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Russian Central Bank To Offer Gold-Backed Loans (Or Why The Spam-Standard Is Coming To An End)

Tyler Durden's picture





 

The spam standard is ending. In news that is likely about to throw the mouth-foaming Keynesians in for a perpetual loop, the Russian Central Bank has quietly announced the sneakiest gold confiscation ploy in history. Reuters reports: "Russia's central bank will offer gold-backed loans for up to 90 days at an interest rate of 7 percent, it said in a statement on Friday, expanding its lending facilities for dealing with any future liquidity crunch in the banking system." So let's get this straight: Russia, which has been dumping US bonds with unseen vigor, and which has been buying gold at a record pace, has just offered its citizen the once in a lifetime opportunity to trade in their hard assets for paper in an imploding fiat system, but with promises to make 7% worthless percent. Oh, and when the "liquidity crunch in the banking system" goes away and one hopes to reclaim title to their gold, one will just find that the title certificate was signed by one Linda Greenova, and said title is perpetually lost in Siberian limbo. And while one waits to reclaim said title from robosigning transgressor #1, Bank of USSR, those heavily armed gentlemen in camouflage attire who just broke into your apartment will not wait to reclaim what now rightfully belongs to mother Russia.

More:

The gold-backed lending was approved by the board of directors at a meeting on Friday. The rate on the facility is in line with the central bank's Lombard rate on borrowing secured against high-quality bonds.

 

"This measure fits the central bank's policy of developing refinancing instruments within the banking system. The facility will be unlikely in strong demand, only at times of liquidity crunches," said Maxim Oreshkin, chief economist at Credit Agricole in Moscow.

 

Levels of rouble liquidity remain at comfortable levels for now, with the overnight interbank rate having hovered within 3-4 percent range since early 2010 compared to more than 10 percent seen during the crisis of 2008-2009.

Next up: the LBMA uses Leonardo DiCaprio to incept the same idea in the brain of the Chairman, who then tells Bill Dudley to hand out a free iPad with a lifetime supply of semi-edible apps for anyone who pledges their gold to the Fed. First on a voluntary basis. Then, not.

 


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Fri, 08/26/2011 - 15:44 | Link to Comment anynonmous
anynonmous's picture

more like gold backed tungsten

or is that tungsten backed gold

Fri, 08/26/2011 - 15:46 | Link to Comment Michael
Michael's picture

Gold and silver are kryptonite to world central banksters.

Fri, 08/26/2011 - 15:59 | Link to Comment Pladizow
Pladizow's picture

But Wait, Trav7777 says gold is in a bubble now that its only 5% off its all time high!

So where is that Smiley Face Finger Fuck TravKKK?

Just another no nothing, stupid, full of shit troll!

Fri, 08/26/2011 - 16:00 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

Thank you for letting me hijack this thread but New York has just announced they will be suspending mass transit at noon tomorrow.

That should be bullish. 

Fri, 08/26/2011 - 16:18 | Link to Comment pods
pods's picture

Godspeed WVI!  

pods

Fri, 08/26/2011 - 16:26 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

Thank you.  We have planned for this.  We are not at ground level.  I plan to take video if it gets ugly on Sunday.  I hope everybody is okay through this.  We will do what we can. 

Fri, 08/26/2011 - 16:29 | Link to Comment pods
pods's picture

If you get bored, do NOT watch Escape from New York or C.H.U.D.S.

pods

Fri, 08/26/2011 - 16:44 | Link to Comment spiral_eyes
spiral_eyes's picture

everyone's scrambling for gold. keep buying the dips, gentlemen

http://azizonomics.com/2011/08/21/the-great-gold-squeeze/ 

Fri, 08/26/2011 - 22:28 | Link to Comment IQ 145
IQ 145's picture

I'd just like to post that the margin on a 100oz. gold contract is only $9500. there's been quite a lot of discussion about the raises in margins; but the absolute value of this, present, vargin; is very reasonable. A 100oz. gold contract is "worth", (whatever), about 180,000$. a 5% margin is not a problem for people in this market. I believe you'll see margins rise to 10%; I have no idea when. But this will not stop the traders either. Many futures traders have traded in ":hot" markets previously when the margins were raised to 10%, and above 10%; but the great majority of the activiity continues. These are pretty well-heeled people and these kinds of numbers aren't going to scare them out of anything; much less Gold; if they make their minds to do it. Just sayin. Some perspective on this margin question.

Fri, 08/26/2011 - 22:47 | Link to Comment tmosley
tmosley's picture

That is correct.  It is not the value of the margin that is important.  It is the change, and more specifically HOW it is changed.

If it is changed multiple times in a few days, it is devastating.  If it is changed ONCE, then there is a single quick hit to the the price in one direction or the other, then the market quickly normalizes.  Changing them constantly drives away speculators, meaning the exchanges make less money.  If they do that over and over, there MUST be a reason for it.  People don't destroy their businesses for no reason.

Fri, 08/26/2011 - 23:55 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Good to know IQ.

Fri, 08/26/2011 - 23:53 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"and" ladies.  I know a lot of women with bucks who are loading up.  I am looking for one interested in adopting me but no luck so far.  I am even considering taking a bath (sorry I forgot Warren Buffet like all metrosexuals takes baths) I mean shower.

