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    Here’s a question that might have you pondering: Is gold a commodity? More importantly, are we doing a disservice to the gold industry by calling gold a commodity? These may sound like silly...

Rumor Meet News: S&P To Put All 17 Euro Nations On Downgrade Watch

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Mon, 12/05/2011 - 16:10 | 1947896 greased up deaf guy
greased up deaf guy's picture

nobody could have seen this coming.  i'm shocked.  SHOCKED.  lol

Mon, 12/05/2011 - 16:10 | 1947910 Pladizow
Pladizow's picture

Sha na na na na......

Mon, 12/05/2011 - 16:19 | 1947959 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Aaannnd, third leg down underway, look for the move to go under even for the day, slight dead bounce to finish even at the close.  Your Algo Market at work, ladies and gentlemen.

Mon, 12/05/2011 - 16:20 | 1947967 CClarity
CClarity's picture

And gold is down why?  Liquidating to cover what?

Mon, 12/05/2011 - 16:22 | 1947973 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Central Banks leased gold to free up their asset sheets, then they leverage the cash 10 to 1 to create liquidity. 

Leasing gold quells demand, dropping the price.

Mon, 12/05/2011 - 16:23 | 1947986 Chris Jusset
Chris Jusset's picture


Mon, 12/05/2011 - 16:24 | 1947992 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Today was the easiest trading day of the year.  Drinks on me.

Mon, 12/05/2011 - 16:27 | 1948008 CClarity
CClarity's picture

Thank you and congrats!

Mon, 12/05/2011 - 16:38 | 1948058 distopiandreamboy
distopiandreamboy's picture

It seems at least 2 people are recovering alcoholics.

Mon, 12/05/2011 - 16:41 | 1948068 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Just like love, once is forever

Mon, 12/05/2011 - 16:51 | 1948118 WonderDawg
WonderDawg's picture

More than two in here. I'll have nice cup of Columbian java and strike a match.

Mon, 12/05/2011 - 17:02 | 1948188 JohnG
JohnG's picture

Why "recover??"

Mon, 12/05/2011 - 17:45 | 1948379 youngman
youngman's picture

Rehab is for quitters...

Mon, 12/05/2011 - 17:52 | 1948422 WonderDawg
WonderDawg's picture

If your choices are recover or die, which mine were, recovery seems like a good choice.

Mon, 12/05/2011 - 18:36 | 1948599 knukles
knukles's picture

...sometimes quickly, sometimes slowly, but they always materialize if we work for them...

Mon, 12/05/2011 - 22:56 | 1949484 WonderDawg
WonderDawg's picture

Amen, brother.

Mon, 12/05/2011 - 21:25 | 1949171 Hulk
Hulk's picture

Welcome back!

Mon, 12/05/2011 - 22:58 | 1949493 WonderDawg
WonderDawg's picture

Thanks, Hulk. It's been a while now, but the memories are still fresh. A clear mind is going to come in handy in the days ahead.

Mon, 12/05/2011 - 16:47 | 1948092 billhilly
billhilly's picture

Glad for you !

My fresh shorts, MS and FMCN are trading near their highs, shit !  WTF. All red today for me.

Speaking of which, my ex-wife's maiden name was Allred.  Ah, ghosts of losing trades' past.  Such is life.

Mon, 12/05/2011 - 16:50 | 1948108 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

So the part of the trade that I outlined that doesn't work is shorting financials because they are the one's shorting gold on the way down.  They know the trade too. 

But they will get crushed from here on down to Dow 11,500 so I would load up here if I were you.

Mon, 12/05/2011 - 16:39 | 1948060 Nothing To See Here
Nothing To See Here's picture

@Hendrix, perhaps I'm slow today but I fail to see any rationale for BORROWING gold... seems like kind of a paradox....

Mon, 12/05/2011 - 16:45 | 1948081 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The Fed has 14k tonnes on their books on loan from the Treasurie (8k tonnes of which is being held as custodian of Germany).  The Fed is allowed to do what they want with this digital gold (the gold which is suppossedly held in Knox and other US Military forts). 

