Yesterday was Snapshot Day at the ECB. It's the day that the ECB takes a snapshot of the current price of the four "foreign currencies" that populate the Eurosystem's reserves. They take this snapshot at the end of each quarter for the purpose of the quarterly revaluation of their reserve assets. Marked to market (or MTM) reserves was one of the founding principles of the euro.
The four snapshots are:
Gold
USD (US dollar)
JPY (Japanese yen)
SDR (Special drawing rights)
Each snapshot is recorded as the unit's price relative to the euro because the Eurosystem's reserves are all reported as denominated in euro. So even dollar reserves are reported as a euro-denominated value. And just for the record, gold is both the first line on their balance sheet and also the top snapshot reported. I don't know if this is intended to imply the order of importance… well, yes I do. ;D
If you'd like to read more about this, I recommend any of the following posts as a good place to start:
RPG Update #4
Euro Gold
Reference Point: Gold - Update #1
If there's any doubt as to the importance of gold on the Eurosystem's balance sheet, last quarter gold constituted more than 63% of the Eurosystem's reserves. That means that dollars, yen and SDRs combined made up less than 37% of the reserves.
We won't know yesterday's precise snapshot until next Wednesday when they release their quarterly ConFinStat (Consolidated financial statement of the Eurosystem). But we know it should be somewhere between €914.39 and €948.33. At some point during the day, someone at the ECB noted the current price of gold in euro and wrote it on a form. They don't use the London fix price, and the time at which they take it seems to vary. In April, they took the snapshot very close to the AM fix. But many other times I've noticed it's closer to the PM fix.
In any case, yesterday's AM fix was €921.889 and the PM fix was €914.391. Shortly after the PM fix yesterday, the euro price of gold rallied up, ending the week at €948.33. It would be a bit unusual for them to take a snapshot long after the PM fix, so I will guess it will be around €920.
I have made a simple chart of all of the quarterly snapshots since year end 2001, when the bull-run began and the ECB launched its new notes and coins. For the purpose of this chart, I'm using yesterday's high of €948.33 rather than what I think it will actually be, just so you can see how shocking even the least-shocking possible snapshot will be.
As you can see from the graph, the last time they had a gold snapshot lower than this was April 2, 2010, more than three years ago. Just for fun, let's compare the other snapshots from April 2010 with April 2013 to see if the USD, JPY and SDR fluctuate as wildly as gold.
2010:
Gold: EUR 823.132 per fine oz.
USD: 1.3479 per EUR
JPY: 125.93 per EUR
Special drawing rights: EUR 1.1265 per SDR
2013:
Gold: EUR 1,251.464 per fine oz.
USD: 1.2805 per EUR
JPY: 120.87 per EUR
Special drawing rights: EUR 1.1698 per SDR
For the US dollar, that's a 5% change. For the yen it's 4%. And for the SDR it's less than 4%. Yet gold, because traders think of it as just another commodity rather than a monetary reserve, changed price by 52% over the same three-year time frame! And now it's down 25% in just one quarter.
There's a point here, but I'm more inclined to let you figure it out for yourselves than to spell it out for you. Somehow, gold ended up in two different worlds at the same time. One which fluctuates wildly in concert with all other commodities, and another one of great monetary significance and relative stability most of the time. Just think about which of these worlds gold actually belongs in, and how it can possibly escape the other one, while you watch this short video presentation:
That video is from my post Fallacies – 1. Paper Gold is just like Paper Anything in case you would like to explore that question a little bit further. ;D
_______________
On December 8, 2010, at the bottom of my post Freegold in the Proper Perspective, just for fun I put up a poll for my readers to vote on two contenders for a Freegold theme song. The origin of that poll was an email from Aristotle who, if you don't know, was one of the main contributors while Another and FOA were posting, so he's been following this for as long as anyone.
