d2thdr

Dr Bubb,

Are you currently bullish on Gold or bearish?

There's always a risk:

 

+ Buy a US-traded etf, and there's a risk that the Gold get confiscated, or the Trustee has replaced some with paper Gold

+ Buy a HK-traded etf, and you are safe from US government confiscation, but maybe the Chinese will do it

+ Buy physical gold, and it may turn out to be Tungsten

+ Buy physical gold, and have it assayed, and you still have to store it somewhere

+ Put physical gold in a bank safety deposit box, and the bank may confiscate it

+ Bury your gold in your backyard, and your neighbor may dig it up

 

There's no way to escape from all the risk, so I suggest you diversify

In the big scheme, there is no question that gold is the only place where the risk is minimal. The gold however is not paper gold. It has to be only physical.We have had this argument on this forum for a long long time and frankly its getting tedious. The thing is those who have still not awaken from the stupor and are still believing the MSM need to be skinned and should suffer the losses they encounter. Personal responsibility and all that.

Tell us Bubb, have you finally bought any more taels?

What has happened to once a fantastic and wonderful forum?

Bubb as much as some people riled you, you too did not hold your grudges back.

I request you to please reinstate the forum as it was along with the mods, perhaps it will get back to what it was once. I will live in hope.

I was more obsessed when I held currency.

What a fantastic retort.

This could hit the share prices of those miners.

And may get some to leave the country, leaving it others (or no one!) to mine the country's Gold deposits.

Just for a minute think what if the price of 1 oz of gold in US dollar terms is 55000....there would be many people willing to mine the local gold. You wont need big companies. Also at that price mining equipment will be paid off by 20 or 30 oz.

Good. I have held a gold for a number of years solely down to Goldfinger and Cgnao

 

I post seldomly but I read lots everyday. I try to get a balanced view on all things and keep an open mind. Goldfinger forms one side of the aurguement and it would be a great loss to this site if his views were not aired, whatever they may be.

 

I will die soon so I don't want to spend any time trading stocks, currencies or commodities. I prefer to spend most of my time designing or making things or maybe playing a round of golf.

 

DrB I enjoy your site and I find your posts very interesting but you do come across as rather a control freak.

Well said. Control Freak is a bit harsh.

Government making foreigners sell mine holdings

 

 

As FOA once said all mines will be nationalised. Its inevitable.

 

Gold has an important role in preserving wealth IMHO. I own it now, and have owned it for years... and I buy on dips and sell some when I think it is overvalued. But we must not treat gold owning as a religion and/or build cults around gold hoarding.

Please clarify your mode of holding gold. Physical, ETF, Options, warrants, shares, exploration shares, mining shares, etc etc.

 

 

No one forces you to read any of it.

As the year draws on, you may see more and more so-called conspiracy material intrude into what you consider reality. Just this week the Gold-back bonds have once again popped up in the mainstream news. And now we are seeing a rash of top bankers resigning. Before this year is out, I predict that many hear will be thanking me for opening their eyes, just as I did on HPC to the debt crisis. Remember I bought DebtBubble.com well before anyone thought there was a debt problem. And I bought and still own GoldStock.co.uk. Who else do you know, apart from a Marc Faber or Jim Rogers who saw these things so early? I have now jumped ahead of MF and JR in pointing the way towards "disclosure". I may be wrong on this, but just give it another year or so to see what happens.

 

You have been a great trader. Perhaps you could be the best.

But extrapolating your insight into reading the financial futures before many people are interested, clearly means the BIG KAHUNA EVENT is very very close.

 

 

How many here will be satisfied with their Gold investments if a Gold ounce falls back to its 2001 purchasing power?

HI BUBB,

Gold is going to fall back to 200$/oz but then there will be no physical on sale. You will have GLD willing to sell you some shares, some gold backed fund willing to invest your money for returns etc. but you shall never see physical gold sold for 200$/oz though the paper price may fall to that price. Physical gold is too valuable to have 200$/oz price tag.

Fortunately the super rich and the third world nobodies know this. The rest of us are in the middle of the spectrum. Some of us want to trade and invest our way into brighter future, most want to stick to their day jobs and make the excess savings in gold.

Why are you so obsessed with conspiracy theories?

Im not a fan of Sinclair, but i know some of you follow him. There is more to read if you click on the link.

