Wednesday, June 19, 2013

Ohh nooo!!! Gold so low!


Another day, in another time, gold had plunged to a 20-year low, plumbing the depths of $250 an ounce at the same time as the Dow was hitting a new all-time high of 11,300, even as astute followers, just like some that I have today, were then following Another and FOA. Some threw in the towel in disgust, some turned on the messenger, and everywhere you could cut the tension in the air with a knife.

I was following the thread of a particular (unrelated) discussion in the old USAGOLD forum archives (I do that occasionally) and I came across a few comments that reminded me of some of the recent comments here. So I picked out a few of them that I thought you might find interesting.

I want to note a couple of things. The first is that I don't think we are seeing quite this level of desperation yet. I think another $100 lower and we might start seeing more of this kind of towel throwing. Also, note that these few days below marked the last time that physical gold would ever be that cheap. So the very time at which some who had been following A/FOA in real time were throwing in the towel was perhaps the best buying opportunity in all of history. If you understand why I, personally, welcome the recent decline, then that's something to keep in mind if the falling price of gold ever starts playing tricks on your mind. If you don't understand, then please feel free to ask in the comments and I'm sure that someone will direct you to some of the posts that explain my view.

All of these comments came from this page, and they are just a few selections that I picked out especially for you today. :D

Skip
Overcoming discouragement
#11907
8/23/99; 22:59:27

I've avoided posting for some time because of discouragement. As of right now, I am regretting that I ever invested in gold or gold stocks. Something that is worse than losing hope and cutting your losses is losing hope and capital and then to have someone lift your hopes...only to have those hopes trashed, again and again and again and again and again and...endlessly trashed.

If I think of all the growth I could have had in the stock market rather than the losses in gold and gold stocks, it is almost sickening and totally depressing. Somehow I know that I'm not alone in feeling EXTREMELY depressed at this latest attack against the POG by the rich big boys. Somehow it seems very unholy to keep getting financially bled to death simply for making the right decisions at what SHOULD be the right time. Maybe I'm over-reacting, but I sure hope that GATA can help bring the POG back to at least its 20-year average. This current price level of gold and gold stocks is totally absurd and complete discouraging.

Long have many of us ardent goldbugs waited and waited and waited, witnessing almost every reason possible to trigger an upturn in the price of gold...only to see apparent collusion drive it down further.

I'm in too deep to sell, and too scared to buy anymore. Somehow I can't help but wonder whether I'll someday die in my old age with tens of thousands of worthless gold stocks and many ounces of worthless gold coins. Am I being somewhat paranoid? ...actually, I'm just plain TIRED of losing!!!

Can someone out there provide some GENIUNE hope for us disillusioned gold bugs? I'm so tired of the misinformation that prevails on both the internet and the news media that it's impossible to know WHO OR WHAT to believe anymore. Some of us would love to start overcoming discouragement, and I'm one of them.

--Skip

The Stranger
Skip
#11909
8/23/99; 23:09:10

Boy, are you going to get a whole wave of responses on this one. I, for one, would be happy to address your predicament in the morning if you like, but, right now, I have to go to bed. For starters, however, let me suggest this: tell us more about what you have been through. Just how bad has it been? What do you own, and how long have you owned it? Don't worry about giving yourself away. Nobody here knows who you are. When I get up tomorrow, I hope to hear more about what you have been through. You will get lots of help here, but first, you need to talk.


Aristotle
Response to FOA
#11917
8/24/99; 4:22:15

[…]

Some people prefer to disregard the fact that the Gold market has spent 20 years coming to this point in time and price--a price that could NEVER exist now except under the special circumstances that have been put forward in many carefully considered posts. Some of these same people might suffer a bruised ego because their own careful and astute choice of Gold as an investment has yet to pay off huge in a timely fashion. Or else they might feel that Gold should be performing for them with obvious gains each and every day. Don't these people ever go home from work and sleep, or must they always be on the job and getting paid? My point is that "productivity" need not be an around-the-clock affair. As ANOTHER has said, "Gold will be repriced once in life, and that will be much more than enough." The bottom line is that you will either HAVE Gold when events turn, or you won't. It's that simple. As Beesting recently reminded us (or was it Turbohawg or ET?), this isn't just a showdown between the dollar and Gold. There's a whole world of currencies that have been suffering at the hands of their national dollar-debts.

[…]

Gold. Get you some. ---Aristotle

PS. for Skip: I don't know if this will help you out. Maybe it'll make you smile if nothing else. I had a chat with a friend the other day who was second guessing his Gold bullion investments after watching the price fall while the DOW powered upward in half frustration. He asked "What if I die with a drawer full of coins before the price of Gold goes higher?" (He's under 50 years) I laughed and said, "Then, congratulations!" I suggested to him that anyone who checks out with Gold coins remaining in his drawers (at any price) obviously had adequate means with which to meet his life's needs. Only a deathbed ego would consider any distinction between the remaining Gold weight and the Gold price during one's last breath. He laughed loud and hard and said that was for sure.

Aristotle
Skip, another thought for some additional perspective
#11932
8/24/99; 8:43:41

You said, "If I think of all the growth I could have had in the stock market rather than the losses in gold and gold stocks, it is almost sickening and totally depressing."

I don't believe a particularly infamous trader who was actively IN the markets had a single Gold investment. His name was Mark Barton, he lost half a million, and killed a dozen people. Just because you see the DOW index climb is no guarantee that your particular choice of stocks will be gaining too (unless you bought into an index fund.) I can't even begin to recall the vast number of times that I've heard the financial reporters announce decliners outnumbering advancing issues despite a higher DOW on the day.

Further, try to recall your original rationale for choosing your current suite of Judy's. (As in "Punch and Judy" shows...taking a beating. A term-use I coined to lighten my own dismay over a mistaken purchase of a mining stock years ago that went south and now vies with postage stamps in value.) Chances are that whatever compelled you to make those decisions would constantly act to sway you to do so again, and are probably more compelling now than they were then. If you couldn't resist Gold or Gold stock purchases before, could you resist them now? Hopefully, as time has passed, you've come to see a distinction between owning a world class asset (Gold) versus stock in companies that try to earn a paper profit by mining for this world class asset. Don't get me wrong...I love mines (I have a professional attachment to them), but I'll never again make the mistake of investing in a paper generator when there is real money (Gold) to be claimed. As a productive person, I invest in myself and make (earn) my paper directly. Then I cash it in for Gold, month after month. It's a One Way Street for an enjoyable life. I never did enjoy fretting over whether IBM or AT&T would be the better performer. I AM the performer, and all that I ask of my money is that it really be money--payment-in-full.

Unlike some people that are fully invested in stocks, with Gold you actually have real savings. You are a sovereign individual, immune to the fiscal mismanagement of your nation's leaders. Also, think of the sector of the population that lives paycheck to paycheck, unable to dabble in the stock market, and unable to save either paper or Gold. Is their life for naught because they aren't "in" the stock market? Wouldn't they be thrilled to have an all-Gold savings? Travel to some other countries and your perspective will change in a hurry. Adopt the larger view, my friend.

Gold. Don't work for anything less. ---Aristotle

FOA
Reply
#11935
8/24/99; 8:57:04

[…]

From my standpoint, most of the gold paper market will revert to forced cash settlement at the last trade! That's for long investors only because it's the inability of the shorts to deliver that will precipitate this. They will be taken out and shot because the CBs will be clearing the deals. If it's dropped to $100 and established trading markets halted worldwide because of sudden delivery demands, everyone will settle at $100 cash and walk away! People that are waiting to sell their hedged gold into their counterparties (mines included ABX?? to the BBs) would have to sell their gold at the new settlement price. Remember, when big international bankers are in trouble on this grand of a scale, the rules are changed into the banks favor. Always has been, always will be.