Anyway, he had this song 'Firework' by Katy Perry come across his screen and he thought it made a great Freegold theme song. He emailed me on Dec. 2, and at that time almost no one had yet heard the song. It was just starting to get airplay and it had just been featured in Victoria's Secret video, which is how it happened to come across Ari's screen. ;D
He thought the imagery in the Victoria's Secret video was particularly "golden", but more importantly, he thought the lyrics were great for those who understand what Freegold means on all levels. Here, judge for yourself:
The reason I bring this up is because he followed that Katy Perry email up with another one that also made reference to the song, as well as to his favorite series of movies. Here's part of that second email:
For the past half-decade, many international policy stirrings gave every indication to me that 2010 was to be the targeted year for assertively rolling forth the freegold paradigm. But as I've said previously, I feel that the ongoing financial crisis that began with the subprime fiasco has caused instability of such magnitude that the central bankers have been forced to delay briefly and "play it safe" -- one does not dare rock the boat (if there remains any choice in deciding the matter) when the financial waters have become so turbulent and choppy. As for the new timeframe, I'd say that the reported EU plan "to make private bond holders shoulder some of the pain from any sovereign debt restructuring after mid-2013" is as good an indication of a benchmark as any I've seen. Plus, that timing nicely accommodates my additional view -- embracing a culturally significant standpoint -- that the December 2013 conclusion to The Hobbit will forever cement the desire for gold into the minds of all western moviegoers, resulting in a perfect storm of the golden variety. ;-)
On the point of the midyear "benchmark" mentioned above, it's almost spookily funny that the song lyrics mention "You just gotta ignite the light and let it shine; Just own the night like the Fourth of July". Indeed -- 2013. (Or sooner, if *necessity* precludes all freedom of choice in the matter!)
--Ari
Now obviously the specific timing of July 4, 2013 and the Hobbit reference were made in jest, but as I mentioned in my New Year's Day post, Ari has been closely following everything written by the central bankers in particular for more than a decade. And he's also one of the smartest people I've met in more than a decade, so I don't take anything he says lightly.
With that in mind, as the dawn of 2013 was approaching, I decided it would be fun to put the only timing prediction I'd ever seen him make to the test. I'm sure he was less enthused about this than I was, but I thought it would be fun! I suppose it's not really fair to call it a timing prediction, because it wasn't, and it was also made in private by email. So it was more like a working hypothesis that he shared with me way back in 2010. And this is actually a much better way to view it because, not only is it more fair to Ari, but also because I had an observable phenomenon that I could use to test the hypothesis once every three months. Snapshot Day!
About five months before the Katy Perry email, Ari sent another email that also inspired a post. That one was the very simple observation that the price action in gold behaved strangely around Snapshot day on 7/2/10. The implication I took from his email was that, perhaps, there might be some "official support" at play in the gold market.
Then, again, on 12/30/11, I took note of some more strange behavior around Snapshot Day. So in this post on 12/26/12, I proposed that we watch the upcoming 2013 year-end Snapshot Day for any sign of official support. The thing was, the price of gold in euro was already languishing at €1,255.94, down 9% or €121.48 from the October snapshot. So it was a prime opportunity to watch for any mysterious levitation surrounding Snapshot Day that might imply "official support" was still underway, even though 2013 had finally arrived.
In anticipation of no support, I went ahead and dubbed 2013 "Year of the Window" on New Year's Day, meaning "window of opportunity for Freegold transition." Snapshot Day was on January 4th, and while it did come in a little bit higher at €1,261, it ultimately proved inconclusive based on my criteria. So we watched… for any sign… which way would it go? Was the window open or not? Decisively up—window not open. Decisively down—window may be open. The rest, as they say, is history. ;D
So here's that shocking chart once again, this time using €920 which is my guess. Decisive? Window open? Window closed? You decide:
If you'd like to read more of my ramblings about the Year of the Window, I recommend these posts in this order:
1. Happy New Year!
2. The Two-Legged Dog
3. Legs
4. Checkmate
Happy Independence Day, everyone!
Sincerely,
FOFOA
551 comments:
«Oldest ‹Older 401 – 551 of 551All depends on what you mean by 'money', Wil.
Do you think we ('the people') will buy land, cars, groceries, gasoline with Gold? Will it be the, or 'a', medium of exchange? or will we change the gold for fiat and buy XXX that way?
Funny, I think some places in Vietnam you could buy real estate with Gold. Which means you can use it anywhere it is the MoE? (not a lot of places though, right?) Do you think this will change with FG? How will Gold become 'the people's money' again?
Cheers,
We will not need to buy things with gold Gary, we will have FIAT for that, just like we do today, but the people's true wealth will be held in gold, as sovereigns once held it (and some still do if they can) as the people's wealth.
One sovereign holds an exhorbitant priviledge as the people's wealth, and rightly so ... they will have none of this "meritocracy".
So yes, by "the people's money" I do mean the people's wealth in this context, certainly not the people's FIAT (or I would have said so).
And the FIAT that is devalued by gold will buy nothing. Yes, Freegold WILL change that.
Today it buys EVERYTHING !!!
Sovereigns did at one time equate money with wealth and did hold the wealth of the people in their own money, gold.
We could always get hung up on modern day semantics, but in the spirit of "old values repackaged for our modern times" I think you can follow my meaning.
Another was surely under the infuence of the flower when he wrote that, and I am sometimes inspired to think in those terms.