Fri, 08/26/2011 - 17:04 | Link to Comment toxic8
toxic8's picture

The water is right across the street from my house in Brooklyn, should I be worried?

 

Wasn't Irene tracking eastward and losing strength?

 

Mass transit suspended.. shit, better stock up on liquor!!

Fri, 08/26/2011 - 20:30 | Link to Comment Yes_Questions
Yes_Questions's picture

The one thing they never tell you to stock up on, easily as important as the other items on the official lists.

Hang in there.

 

Fri, 08/26/2011 - 21:10 | Link to Comment macholatte
macholatte's picture

BREAKING NEWS!!!  VIRGINIA QUAKE  BREAKING NEWS!!! 

The USGS has determined that the epicenter of the Virginia earthquake was in a cemetary just outside of DC.The cause appears to be all of our Founding Fathers rolling over in their graves. Due to the unusual severity of the quake that hit near D.C., the GOP representatives in the House called an emergency sessionand adopted a bill to rename the fissure that runs under the Capital. It will now be known as "Obama's Fault."

Fri, 08/26/2011 - 22:31 | Link to Comment IQ 145
IQ 145's picture

LOL ! Damn, I wish that man would retire; and get his buddy Warren to retire too, while he's at it; and fire Bernanke on the way out. Oh well; it is what it is.

Fri, 08/26/2011 - 23:49 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

All puppets.  Lose them and they will be replaced by new puppets.  Have we not figured this out yet!?

Fri, 08/26/2011 - 16:14 | Link to Comment Terminus C
Terminus C's picture

Your magnificent boobs are gone!

Fri, 08/26/2011 - 16:19 | Link to Comment mick_richfield
mick_richfield's picture

I must say, Terminus, that it seems an ungentlemanly observation to make.

Fri, 08/26/2011 - 16:24 | Link to Comment Pladizow
Pladizow's picture

Yes sorry, I had them on display so that I could easily see them in the thread.

But with so many copy cats lately I had to put them away.

Currently in search of a new avatar.

Fri, 08/26/2011 - 16:48 | Link to Comment NotApplicable
NotApplicable's picture

How about a single boob, or just a nipple? That's different.

Fri, 08/26/2011 - 20:17 | Link to Comment Mr. Mandelbrot
Mr. Mandelbrot's picture

Or a penis, that would be original . . .

Fri, 08/26/2011 - 20:32 | Link to Comment Yes_Questions
Yes_Questions's picture

Or a penis and boobs: go all out Bankster.

Fri, 08/26/2011 - 16:58 | Link to Comment EvlTheCat
Fri, 08/26/2011 - 17:18 | Link to Comment hunglow
hunglow's picture

I'm happy.  That Au has a rise.

Fri, 08/26/2011 - 17:21 | Link to Comment Rome is burining
Rome is burining's picture

The trifecta!

To alien for me.

Fri, 08/26/2011 - 18:05 | Link to Comment Atomizer
Fri, 08/26/2011 - 18:53 | Link to Comment EvlTheCat
EvlTheCat's picture

I'll never love again! :(

Fri, 08/26/2011 - 16:15 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

Trav7777 did call the silver crash perfectly. $48 something. I sold at $46. I don't expect s silver run again until next year spring 2012(I could be wrong)

Fri, 08/26/2011 - 17:00 | Link to Comment Hearst
Hearst's picture

Silver's going to surprise everyone to the upside.  Every time it gets whacked down, like a water bouie held under water it quickly advances back up.  As most know, central banks hold no Silver today.  At least I can't think of one that has any.  Silver will go out of control very soon.  Put even a fraction of the interest Gold has recently received around the world into Silver coupled with a couple MSM news bites and the strain on physical will cause Apmex to issue one of thier 'pre-market disruption' notices that all sales are temporarily halted due to market volitility.  Reopening at $150+ per oz, 6-12 week delivery.   

     What was that schill report last year?  CPM's own calculations showed Silver represented as a total global asset registered at .007%!!  That is unreal!  Second to oil, Silver is used for more items industrially than any other commodity and yet it is extraordinarily under owned, under supplied, critically needed but costs 1/44th of 1 oz of Gold!  Silver's going to leave everyone (or almost everyone) completely dumbfounded.  The bubble and mania speak will make their rounds again but it wont mater.  Economic law will exert itself maybe by the end of the year and Silver's assent will be spectacular!  Then we get to witness the implosion of the manipulated short positions and fraudulent SLV.  This is going to be sick!

Fri, 08/26/2011 - 17:07 | Link to Comment BayAreaAlan
BayAreaAlan's picture

Hype much?

I own more silver than most, but your posting is hype, not fact, based.

Fri, 08/26/2011 - 17:16 | Link to Comment tmosley
tmosley's picture

So you own what, a half an ounce?

Most people own NOTHING beyond some sparse wiring in their electronics or some cheap jewelry.

Silver has and will continue to surprise to the upside.  The fundamentals dictate that that will happen under ANY set of circumstances short of a mile wide meteorite made of silver crashing onto some of Warren Buffett's land.  The only question is this: what will be the nature of the rise?  Either the supression efforts continue, and we get an explosion and industrial panic followed by a blow off top before settling at a short term equilibrium point around a quarter the price of gold (the blow off top could go to many multiples the price of gold, rhodium style).  Alternatively, other markets could open and allow real price discovery to happen, allowing an orderly rise to the parity with gold which drives an increase in recyling and mining efforts resulting if a fall back to the same short term equilibrium as the other scenario.