Understand, that the BIS clears all trade in CB gold. If that gold is tied up in private Bullion Bank deals, it will come under their rule. The BIS tells the Government what needs to be done and the Governments tell the mines. In perspective, this will be happening in every industry, worldwide, not just gold. Everyone will lose some skin…

FOA
Comment
#11943
8/24/99; 9:47:21


---CoBra(too) (8/24/99; 9:08:34MDT - Msg ID:11936)
Endgame among not so clearcut adversaries?!?---


CB2,
Good point. I have one view for what you write:


-----So why hold on to bad debt paper scrip if the endgame between $/IMF and Euro/Bis was so clear-cut policy as FOA feels, all along.---------

There is no possible way that the CBs could ever sell or unload all of those dollars. Presently they are held in the form of US treasury debt. It's owned by the CBs not their public / private interest. So, the CBs would not be looking to "spend" these reserves in the usual sense. They obtained these reserves as their local economy generated excess sales to the US (for them a trade surplus) and their private citizens wanted to hold local currency assets, not dollars. The Cbs printed Marks (example) and traded with their citizens for these excess dollars. Then they traded these dollars for US debt so as to earn interest.

Now, exactly what good are these debt holdings as long as their country continues to carry a trade dollar surplus? Not much, if the locals don't want to hold dollar assets. In the end, if the CBs were to sell these treasury holdings it would crater the US debt markets long before any value was received. And, to add further, that value could only come from using the dollars to buy something. Now what does a Cb use its reserves to buy, cars, TVs, other currencies??

No, the only avenue to balance currency value is through the age old asset of gold. Indeed, if you already hold enough gold, one just uses the dollars to bid for gold until the dollars become worthless (price of gold spikes to the sky). Usually only the intention to bid is enough?

Yes, No? FOA

FOA
Reply
#11947
8/24/99; 10:20:59


---- Al Fulchino (8/24/99; 9:12:26MDT - Msg ID:11939)----
------what I was grasping for is the connection with this analogy to the gold industry is how the industry wasn't wary like OPEC with their own product. This manipulation could have been prevented had they OPEC'ed themselves. Do you agree?------


Al, it's true that the mining industry could have done a better job of managing their product. But, would they have been allowed to? Just prior to OPEC and the 1971 gold window close, all the major nations were still trying to work out a common ground with respect to gold. The price was so low that few mines were making anything more than subsistence. The governments were finding that they could no longer use gold as money because they needed to cheat on the currency. The US wanted the price of gold to run up so as to spike the oil price and obtain more local production. Something they couldn't do competing against the nickel a barrel ME producers. As gold rose, the mines didn't need any production agreements so no one sought one. Throughout the 80s everyone was expecting gold to regain its trend, so again , no need for collusion. It's only been in the 90s, especially during and right after the gulf war that the industry began to smell a rat. Hell, even two years ago, Another's Thoughts about manipulation were dismissed as crazy. Now, the industry sees they are in a battle for their lives as their asset is at the center of a realignment of world currencies.

Truly, if gold is repriced high enough, as a competing currency, the falloff in jewelry demand will negate the need for any additional supply. At extreme prices, the CBs could supply the market for years to come without impairing their asset reserves. Production curbs on the mines could again restrict them to minimal profits even if gold was in the tens of thousands. A mess indeed.

FOA


Canuck
Sorry to all, I quit.
#11987
8/24/99; 18:40:45

Sorry to all, FOA, Aristotle, Aragorn, ET, Steve H., Gandalf, Peter A., The Scot, canamami. I'm done.

We talk of an upward swing that I don't think is going to happen. We endless surmise on the possibilities, Sachs is 'working' 15 mt. and BOE is selling 25 mt. in 4 weeks, yadda,yadda. The USA gas 7,500 mt., BOE still has 680 mt., the IMF, the Swiss, many other CB's. The 'overhang' is monstrous compared to this 15mt. and 25mt here and there. Who is really going to control gold?? I don't understand the 'paper' end of it but I will take your word for it that it will blow up, and then 'physical' will rule. So then, you controls the 'physical', the holders with thousands of onzes or the one with thousands of tons? Did the 59 page article not allude to the fact that CB's WILL sell down the price of physical. Gold has been dropping for 20 years, if I am a country in need of quality, value-oriented reserves, given that it is 1999, do I want gold or do I want the currency of choice. Fifty years ago, gold was a 'reserve currency', today it is not. With today's global infrastructure I can 'switch' my reserves very quickly. Investors are 'switching' investments into Japanese equities, and tomorrow it might be England or Germany. Tell me why a federal bank needs to hold gold? Why does a central bank hold gold? For a few years now CB's WANTED USD as reserves because it represented stability and wealth.
And it is as plain as day that CB's want out.

In regards to the message above, I have read it 10 times and two phrases stand out, "all that I ask of my money is that it really be money--payment-in-full." I'm investing in gold and I'm not getting paid in full, I feel brutally sorry for for the folks who have been investing in golds for years and years. I wish gold a turnaround for their sake. Secondly," Adopt the larger view, my friend" confuses me. I think the CB 'overhang' is the larger view.

Again, I apologize to all, I am throwing in the towel, I wish all gold investors multitudes of luck and fortunes, I won't be there; perhaps I am scared, short of time, impatient, 'fiat' hungry, I don't know. But again best of luck, sincerely.

Canuck

SteveH
Canuck
#12003
8/24/99; 20:58:06

You will be missed. We all feel your pain. I would offer that the pain is most always the greatest before change, but we all live our own lives to our own rythm.

Good luck. Keep in touch.


FOA
I'll be back later.
#12004
8/24/99; 21:06:47


----Cavan Man (08/24/99; 20:06:51MDT - Msg ID:11996)
FOA
I see there are a couple of posts here this evening that are not pro-gold and perhaps for good reason(s). Do you have a repartee?-----


CM,
Yes, it is sad when someone gets hit without a clear knowledge of why. Unfortunately there will be more of this because investors are unprepared for the times ahead. We could see gold go through tremendous swings as this is unwound.

Long term booms (20 years +??) always die with major losses inflicted on the most leveraged positions. Add to this a once in a century destruction in the most popular currency, and we produce an economic earthquake the likes of which no one has ever seen.

Most investors retain their life savings in a fully invested mode and would not get off these train tracks if they saw two engines coming. They will stay there because it's impossible for them to believe they occupy the wrong position! Who can lay blame or call them fools? These typical western savers have been educated to believe in a money system that serves no purpose, except a medium of exchange. Yet, they perceive that all of their assets are correctly valued by this system.

The gold market suffers the same fate. The same ideals that hold us in bank accounts, using credits to indicate what is on deposit, also drive us to invest in gold assets that must be sold to realize a profit. Modern gold bugs travel from bank accounts into paper gold and back into the same bank accounts. All the while pointing out the weakness of the system, yet needing the same system to keep score. Without the modern paper gold market, gold bugs, as we know them are lost to place a value on their holdings. That is why they gravitate into familiar gold holdings. Ones that still retain some connection to their paper currency. Mine stocks (and various option / futures) are a likely choice as they sit squarely upon the financial system we know most.

Great swings in asset preference always bring monumental profits. However, these profits will be shared by only a very few. And those few will have to endure gut wrenching blows to their assets when this storm hits. Gold will by no means be safe and it will not be secure. But in comparison to every other form of wealth, it will be the most well-known and sought after asset on the planet.

I think, many will be weeded out from this market as events unfold. Most of them never expected the fluctuations occurring now and they would be horrified at what may come. However, what they retreat into will be completely cleaned out. Completely! As for those that are sharp enough to buy when the proverbial blood is running in the streets? Time and events will prove that they were not as smart or quick as they thought.