Wil (from another account) said...
If you accept FOFOA's premise in "metamophosis" that we are gradually…………
Brilliant summary.
I would only add that capital gains and death taxes form the final wall of the trap that is the roach motel for ‘all’ net producers in a debt based monetary system. A trap that even gold is held in at present under existing kleptocratic law, at least among us net producing shrimps anyway.
Thus one must ask, why would the kleptocrates that benefit financial and politically by their alliance ‘ever’ voluntary end it in exchange for one that is obviously more equitable for shrimp net producers like the equity based system you described? Basically the ability for shrimps to accumulate capital in any form that is not taxed based on its value relative to an ever expanding pile of debt based fiat? Better known as capitalism.
My answer is that they won’t. For Freegold to happen at all they must be forced in to it somehow. But how? Keep in mind that all the worlds’ kelptocrates benefit from the IMF system, not just the US. The fact that US also takes a cut from the lesser mob bosses ‘also’ fleecing their local net producers is an accident of ‘recent’ human history (namely WW1, WW2, Cold War). At the end of the day there is no honor among thieves.
My guess is that when the debt based ponzi scheme explodes or implodes, and it will, those that can still net producer will be looking for something other than paper to store ‘future’ net production in; individuals and nations alike. The more dominate scenario discussed on this blog is that saving debt at all costs will bring forth Freegold via hyper-inflation (explosion), but I think it’s much more likely that a deflationary process (ie Cyprus aka theft) will be what brings it forth via (implosion).
The keltocracy will use the collapse of system as pretext to steal the wealth of shrimp net producers. All the world’s net producers will receive a once in lifetime lesson on the difference between IOUs promised to them by the Kleptocracy and having physical possession of which gold is the king.
Ownership of net producing assets will also have value but holding ones certificates in a ‘Street’ name will be thing of the past. Physical possession will once again be key, whether it be gold, cash, land or stocks. This will form the foundation of the next system as it always has. Over time real bills, gold notes, secured debt, unsecured debt etc. will progressively emerge on top of this foundation ensnare a new generation of net producing shrimps until it too collapses.
“Much that once was, is lost, for none now live who remember it”
Wil,
I think I finally figured out your flower reference.
http://youtu.be/IlqsvSPz3Gg
Do you fancy yourself a flower of this variety?
Spaul,
I think you've been reading way too much Martin Armstrong.
LUCY IN THE SKY WITH...A GIGANTIC SPACE DIAMOND
how many oz's of FREEGOLD to buy this? I'm gonna get Branson to retrieve it for me....
Space diamond, larger than Earth, spotted by astronomers- NBCNEWS.COM
http://www.nbcnews.com/id/49375536/ns/technology_and_science-space/t/space-diamond-larger-earth-spotted-astronomers/
@enough
Probably just a big assed cubic zirconia. They are always so gaudy.
At any rate, the setting would use up your whole stack.
I, for one, am holding out for a planet made of beer.
Cheers
Gold price is managed both up and down; it's current price serves a purpose for something. The flow did increase and mines are cutting production forecasts. This result would have been easily foreseen by the price manages (BIS).
Now if negative GOFO is being interpreted correctly as bullion banks desperate for physical gold to lend (and buy back later?) and ETF's are being drained this all points to physical gold being poked with a stick. And we know Europe has physical gold and we know the monetary system would benefit from physical gold. Its the BIS job to sort this new system out and it will be left up to them, no one else need make a move to instigate it.
MF, Jeff, Edwardo,
"the silverbugs are the strong hands" is of course ridiculous - I just wanted to quote Bron accurately. The point still is that if investors in Bullion Vault sell 10% of their gold (all of them retail) then it is reasonable to expect similar behaviour of the retail investors in GLD (yes, a good part of GLD is indeed owned by retail investors). This argument still stands. Some of you know that FOFOA privately sent me a long criticism of Bron's argument - not that I disagree with FOFOA on most of it - but FOFOA doesn't refute the "behaviour of the small investor" aspect of Bron's comment. Jeff's remark does. Sprott's PHYS didn't shrink, and this is another example of shrimp behaviour.
Victor
...
Gold backwardation for this reason is nevertheless damaging to the gold market, for the same reason that Fekete explains in his original Red Alert: everyone who used to provide (gold) liquidity to the market, now no longer has any incentive to continue doing this. As long as the forward is more expensive than spot, someone (market maker, writer of contracts,...) with some operating capital in dollars, could swap these dollars for gold, use this gold to provide liquidity to the market, and still pocket a positive carry in order to fund this operation. With spot more expensive than the forward (on 16 July up to 3 months), the market maker would have to pay a premium for providing liquidity (buy spot and sell the future in order to acquire the initial inventory to trade). The term structure now provides an incentive for gold to "go into hiding" for up to 3 months, i.e. to move from market makers into private hands. Yes, I know this may be London paper gold that has an incentive to go into hiding... but it is not just a paper effect, simply because the same happens at the COMEX, too, and there it is actual physical gold - nicely visible in the shrinking "registered" inventory of the market makers there.