Why not? A couple of months back when you started posting, you came across as someone who does not know anything. I took almost 2 years to formulate opinions about most financial gurus and now I know whom to listen and whom to avoid.

I wonder what was it about Sinclair which turned you off? You can choose to not answer, but I would like to hear your opinions as there may be an angle I have not explored. Thanks in advance.

Does the Farm need to be purchased NOW?

I hope I am not faced with such a question and the decision that needs to be made now about selling gold.

Looking at GLD for gold volume is as if you asked someone like Lindsay Lohan about the state of general business affairs in Hollywood, and then you based your whole investment strategy on it. Oh gee...

Hah hah. Good one.

The issue I have with claims that there's x tonnes of secret gold somewhere out is that they do nothing to explain where it all came from. If there's that much more gold than thought, and gold is formed at the same time and by the same processes as other elements, there ought to be more of those elements as well, unless our theories are wrong. They may well be, but in that case, the "there's much more gold" proponents then need to offer a new method by which all this extra gold came into being.

If you do not take Bubbs thesis on gold seriously and read his stories for fun, it is a tortous way to spend time.

I dont see explanations, only excuses for Gold's poor performance.

Meantime, I am happy to buy Gold calls with Gold below $1600, leaving some powder dry for lower prices, in case we see them. The permabulls have been shouting "buying opportunity" all the way down, with me asking: "Why what?" while I have shown how you can be patient and keep your powder dry, and generate cash from trading.

Gold has had a 12 year bull market. Gold has outperformed every asset class. So I do not get your 'excuse' for gold's poor performance.

I generate cash by making dentures, doing root fillings, placing implants, fabricating veneers etc etc. I do not need to trade, and neither do 95% of homo sapiens. My dry powder is spent on eating out, purchasing music, travelling when ever the tiny one allows us etc. etc. and whatever is left goes into physical gold.

I tell you its a winning strategy without any stress associated with trading.

Everything that needs to be said about gold has been said. Everything that needs to be written has already been written.

Sometimes the best you can do is just wait.

A farmer tills his land, sows his seeds, irrigates the land and then he waits. Thats where we are today.

Why discuss the physical gold market ad nauseum and explain the same things.

Its getting boring and tiresome to explain to bUBB this.

So you need your own personal Death Star to create gold? Maybe Darth Vader was just a misunderstood gold bug!

Wilcock says that the Gold was mined long ago, and collected into China over hundreds of years.

 

In fact, I have also heard something about this story from other sources about two years ago, and so it has fascinated me how the story that has come out through Wilcock is so similar to what I heard then, and found so hard to believe. Another past of the story I heard was how people we have not heard of, are the true powers within this world, and they were virtually at War with the Illuminati.

 

 

When one hears such a strange story from such different sources, it does slowly become somewhat more believable.

 

Now with this case being heard by a NY court, more information and corroboration should begin to leak out, if there is indeed anything to it.

How about Science?

My link

Ever wonder where the gold in your wedding ring came from? This Valentine's Day, we ask Neil deGrasse Tyson, director of New York City's Hayden Planetarium, to explain the history of the rare element.

 

In the Beginning

 

According to Tyson, author of Death by Black Hole and Other Cosmic Quandries, all gold on Earth started out in the center of a star; he says stars are "in the business of cosmic alchemy."

 

When the universe began, there were only two kinds of atoms: hydrogen, which has one proton, and helium, which has two protons.

 

The problem was that hydrogen and helium couldn't combine to make a new kind of atom of three, four or five protons. The two atoms resisted each other because they were the same charge.

 

Unless, of course, it got very, very hot. How much heat would it take to get two protons to sit together?

 

About 10 million degrees, Tyson says. And that's where stars come in.

 

Fiery Fusion

 

Stars like our sun are so hot that protons collide with such force and have no choice but to combine. It's called fusion. Inside the sun's furnace, protons turn into heavier and heavier atoms: Hydrogen atoms combine to become helium, and then those helium atoms combine to become carbon.

 

"It keeps going," Tyson says. "Carbon and oxygen and nitrogen and silicon, and [fusion] just plows its way up the periodic table of elements."

 

Carbon has six protons, nitrogen seven protons, oxygen eight protons. A hot star can cook all the way up to iron, a 26-proton atom. But that's where it stops.