The equilibrium value will be the same in either case because the stock and flow of silver are the same in both cases, absent the market preturbations created by the actions of the big players.  

Fri, 08/26/2011 - 17:30 | Link to Comment Surly Bear
Surly Bear's picture

I keep buying my son coins. 

Fri, 08/26/2011 - 18:54 | Link to Comment knukles
knukles's picture

I keep stealing my son's coins.

Fri, 08/26/2011 - 19:19 | Link to Comment akak
akak's picture

I keep sunning my non-steel coins.

Fri, 08/26/2011 - 20:24 | Link to Comment SumSUN
SumSUN's picture

I'm a sun-keeping coins.

Fri, 08/26/2011 - 23:45 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

God is watching you and he is waiting around the corner for you with a club and it ain't filled with cotton.

 

Fri, 08/26/2011 - 23:47 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, he is leaving the post 1965 dimes and quarters in his piggy bank for you, ya dumb ass.  He has his 90% well hidden!:)

Fri, 08/26/2011 - 23:44 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Same here Surly!  It's the least we can do for our kids after we allowed this shit to happen!

Fri, 08/26/2011 - 20:02 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Paper meteorites inscribed with the word 'silver' land all the time.

Fri, 08/26/2011 - 20:30 | Link to Comment Mr. Mandelbrot
Mr. Mandelbrot's picture

tmosley, I know you're an astute PM guy and I agree that there will be an explosion in silver price at some point relative to gold, but when when the expected move happens, my approximately 50/50 gold silver ratio (I keep finding fraction of spot deals on silver, but never gold) will quickly be converted to 90/10+ gold.  Everyone talks about a 16:1 historical ratio being proper, but if silver gets anywhere close to 1/25th of gold, I'm cashing in big time.  I'd rather not hold too much of the "poor man's" anything . . .

Fri, 08/26/2011 - 22:51 | Link to Comment tmosley
tmosley's picture

That is exactly the right move, though I would argue that your ratio is too conservative.  You will do exceptionally well following your strategy.  You won't become ultra rich, but you will be wealthy.

Always, always, ALWAYS have an exit strategy.  Mine is to exit into gold on a cost average basis averaging somewhat above parity.  The exit strategy for gold is there as well, ie buy farm land, real estate, stocks, etc.  Things with a return, which produce things for society.

Sat, 08/27/2011 - 11:05 | Link to Comment Ahmeexnal
Ahmeexnal's picture

A harem or two would also be a good strategy.

Fri, 08/26/2011 - 23:42 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Sunday night.

Fri, 08/26/2011 - 20:35 | Link to Comment Dyler Turden II Esq
Dyler Turden II Esq's picture

If 1/4 the price of gold is the SHORT-term equilibrium price, then what do you reckon the LONG-term equilibrium price to be?  Roughly...

Fri, 08/26/2011 - 22:56 | Link to Comment tmosley
tmosley's picture

Probably around 1/10 as mining ramps up and recycling efforts become entrenched and capitalized.

It won't go much higher than that due to the fact that so much silver is used in applications where it can't be recovered at any reasonable price.  Think medical applications where you would have to retrieve it from urine, or worse, the bodies after death.  Remember, the gold sticks around, but silver is scattered to the winds in nearly irretrievable forms.

Fri, 08/26/2011 - 21:10 | Link to Comment mt paul
mt paul's picture

monster bar 

in the cats litter box...

 

just because...

 

 

Fri, 08/26/2011 - 18:24 | Link to Comment Hearst
Hearst's picture

Bayarea, hype would be if the few facts I gave for owning Silver were untrue.  The fact is Silver has every potential to (re) become the second most sought after financial asset in the world, while still currently being the most underowned!  A few decades of powerful, constant propaganda and legal tender laws has almost completely removed from the understanding of the general populace how valuable Silver is.  Together with industrial use like Eric Sprott said, Silver is going to be the investment of the decade.  Realizing those facts we should be shouting this news to everyone and anyone we care about, keeping with a longer term perspective and not being caught up with day to day price movements.  Gold is currently trumpeting the truth to the world of what these metals are and represent.  Silver is soon to follow! 

Fri, 08/26/2011 - 22:44 | Link to Comment IQ 145
IQ 145's picture

Now come on; he's not an unreasonable person; I've been seeing his posts for years and he's not a wing-nut. It's just his opinion; and none of it is impossible. The market is so small a few wealthy European families could get together and buy the whole freaking Comex Warehouse. There, now you can tell me I'm hyping. Facts are little short on the ground, I believe, but there sure isn't a lot of surplus silver laying around, and there sure did used to be. Now, that's a fact; what it portends  for the next year, I really couldn't tell you. It's a little unusual tho, to see the price of something go down for a significant whiile at the same time the supplies are being bought up faster than it's getting mined. I supposed everyone might stop buying it; if peace and prosperity breaks out, for instance.

Fri, 08/26/2011 - 23:39 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Hearst, I am not aware that APMEX ever shut down there websiite because of "volatility".  Dates, causes and length of shutdowns please. 

Sat, 08/27/2011 - 02:13 | Link to Comment aces and eights
aces and eights's picture

They suspended sales the weekend after the S&P downgrade.