It seems negative GOFO as we see it today is a consequence of negative short-term dollar (market) interest rates for those who matter in the market for gold swaps.
I said it before that Bernanke can always prevent such negative market interest rates from happening if he wants it desperately enough. How? He just purchases a massive amount of short-term treasury debt and pays by a balance sheet expansion, i.e. with created base money. At the same time, he offers a small but positive interest rate on reserve balances. This way, everyone who is desperately looking for large scale risk-free short-term dollar assets and who is presently crowding in T-bills, can instead hold a proper Federal Reserve system banking reserve which is truly risk-free, and he is even rewarded with a small positive interest rate. (You might want to call this Operation Twist 3.0 since it would be a continuation of OT2 in which the Fed bought long T-bonds and sold T-bills and shorter T-notes). I claim that the Fed/Treasury can always protect the gold market from OBA's "The Last Rubicon" syndrome this way.
There is a price to pay though. It's Charles Plosser's 50% (Out On A Limb). This move would peg the short-term interest rate at a small positive value. As there is a strong empirical relationship between short-term interest rates and liquidity preference, i.e. monetary base per nominal GDP or, alternatively, one divided by the velocity of base money, this pegging would (re-)introduce a direct link between Fed balance sheet size and consumer prices - the link whose absence so far has so much confused goldbugs, Austrians and other hard money people (Sixteen Cents - Pushing the Unstable Limits of Monetary Policy). Recall that velocity used to be approximately constant until the mid 1980s, i.e. money supply was rather directly linked to the price level. Milton Friedman's work was plausible at that time.
...
...
If the Fed pegs a small positive short-term interest rate, the Fed's balance sheet size will again be linked to the price level because velocity cannot decline any further. Most economists to whom I showed Hussman's pieces, replied something along the lines "In the absence of external shocks, the size of the Fed's balance sheet does not make inflation any more likely, simply because once interest rates rise, people will be willing to hold more bonds and less base money, and so the Fed can easily shrink their balance sheet again." The key phrase here is "in the absence of shocks". This does not mean natural disasters, but rather foreigners selling US Treasury bonds might be such a shock.
I guess this is the Treasury's true monetary catch 22 here. They can
a) let the gold market die by protecting the bond market and the domestic value of the dollar (let interest rates creep into the negative - "The Last Rubicon".
b) let the bond market die by protecting the gold market and the domestic value of the dollar (OT3, fix positive short-term interest rates, but sell off long term bonds to keep the Fed's balance sheet in line with the historical liquidity preference, i.e. the relationship between monetary base and interest rates)
c) let the dollar die by protecting the gold market and the bond market (OT3, fix positive short-term interest rates, but keep expanding the Fed's balance sheet as needed to placate the bond market, irrespective of consumer prices)
Unless the government deficit shrinks substantially and foreigners continue their dollar buying at the 2009-2012 rate, I suppose, the US Treasury won't be able to avoid all three consequences at the same time for much longer.
If our observations are right that the Europeans have stopped supporting the gold market and, at the same time, the ROW in aggregate is slowing down their dollar purchases, this means the ball is in the Fed/Treasury's court and the action will be in the dollar financial markets. No immediate action by oil expected for now.
Victor
Hi @Wil!
Please don't feel set upon if I ask you a few more questions - I am just trying to understand what you are saying. I am only seeking clarity - not to offend you. First, you stated:
...when the people's money is returned to them.
and when I challenged that - you stated:
So yes, by "the people's money" I do mean the people's wealth
Firstly, I don't feel this is semantics.I think this distinction can be important. I think these terms can be misleading, ex. when I read 'money' I, perhaps incorrectly, thought MoE.
I am curious how you feel the people's wealth will be returned to them via FG.