Having said that, paper gold may rally, gold stocks could storm up and physical could just sit there. But that won't be the end of it and such an action would simply draw more into the fire. I remain steadfast to what Another once said:

"when a thousand hungry lions fight over one scrap of food small dogs should hide with what's in their belly"

This dog is well fed with gold and hidden deep in its history. Thanks FOA


The Stranger
The Post With No Name
#12005
8/24/99; 21:34:29

Last night, somebody calling himself Skip posted a sad commentary of his experience in the gold market and issued a plaintiff call for reassurance from this Forum. Tonight, Canuck, in an act hardly anybody could fault him for, suddenly jumped up and made a run for the exits. The last time we were at these price levels (and after years of pie-in-the-sky forecasts) ANOTHER and FOA suddenly reversed themselves and announced that the POG was very likely to collapse. And now, just to be sure we are all scared as hell, Farfel shows up tonight to remind us that the world economy is about to slip down a blackhole, taking gold with it, of course. (Needless to say, I think such pronouncements are as looney as they are facile.) But there must be something about $250/oz. that brings out the fear in even gold's most devoted enthusiasts.

Forgive me for being presumptuous, but I think times like these are apt to be hardest on those who have the least confidence in their own research. I doubt anybody here has a higher proportion of his own assets in gold or gold-related investments than I do. Yet, I have absolute confidence in my position. There is a worldwide reinflation taking place. It is quantifiable here in the U.S. It is, in fact, quantifiable in many countries around the globe. It is the very reason, in fact, the FOMC raised rates today (despite having committed three coupon passes in the last month). One doesn't need to be a PhD. in economics to understand the meaning of these things. But, because it takes time for the masses to come around, one needs to have patience.

I think it was Ben Franklin who advised never putting all of one's eggs in the same basket. But somebody else must have said, if you ever want to get rich, putting most of your eggs in one basket is just about what you're going to have to do. The trick is to watch the basket. I don't know who might have said that, but, whoever he was, he convinced me. Apparently, he also convinced Bill Gates, Aristotle Onassis, Michael Dell, J. Paul Getty, etc., etc. etc... None of those guys ever gave a darn about classic portfolio theory, and, frankly, neither do I.

I have always been a "plunger". When I find the right thing to do, I just can't bring myself to do much of anything else. But, over the years, my efforts have paid off handsomely. That's why, as much empathy as I feel for someone like Skip, I also feel respect. No, I don't know what he owns or when he bought it. I also don't know how much homework he did before he risked his money. But I know this: Skip had a dream once that I can relate to. He wanted to be rich and he had the courage it takes to get there. Now, that's my kind of guy.

Skip, if you are still out there, remember these simple words: If at first you don't succeed, try, try again. You may be having a low moment, buddy, but the future belongs to people like you. You will learn from this and go on to do great things with your investments. Believe me.

And as for you, Canuck, get a good night's sleep, my friend. Tomorrow is another day!

Skip
The Stranger
(08/24/99; 21:34:29MDT - Msg ID:12005)
#12020
8/24/99; 23:26:52

I'm still out here, and have frequently lurked on this forum although I rarely post.

True, gold approaching the low $250 range struck fear in my heart, as I've been bleeding financially all the way from the high $300 range down to the present pits of despair. Nonetheless, my concern is how much lower gold will go before it finally turns, and whether or not I can hang onto what stocks and coins I currently own before the POG returns to at least normal levels. I'm building a cash account through working two jobs and very long hours in case such a slush fund is needed to get me through the next few months without having to liquidate at great loss.

I'm sorry for Canuck that he threw in the towel. Also, I do appreciate your praise of my courage... and I once heard that the TRUE test of courage is having the ability to do the right thing during a time of fear. Right now, I believe that keeping my gold and gold stocks IS THE RIGHT THING TO DO.

My thanks to all who have responded to my posting from last night.

Sincerely, Skip


FOA
Comment
#12064
8/25/99; 11:29:26


---------The Stranger (08/24/99; 21:34:29MDT - Msg ID:12005)
The Post With No Name
Last night, somebody calling himself Skip posted a sad commentary of his experience in the gold market and issued a plaintiff call for reassurance from this Forum. Tonight, Canuck, in an act hardly anybody could fault him for, suddenly jumped up and made a run for the exits. The last time we were at these price levels (and after years of pie-in-the-sky forecasts) ANOTHER and FOA suddenly reversed themselves and announced that the POG was very likely to collapse. And now, just to be sure we are all scared as hell, Farfel shows up tonight to remind us that the world economy is about to slip down a black hole, taking gold with it, of course. (Needless to say, I think such pronouncements are as looney as they are facile.) -------------

(to see the rest, read his post)


What do we conclude from the above post? Stranger, I appreciate your presenting your thoughts and perceptions. They validate my own perceptions of how westerners feel about gold. I also used to read Another's Thoughts as an observer when they were presented by someone else. The one common thread in all of them was his council to buy only gold, physical gold. Yet, it never failed to impress me that every time those considerations were given, all discussion immediately turned to buying gold options, futures and mine stocks. It was like an automatic response that was ingrained in investor psychology from years of indoctrination. Your conclusions fit the same pattern.

Why is it that professional brokers and investment councilors in this country lead the public to this end? Is it because they have no depth of history to draw from or is it that they have "no fear" of losing others' money? Mention that gold may rise and could become a bedrock for your life savings and not one paper pusher tells his clients to buy real gold. Yet, we let the facts speak for themselves. The gold price having fallen from manipulation has literally destroyed a large percentage of portfolios invested primarily in gold stocks. Some of these mine stocks have gone to zero and are in bankruptcy, never to return.

All the way down Another (and later myself from association) said to buy gold for the long haul because in the long term it may go very high. Then in typical like form, traders said buy gold stocks for the long term also. Don't listen to Another, it will never go that high and with these paper items you will get rich if it only goes up $100 bucks! Indeed, leverage ruled the day all the way down with little regard to the fact that the "little guy" could lose it all with no hope to run for the final payoff. Now, here at $250 gold, Another presents a case for the destruction of the pricing market mechanism and still says, buy gold for the long haul. A concept, I might add that fundamentally offers the most bullish case for physical gold, while posing a worst case scenario for mine stocks. Yet, intelligent thinkers and admitted white collar investment professionals, such as yourself, lay the blame of loses to mine stock investors at the doorstep of physical gold advocates.

The whole philosophical reasoning for buying physical gold was always to negate the possible total loses to ones assets from a breakdown of the world's modern derivatives pricing system. A system that spans our entire financial structure, not just gold. Even with this risk in mind, I submit that it is still the current system advocates that present a "pie in the sky" council to new, unseasoned savers. Just as you use Bill Gates and other "risk takers" to portray an "American Spirit" of "plunging in", it hides the hideous failure rate inherent such accomplishments. Had Skip not listened to the sirens song of great wealth, he would still have had a chance today to benefit from a centuries old investment, real gold. So consider this, the next time you drum the march for the average person's savings to the tune of "paint your wagon and come along". For myself and many others, long term playback and asset safety are more important to our family than the bragging rights of day traders.

Please continue. (frown) FOA


The Stranger
Sorry, FOA
#12068
8/25/99; 13:46:23

I didn't make the point to offend you. My intent was merely to share my confidence in the gold market at a time when people were obviously getting nervous.

As to your comments about white collar professionals and "westerners", I suppose you mean well. I would emphasize, however, that, out of respect for our host, I have specifically avoided discussing the merits of stocks vs. coins. I intend to keep it that way.

Finally, as to who is misleading whom, all of our (your's and mine) posts are a matter of record. I hope I need say no more.

