Pluto

I did notice that, but 'favourite' is a subjective criterion -- you buy a favourite drink because it's nice to drink in your opinion. If you decide it's nice, no one can take that away from you, and all other considerations are pretty much irrelevant.

 

I assume you wouldn't want the criterion for buying gold to be just that subjectively you happen to think it looks nice and shiny, though!

 

If you're going to decide to be long on gold today whether the price goes up, down or stays the same, then that means today's price isn't relevant to your decision... so there's not much point in even making reference to the price today...

 

P.S. That doesn't mean that I'm not mesmerised by the POG just now, like most other people on this forum at the moment I would imagine!

Exactly, favorite is subjective. That is why not everyone buys gold and some people actually short it.

One day it may not be my favorite - until I buy on dips and ignore the bubble BS.

This is nothing to do with whether I think gold is going up or down in the near, medium or long-term, but... that seems a bad analogy to me.

 

Something getting cheaper isn't necessarily a reason for stocking up on it -- take sterling for example...

Please note I said favorite, not any drink that was lower in price. The analogy is correct.

Never underestimate the enemy.

 

They will be scheming and plotting against our precious.

Think of a smackdown like you would if your favorite beverage goes on sale at the supermarket. Would you panic, run home, and sell any you may have left in the drinks cabinet? Or would you smile, and say thank you very much Mr. Supermarket, I'll have some more please.

Most sellers of gold don't know why they bought it in the first place. I know why they did, it was because it was going up, and now it is going down they must sell. Ignorance is bliss.

Will it be the smackdown ???

Whatever they do can't hide the fact they are now printing more money than people can count.

Most people don't even know how many zeros a trillion has. We are all freeking doomed- some more doomed than others.

Another smackdown is another buying opp.

Comex opens at 8.20 EST. In five minutes.

Get strapped in folks...

Not too shabby.

The last days of sub 1000 are here.

The naysayers that claim gold is in a bubble have no clue and are freeking doomed.

The only bubble I can see with my canine eyes is fiat money being created left right and center, while claims on that fiat, goods and services, being evaporated.

PS I have a lit a candle for SAAB. It was always junk.

It seems as though the whole world's gold production (and some more) is going into GLD a gold ETF. If this is true, then it is comical.

http://seekingalpha.com/article/121121-ten...id-the-gold-etf

3. Gold Acquisition: Then there's the amount of alleged gold acquired for GLD per se. Many sources, including the World Gold Council, the Sponsor of the ETF, have noted that the quantity of gold mined the past four years has plateaued somewhere below 2500 tonnes a year. Divide even that optimistic 2500 tonne number by 52 weeks a year, and you get about 48 tonnes of global gold production per week.

Yet, somehow, during the first two weeks of February, 2009, for instance, GLD said it acquired almost 103 tonnes of gold, more gold than was mined in the entire world during that two week period. (Don't ask about getting gold from above ground stocks. Do you think that owners of large piles of gold are selling these days?) GLD's purchases apparently left zilch gold for all those other gold bullion ETFs - the IAU in the U.S., and the British, Swiss, Indian and Australian gold ETFs in their respective countries.

Another not too shabby day for the barbaric relic.

The Euro really is starting to stink like the smelly turd which it is.

Gold isn't too shabby today. Not like the Dow and Euro, both staring down into the abyss, with poodle sterling not too far behind.

Take that you gold shorty....

Bretton Woods died in 1971, when the US "suspended" gold/USD convertibility. Funny how they never reinstated it.

They just replaced the gold in Fort Knox with F-16s in Saudi Arabia. This enabled dollar hegemony to limp along for another 30 odd years.

GM going bust will have very little direct affect on the Dow.

 

The Dow is price weighted.

 

At $2.50, GM is the cheapest stock in the Dow 30, so it will make the least difference to the Dow if it does bust.

 

The FTSE + S&P500 are weighted by market capitalisation

I understand, but the knock on effects from a GM bankruptcy will drop the dow by at least 1,000. There are 2M jobs in the US directly and indirectly associated with GM. Furthermore, there are circa 1M retirees receiving medical insurance and pensions from GM.