Fri, 08/26/2011 - 18:33 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

No he didn't

Fri, 08/26/2011 - 19:02 | Link to Comment russki standart
russki standart's picture

Pladizow, never mind Trav, where are the Tits!!! Bring them back!!!

Fri, 08/26/2011 - 21:03 | Link to Comment Fiat Currency
Fri, 08/26/2011 - 19:57 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Pladizow, to be fair that's not exactly correct. No matter how much you may not like his other qualities.

What he said was that Gold from a technical paper perspective was in a bubble. He could have been more accurate and simply said that it was overbought and due for a short term correction. He was right. 

Fri, 08/26/2011 - 23:33 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Being overbought and being in bubble are two completely different things.

Sat, 08/27/2011 - 18:31 | Link to Comment Hook Line and S...
Hook Line and Sphincter's picture

Exactly. that was my point. He used the word bubble while implying overbought. Still, real money (IE AU) by its very definition and historical 'tradition' can never be in a bubble. 

I do wonder though whether anything of unbacked paper origin is ever overbought. Investments in anything fiat without something other than faith backing them seem to always be both overbought and in a bubble, no matter what the price!

Fri, 08/26/2011 - 16:39 | Link to Comment vast-dom
vast-dom's picture

Hunting down racist haters!

Fri, 08/26/2011 - 21:21 | Link to Comment SumSUN
SumSUN's picture

An informed, and armed (guns gold and silver) public is their death blow.

Fri, 08/26/2011 - 17:09 | Link to Comment Ruffcut
Ruffcut's picture

Russians have become immaterial.

Fri, 08/26/2011 - 17:14 | Link to Comment IQ 145
IQ 145's picture

Silver and gold denominated accounts were a commonthing in 1979; I had one with Deak-Bank in Vienna, Austria. You could write checks on it and they would do the accounting in Silver. A Gold backed loan is a step in the direction of fiscal sanity; it'll be interesting to see how many people make use of this. Sooner or later, this is the kind of thing I expect to happen; and to grow and to become a problem; it's kind of a strategic attack on the dollar freaks; like the Chinese Government telling their people, in 2010, that "it is beautiful for a chinese family to own gold or silver"; or words to that effect. Strategic attack on the dollar; but no blame attaches. "We just offer our people free market; isn't this what you teach us, oh, powerful American Cousin?" What can you say.  About all they can do at the Mariner Eccles building is grind their teeth and kick the copying machine.

Fri, 08/26/2011 - 17:17 | Link to Comment IQ 145
IQ 145's picture

I looked for a picture with a nice bra; then I found some; then I got very, very interested in them. Then I wasn't interested any more, but I was kind of tired and out of breath. So, I decided to go with this.  No Sponge Bob Square pants were injured in the changing of this picture.

Fri, 08/26/2011 - 17:21 | Link to Comment smore
Fri, 08/26/2011 - 17:22 | Link to Comment IQ 145
IQ 145's picture

Sorry, I speed read this upside down. It's actually kind of funny.

Fri, 08/26/2011 - 18:00 | Link to Comment Freddie
Freddie's picture

Hey Tyler.  When are you going to smack that fraud Noiel Roubini in the fvvkking mouth?

Fri, 08/26/2011 - 18:34 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

I kicked his ass on twitter!

Fri, 08/26/2011 - 15:51 | Link to Comment Scottj88
Scottj88's picture

Holy smokes batman,

Why would anyone do this?

Fri, 08/26/2011 - 15:52 | Link to Comment LoneStarHog
LoneStarHog's picture

Everyone minus Karl "Kool-Aid" Denninger.  He has a mattress stuffed with FRNs and he is going to buy everything in sight at the bottom of the deflationary spiral.

Fri, 08/26/2011 - 16:40 | Link to Comment akak
akak's picture

For casting such rude (and correct) aspersions at Herr Forumfuhrer Karl --- I BAN YOU!

I wonder if KD has ANYONE left in his stalag of a forum over on MarketTicker by now?  Or has he already been reduced to his inevitable fate of shouting at the pigeons in the park (for lack of any other audience) about his deflationary fantasies and the magically appreciating fiat currencies of bankrupt national governments?

Fri, 08/26/2011 - 17:11 | Link to Comment Ruffcut
Ruffcut's picture

Douchenigger is a shitbag as big as kudlow and cramer.

Any moron that still pays to be on that site is a supersized moron.

Fri, 08/26/2011 - 21:13 | Link to Comment mt paul
mt paul's picture

denninger

 

needs to get laid

Fri, 08/26/2011 - 21:26 | Link to Comment indio007
indio007's picture

Ya and he needs to be a "top" this  time.

Seriously, I've been on the internet since 1991 , his is the only forum I've ever been banned from. He demanded proof that the FED does more than short-term (90 day) loans via the discount window. I provided it and made him look foolish in the process. BANNED the first day!

Fri, 08/26/2011 - 17:03 | Link to Comment MarketTruth
MarketTruth's picture

Karl Denninger is the biggest snot nose LOSER cheerleader for the banking system. He really wants it to work the way HE envisions it per those things he believes works (laws... ROFL). Obviously his total cluelessness about banksters winning NO MATTER WHAT and KD being a constant loser.