Farfel
Five Lessons I Have Learned Late in Life as a FORMER Goldbug
#12069
8/25/99; 13:47:35

1) With the exception of Barrick Gold, ALL gold mining companies are run today by maleducated, sub-moronic, good ol'boys from Hicksville. After all, just take a look at all the formerly unhedged gold producers who finally decided to hedge today some $200 an ounce below Barrick's hedges. True idiots! Talk about shooting yourself in the golden foot! Oh, well, what the hell, might as well tank the gold price another 100 bucks or so.

[…]

2) Unlike other commodity producers (like OPEC), there is ZERO co-operation amongst gold producers... and so they are doomed to die their own individual respective, deaths (except for Barrick Gold).

These guys couldn't get together to throw a birthday party, let alone figure out how to coordinate a de facto cartel designed to curtail gold production and enhance the gold price...

3) All Gold mining company managements operate on automatic pilot, following a pre-determined path to oblivion (excepting Barrick Gold)…

4) There is NO notable difference between South African golds or North American golds or Antarctica golds, for that matter. They all share one thing in common: a plunging gold price below 200 will ultimately bankrupt the entire lot of them (except for Barrick Gold)…

5) There are NO gurus in the gold market (except Peter Munk). It is impossible for any single technician, chartist, fundamental analyst, astrologer, etc. to predict the arbitrary path of gold in the short-term with any scintilla of success, although it is a usually a pretty safe bet to say "It's going down!"

Gold's arbitrary behavior stems from its oligopolistic control by the Central Banks. Upon any given day, there is at least a 50% chance that some Central Bank will pre-announce its decision to dump its entire gold reserves in order to MINIMIZE its profits on the sale.


FOA
Comment
#12083
8/25/99; 16:45:26


------The Stranger (8/25/99; 13:46:23MDT - Msg ID:12068)
Sorry, FOA I didn't make the point to offend you. My intent was merely to share my confidence in the gold market at a time when people were obviously getting nervous.------


Sir Stranger,
no need to be sorry and your post did not offend me. I felt the offense was directed towards intelligent physical gold advocates. When you publicly interpret my posts as a reversal of thinking, you are wrong and send a false signal. To say that I expect the (physical) price of gold to tumble, is a misleading statement that subordinates my reasoning by talking out of context.

I understand how our gold market presently trades as a paper derivative and in physical form. Every day, new evidence comes out to confirm this concept. TownC offered the excellent work of John Hathaway to further explain this evolution. When Another pointed out that the derivative side could fail and be discounted in price from the effects of that failure, you obviously did not grasp it. Others did. If you had then you would have noted that I expect the physical gold price in the dealer community to explode as its supply falls. A process of rejecting the current price setting methods.


--------As to your comments about white collar professionals and "westerners", I suppose you mean well. I would emphasize, however, that, out of respect for our host, I have specifically avoided discussing the merits of stocks vs. coins. I intend to keep it that way.-----

Again, I present a balanced observation that helps to account for the much larger percentage losses to investors that have followed the "established paper rout". Nervous people have a more pressing need to learn why their strategy has failed. Without balanced input, we often repeat our mistakes. I learn from my mistakes also.

As for merits of stocks vs. coins? There is no valid comparison. Apples and oranges have never had the same taste. The percentage of loss for one or the other is but a function of the risk one takes when placing savings into that vehicle. Coins will never be as risky as stocks of any kind. Nor will gold bullion in one's hand. The very simple laws of nature dictate that gold cannot fall to zero as stocks have and often do.


-------Finally, as to who is misleading whom, all of our (your's and mine) posts are a matter of record. I hope I need say no more. ------

I believe we come to this forum to offer our Thoughts for everyone to view and discuss. No one is right, wrong or misleading as only events can and do prove all things. To date, cash invested in gold bullion has lost value much less than if it was placed in mine stocks. All of us can grasp that fact. Indeed, no more need be said.
Thanks FOA


AEL
ha ha ha
#12085
8/25/99; 17:07:52

did anyone catch the unintended double entendre in FOAs latest? --- "... the much larger percentage losses to investors that have followed the "established paper rout"

i.e. rout, or route?

:)


FOA
Come what may?
#12506
8/31/99; 16:15:01

ALL:
I do thank everyone that have voiced support for the continued sharing of my insights. Anyone of you that have been alive for a while must also understand the frustration of explaining a difficult topic. Truly, I (like all of you) am not a machine and the process of walking a fine line between two worlds of thought is a major energy drain. This unique forum gives all readers an opportunity to expand their viewpoints by observing the "real world of money" through different eyes. As such, I deplore any direction that takes us into the ego world of "traders calling the market". It is an accepted fact that many aspire to make that role their life's work as there are plenty of other net sites and forums to confirm it. As popular as this may be, it offers little in the way of gaining insights to the perspectives that drive world investments. As a group, the trading society often loses the concept that feelings and viewpoints are the driving forces that shape those little chart patterns so many follow. Because many give up in trying to decipher the meaning of these forces they degrade themselves to a level of "follow the leader investing". True, it works sometimes, but one's spirit of understanding develops little from the process. As a result, when a major change does impact world thought, people are lost to grasp why the trend reversed, and more importantly, cannot change their strategy with it. Perhaps, something we have seen in the gold market these last many years? So, "let the world have its way, come what may", I will try to present my insights as seen through others. I hope many will join us on this journey.

Further:

I completely understand (as do you) that many people become upset when someone attacks the validity and purpose of their favourite investment strategy. Indeed, if most of your savings are installed in said discussed vehicle, the urge to find a flaw in the reasoning becomes overwhelming. Often one does not have a factual explanation, but we do have the ability to "think out loud" in the form of a rambling discussion. Perhaps, this is how many view my posts? I offer that this form of "rebuttal" is preferable to just stating "he/she is faceless and doesn't have the facts"??? If I do this, I apologize and will try to change. I think Mr. "PH in LA" had it very right when he observed how some internet writers, "come wading in with both barrels blazing" as they present their thoughts! I add that this could be an offshoot of our modern society. Hope we can get past this, soon! Thanks PH.

Onward:

Most investors that have assets in this broad arena called the gold market, have also come to appreciate just how large an "impact area" gold has had. Not only throughout history, but right up to today. The ongoing battle over the "gold concept" has won and lost fortunes, built and destroyed empires and in general has warped the human senses about what money and savings should be. This conflict continues today, even onto the pages of this forum. As the stress builds on our world financial system, the lines of thought concerning gold are becoming more clear. Let's examine some of what I perceive to be some of those lines.

Of course there are those that do not even consider gold as a viable contender on the world money / investment scene. The have lately been a major vocal class that have prospered in the realm of the current financial system. Myself nor anyone else should blame them, as they follow their reality in a world that presently benefits their ideals. I think few of them have given themselves a full study of how world currencies have come and gone throughout the years. If they had, the fact that they "have lived in a period of little change" should hold for them that things can reverse without notice. History is full of recounts that describe the rise and fall of entire social groups at the hands of a sudden rethinking of what has economic value and what doesn't. In any event, ingrain monetary ideals usually do not change during one's lifetime, so the past lessons may be worthless for some. As a result, a large mass of society must always return a great portion of their wealth into the hands of some "historical event".

Also included in the "gold perspective" are the true "physical gold advocates". They have seen through history how the destruction of various "money systems" always leads to the destruction of the "economic system" built upon the fiat concept. The efficient money system present in those fiat times, help to create the need (and therefore increase the value) for many real assets. The ensuing breakdown of the money always destroys the "efficiency" factor that society used to up-value the assets. Usually, any enterprise built upon the current functioning money contract system is impacted as it cannot change quickly enough to the evolving money system. It's hard to grasp that even real assets like houses, land, equipment, vital necessities and even food, can lose value as their trading pipeline is disrupted because no medium exists to fairly create "market value"! We have seen, time and time again, that real gold can gain value against "everything" during true money destruction. During these times, the human spirit need for using a familiar process is all consuming. The exchange of goods and services continues, with or without a valid medium of exchange to express it. Still, values become so conflicted and lost during this process that the marketplace reaches out for the most tradable of things that can act as a medium. In that need to replace "efficiency", lost with the medium value of paper money, it upvalues any store of value thing as the new "medium of exchange". Yes, within a large marketplace, the human need for trade gives any "efficiently" attribute more valuable than food.