 

"When you reach iron, nobody can do anything... It's dead matter. You can't fusion it. You can't fission it," Tyson explains.

 

Once a star has converted all its atoms into iron, it's out of fuel.

 

"That's a bad day for the star," Tyson says. "And at that moment, the entire star collapses, and in that collapse, the star reaches stratospheric temperatures and blows its guts to smithereens."

 

The Collapsing Star

 

A collapsing star is called a supernova. The explosion is so powerful and cataclysmic that you can see it across the universe.

 

Supernovae outshine whole galaxies, because the atoms inside are colliding furiously, creating intense heat — hundreds of millions of degrees.

 

Only in a supernova is it possible to create atoms with 30 protons, 40 protons, 50 protons or even 60 protons. Nature prefers even numbers for stability, but every so often, the star will forge an odd-numbered atom, a real rarity: gold!

 

Gold is a rare, odd-numbered atom with 79 protons. For every single gold atom in the universe, there are 1 million iron atoms, Tyson says.

 

A Long Journey

 

After the explosion, those few gold atoms are cast deep into the universe where they sit in empty space for eons. Eventually, some of the atoms may join a cloud. That cloud may condense into a planet.

 

Once inside a planet, some of the atoms may make it near the surface where we can come and dig them up.

 

So every atom of gold in your wedding ring was forged in a collapsing star, and then traveled across the universe to get to your finger. All the gold we wear and all the gold we give has made this same journey.

 

So how many miles and how many years are represented in a ring?

 

Calculating the path from several supernovae around our galaxy back to our solar system, Tyson concludes, all told, it's a journey of 3 million light years.

 

Keeping your assets in the system is a mugs game. I am out, and can stay out till i retire if necessary.

Then, down to the jeweler once a month for my 'pension'.

My link

The King Doesn't Like Gold, Never Has, Never Will — Unlike Mr. Chang

by Burton S. Blumert

 

The last small rally that gold enjoyed carried it to $306 per ounce (it has since fallen back to $290). One of the reasons given for the run-up was that new money was pouring into gold from Japan and China.

We don't get much reliable information about those markets but I've experienced very strong inclination among Asians towards gold.

Which reminds me of my favorite Chinese customer, Mr. Chang.

I don't remember when he first became a customer but it had to be a decade before 1974. He barely spoke English, and I'm not even sure he was legally in the US. He worked in food service at United Airlines, and his wardrobe was Shanghai c.1930.

We didn't have much in common. His English was primitive and my Chinese non-existent.

The only thing we shared was his interest in gold and my desire to sell it to him. In those days we were prohibited from selling anything that could be considered a bullion coin. That didn't matter to Mr. Chang.

There was only one coin he would buy and that was the US $20 Liberty Head coin. He was familiar with it from China and to him the Liberty $20 gold coin was gold and gold was the Liberty $20 gold coin. Any other gold item might as well be counterfeit.

Through the years I saw him almost monthly. He brought his paycheck, would negotiate price, and then decide how many coins he wanted. (The $20 Liberty cost about $50 each.) I would give him change against his check.

Originally, I was amused that he came with his own balance scale. It was made of bamboo with a plate at one end and a weighted rock at the other. It was designed to balance the $20 Liberty. If a coin failed, it was either shaved or counterfeit.

After about a decade I became annoyed with his scale. "Mr. Chang, when in heaven's name will you trust me and not need a scale?"

He considered the scale just part of doing business, but he got my message and was embarrassed. Although his scale was present for the next purchase, I never saw it again after that.

In those days it wasn't easy getting information about the gold price. There was no US market and the London AM and PM fixings were sometimes available on the radio but it often required seeking the financial pages of the Wall Street Journal to learn the value of an ounce of gold.

Mr. Chang followed the price very closely. He would call almost daily, and ask, "Wuddah prica London gol?"

Upon getting the information he would respond: "Very thank you," and that was that. There was never any doubt about it. It was Mr. Chang on the phone.

Then we didn't hear from Mr. Chang for months.

"Has anyone heard from Mr. Chang", I asked? I was sure he was ill or worse.

Then one day there he was. "Wuddah prica London gol?"

I had answered his call and asked, "Mr Chang, have you been ill? We've missed hearing from you."

Dead silence.

How in heaven's name did I know it was him, he wondered. Gold dealers are amazing, with wondrous perceptions. I guess he believed that every customer said, "Very thank you."