Ok, to be kind, KD is good for one thing... having amazing stupidity at the highest level. If anyone is stupid enough to try and make a failing system work even to the very last failure, it is Karl "stock market and banking system works when they follow those things called laws cheerleader' Denninger.

Hey Karl, WTF up! The system is failed, there are no laws being followed and no matter what you might think, you are being laughed at by MANY within the industry and public online. 

Fri, 08/26/2011 - 21:54 | Link to Comment Hansel
Hansel's picture

I take it you will not be buying his new book.

Fri, 08/26/2011 - 23:30 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

I spent my book money on Dick Cheney's new book.  I want to find out exactly how he orchestrated 9-11 and got NORAD to stand down for two hours.  A friend of mine is a relative of that tyrant.  He says you look into the man's eyes and you see "nothing".  Creepy shit. 

By the way, are you all aware that at the upcoming 10-year 9-11 ceremonies the 9-11 first responders will not be allowed to attend!!!!!!!  I shit you not.  Reason, partially because the EPA director at the time (Christie Todd Whiteman) immediately following the black ops explosion of those three buildings stated that the air in downtown NYC was safe to breathe.  Well, since then thousands of responders have died painful lingering deaths because they inhaled toxic asbestos and dozens of other toxins for weeks on end.  And, not surprisingly the first responders protested.  Finally, after many years our beloved congress  allowed them health benefits, BUT each responder must first go through the deminati's terror data base before receiving funds.  Do you think maybe our government has been hijacked by tyrants?!

Sat, 08/27/2011 - 07:41 | Link to Comment MarketTruth
MarketTruth's picture

Karl's book will be filled with his prayers for an honest system... which will never happen.

BTW, he needs to change his Gold membership to be called "Federal Reserve', and silver can be called 'Treasury". Karl is a nice throwback to the old ways, which has long passed him by. If Karl Denninger's helping members of the DC has obviously gone nowhere, imagine how much more worthles his book will be.

Fri, 08/26/2011 - 18:11 | Link to Comment Infinite QE
Infinite QE's picture

Karl better buy a tent now while he can still afford one!

Fri, 08/26/2011 - 16:01 | Link to Comment Confused
Confused's picture

This is squarely aimed at the people at the bottom of the pyramid. It fleeces them out of whatever assets they may have, so in the short term these people can make ends meet.

Fri, 08/26/2011 - 16:20 | Link to Comment MachoMan
MachoMan's picture

In soviet russia shop pawns you!

PS, how is this any different than the cash for gold scams?

Fri, 08/26/2011 - 17:27 | Link to Comment smore
smore's picture

In Russia, source opens you!

Fri, 08/26/2011 - 19:16 | Link to Comment Confused
Confused's picture

It appears to be the same to me. Only this one is run by the Gov. 

 

Oddly enough, those cash for gold shops are set up in neighborhoods house that bottom portion of the pyramid. 

Fri, 08/26/2011 - 17:31 | Link to Comment narnia
narnia's picture

why wouldnt's a hedge fund short a 90 day GKO yielding 4% to buy gold to cover the bet at 7%?  seems like 3% free money to the first in line.

Fri, 08/26/2011 - 18:58 | Link to Comment knukles
knukles's picture

Sweet Jesus, please don't give any ideas to Ben and Timmah.

Fri, 08/26/2011 - 15:47 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

 

Next up: the LBMA uses Leonardo DiCaprio to incept the same idea in the brain of the Chairman, who then tells Bill Dudley to hand out a free iPad with a lifetime supply of apps for anyone who pledges their gold to the Fed. First on a voluntary basis. Then, not.

LOL. 

LOL.

LOL.

Breathe.

LOL.

LOL.

LOL.

Breathe.

LOL.

 

Pause... 

 

Cry.

 

Fri, 08/26/2011 - 15:45 | Link to Comment Dasa Slooofoot
Dasa Slooofoot's picture

[Roubini] IGNORAMUS! [/Roubini]

Fri, 08/26/2011 - 15:51 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

You're an idiot.  Roubini is a brilliant man of vision and intellect.  What the hell are you?  He can see what the economy really needs.  And you are just posting on some blog.

Just kidding.  Roubing is a Soho douche bag that thinks like Krugman.  I hope you will forgive me for having some fun with you.  Stocks and gold both surging at the close.  What a world, what a world. 

Fri, 08/26/2011 - 18:03 | Link to Comment Freddie
Freddie's picture

I would pay a lot of fiat money to see Tyler smack Roubini in the f**king mouth in a cage match.

Fri, 08/26/2011 - 18:31 | Link to Comment snowball777
snowball777's picture

But how many silver eagles to watch a Faber/Schiff and Krugman/Roubini no-holds barred wrasslin' match?

How many gold eagles to punch Bernanke square in the nuts?

 

Fri, 08/26/2011 - 19:22 | Link to Comment akak
akak's picture

What makes you think the Bernankster has any nuts?

The lisping pussy probably only has a mangina between his legs.

Fri, 08/26/2011 - 21:57 | Link to Comment Hansel
Hansel's picture

Roubini has dreams of being Fed chairman.  He wants people to respect the Fed when he gets his turn to play god.  Goldbugs are his enemy.

Fri, 08/26/2011 - 23:16 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

In a world of exponential growth in FRNs (debt) one would expect that generally speaking any asset, paper or otherwise will rise in nominal terms.  Given that, it is not surprising to see stocks rise along with gold.

