM; and ITM->ATM->OTM; scenarios. Might bear nutritional fruit.

Was amazed to learn that the synthesized iv's for near the money trades could be off the actual market iv's by 10 - 20 cents - and yet - the synthesized option price always landed inside the market bid ask.

That only burned 18 months of candle.

Working the the theta synthesis to synthesize forward spots out to expirey ain't been as easy as hoped.

If anyone has contact info they can share for Emanuel Derman - slam it back to me!  Thinking he can reduce the number of dead ends I be having to sniff out.

Why is it when we look for a misplaced an item or look for an item hiding in an unknown location - it always be found in the last place we be looking?

I be better after a little sleep and flush out the case of beer imbibed at the titty bar last night.

PS - Can't wait to hear who the diebold picked in Puerto Rico. Our Remarkable Turnaround once wall flower now turned queen, the Sanitarium say Ricans are jus too damn addicted to porn -shit - who with a pair ain't.  Dat like sayong people are addicted to air - A Sanitarium face on the Republics headstone guessing is just as good as Alfred E Newman's. History will be gentle to us and blame our bling addiction on a CSPAN idiot.

Saw the palm reader, Madam Rue, yesterday - she said quit fretting about Iran and Syria - it be noise to cover the real play being scripted by the DC Bathhouse Crowd  for Egypt.

Sat, 03/17/2012 - 22:39 | 2266363 Dermasolarapate...
Dermasolarapaterraphatrima's picture

Gold buying (and refusing to sell thwt they have in inventory) has reached a fever pitch by Central Banks ever since India grabbed tons of gold a while back...then Russia...then Sri Lanka...then China...Lithuania....and so on...it never stops now....Grab ...Grab..Grab!.

What a Bunch of Barbarians!

Sat, 03/17/2012 - 22:47 | 2266381 toadold
toadold's picture

http://www.ebullionguide.com/price-chart-gold-last-5-years.aspx

http://www.kitco.com/charts/popup/au3650nyb.html

I suspect that there just might possibly be a trend.  If we get a run like the 1980s when gold hit $800 then if adjusted for inflation then your looking at a possible $5000???

 

Sat, 03/17/2012 - 23:03 | 2266418 WilliamShatner
WilliamShatner's picture

First chart reminds of something I've noticed and have talked about before.

The price of gold seems to double every four years.

 

Example:

Look at the POG over the span of the year of 2002... it's average was, roughly, 300 for the year, give or take a few bucks.

Look at the POG for 2006... roughly 600 on average for the year.

Same thing for 2010... about 1200 for the year.

 

You can take almost any 4 year time frame and get almost the same result....

2000-2004-2008-2012

2001-2005-2009

 

The point being, if this trend continues you are looking at 2000 gold by next year and 2400 gold by 2014.

An average 4 year return of 25%.

 

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