I think there may be a shift of wealth from West to East (as you stated - I agree!). A shift from paper holders to Gold holders, but I don't see how that will be 'returning people's wealth'. I see the physical gold holders (vast minority - even including our Asian brothers) gaining wealth and the paper holders (vast majority) losing wealth. So I don't see more wealth created overall when Gold is revalued. I only see it both shifting and decreasing for the masses. Whether that is equitable will probably be... relative. FG will run concurrent with some pretty bad sh*t, frequently described by the goldbug pundits as 'the greatest transference (not creation) of wealth' ever. I don't see Gold as being people's money (wealth) in the future - but rather a means of large-scale trade (think Oil) pretty much as it has been, clandestinely, for a few decades. Just less gold will buy more oil. Will FG be the defining death knell for paper? or will the last breaths of paper be the spark to ignite FG?
regards,
SPaul,
We are thinking very much along the same lines here ... but consider this:
The collapse or implosion we expect is one of paper, yes? There is no natural catastrophe or devastation as in a conventional world war (hopefuly not) or a global natural catastrophe such as a meteor impact of Tsunami to dwarf Fukashima.
Usually this will mean an epic claim upon the derivative sructure of debt. Breaking the buck as they say, or much worse.
But if it is allowed to simply default, what matters that a gazillion paper zeros are left blowing in the wind? Yes, those whose life's savings is stored in paper will jump out of windows, but fools and their paper are always parted.
What a shame.
The matter to consider is: Is this truly wealth that is being claimed, and where to we steal it from now?
This is why I believe the backroom thinking is to balance the debt and sustain the systemic kleptocracy, such that the host is bled slowly, on slave wage life support. No doubt a debt default in the derivatives market must be avoided at all costs because this holds the entire Ponzi scheme together.
Much like the silly paper gold see-saw.
But who sees these contracts besides the BIS, the DTCC and the counterparties at large? Who truly "holds them to their bargain"?
Shrimp will never know the weight of it, and in the parlance of Giants it is but a paper game they make the rules to as it goes along.
There will come a time when "This paper. It is not what it says it is."
But will the world exclaim this, or the issuers of this paper? There will be many messy stains on sidewalks to view if the issuers do not come to the rescue with "Plan B".
It is a deep thought to ponder indeed. And the flower, as nickelsaver has duly noted, has no allegiance to one "side" or the other. It is the flower of man.
In the end, we are all brothers in this, Giant and Shrimp alike. One can not thrive without the other.
Freegold merely changes the relationship from parasitism to symbiosis.
Victor
Good commentary. :)
Your catch 22 is interesting as well in light of the other problematic factor being physical gold supply. The Shanghai exchange with 25-40% delivery rate totaling about 1000 tonnes or all mining production YTD, versus comex which has an order of magnitude more volume but only 3-5% delivery rate and total deliveries of 100 tonnes or so this year gives a good idea of flow, and lack of supply from new sources.
TF
Gary, No time to answer, I have to scurry along and earn my daily ration of paper ... but I will.
No worries Wil! I think you did, a lot, with your simultaneously post to SPaul - Later...
Victor, thanks for sharing.
@Victor
I appreciate your insightful comments. Good to see you back here.
Thank you Victor
On a side note. In my local gold market gold coins trade at 12%+ premium to spot/ scrap gold is at 7% discount (usually it is 14 k gold, where 5% loss in the smelting process is normal) and silver scrap trades at 55% discount to spot (no VAT play). Being a shrimp-size ''investor'' in my local market or at Bullion Volt depository what should I sell, if I feel liquidity tightness comes this way. 10% of my gold in a liquid market to help me whether the storm or a great amount of silver where I` ll feel like being ripped off to the tune of at least 40%(a great deal of course but how many shrimps think in FG terms?)
Cheers
Wil (from another account) said...
“The matter to consider is: Is this truly wealth that is being claimed, and where to we steal it from now?”
Dodd-Frank basically sets up the situation in which a collapse of the shadows banking system the next time around will result in a ‘bail-in’ scenario for ‘all’ assets. Basically those running the casino (ie Street Names) get first rights to ‘all’ assets thus preventing the need for the Government to do another bail-out scenario like 2008. It’s all to keep the system alive don’t you know. Ironically those holding the bag whether it’s a bail-in or bail-out are the same, ie net producing shrimp.
My guess is that since such an event will also nuke the entire pension system that some means of backfilling the paper losses with say 30 year UST at 3% will be found thereby transferring all paper claims on real assets from the net producers to the keptocracy. So your 401K/Pension statement will still have the same dollar value it will just now be 100% government IOUs.
I’m sure Ben in Co have a few 30 year UST they need to unload, so it’s a win win. At which point why not just consolidate the entire pension system (public and private) since they ultimately all use the same IOUs. Going forward continue to increase means testing and presto-chango, all the purchasing power the top 9.99% of earners were attempting to store away for a slight more comfortable retirement than the average Joe amounts to maybe a few extra pink flamingos in front of their trailer park home at retirement vs those that were net consumers all their life.