This is why I smile when someone says, "how will anyone be able to know if the gold is real and what will they value it as"? I say, that the marketplace dynamic will ram this education home very quickly. The above question is asked by someone that accepts and uses paper dollars every day. Yet, these dollars are paper (how do you know they are real? as often they are counterfeit) and hold value only because the marketplace is using them. During a money breakdown, you will observe trading in the marketplace and quickly come to accept anything, ANYTHING, that even could be gold. Believe it!

Finally, we also have the "in-between gold advocates" in the "gold perspective". Usually, their view of the market is such that it is an industry built within the confines of the present monetary system. They do not hold an extreme view about paper money, and believe that today is different and our currency will only fail "somewhat"! So far, in concept they have been right for many years. Yet, in investment practice, their "gold perspective strategy" is failing. I say this in contrast, in that by holding physical gold, the "physical in your hand money insurance factor" is never lost, even as the quoted gold price falls. Especially, in today's new market dynamics we require the question:

"does the paper security in your hand give you an absolute claim to physical gold, or does it more so give you a "right" to receive dollars that match the increased value of gold?"

This "in between gold perspective" strategy, calls for placing money in various forms of paper gold. All based on the convenient factor of holding paper that gains in price as the demand for gold increases during a controlled slow burn of the world money systems. These paper investments are expected to all gain because their value is "derived" from the quoted price of gold on established major exchanged, London, Comex, etc. Whether you hold "gold certificates" , mining stocks, gold options or gold loans, an observer can readily correlate their increase and decrease in value to the world quoted gold price. They are derivatives by nature, because their very worth requires the observation of another price setting market.

It is here, in this "in-between market" that I believe most gold investors will first see the breakdown in the world money system. Yet, for them, this breakdown will bring the loss of performance to their paper holdings, because, from necessity, our financial structure cannot allow the established quoted price of gold to rise. To honour the present contracts, would require the supply of millions upon millions of ounces of gold that simply does not exist. In as much as these players expect a huge payoff on their holdings as the gold market must run skyward to balance delivery, the opposite action will most likely be delivered. Because all of their holdings are valued upon a marketplace that establishes a price with even more derivative trading, the expected failure of those contracts will crush the quoted price. Just as most men will not hang themselves with a rope, the shorts that actually create the quoted price of gold today, will not trade it higher. In fact, I believe they are trying to gather physical gold (taking delivery everywhere) while it still trades in relation to the low derivatives price. Unless you are a major entity in world affairs, holding something the world must have, I doubt any form of gold paper securities will escape the burn. Indeed, over time, in a up and down fashion, most of the paper gold holdings will be destroyed first, then the physical gold price will zoom in a matter of days if not hours!

How will mining shares respond to this "POSSIBLE" event?
More (sometime?) later. FOA


______________

I included portions of Farfel's comment above because I thought it was funny. In fact, gold mining stocks were sucking so horribly on 8/25/99 that I thought it would be interesting to take a look at how some of them are doing today after having almost 14 years to recover alongside a gold price that has risen 550%. Barrick (ABX) appears to be the worst of the bunch (at least of the ones that I looked up). It is one of the largest gold mining companies in the world, yet its share price is the same today as it was at gold's lowest bottom in 34 years. Barrick was $18.52 on the day that Farfel wrote that comment, and today it's $18.90. Why's that, you ask? Well, for one thing, in 2009 Barrick diluted its shares in order to essentially spend $5B of its shareholders' money to buy back those hedges that Farfel was raving about. ;D

Sincerely,
FOFOA


653 comments:

«Oldest   ‹Older   601 – 653 of 653
Anonymous said...

M said...

“@ Spaul67
"I agree, all it takes is a spike in interest rates at this point followed by a panic into cash. Equities will also collapse. All the FED needs to do is just end the current version of QE. "

The Fed can do nothing once the run on the bond market starts. …………….”

Once again I agree with your analysis of how this goes down to a point, but ask yourself the question, who exactly is taking the other side of the bond trade? Who has the cash needed to close the deal? In a liquidity collapse the only one with ‘cash’ is the one that can legal print it. The government gets to repurchase its debt at 1/10 the past purchasing power during the panic and then implodes the banking system removing the cash it just printed by the ton from the system. The government emerges on the other side largely debt free and with a new lean low leverage banking system and fiat unit. Any old fiat that manages to make it through all this can then be absorbed by a slightly elevate price of gold if needs be.

The key move the oligarchy needs to pull this off is to shut the doors on the burning building and ‘not’ allow the vast majority of this newly issued fiat to enter the market place. This is exactly what happened in Cyprus which is why this event is a watershed for me. Capital controls morphing into outright confiscation. Everyone is far too enamored with paper and existing legal frameworks. Both will be altered to serve the interests of the oligarchy running this crooked casino. It’s just like what happened to gold under FDR when it backed the system. So that which ‘backs’ the existing system now is that which will be confiscated this time around and then effectively reissued at a new price. This wasn't 'legal' for FDR and it won't be the next around time either. Those with the guns rule the gold.

Which is at the heart of my concern with Freegold as liberating a concept as it is. I hope you are right; they ‘don’t’ have a choice; that freemen will prevail in the end; but I have yet to read in history a totalitarian system that doesn’t push its weight around grinding up a lot of freemen and slaves in the process. My read is that they don’t go down without fight and certainly not before significant damage has been done at all levels.

Anyway, the fiat we use for day to day transactions are nothing more than casino chips in this crooked casino. You haven’t won one dime until you cash out this fiat for physical gold and then leave the casino with your payment in full. In addition, the physical gold fiat exchange only works as long as new marks keep coming into the casino and exchange their physical gold for casino chips. When they stop showing up the chips that remain in the casino become worthless in terms of physical gold. Since physical gold is the king of SoV this also means they become largely worthless in terms of lesser SoV as well.

Its house rules, and the first rule of the house is they don’t like to lose. My bet is that they won’t in balance. Which is why all excess fiat I generating is being placed into physical gold among other things of a lesser SoV nature.

BTW I’m loving the price roll back. How about you?

http://www.youtube.com/watch?v=FODPzxzdaEs

ein anderer said...

Europe’s waiting for € 8xx …

Robert said...

You know those skyrocketing premiums that the KWN gang is always quacking about? Do you know how high they are? Three bucks.

From today's The National (in Dubai): "Mr El Mdaka added that gold is in such short supply in Dubai that he is able to charge a US$3 premium per ounce. 'In the last week or so that has gone up from $1.25, $1.50 to $1.75. But now it is $3. We are really squeezed.'"

Haha. Three bucks! Gull Mann, you said you are looking for cheap premium. How does $3 per ounce sound? Get on a plane for Dubai before the premium jumps to $4!!!!


Archer said...

spaul67 wrote:

It’s just like what happened to gold under FDR when it backed the system. So that which ‘backs’ the existing system now is that which will be confiscated this time around and then effectively reissued at a new price. This wasn't 'legal' for FDR and it won't be the next around time either. Those with the guns rule the gold.

Except it's not like what happened to gold under FDR, because confiscation pertained only to locals. Dollars and dollar derivative debt are held all over the world. As for guns ruling the world, well, it's not that simple, but even if it were, this isn't The Revolution and the operators of the guns (as opposed to the "owners" of the armaments) aren't going to lay it on the line for worth (a lot) less Continentals.

milamber said...