Mr. Chang retired. I don't know if he had social security checks coming in, but his gold coins provided for his retirement. He came in as regularly as when he was a buyer. Only this time with one or two gold coins to sell. As he came in the front door, I noted he had coins in his hand, wrapped in tissue paper. He pretended he might be buying to keep me honest, but of course I knew that was not the case.

Then we learned from one of his old Chinese cronies that Mr. Chang had passed on. In fact he had gifted several coins to the friend who gave us the sad news. We dearly missed Mr. Chang, although "Very thank you" had become a part of the language in our office.

Some year or two later a young Chinese woman, whom I later learned was Mr. Chang's grand niece, came in. She was an accountant and evidently had found Mr. Chang's check stubs with Chinese characters on them breaking down how he had spent each check.

She was convinced there were gold coins some place and wondered if we were actually storing them. It was clear that she was not part of Mr. Chang's inner circle.

She left rude and angered.

As if rehearsed, my employees looked at me and in unison we all said: "Very thank you."

 

 

For 50 years as a dealer, we never stored customer metals

At Coin Shows and Hard money Conventions, we shouted the

message to all, "Take delivery of your metals."

 

Most listened, but just as there is a new audience for the Three Stooges every seven years,

there are always fresh victims who will surrender their gold and silver for a piece of paper.

 

Keep spreading the message, Jason. If you help just one poor sucker to keep

his gold and silver the struggle was worthwhile.

 

Burt Blumert

 

Iv just been reading youyr free gold link in your Sig, I found it very usefull. I shall be keping upto date with that blog weekley, looks good.

Is it your own blog?

I wish I could write as well as FOFOA which is an acronym for Friend of Friend of Another.

Another was an anonymous poster who wrote here. Check it out.

FOFOA has just continued the gold trail taking us where not many currently alive western men have gone before.

Here is his latest FOFOA

The trail is long and winding but when you reach the summit the view is amazing and very clear.

Everyone knows where we have been, lets see where we are going.

 

 

Just me thinking thats all

 

Ill shut up now!

 

Thanks for reading

Good points. You have given your reasons. Let me tell you what I think. Irrespective of whatever happens, the gold you buy will play some role in your life. So any gold you buy (ideally in personal possession) you will be better off than the sheeple who do not. Gold standard will never materialise, but your gold will find buyers irrespective.

Mrs JL has blessed me with a bouncing baby boy and her nesting instincts are strong.

 

 

Congratulations.

JT thinks we might shoot up to $70/t.oz given the half mast formation. Let's hope he's right.

 

That would be great. Need to sell a lot of silver. 70$/oz will be a good enough profit. from 20$/oz purchase to 70 is quite good. I shall however plough profit back into gold.

When?

 

And what will be the 'price' in pounds I wonder. 50-100K/oz, /Av house.

 

I' be happy with that scenario in theory. But the UK might not be worth a punt at that price. ?.

 

What sort of world is GBP 50K gold? First of all I'd like to see USD 5 or 10k/oz. Then we might know more of where we are going.

Hi Jake,

IMHO, I doubt we will even see 5000$/oz. The game is likely to be up before gold gets there. We are more likely to see Prechter on TV and his 200$/oz gold. But at that 200$/oz price try taking delivery. There will be GLD readily willing to sell their fractionally reserved paper or if you kick up a fuss they will settle you in cash if you are redeeming your paper and they will direct you to the closest physical market - Of this statement I am 100% certain. We shall see and time will tell.

I make this statement after reasonable study of A/FOA archives.

This is a email I received from FOFOA.

 

Another Thoughts;

 

"The BIS and other various governments that developed this trade (PAPER GOLD) , thought that the paper gold forward market would have allowed the gold industry to expand production some five times over! Don't ask where they got this, as they are the same people that bring us government finance and such. But, without a major increase in gold supply, the paper created by this "gold control operation" will either be paid by, 1. new supply. 2. the central banks. 3. rollover existing. 4. cash? 5. or total default! As the Asians started buying up everything last year ( 97 ) , number 5 and 5 started looking like the answer! When the CBs started selling into this black hole of demand, the discussion of #5 started in their rooms also."