This will be like a nuclear weapon going off. This will be felt from the Midwest right down to the Mexican border states and all in between.

The 70's were far worse than now when we still had a large manufacturing base and strong unions. There probably was a credit crunch back then and banks were far more ruthless about getting their money back calling in the loans if they needed the money causing businesses to fail and more people to become unemployed.

No, the 70s were a walk in the park compared to what we have now. Do you realize that General Motors is probably going to go chapter 11 next week? We have banks folding left right and center, most of manufacturing dropping all over the planet, world wide housing collapse, and on and on.

General Motors alone will lop 1,000 off the dow.

Folk talk about about a housing crash in the UK - it ain't even started yet - most of the masses are still waiting for a spring bounce, they think this is a banking thing and will blow over. Most folk are numb to this and wont panic until it hits them squarely in the face.

Possibly - ever heard of the secondary banking crisis of 1973–1975?

 

http://en.wikipedia.org/wiki/Secondary_ban...73%E2%80%931975

 

 

 

We have been here before.

No we haven't. Nearly every investment bank apart from Morgan and Goldman has collapsed. You can't compare any banking crisis in living memory with what we have going on now.

The Bretton Woods agreement is collapsing.

Excellent points made Pluto.

 

Just to clarify, you are still bullish on Physical bullion long term ???? Or do you see a really longterm correcting of all gold prices back to the 1990's dulldrums.

I have never sold one gram and don't have any plans to - even with corrections. There is no other game in town.

Let me end my rant on ETFs with the following: Charles Ponzi's scheme was selling international postage reply coupons, he was successful until some bright spark realized that he was selling more coupons than existed. Forget the price of gold, if the holdings increase at the rate they are going where is all this gold going to come from? All the gold mined only increases at circa 2% per year.

http://en.wikipedia.org/wiki/Ponzi_scheme

By this time Ponzi was seeking another deal to get him out of the golden trap he had built for himself, but time was running out. On July 26 the Boston Post started a series of articles that asked hard questions about the operation of Ponzi's money machine. The Post contacted Clarence Barron, the financial analyst who published the Barron's financial paper, to examine Ponzi's scheme. Barron observed that though Ponzi was offering fantastic returns on investments, Ponzi himself wasn't investing with his own company. Barron then noted that to cover the investments made with the Securities Exchange Company, 160,000,000 postal reply coupons would have to be in circulation. However, only about 27,000 coupons were actually circulating.

Pluto and ecoface, that's an interesting discusion. You say there will be carnage and anticipate a physical sell off later in the year.

 

Would you gamble yor physical stash (if you still have one) on this happening? ie sell prior to the correction with the intention of buying in later.

Just out of curiosity what do you see as 'carnage'?

The physical stash could be almost impossible to replace unlike the ETFs with their unlimited supply from .... who knows where.

Sell physical at your own peril.

You should team up with Ker. $200 just around the corner.

 

Yes, in the mother of all financial crises, let's sell all our gold because it could be cheaper in a couple of months. Sound advice.

That is another reason why I prefer bullion and coins. It requires more effort to sell, so you are less inclined to so when the spooks come out to scare you back into their numpty bits of paper.

That's because the mid cycle correction that will occur in the next year will be much greater than that correction IMHO.

I will look forward to that in anticipation.

Gold coins at spot price I haven't seen for a few years.

I agree.

 

I also think that alot of those who have bought physical will sell in the correction.

If you're correct the spreads on coins should narrow. It is my humble observations that during the last correction the opposite happened, that infact folk used the correction as a chance to purchase more bullion/coins.

Its interesting how people see different things.

 

The bit that scares me most in the article is:

 

"It's a little worrisome that so many people are piling in," Gartman said.

 

 

The herd is gathering. A big correction will come perhas after a re-test of 1000-1030, but it will demolish all that dumb money that has flooded in Dec / Jan.

During the correction of gold from 1030 to 690 gold bullion/coins was very hard to obtain. When silver corrected from 20 to 9 it was even harder to find. The only freely available at any quantity gold and silver was via the ETFs. The numpties piling out of these abortions is what is will crash the paper price of gold.