Not that ranting against the oligarchs isn't fun, but you might want to actually listen to one of "them" explain what is actually happening.

http://www.youtube.com/watch?v=wJP2IWk4mW0

As JR posted here many months ago, a Privlige can't be taken; it is given.

Glad to see Claude is a lurker at FOFOA's :)

Milamber

Grumps LaBastard said...

M,

What do think? These fireworks sure are fun.

Roacheforque said...

There is ONE economy for Shrimp, where general goods and services exist, and ONE economy for Giants, where luxury items prevail ... and though Giants do require certain general goods and services, there are so few of them in number to compete with that Shrimp mass, their volume of money hardly competes in that realm.

Of these two economies, never shall they meet.

And of printing versus stealing. Printing sends more betting chips into the derivative universe of Giants where the gaming lifestyle of the elites takes place. Some do leak through by necessity as above ...

But stealing from the "lesser" classes prevents too much of these betting chips from chasing after general goods and services, thus creating a hyperinflationary issue for those incredibly valuable 'Giant realm" betting chips.

Playing the Devil's advocate a bit more here, how can interest rates actually "rise" other than "on purpose" or "by design" in a complete and total control interdependent and coordinated global economy?

Does anybody here truly believe that interest rates can somehow "run away" from central banks?
Just what mechanism is truly "out of their control" such that they cannot help but to watch interest rates rise and be able to do nothing about it?

Think hard on this, are risk rates TRULY out of their control?

So again I ask, "How does Giant money flow into the Shrimp economy to create general price inflation?"

And then it follows, if not hyperinflation, what event will destroy the transactional currency use value (MoE) of these dollar betting chips.

We say it is the cessation of foreign support, but does the ROW stop supporting the GIANT realm of dollars? Or just the the Shrimp realm?

These are the questions the FLOW-ER poses.

Time Proven said...

test

Time Proven said...

“Time will prove all things”

May I add, “It dose – it has – it is”!

The bail – in agreement in Europe is now complete. Its real purpose is to begin the process toward “Freegold”. This agreement, sold as a way to take depositor money, was enacted as the first concrete step to force all major players to RUN from IOU bank gold contracts! These bank liabilities number in the trillions and are largely hidden from view. Truly, they will be the very first to be written off in the next bank crisis that now approaches! Physical gold advocates are now selling IOU gold and buying physical gold. This process will be pain full for most but will result in a tremendous gold price.

Paper gold begins its journey to become a highly discounted side market to this true worldwide physical market. The run on paper gold has now begun! The next political step to look for? When the ECB marks to the new physical gold price!

Enjoy the transition; the best is on its way! (smile)

Aaron said...

Yes Bastard, lots of fun. Even more fun than your comments below:

Quote from Fat Bastard

Then there is an alternative site the FOFOA blog. I don't recommend it anymore. The thesis there is that gold will stay external to the system at a price of 55,000/oz. There will be no mining of gold, no gold lending, easy credit creation in a currency will be punished by a higher gold price in that currency. It is bizarre. I post there under GrumpsLabastard telling the cultists there they're full of crap. My name is mud over there.

milamber said...

Gary/60253/FakeAnother/SugarLover/Time Proven,

I (the East German judge) give you a 6 out of 10.

I liked the misspelling of does, but it was a little over the top considering you put it at the beginning.

But then you go and mess everything up by well, being Gary.

http://www.youtube.com/watch?v=5e4k6MpbLl8

oh & (smiles)

Milamber

gull_mann said...

@ lola: No I am not alan2102, but I guess him and I share similar views that we are currently seeing/will see more biflation/mixedflation rather than just inflation/hyperinflation/deflation as many argue.

@ battleship: I agree very much with your post. Price increases for necessities (food, fuel) like you mentioned and then price drops in luxury items.

@ Robert: I would love $3 premium gold!!!!! That would be amazing. haha. If only... I wonder how they are able to afford such low premiums? Anyone know the history there?

Polly Metallic said...

Time Proven,

Test

Test failed.

The paper gold market doesn't quietly fade into the night. It suddenly burns to ashes and ceases to exist.

Anonymous said...

Wil (from another account) said...

“I.E. why does any FIAT issuer need to steal when they can just print?”

Because 'if' newly printed fiat is 'allowed' to enter the market it always results in hyper-inflation that then back feeds through the social welfare system that strikes at the foundation of the parasites minimal life style that in turn keeps the oligarchy in power.

Do you know of any hyper-inflationary event that isn’t coincident with serious social turmoil? In fact a rather famous individual arose in Germany in the last century due in large part to this very thing. Something that one should keep in mind given the influence the Germany has over the ECB. My guess is that Germany will be hard on the side of using something ‘other’ than using hyper-inflation to extinguish excess debt and leverage will be used this time. Now which nation in Europe who suggested the Cyprus approach again? If my memory serves, the idea originated out of a hard working nation to the north that makes great beer and cars?

It could be an inflated price of gold relative to all other things for sure, but it could also have dash of Cyprus as well. Well at least for those 9.99% not in the 0.01% club that are ‘always’ tipped off well in advance. House rules after all. If you don’t like our rules than tough, just exchange your chips for gold……while you can. Frankly it’s going to take every tool the monetary rulers have in order to keep the social lid on this time around.

I could easily see some hyper-inflation, confiscation, bond collapse, gold inflation etc. all being used at some point in the life cycle of the reset. A reset I might add that will not be over in day but one have a number of ‘apparent’ setbacks for us gold holders, like now.

Woland said...

I kinda liked the "pain full" touch. Showed a modicum of creativity.
However, since we now know that Another was "English", it would
have helped to conclude with "Cheerio, old chap!" That would have
gotten my attention! GREETZ

Phat Repat said...

Nice, trend change alerts on NUGT, DUST, SLV, but not GLD as of yet. Looking good... Paper dead? Nah, not just yet.

milamber said...

@ Tintin,

I think that China has already decided. They are popping pimples all over the place!

http://news.xinhuanet.com/english/indepth/2013-06/26/c_132489308.htm?utm_source=Sinocism+Newsletter&utm_campaign=53022f3399-Sinocism06_27_13&utm_medium=email&utm_term=0_171f237867-53022f3399-24573061

http://dealbook.nytimes.com/2013/06/25/chinas-market-stress-pay-attention-to-the-politics/?_r=0

(h/t Sinocism)

Milamber

ein anderer said...

Time Proven,

do you think ECB "will do it" next week? Or will they prepare the public via some statements that time is coming soon when they will? I mean, they have to say something July 4th because of their devalued main asset, don’t you think so?
Thrilling!

Edwardo said...

Phat Expat, A big, perhaps, on life remaining in paper gold. Until a whole lot more proving is done I err on the side of this action representing little but the nervous system twitching of an otherwise lifeless being. Good luck with the trade.

Phat Repat said...

@Edwardo
It is play money only. I enjoy the gambling side with a sprinkle of TA just to see what is possible. Since TA is derided by many, and in some cases rightfully so, it is but a weather vane to help decide direction and provide stop-loss to protect my meager holdings. I still buy physical on a regular basis; irrespective of the paper price (though I like a bargain as much as the next guy).

Edwardo said...

The second to last sentence in my last post should read:

I err on the side of this action representing the nervous system twitching on an otherwise lifeless being.

Dante_Eu said...

One stupid question:

How can gold be devalued against a currency?

Has that happened ever in history of mankind? If so, what was the result?

Isn't it (an)other way around? Always has been?

Ok, that was several stupid questions. :-)

M said...