Fri, 08/26/2011 - 15:45 | Link to Comment Irish66
Irish66's picture

say what, did someone reset the time clock

Fri, 08/26/2011 - 15:54 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

so far Gold shorts, who were recommending puts here in ZH day before yesterday, are getting a good lick today.

DangerTime, mogul rider ?

Only after the Indian Gold buying season ends during October can paper masters control Gold successfully. Until they are at the mercy of India brides. They were able to crash the dollar price of Gold in 2008(wedding season) but then dollar was high(so price remained narly same in Indian currency), so Indian brides did not get a real discount in local currency and price stayed up even in 2008 + Indian economy was falling then and this also created less demand.

Fri, 08/26/2011 - 15:55 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

I had an interesting conversation in a local bar last night.  It was between a day trader, a former Goldman gold trader, an Indian investment banker at Goldman and me.  I was waiting for a priest and a rabbi to walk in.  The daytrader thinks the S&P will go down to 480.  The Goldman IB just hopes the wheels don't fall off so he doesn't lose his job.  The former gold trader thinks gold is in a bubble.  I expressed that the government is in a bubble.  It was a fun talk. 

I keep hearing about the gold bubble.  But still the average Joe does not talk about the dollar bubble, government bubble or the bullshit bubble.  Of all of these I think the bullshit bubble is the biggest. 

Fri, 08/26/2011 - 16:00 | Link to Comment disabledvet
disabledvet's picture

Let us be clear: "the point of Fed policy is to inflate." that includes gold. If gold deflates.../..../....do other things deflate with it?

Fri, 08/26/2011 - 16:14 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

Housing still has a long way to deflate.  If gold deflates housing and stocks will deflate a long way. 

The funny thing now is that inflation will proably also cause housing deflation.  Good luck getting a loan on some POS house when inflation is high. 

Sat, 08/27/2011 - 10:00 | Link to Comment BorisTheBlade
BorisTheBlade's picture

Housing will most certainly continue deflating in gold terms.

Fri, 08/26/2011 - 17:30 | Link to Comment IQ 145
IQ 145's picture

good. rational analysis. If Gold goes back to 800$/oz. does that mean I can buy a new Ford Pickup truck for $5000 ? Don't seem likely. Therefore; since there is a connection; it's not likely Gold is going back to $800.

Fri, 08/26/2011 - 19:39 | Link to Comment disabledvet
disabledvet's picture

How about a govrnment motors pick up then? I understand of course that pricing power reigns supreme and no bank has ever failed of course.

Fri, 08/26/2011 - 23:12 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

The nominal value of gold means nothing!  It is PURCHASING POWER!  If you can buy southern Montana for ten one ounce gold eagles who gives a shit what its nominal value is!

Fri, 08/26/2011 - 23:26 | Link to Comment disabledvet
disabledvet's picture

of the gold? or the house? if i were the government i would be extremely concnerned about the value of the house. i don't recall how taxes are paid on a lump of metal. especially when like all the good Frenchmen that we are we don't tell anyone about the gold in the first place. You all are...being quiet about your gold holdings...are you not?

Fri, 08/26/2011 - 16:16 | Link to Comment Smiddywesson
Smiddywesson's picture

Sharp pins like May and August 2011 would pop the gold bubble, if it were a bubble.  I am still up in my paper position, and LOVE my physical.  Pop away.  I hope they use all their margin hikes.

Fri, 08/26/2011 - 17:33 | Link to Comment IQ 145
IQ 145's picture

Yeah. A bubble is a lot like virginity. One little prick and it's gone. This market is more like a tough old street whore. It isn't going away, and it's going to keep doing business. Although the "pricks" may come and go.

Fri, 08/26/2011 - 17:07 | Link to Comment toxic8
toxic8's picture

where the hell ya drinking man, around the corner from 200W?

Fri, 08/26/2011 - 15:55 | Link to Comment Spitzer
Spitzer's picture

Yeah and I don't think they will be buying much silver.

As for Russain loans.....7% ???? I want a lower rate then that if the bank is holding gold as collateral.

Fri, 08/26/2011 - 16:02 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

I believe they hold your testicles as collateral. 

Fri, 08/26/2011 - 16:19 | Link to Comment caerus
caerus's picture

you are correct...rough day but i'm still short (paper) long (phys)...pattern still doesn't look right imo...looks like a tight h&s to tell you the truth...i will cover next week if i must

Fri, 08/26/2011 - 16:42 | Link to Comment fiddler_on_the_roof
fiddler_on_the_roof's picture

I think a H&S here, will be wrong and it will blast right through. They cannot allow a Gold crash unless there is a Indian Rupee crash also.

Let's see how this goes. I expect a pump and dump(a la silver) above $2000 just at the end of the wedding season, when the Gold longs will be emboldened after seeing two take down which failed($1800 and $1900).

 

FYI : I am long physical Gold (95%) and long GLD calls (5%)

Fri, 08/26/2011 - 16:47 | Link to Comment caerus
caerus's picture

you may be right...i would be more comfortable with the formation of a broader base

Fri, 08/26/2011 - 23:07 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

One should never buy or sell puts or any futures options for that matter without gauging "option volatility" first.  If you buy puts or calls at a volatility peak your options can actually lose premium even when the underlying moves in your favor, time value notwithstanding.