People piling into ETFs will be the first to sell, that is what the government is banking on and why they are being herded into ETFs.

I agree with whats written but how can the ordinary person with a few thousand to spare invest wheat and oil without exposure to wall street?

There is no practical way for the individual investor to store those commodities, that is why gold and silver are the perfect vehicles for storing wealth.

Gold ETFs are what banks were when they first started. Banks held your Gold and handed you a receipt for it. This receipt traded and become money.

This time the paper receipt (money) has been replaced by pixels on the screen.

We have learnt nothing.

Yes alot of growth was fuelled by credit.

 

However, alot of growth was created by ingenuity, creativity, inspiration, invention, hard work, tenacity, productivity, IT, globalisation, improved terms of trade and so on.

 

In other words the boom grew on the back of these basic factors which allowed more credit to come through and so on.

 

Let us not assume that with credit contraction all of the basic factors of growth will be eradicated. Value in terms money may be reduced significantly but the gains (health, science, efficiency, IT, invention, inter-dependence etc etc) will not be lost forever.

 

So lets not be too alarmist here. Growth will return but will be measured in different ways perhaps.

I think some people are missing the point. I am not stating that gold ETFs are frauds and do not contain the amount of gold they claim to. What I am saying is that you cannot assume the government will not go to extreme lengths to protect its script. As I said earlier, in Volcker's memoirs, he stated that the government during the expansion of the money supply in the 70s did not have a good plan to contain the POG which therefore required him to increase interest rates to over 20%. He did not say money supply expansion was a problem; he said not containing the POG was. Bernanke in his 2003 speech stated that to cap the price of gold all that was need was a rumor of alchemy being perfected, the impact would cause the POG to decrease. More recently, central banks have been using rumors to depress the price of gold before their sale. Also during the great depression it was rumors of Gold confiscation that caused bank runs and their collapse - this was mentioned in Hoover's memoirs.

So with all this history it is naive to think that the central banks and government do not have a plan in place. So guess what appears on the scene about the same time as the start of this credit expansion: Gold, Silver, Wheat, Oil, etc etc etc ETFs. These ETFs are mopping up cash from investors who think they are hedging from an expansion in credit. You have already seen what can happen with oil and that is what they have in plan for goldbugs.

They have control of the lolly in the ETFs via their creators - wall street - do not forget this.

I am amazed that the masses continue to hand over their hard earned lolly to the crooks on wall street so they invest on their behalf in derivatives. Once ETFs are exposed they will be something else in place. Remember Mutual Funds? whatever happened to those sure fire money earners. What about endowment mortgages? Lots of suckers around.

This article makes me nervous. They are herding the masses into their pen. Remember what I said: "owning gold is not the same as having possesion".

http://www.reuters.com/article/reutersEdge...E51C3T020090213

"More and more generalist money managers are looking at gold. A lot of money mangers find comfort with the idea of owning gold via GLD. It's quite convenient to own the GLD, versus having to pay warehouse costs on your own," said Brian Hicks, co-manager of the $500 million Global Resources Fund at Texas-based U.S. Global Investors.

Gold ETFs are listed on stock exchanges and offer investors exposure in bullion without taking physical delivery. Sponsors of the funds buy a matching amount of physical gold and keep it in bank vaults.

Pluto, do you hire yourself out for wedding speeches ?

 

ps - love the new avatar.

No one wants to hear what I have to say in person. It is only on the internet under the disguise of a fiction cartoon character that I find folk wanting to listen to my ramblings.

Here is an old email from Jim Turk which seems relevant to the above.

The same was said about Switzerland until recently.

http://abajournal.com/news/ubs_gave_feds_i..._bank_accounts/

"U.S. authorities have requested data from UBS on U.S. onshore clients," a spokesman for the Switzerland-based bank tells Reuters. "UBS must comply with that request for information located in the United States."

However, the bank hasn't provided data about secret bank accounts in Switzerland that the U.S. Department of Justice also is seeking, according to the news agency. Reuters reports that UBS and the Swiss Finance Ministry, which would have to approve any such data transfer, are still assessing the DOJ's effort to obtain this "offshore" banking information.