Spaul and Wil

The Asian financial crisis involved 400 million ppl excluding China and Japan. They lost all control.

Roacheforque said...

And yet, we still do not see "how" Giant money is "allowed" to enter the general market.

We just assume there is hyperinflation as a direct result of a diminishing return on FIAT which ALL finds it's way somehow into the general economy of Shrimp, where a relative hyperinflation would actually matter.

But it never does with the dollar.

Because we're not talking about 1921 Marks here, there are plenty of precedents in THIS time.

Never had debt like this ...
Never had bailout insurance like this ...
Never had a global reserve FIAT like this ...
Never had technology like this ...
Never had a globalized system like this ...

Asian currency crisis in 1997 is just a memory now, none of that competes with today's dollar.

So to take the past and say the future will follow suit is a bit colloquial ...

Now we do have high inflation in the GIANT realm, high end luxury items are through the roof, and there are many we've never heard of and never will ... quite exclusive stuff I'll say.

And Giants can handle the prices. Shrimp will never need to ... they don't live in that world.

Time Proven said...

“Time will prove all things”

May I add, “It does – it has – it is”!

Hello E A

Yes, the race is on! It’s as if “the big poker hand” has been played, yes? It was only when some found out that the bail-in was on track (a number of weeks ago) that the big unloading of IOU gold began!

The political story or political engineering (if you will), is to “let it be known” that paper gold will not hedge in the next crisis! The market is now stunned; IOU bank gold will be lost in settlement; right along with bank bonds and other credits!

This is a move that fits Another’s point that “paper gold will crash and burn”! It no longer makes any difference if it trades to $100 or $5,000, if that figure is highly discounted to a new “Freegold” physical price! Even a fool can see where paper pricing is “of no use” if the contract is part of a widespread bank failure bail-in! Major players can now see that cash settlement will not count if the cash stays with the bank?

When the spread reaches many thousands and the ECB re liquefies using gold as an asset, the US will be forced to ship gold as payment to be part of recovering economic climate.

The time has come, major forces are in play!
We watch!

Jeff said...

You can't buy a Rolls or the Mona Lisa? You can still follow in the footsteps of Giants. You have access to one high end luxury item that is through the roof, but you can get it at a remarkable discount. A discount that isn't availabe to Giants at all, so cheer up flunkies. Be your own oligarch.

"Gold has always been funny in that way. So many people worldwide think of it as money, it tends to dry up as the price rises."

FOFOA: In economic terms, ANOTHER was referring to gold's price inelasticity of supply here. In other words, gold seems to violate the economic law of supply. As the price rises, the supply dries up.

But another funny thing also happens when gold "tends to dry up as the price rises." Even more people join the "many people worldwide that think of it as money." And this means that gold violates the economic law of demand as well, delivering a positive price elasticity of demand. In other words, gold is a Veblen good. But unlike a Rolls or the Mona Lisa, gold is divisible and fungible making it the Veblen good that puts the common man on equal footing with the Giants!

This is what FOA meant:

In this world we all need much; blessings from above,,,,, family,,,, home,,, friends and good health. But after all that, one must have currency and an enduring, tradable wealth asset that places our footing in life on equal ground with the giants around us,,,,,, gold!



Anonymous said...

Chris Whalen speaks to Heny Smyth of Granville Cooper Asset Management about gold. Short and worth the read, IMHO.

snip:
"HS: The shorts in the market are running out of short fuel. The decline in gold has been going on since late 2011 and is very long in the tooth. Sentiment against gold is virtually 100% right now among Western gold analysts. This is a Rothschild moment.

RCW: This is a reference to the famous dictum by Baron Rothschild: “Buy when there's blood on the street?”

Contains observations by Smyth on the massive flow Eastward and tightness of supply.

http://www.zerohedge.com/contributed/2013-06-28/henry-smyth-rothschild-moment-gold

Roacheforque said...

OK, I've had my fun. I'm a little giddy as we draw near the end, especially with the 4th coming up ... Great Fireworks ahead. Dusting the pine pollen off my lawn chairs today.

But Time Proven has answered the question inadvertantly (or intentionally?).

What will cause the apple cart to be spilled?

GIANT money would need to be used to bail-in this next crisis, not shrimp money. As I said, Shrimp do not have enough to make 85 trillion bail and the sovereigns after all are already SO tapped out.

Some GIANTS do have lapdog TBTF banks at their beck and call but they do not call the shots entirely in central banking - they cannot call the printer when a massive counterparty claim clocks all their working FIAT.

And HOW will it happen? Why human nature. That has NOT changed. No precedent there.

Nor has the hubris of Giants and especially those who do the dirty work of Giants.

There will ALWAYS be a Dick Fuld or a Joe Cassano out there thinking he can outmatch his master. But you don't even need a loose cannon with 1.7 Q at risk. One domino is all that needs to topple.

So in an ironic twist, a-la War of the Worlds, it is in fact the meek who disrupt the mighty after all, because you can only bleed a shrimp-farm turnip dry so far.

The GIANTs will ahve to bail EACH OTHER out now, and that simply will not do.

Time to bring out the big guns, you know, the shiny yellow ones, or how did Another say it?

"Perhaps we should think in this way: in "cold war" of modern exchange rates, "digital currencies from reserves are used", however, when "hot war" of major default does begin, "nuclear weapons of GOLD" are deployed!"

The interest rate derivative failure about to take place ... I do believe will qualify as a "major default".

Woland said...

Jeff; I love it: Gold; the "do it yourself" Oligarch kit.

Roacheforque said...

Jeff:
Great reference explaining "price".

Grumps LaBastard said...

I thought the miners were going to zero b/c of imminent nationalization. What happened?

Polly Metallic said...

Grumps,

Ever heard of a bear market rally?

Anonymous said...

M said...
“Spaul and Wil

The Asian financial crisis involved 400 million ppl excluding China and Japan. They lost all control.”

Yes the did, but what the FED has that they didn’t is the ability to print the reserve currency. Let’s say that Korea had an exclusive right to ‘also’ print US currency. How would they have faired vs the other Asian nations caught up in the crisis?

No question that very act of doing this would end the US reserve currency status, but that will happen either way. The key is that you avoid a social melt down, own a lot of productive assets and are largely debt free. The 9.99% caught in the middle on the other hand are hung out to dry.

I ask again, who is buying the bond at these fire sale prices and where are they getting the cash in a liquidity freeze up?

The FED could easily do a few pump and dump cycles (QE on/off) to extract at least 50-75% of the bond market into their hands. At which point the cash in the bank is set up for the confiscation.

Anonymous said...

"Jim was very clear that he sees a price rise in gold coming by early July. This rise in prices could take us to new highs. How high? Jim sees $50,000 gold as a likely target should the paper manipulators lose control. This number sounds staggering to many, but you must remember that this market has been a beach balloon that has been pushed to depths never seen by man."

LOL!

Where have I seen that number? That visual?

Grumps LaBastard said...

You mean my miners are still going to zero? Ooooh crap!

milamber said...

"Time Proven" (or TP for short):

OK you almost hooked one with your 1st effort.

I think I have to give the 2nd one a lower grade.

I mean you started out trying to write in ANOTHER's style, but when you were called out on it, in your 2nd post, you referenced ANOTHER in the 3rd person, thereby trying to distance your earlier insinuations that you were indeed ANOTHER come back to the interwebz after Time proving your THOUGHTS!

If you just weren't so blatant, TP, I would score your effort higher.

As it is...

http://www.youtube.com/watch?v=WSB7QpldGTQ

Milamber

milamber said...

Mud,

No. In your world, the miners can do whatever you want them to do.That is the plus side of being crazy.

The down side however, is that in the real world, real people are only concerned with what is really happening.