Fri, 08/26/2011 - 15:46 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

The best investment of 2012 will be pick axes and shovels.  Dig deep, bitchez. 

Fri, 08/26/2011 - 18:57 | Link to Comment theMAXILOPEZpsycho
theMAXILOPEZpsycho's picture

There's two types of people in the world my friend - those with guns and those that dig. You dig.

Fri, 08/26/2011 - 23:03 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Max, you forgot a key ingredient to that quote which I was on the receiving end of by the way and I still haven't quite gotten over it. Arch Stanton's ghost is even more pissed. 

It's "loaded" guns.  Very important unless you intend to throw your weapon at someone.

Fri, 08/26/2011 - 23:00 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, but take notes:)

Fri, 08/26/2011 - 15:46 | Link to Comment Vinny
Vinny's picture

Sounds like a great deal. Seven percent rate of growth...and will this be in Russian or Belorussian rubbles?

Fri, 08/26/2011 - 15:56 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

Is that Barney Rubbles?  That would be a currency you could believe in. 

Fri, 08/26/2011 - 15:47 | Link to Comment Dick Darlington
Dick Darlington's picture

Would love to ask The Bernank & Beard why the Russian central bank is hoarding gold. Methink russians have a little bit different reason than "tradition"... End the central banking cartel now!

Fri, 08/26/2011 - 15:58 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

The Russians have gone through 70+ years of Bolshevism, mafiaism, currency crashism and now Putinism.  How many Russians do you think have a different attitude about gold than the average "I'm a dumb fuck Americanism"? 

Fri, 08/26/2011 - 16:18 | Link to Comment CD
CD's picture

Can only offer indirect, anecdotal evidence, but the majority of the populace of the region KNOWS that gold is money/wealth storage. It's just that relatively fewer of them have spare wealth to store.

Fri, 08/26/2011 - 19:08 | Link to Comment knukles
knukles's picture

I'm not a dumb fuck American; I own Dollars.

Fri, 08/26/2011 - 18:32 | Link to Comment doggings
doggings's picture

Would love to ask The Bernank & Beard why the Russian central bank is hoarding gold. Methink russians have a little bit different reason than "tradition"... End the central banking cartel now!

this is why.. http://buygoldsilver.org/2010/11/global-currency-crisis-gold-whats-really-going-to-happen-2011-2012/

 

Fri, 08/26/2011 - 15:47 | Link to Comment traditionalfunds
traditionalfunds's picture

Red Dawn is ending for Paulson.

Fri, 08/26/2011 - 15:58 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

"WOLVERINE"

Fri, 08/26/2011 - 15:52 | Link to Comment Vinny
Vinny's picture

You can use your pick axe, and I will invest in lead. Because there are 2 kinds of people in this world amigo. Those with loaded guns and those who dig.

Fri, 08/26/2011 - 16:09 | Link to Comment What_Me_Worry
What_Me_Worry's picture

My guess is there is a high positive correlation between those with gold and those that are properly armed.

 

Fri, 08/26/2011 - 17:22 | Link to Comment Uncle Remus
Uncle Remus's picture

ding

ding

fucking ding

Fri, 08/26/2011 - 17:35 | Link to Comment smore
smore's picture

If you weight for the AMOUNT of gold, I think you might find that correlation considerably weaker.

Fri, 08/26/2011 - 22:58 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Correct, one must maintain the proper gold to lead ratio.

Fri, 08/26/2011 - 15:56 | Link to Comment gwar5
gwar5's picture

Looks like the race is on for sovereign gold in earnest. First serious gold backed currency will be default (transitory?) safe haven and contender for WRC. Russia does not have that much gold, so this is not surprising, they need to get lots more. Stealing it from their own people is so, old school, FDR.

 

"Only gold is money... everything else is credit" --J.P. Morgan.

 

 

 

Fri, 08/26/2011 - 16:06 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

It is funny.  I held a gold coin in my hand earlier today.  And all I could think is, "why is this worth so much?"  It doesn't make sense to me and I am still a believer in gold.  Is anybody else a believer and a doubter at the same time?  it seems odd that we should value something so much that does so little.  Next, I will hold a thousand dollar bill and think even more impure thoughts.  I think I will need to go to confession next week. 

Fri, 08/26/2011 - 16:26 | Link to Comment Smiddywesson
Smiddywesson's picture

1.  Tradition, like 5k years of it

2.  It is shiny and pretty and fascinates the lizzard brain

3.  It is relatively rare, and can't be manufactured or counterfeited

4.  It isn't needed in large amounts by major industries

Of all of the above items, #4 is the least recognized as the threat.  TPTB can make worthless financial stocks rise to ridiculous prices without destroying whole industries.  Not so with copper, lead, zinc, or anything else.  They can, and will, drive gold prices to outrageous levels when it suits them.  Gold is just a token of wealth.  When the token of wealth shifts from paper back to gold, the traditional token of wealth, the people who hold most of the gold, TPTB which are buying, have NOTHING to stop them from running gold up to ridiculous levels, and every incentive to do so.

When that happens, everything you own is measured in gold, and anyone who has gold can buy it for a pittance.

 

Fri, 08/26/2011 - 17:39 | Link to Comment smore
smore's picture

Religion.  It's strength is ridiculously underestimated.  It built the pyramids, for Gods' sake! (Note position of apostrophe.)