See the thing is that the event described above destroys a good deal of the debt that ‘if’ converted to currency would drive hyper-inflation. Thus it’s the perfect crime in which the net production of the last four decades is permanently trapped within the roach motel to be dissolved away via a rate of future currency expansion that is higher than the rate of fixed interest.
So all the paper claims to assets remain in place and are fully enforceable under the kleptocratic law, all that happens is that they have new owners, ie the 0.01%. The other 90% who either live hand to mouth or are parasites on the system don’t feel a thing. My guess is that this class of voters won’t give a you know what about what just happened to the 9.99%. Hence no riots in the streets over the greatest theft in human history.
Or we could save all debt at all costs have hyper-inflation leading to riots in the streets by the 90%. My guess is the Kleptocracy will choose owning all the assets of the 9.99% over being lynched by the 90% because their EBT cards won’t keep the pantry stocked.
So the moral of the story is if you don’t want to be part of the 9.99% you need to ‘physically’ hold every asset regardless of form; of which gold should be a significant portion since it’s the currency of net producers the world over.
Victor,
Thanks for that interesting overview. I think you've elucidated well the state of play the (U.S.) monetary authorities are now facing, namely an increasingly severe set of implacable Hobson's Choices.
The following is my view of the likely outcome of one of them.
Murphy's Law, which as I'm sure you know, posits that, "What can go wrong will go wrong" is, in essence, nothing more or less than a bit of "folk wisdom" whose insight amounts to noticing the frequency with which plans with any nodes of risk, not to say glaring ones, tend to fail. I'd say an OT III exercise fits the description of a plan with a glaring node of risk. As we know, the rest of the world, unlike Ben Bernanke, are not so constrained where their relationship with U.S. debt is concerned. As such, the ROW's "taper" program is has been well underway for a while, which, in turn, has translated into Quantitative Easing for the duration. Given this backdrop, the risk of the ongoing overseas taper project increasing would, be quite high in the advent of another iteration of OT. Does that mean that Ben and Co. wouldn't go this route? Not necessarily, but it does suggest, at least by my runes, that the "shock" you describe is more likely to occur than not.
@ Victor et al
These are all timely and important considerations and perspectives being shared with respect to likely scenarios.....I do have a question I'd like to pose to the group that comes about from my recent reading of a biographical book about Jacques Rueff "History of a Monetarist" which is well worth reading.
The book describes the thinking of a great monetary mind during his career that spanned the 1920's through the 1970's. It also provides the historic backdrop of a tremendously volatile set of political, economic and monetary conditions that prevailed during those times that included great world wars, hyperinflations, and economic bankruptcy in vast sections of the world...as well as the transition of one global reserve currency (British Pound) into another ($US). The book makes clear that gold was very instrumental in being the "change agent" during the various moments of systemic resets. However, on the scale of transition (revaluation) that some/most of us are expecting with respect to resetting our present circumstances....something akin to 30x...during this past period covered by Rueff's lifetime of great wars, monetary inflations, economic collapse, political revolutions, etc etc the gold resets were "modest" by comparison (1920's to 1930's change from $20 to $35...London Gold Pool period that took gold to $42). One could argue that the 1970's market driven gold revaluation of 25x was stunning following Nixon's closure of gold window....My question to the group is the following: Why couldn't a reset gold price
be "modest" by the standards expected here? Why not even something like the mid $2,000's even as a transitory level so that Ponzi game moves forward thus benefiting the present actors who hold the power and reap the rewards of said system. There were clearly "modest" resets in the past...why not for the present and future?
From : http://rbth.asia/business/2013/07/17/china_reportedly_planning_to_back_the_yuan_with_gold_47997.html
According to media reports of early July, the People's Bank of China is mulling the possibility of phasing out the dollar as the reference currency for the yuan exchange rate, and to start using gold as the reference point.
Hmm, that links seems to have died...so here then : http://jessescrossroadscafe.blogspot.com/2013/07/china-reported-planning-to-back-yuan.html#
...where there's smoke there's fire... :-)
Spaul,
You're spot on with the annuitization of 401K's, I believe Orin Hatch is working on it now (though it's been brought up several times in the last 15 years).
And the US sheople have been dumbed down enough to accept it. They'll probably buy a lot of flags that month for their front porches.
So we know where they'll "steal" it from ... but is it truly wealth?
Yes it is, as long as it retains it's transactional utility (MoE) in the physical plane.
So that brings us back to ... if NOT hyperinflation, then what DOES destroy the transactional credibility of the dollar?
Well, when Giants stop accepting it and instead demand gold I think we'll see. Ask Greece about the new "acceptable" collateral.