Regarding synthetic supply, it is the same as credit money—"our money"—being a synthetic supply of base money. Same thing! Only there's no Fed that can create "gold base" with the click of a mouse. That doesn't mean the BBs are net short paper gold any more than the banks are net short dollars. But you can still have a run on the reserves, and without a lender of last resort, hello Freegold! You can also have a lightning-fast and unexpected exponential rise in the "leverage factor" or "reserve ratio" of these BBs without them being net short:

"What we have here is an explosion in the bullion banks' physical leverage factor, not through an increase in lending this time (the lending is actually declining), but through customer withdrawal of reserves, with no physical backstop. Even a bank with a conservative leverage factor can experience a bank-busting, system-crashing run. Public confidence is the only thing that stands in the way. This is how a classic bank run runs."

 

A Bullion Bank has X amount of ounce-denominated liabilities offset by Y physical reserves plus Z amount of ounce-denominated claims on others. So X=Y+Z. If the holders of X run on Y, that leaves only Z offsetting the remaining X holders. That's a big bank holiday and Freegold party!

BB ounce-denominated liabilities (paper gold) are apparently being used as a currency trade. It was this revelation that immediately preceded the appearance of ANOTHER.

Here are a few comments by other people prior to ANOTHER's first post:

"It is relevant to notice gold's average trading size per transaction, which was 29,140 ounces -- nearly one tonne per trade (32,150 oz. equivalent to a tonne). This is approximately $10 million per trade. This suggests (at least to me) the trades are non-Central Bank transactions - and more probable commercial operations related to CURRENCY TRADING. Interestingly, the average trading volume for ALL INTERNATIONAL CURRENCIES IS ABOUT $1.2 TRILLION PER DAY.

 

Viewing gold as a commodity may be mistaken, however. The LMBA revelations show that gold is a global currency of some substance and liquidity. So what affects the fundamentals of a currency? Usually Central Bank monetary policy. However, gold does not have a CB.

 

Remember, these huge volumes on the LBMA are NOT from hoarders.... these are the numbers of merchants using gold as a CURRENCY."

Red Baron

 

When ANOTHER wrote the following he was referring to the above (the full Red Baron series is linked in my blog sidebar):

Date: Sun Nov 02 1997 11:38

ANOTHER (THOUGHTS!) ID#60253:

 

REIFY:

Check the "gold eagle site" under Red Barron ( LBMA ) .

 

Read everything and rethink your thoughts.

That was 1997. As we now know, those were just the clearing numbers. The BBs don't publish an M1 or M2 equivalent for "gold credit money." They only publish the average daily clearing volume, and now, with this document

LBMA

 

they released the total Loco London daily turnover which appears to be about ten times the clearing volume. That's not the total stock of paper gold, but the flow. That's all synthetic supply! And TONNES of it!

What size stock does that huge flow of thousands of tonnes per day imply? I don't know. How much physical do they have in reserve behind it (i.e., what is their de facto reserve ratio)? I don't know. Where did all those BB liabilities come from (i.e., what are the claims offsetting them)? I don't know. But you have to admit that a futures market (speaking of COMEX now, not the LBMA) is, by definition, a synthetic supply. If someone who could have bought 5 ounces of physical gold now buys control over 100 ounces of "future" gold (as in, not yet physically available), wouldn't you call that a synthetic supply as opposed to a physical supply?

And once you discover that most of those futures contracts are cash settled, you will come to understand that the "future" gold can just stay in the ground or wherever it was lying still. So it always was a synthetic supply from inception to settlement. The commoditization of gold in the '70s along with the vibrant commodities futures markets and forward sales that grew out of the '70s and '80s freed up the physical to flow where physical was still valued. Is that a big conspiracy? Or is it just the way things worked out?

 

 

 

Date: Tue Oct 07 1997 22:37

ANOTHER (THOUGHTS!) ID#60253:

 

Why did LBMA go public?

 

Ever notice how many important middle eastern people keep a residence in London. It's not because of the climate. The most powerful banks in the world today are the ones that trade oil and gold. It is in the "city" that the deals are done by people who understand "value"! Westerners should be happy that they do because the free flow of oil and gold has allowed this economic expansion to continue this past few years.

 

Understand that oil is still traded for a certain number of US$ but after the deal is done a certain amount of gold is also purchased "with the future flow of oil as collateral".

You are very correct. What is your target for oz?

Mine is 1 oz or less for a average British House.