Fri, 08/26/2011 - 23:31 | Link to Comment disabledvet
disabledvet's picture

How about "the City of Chicago." I'm a big fan of the Pyramids but i really don't like the IDEA of the Pyramids if you get my drift. That's one big grave for just one family or even less. In short a gold standard provides the possibility of a rational economy. Now look what we have..."one bubble to the next."

Fri, 08/26/2011 - 19:08 | Link to Comment Spitzer
Spitzer's picture

I know that it does ONE thing better then anything on earth and that is STORE VALUE.

I have no doubts

Fri, 08/26/2011 - 17:13 | Link to Comment Calculated_Risk
Calculated_Risk's picture

"why is this worth so much?"

 

Go try and dig some out of the ground. Then you'll know why.

Fri, 08/26/2011 - 19:10 | Link to Comment Spitzer
Spitzer's picture

Exactly.

I have no doubts. You have to be an idiot to have doubts on gold, Its gold for fuck sake

Fri, 08/26/2011 - 17:43 | Link to Comment IQ 145
IQ 145's picture

What  it "does"; and it does it very welll; is store value. There are no more dollars. The dollar was defined as a certain amount of silver. there are no more dollars. The big number attached to the gold coin is not "worth so much" it's very similar to "how much" it was worth in 1878. Someday it will be worth $12,500 promises; this will not be "so much"; either.

Fri, 08/26/2011 - 22:54 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Righto.  There are no U. S. Dollars just Federal Reserve Notes.  Each one dollar FRN represents one dollar of debt.  Therein lies our fundamental problem.

Fri, 08/26/2011 - 21:29 | Link to Comment Hindsight2020
Hindsight2020's picture

When I first started collecting PMs I thought the same thing then I opened my wallet and held a dollar bill in one and a hundred in the other, closed my eyes and understood that faith is the only thing keeping our system alive.  Like someone else said try digging in the ground and making that same coin.  Gold's value is the time it takes a man to create it multiplied by its scarcity in the most basic of terms while FRNs are newspaper meant to trick the masses.

 

Long physical assets.

Short newspaper with numbers printed on them.

Fri, 08/26/2011 - 22:05 | Link to Comment Hansel
Hansel's picture

But that newspaper with numbers printed on them are signed by HANK PAULSON, TIM GEITHNER, AND ROBERT RUBIN!  They're like baseball cards, or pokemon cards.

Fri, 08/26/2011 - 22:52 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Short electronic "digits" too!

Fri, 08/26/2011 - 20:13 | Link to Comment DavidAKZ
DavidAKZ's picture

supply and demand - despite the paper games ?

Fri, 08/26/2011 - 22:49 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

As my brother, a priest by the way, frequently told me after confession, "Go my brother and sin no more".

"Say three our fathers, three hail mary's and make a good act of contrition."

Fri, 08/26/2011 - 16:24 | Link to Comment Bullionaire
Bullionaire's picture

Unless TPTB can push silver below $36.21 in the next 6 minutes, on Monday the JPM:SILVER ratio will be negative for 28 days.

 

Suck on THAT, Blythe.

 

 

Fri, 08/26/2011 - 17:23 | Link to Comment Uncle Remus
Uncle Remus's picture

Next up, 28 weeks.

Fri, 08/26/2011 - 19:10 | Link to Comment knukles
knukles's picture

Owwweeee.  That's one long rehab....

Fri, 08/26/2011 - 16:37 | Link to Comment MachoMan
MachoMan's picture

I think the U.S. has that one covered too...  if not, then it will be a single world central body, like the IMF, that has it, which would be de facto U.S. control...  The U.S. is just waiting around to see if europe is dumb enough to pony up the cheese to an international organization (Germany better get it before the IMF).  If so, we go world route...  if not, we stick with the new and improved dollar.  Everyone else is just playing for a ground seat next to the dinner table...  maybe actually getting a chair if successful enough...  and maybe even getting to talk at the dinner table if successful enough...

Fri, 08/26/2011 - 22:40 | Link to Comment Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

MachoMan there is no "U.S".  This country has been hijacked by international banks and the corporate fascists.  We are now under a New World Order and few see it yet.  In 2005 Bush and the presidents of Canada and Mexico created the North American Union by signing an illegal treaty in Texas.  Web search it.  That is why there is no border control with Mexico.  There "is" however a burgeoning border control to Canada as the globalists in our government don't want too many Americans escaping to Canada when the SHTF.  Web search it.

Sun, 08/28/2011 - 00:30 | Link to Comment MachoMan
MachoMan's picture

At the very least, I hope you would concede that the concept of a strong U.S. is a "backup" plan, should globalist endeavors fail.

Ultimately, there will be no passing of the torch to a centralized world order...  isolationism and protectionism will return...  world unity is simply an inevitable conclusion to the evolution of trade, travel, and communication.  The question is simply when...  in time, but not now.  Clearly it is their goal...  but the best laid plans...

Further, as covert actions become more overt, the entire premise will be risked...  think of it like a date...  you can seem nice, charming, and go through all the motions...  if clever and skilled enough, you might even be able to convince her you're not trying to get in her pants...  you might even convince her to play with your penis a little...  but demand it from her, and there will be hell to pay. 

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