Back in the '60's, to quell the rising demand of gold, the US sold it outright on the open market.  They did this in cordination with the IMF and Britain.  By the early '70's they realized that they were selling all of their gold.  So they closed the gold window, and stopped selling it.  But this had an impact on price; as demand shot up, price followed.  So then they began to lease gold.

They told countries such as China, "Hey, if you buy our paper, we will lease you gold."  China thought, "Well, that will hedge our paper positions, so we will go along with it."  So now when the Treasurie calls China and asks for them to buy paper, China calls the Fed and asks how much gold they can lease to hedge for inflation of paper assets.

Mon, 12/05/2011 - 18:33 | 1948588 LooseLee
LooseLee's picture

But the Fed cannot prove that this Gold exists and resists any congressional mandate to audit...Would you resist any madate to prove you actually had sex with any babe?

Mon, 12/05/2011 - 16:25 | 1947994 tbone654
tbone654's picture

convert to cash... stuff your matress...  remember M/F Global...  cash is king...

Mon, 12/05/2011 - 16:30 | 1948023 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Paper burns and your house is on fire.

Mon, 12/05/2011 - 17:06 | 1948210 Long-John-Silver
Long-John-Silver's picture

Fiat Paper contains 12.44 BTU so it's never worth nothing until you convert them to heat.

Mon, 12/05/2011 - 18:30 | 1948570 LooseLee
LooseLee's picture

Gold is down because fools have to cover losing paper investments.

Mon, 12/05/2011 - 19:26 | 1948783 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold was down before equitie was

Mon, 12/05/2011 - 16:44 | 1948078 Max Fischer
Max Fischer's picture



If silver can't catch a bid even after all 17 Euro nations get threatened with a downgrade and with the viability of the euro front and center, then it's probably time to get out. 

Silver was the BIGGEST joke of 2011.  There's only ONE person who made money on silver this year: Eric Sprott, and that's only because he spent a good portion of the year pumping his funds with hyperbolic nonsense, and then dumping millions of his shares into the subsequent hysteria. 

Plus, remember Buy physical, crash JP Morgue? ....what a joke!  Silver is doing EXACTLY what it did the last time it went parabolic in the late 70's and early 80's:  it's slowly grinding back to reality.

Max Fischer, Civis Mundi

Mon, 12/05/2011 - 16:48 | 1948087 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I made money, and JPM is down 16% year to date. 


Mon, 12/05/2011 - 16:47 | 1948090 GeneMarchbanks
GeneMarchbanks's picture

You've convinced me, I just sold and bought Bernanke bux. Thanks.

Mon, 12/05/2011 - 16:50 | 1948101 taraxias
taraxias's picture

I had you on downgrade watch but your downgrade to fucknut is imminent if you keep posting rubbish like this. Just a heads up.

Mon, 12/05/2011 - 16:51 | 1948116 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Egan-Jones has him at junk

Mon, 12/05/2011 - 19:47 | 1948841 TheFourthStooge-ing
TheFourthStooge-ing's picture

Ratings from taraxias and Egan-Jones have proven far more reliable than those from S&P, Fitch, and Moody's.


Mon, 12/05/2011 - 16:59 | 1948176 Jonas Parker
Jonas Parker's picture

Sorry Max. I made out pretty good on silver this year. Better luck next time...

Mon, 12/05/2011 - 17:11 | 1948219 Max Fischer
Max Fischer's picture



Well, silver began the year at ~$30.  Currently, it's under $32.  If you consider the huge, ripoff margins between wholesale and retail, you're definitely underwater.

Or, you could have been trading paper silver, which is the EXACT OPPOSITE of what the doomer lemmings say to do. And you certainly weren't following the advice of Turd Ferguson.  He totally missed the summer run (in fact, he advised to stay out of it), and failed to predict both the collapses in April and September.  You would have had better luck with a dart board.    

You should have just done your patriotic duty and bought a 30Y bond.  No risk.  No volatility.  No need to dig holes in the woods, and its got a 40 year trend of insatiable demand and proven safety.