But why would they make that demand, when the scenario you describe is so richly rewarding today? Even recently solidified by Franky Dodd.
It's all about TIMING and CONFIDENCE.
It takes TIME for Giants to unload all these paper-zero-promises into more jets, more mansions, more yachts, more islands, and more young virgin slaves. (and really, it's only that last one you never grow tired of or can get enough of, and they aren't THAT expensive).
And also ... Giants can only insulate themselves from the world of hapless Shrimp so much.
After all, the factory owner still likes to fish from the river he pollutes. At some point in time, he looks at his holdings and says, "Time to clean up my own mess".
From a self-interest standpoint, the last thing Giants want is to be caught flat footed holding dead paper-weights.
So they could simply agree to stop accepting promises and go to Plan B if they were spooked enough to stop the music, grab their chairs and say "enough is enough".
It does seem, however unlikely, as the more reasonable way to proceed. I'm sure the board members up there in Basel have sipped absynth in the smoking room on this one.
All we can say now is, "we shall see".
Gary,
China and India make up about 40% of world population, and there are many other people (3rd world nobody's) who see gold as their only "true and forever" money. More and more may see it that way as we get closer to the time when it starts slipping away from their means to grab it.
These are who Giants will "take from" after freegold. By bringing to them the same trappings they brought to the West. I guess that part of the system will never change, since human nature (its weakness) powers it. Didn't like the last one? Won't like this one.
Gold can always be traded for FIAT and FIAT can always be traded back for gold. We just add a lot more zeros to the FIAT to do it.
As the wealth shifts from West to East the game remains the same, only the target has moved.
Someone mentioned Damon Vrabel a while back. He's one who get's it in this regard ... another sharp Canadian, that one.
John,
Don't know if anyone noticed, but "John" posted a strikingly similair comment as the one I did, albeit without fake paper crash portion.
"My question to the group is the following: Why couldn't a reset gold pricebe "modest" by the standards expected here? Why not even something like the mid $2,000's even as a transitory level so that Ponzi game moves forward thus benefiting the present actors who hold the power and reap the rewards of said system."
This price of gold, it must be set by someone no? In the past, the resets were manual pegs. It was in the matter dictating what the currency would be worth relative to gold, not the other way around, yes?
Now if such an attemt were to be made again, a peg to gold, it would force that currency issuer to defend that price with their gold. Such a scenario would not bepossible for USD at anything less than $100,000 per ounce. And the spending power of the dollar would trashed.
so I will assume you mean "could the FG price be lower than FOFOA's predicted 55k in 2009 dollars.
My question to you be, how does the dollar mark their gold to market and not expect the market to simply take gold to the level it would be if they attempted to peg?
@Victor
Based on what you see and what you know. If the decision in front of Benanke was yours, what would you do? It seems to me that letting the gold market die would be the right choice. Choice A if you will. My main reason for choosing it would be that the physical market is going to break the "gold market" in short order anyway.
Hmmm, no wonder I didn't a reply to my question. I just did a search for it, and it looks as though it did not go thru.
My question is...
Given the difference between the COMEX/ETF brand of paper gold and the slightly different LBMA version. Could it be possible for us to see a partial crash of paper gold where LBMA survives being seen as a physical market, whilst the other markets crash, leading to a higher price of gold, yet not as high as we would see given a total crash? I am suggesting this as a possible (hypothetical) leg of support for the current monetary structure.
Wil
I noticed you mentioned FOAs "if you didn't like the last system...well then you won't like the new one" quote again.
I guess I never really understood exactly what FOA meant by that quote, and I just loved RJPs recent explanation. (And his "IF" joke was extremely witty).
I thought it was worth repeating RJPs comment, since repetition of the concepts here are always helpful.
So here goes - h/t to RJP, comment from this post on July 8, 2013 at 6:31 pm.
Wil,
And I have to admit: if you hated our last one, you will no doubt hate this new one, too.
I used to think that quote meant the next monetary system would end up being just as unfair, oppressive, etc as this one, so don't think it's gonna be sweeter than duck butter just because gold is re-entering the system.
But during an email exchange I had with JR one night, I seen a light. "Now it won't a light like Paul seen, but a light nonetheless."
I realized that FOA wasn't trying to tell us the next monetary system was going to be bad, but the point he was trying to convey was that you shouldn't hate ANY monetary system. You just need to understand its structure and save accordingly because that's really the only course of action a Shrimp like you or me can take.
"IFyou hated our last one...."
The key word is IF.
IF is a big word.
IF Mama Cass would've given Karen Carpenter a sandwich, they both might be alive today.