See, when you rant (among other things) about the Boston Bombing being an "inside" job, you lose all sorts of credibility. Not that you had much to start with,mind you(Although I guess the selling gold to GIANTS plan was genius!).

I guess FOFOA will tolerate you here as long as you keep on providing comedic material, but once that is gone, then you might want to consider another profession.

Say, I have it!

Since you and TP are both delusional & like to pump out copious amounts of excrement, Why don't both of you go to the Gym and pump each other up instead of polluting FOFOA's blog?

http://www.metacafe.com/watch/an-WNquJu7bYhbJmm/fletch_1985_police_involvment_in_narcotics/

Just a suggestion.

Oh and GREETZ,

Milamber

Edwardo said...

Milamber wrote:

No. In your (Mud's) world, the miners can do whatever you want them to do. That is the plus side of being crazy. LOL!

Grumps LaBastard said...

CD Refugees at Risk

http://mcalvanyweeklycommentary.com/05-29-13/

I just finished listening to this podcast. It illustrates how people behave in relation to interest rates. People don't want to eat their seed corn, chew away at principle. While listening try to reconcile how a gold holder would behave. For a saver to stay overweight in gold real rates would have to be negative.

Knotty Pine said...

Milamber,

Great link! You have inspired some future time misallocation! I think Gramp's initials are J.C..

M said...

M

Nobody will be buying the debt except the Fed maybe. But the more they buy, the more depteciative pressure it puts on the dollar

Edwardo said...

Okay, as I asserted here recently, the $1200 area was a well delineated "test" area with respect to the status of "paper gold." Today did evince a robust reaction/bounce that has the look of something that will probably engender a rally, though that remains to be seen. As for anything beyond that, i.e. a resumption of a bloodied to an absolute pulp, "bull market", well, let's not get ahead of ourselves.

Phat Repat said...

Though GLD, SLV, DUST, and NUGT did quite well, to say the least, I wasn't able to take a position at this time. As Edwardo implies, more data is required. ;-) Monday will be interesting...

Unknown said...

Freegold or hedging back in vogue?

http://traderdannorcini.blogspot.com/2013/06/mining-companies-appear-to-be-engaging.html

Bright aurum said...

@all

OK, it`s official now, after a magic levitation the EURO POG finished at 947.716!
Will the asset side buffer (the previous G.revaluation buffer) be enough not to have to withdraw liabilities (euro notes/M0) from circulation?
Does anyone have an opinion on this?

KindofBlue said...

Milamber

Re: Boston

The FBI initially released the photos/video of the Tsarenev brothers and asked for help from the public to IDENTIFY them. Then it came out from the mother that the FBI had contact with them previously. The FBI then said "Oh, yes, well we talked to them 2 years ago." The mother said "no, they had several contacts with them over 3-5 years previously."

When a suspect CHANGES their story, what do you typically believe? Hiding something?

Then we hear that while on the lamb they robbed a 7-11... which was not true.

Then we hear that the younger was in a "shoot-out" with police, only to find out that he was unarmed.

And we hear the mayor say it was "chilling" when he saw the video of one of the brothers laying down the bomb, only for him to later retract that statement as he'd had that relayed to him second hand. By who? We don't know.

And on and on.

I'm 3000 miles away so I'm not gonna say I know what happened or that it was an "inside job". But the story don't add up.

I don't believe stories without evidence, and evidence is scant if it exists at all.

What we do know is that many/most of the recent 'terror' events these last few years have been heavily assisted and guided by FBI handlers. That's been reported in the 'mainstream' press.

Remember the "underwear bomber"? Go look up what attorney Kurt Haskill reported in MSM interviews THAT DAY (he was there with his wife and witnessed how the kid was assisted and let on the plane w/out a passport) and his story has never changed.

The media is now heavily concentrated (6 major corporations own 90% of big media) and the corporations who control it have AGENDAS and interests that may well not align with 'the truth'.

Anyway, I don't want to sidetrack this great blog and FOFOA's discussions on money and gold by climbing down rabbit holes. Suffice it to say that 'truth' can be more complicated than the simple narratives given to us by the corporate press.


michael3c2000 said...

Time Proven- Great posts. We watch together, old becomes new.
-Mikal

ein anderer said...

Pure, dumb speculation, but somehow it looks funny that the curve dropped before Snapshot day and »recoverd« after Snapshot day again to it’s June 27th-level.
From there on?
Remember FOFOA: In the end the PoG will recover several times, each time a bit low, (I say: like a hopping ball after the play), until it comes to the final stop. Zero line. On whatever level (but probably (!) quite a bit lower than now.
We can only watch …

Agent98! said...

M said...
"“Spaul and Wil

The Asian financial crisis involved 400 million ppl excluding China and Japan. They lost all control.”

Yes the did, but what the FED has that they didn’t is the ability to print the reserve currency.."

Wall St stitched the Asian tigers up into dodgy finance. It fell over, naturally. The tigers fell over. The IMF said they had to take their finance next ( in order to pay back Wall St, naturally). The IMF borrowings to be paid by the former tigers' revenue being redirected to that end after tax increases and massive cuts in government spending, particularly cuts in health and education, naturally (ref. economic hitman). All the tigers EXCEPT Malaysia meekly did as the IMF and Wall St directed, and they laboured under starkly shrunken economies with little growth over the next decade.

HOWEVER, Malaysia told the IMF and the rest of the parasites to "GO JUMP" in no uncertain terms, and were out of the mess in a short while and back to growing healthily. (The switch in much of the Arab/Islamic world's financial trade going through KL and not NY post 2001 after GW threatened that trade no doubt helped somewhat too, and it continues to help Malaysia grow.)

M said...
"Let’s say that Korea had an exclusive right to ‘also’ print US currency. How would they have faired vs the other Asian nations caught up in the crisis?"

In ways that counted that is effectively what Malaysia did... printed money, kept business and employment going, kept growing, didn't default in the end, didn't fall over, and quickly rolled over into another fairly strong continuing growth phase....

----
An aside:

http://www.newscientist.com/article/dn23778-gold-and-sacrificed-humans-found-in-ancient-wari-tomb.html#.Uc52V9d-9hF [... http://fofoa.blogspot.com.au/2013/06/black-gold-massive-hoards-hidden-for.html ]

Lost Inca Gold—Ransom, Riches, and Riddles
http://science.nationalgeographic.com/science/archaeology/lost-inca-gold/

First Pictures: Peru’s Rare, Unlooted Royal Tomb
http://news.nationalgeographic.com/news/2013/06/pictures/130627-peru-archaeology-wari-south-america-human-sacrifice-royal-ancient-world-photos/#/new-untouched-royal-tomb-peru-skeleton_68846_600x450.jpg

First Unlooted Royal Tomb of Its Kind Unearthed in Peru
http://news.nationalgeographic.com/news/2013/06/130627-peru-archaeology-wari-south-america-human-sacrifice-royal-ancient-world




Gary Morgan said...

Hello Time Proven.

Those posts of yours are the best thing I've read on this blog for a long long time, thank you for sharing your Thoughts!

If you find the reception a little hostile here, please feel free to come and chat with a more open-minded crowd over at Screwtapes File blog.

Good luck.

M said...

@ Agent 98

The Maylasian currency flopped. All of the Tigers were recovering by 2001. Thailand repaid its loan a few years early.

M said...

And they all printed money at the start. Which they soon realized, made the problem worse. Including maylasia

milamber said...

Sugar lover,

Since it is quite obvious you have an internet persona for each of your separate personalities, does the appearance of TP signal that your condition has gotten worse or sure you just that lonely?

And you post as multiple entities pretending to be multiple people each conversing w/ one another on multiple sites.

You are one messed up dude.

Maybe mud can prescribe something for you & then you can have even more delusions together.

Milamber

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