Max Fischer, Civis Mundi

Tue, 12/06/2011 - 02:52 | 1950038 jeff montanye
jeff montanye's picture

thirty year bull trend: 1981 to 2011 (really the bottom yield/top price of december 2008 still holds at 2.53% on the thirty year).   the prior ten years, 1971 to 1981 were the last decade in a thirty year bear market taking yields from around current levels to 16% in the fall of '81, comprising the worst price declines, not to mention losses from inflation, in the history of the u.s. treasury market.  

however your greater mistake is the wildly wrong claim of no risk, no volatility.  the full coupon thirty year treasury, and even more its zero coupon relations, are highly volatile investments with price changes of twenty or thirty percent in a few weeks or months commonplace:  http://futures.tradingcharts.com/historical/TR/2011/0/continuous.html

Mon, 12/05/2011 - 17:02 | 1948187 antidisestablis...
antidisestablishmentarianismishness's picture

"Plus, remember Buy physical, crash JP Morgue? ....what a joke!"

Yeah, whoever came up with that concept was a genius.  He could make a killing as a lemming bait salesman.

Mon, 12/05/2011 - 18:12 | 1948496 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I've never baited a lemming because lemmings don't know what real monie looks like.

Mon, 12/05/2011 - 17:05 | 1948201 JohnG
JohnG's picture

Then explain my 102% gain from November '10to April '11?


Mon, 12/05/2011 - 17:23 | 1948266 Max Fischer
Max Fischer's picture



Who cares.  It collapsed into a pile of burning rubble afterwards.

For the year, it's only up a buck or two.

You should have bought teen retailers.

Max Fischer, Civis Mundi

Mon, 12/05/2011 - 17:06 | 1948203 tmosley
tmosley's picture

Yeah, and short Bernie Madoff was the BIGGEST joke of 2008.

Also note that I, and everyone else who owned silver a year ago, is up 8% in Bernanke Bux.  Gold did better, returning 21%.  But the current price only matters if you are buying or selling.  As the thesis of most silverbugs is to hold silver through a dollar collapse, they aren't selling now, and the low prices only enable them to buy more metal.

And I guess you missed the part where JPMorgan is down 17% in the same time period.

Tue, 12/06/2011 - 03:02 | 1950054 jeff montanye
jeff montanye's picture

one might also refer to http://www.gold-speculator.com/editors-picks/5010-600-year-chart-silver.... for broad historical purposes or http://www.oilngold.com/analysis/research/gold-a-gold-stocks-during-peri... for a comparison of the price action of (gold) miners during the last deflationary depression (with a far less inflationary set of global central bankers).   

Mon, 12/05/2011 - 17:28 | 1948260 Ku
Ku's picture

Silver is doing EXACTLY what it did the last time it went parabolic in the late 70's and early 80's:

So you think the tops in for silver for the next decade or so? is that what u mean. HAHAHAHAHAHAHAHAHAH

today was thinking 32.20 to buy silver, riskd dwn and went for SLW calls instead

Mon, 12/05/2011 - 17:24 | 1948269 ZeroPower
ZeroPower's picture

Youre right for the most part. Ive been advocating strongly against any new positions in silver since last April when it was clear it was heading parabolic and into a crash. What i cant comprehend is why people expect another new parabolic rise out of silver so short after the last when. Forget the ones that can't read a chart, just consider:

  • The only people bullish on silver are PMs who have silver to sell you
  • If you want an inflation hedge, you buy gold
  • The chart
  • Silver supplies: while there are many 'pros' out there who say supplies are on the decline, i can find just as many charts or statistics that speak of stale silver inventories. Why invest in something with so much noise



Mon, 12/05/2011 - 18:35 | 1948595 LooseLee
LooseLee's picture

OK, so short the SLV (while maintaing a sufficient portion of physical in your possession)...

Mon, 12/05/2011 - 18:39 | 1948619 knukles
knukles's picture

...or make that into a nice paired trade with a PSLV long.
Delivery bitchez...

Mon, 12/05/2011 - 16:16 | 1947940 Hansel
Hansel's picture


Mon, 12/05/2011 - 16:25 | 1947972 The Big Ching-aso
The Big Ching-aso's picture


S&P needs to pull its collective ass out of its head (sic).  Why don't they just downgrade the entire world instead of this penny-ante country by country bullshit.  Where were these nimrods before all this global-wide derivative inspired crap hit?    

Nothing like being armchair quarterbacks after the fucking game is already over. 

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