IF I hated the last one, I'd hate the next one too. But I don't hate this system. In fact, I love that it's still in place. "It was good business. It bought me more time."
RJ
@ Nickelsaver,
You make a very good point and your numbers are correct if the US still has it's 8300 tonnes
(roughly 250 Million ounces) and you weigh that against a very rough $25 Trillion of paper liabilities ($17 Trillion Debt plus $8 Trillion of "money")....then you get your $100,000 per ounce which I won't argue with. But others have suggested you never would need a full backing. James Rickards has suggested 40% would do and he arrives at a much lower gold price (using as his liabilities also a much lower number)...others have suggested that a 20% backing would work. I for one do not pretend to know what would or wouldn't work...just that the temptation to use any boneheaded scheme (even ones that will end up falling flat on its face) that buys time and extends exorb privileges would be the natural state of political types. To me it seems a question of what you can "get away with" and there seems to be a consensus here that the market won't let you get away with anything other that full out FG and its resultant gold valuation....that's the part I wonder about.
+1 Lisa for bumping "duck butter" back towards the front of the blog's comment section
hating the monetary system is almost always linked to hating human nature. Something all of us probably have a love/hate relationship with depending on what latest thoughts are freshest in our mind. As humans we are benevolent and corrupt all at the same time. So if you hate the current (and probably future) monetary system, political structures, ect. you probably just hate where we stand as a collective planet at the moment. Nothing wrong with that, and it's certainly of noble to try and change it, but I would suggest we all see to our own sins first. For the night is dark and full or terrors =)
Wil Martindale said...
“From a self-interest standpoint, the last thing Giants want is to be caught flat footed holding dead paper-weights.”
I define a giant as those in the 0.01%. or about 600,000 individuals worldwide give or take. If you have to ask if you are among them you aren’t. Now even giants hold physical gold because they don’t trust the other giants, ie no honor among thieves. They also seem to accumulate all kinds of other exotic physical assets like old cars, castles, paintings, etc. that other future giants are likely to desire as well. The rest is in paper that looks a lot like shrimp paper sure enough but consider this.
Concerning ‘paper’ assets; there are really two types of paper assets, those that will still deliver ‘legal’ ownership in a systemic collapse and those that won’t. After all, most of the underlying ‘physical’ assets will remain post collapse will they not?; the only question is who has the superior claim as set forth by law?
Thanks to Dodd-Frank (which was written by the Giants and given to Congress to put into law) shrimps hold paper IOUs that won’t deliver and giants hold paper IOUs that will deliver. See the difference? For example Warren Buffet billions are covered via the shadow banking system, but Joe bag of donuts 10K pension which in reality are just IOUs for stocks, not so much. Not unlike how fractional reserve banking works.
Joe’s IOUs for stocks will go to Warren Buffet via the shadow banking system that thanks to Dodd Frank now has a superior claim over Joe, after all Warren is made man and Joe is not. Now if Joe is lucky after a years of waiting and dozens of hand wringing Congressional hearings of (how terrible this is, how could this happen, nobody could of predicted etc) he will get government IOUs in exchange, again if he is luckily.
So the shadow banking system is basically setup under existing law as a ‘legal’ delivery mechanism to transfer shrimp paper claims on real assets to the giants. Until that event though the giants will continue to milk the cow in full confidence that they also get to eat it.
In addition, the tax law is effectively different for shrimp than giants as well.
Giants can transfer gold and other assets among each other all day long and are not be required to declare capital gains via various tax havens around the world, shrimps on the other hand must pay the inflation tax (better known as capital gains) that is almost entirely a product of the ever expanding pile of fiat that always and everywhere is given pretty much free of charge to giants first.
So what is a net producing shrimp to do?
Well first off don’t hold your assets in the giant’s casino; Important safety tip. While you may not become rich you’ll still end up in better shape than the paper shrimps that will only receive government IOUs under even the rosiest scenarios I can think of. Given that they are only 9.99% of the voters though don’t count on even that frankly. Making about 60% of the 90% happy is all the 0.01% need accomplish in order to stay in power.
So the question is what do paper shrimps do after this event with the excess dollars they do continue to generate? Do they start putting it back into government bonds or stocks held in the Street names? My guess is that they don’t. At least not the ones that are completely brain dead anyway.
I think our only hope is that somehow gold will emerge as a focal point asset that ‘must’ be used to reconcile global trade imbalances that ‘also’ must be free of capital gain taxes even at the shrimp level in order to perform that function.
If so then kleptocracy would just fall back to baiting future shrimp net production (via nationalization of the mines) into an extremely elevated price for physical gold say $200K/oz. A generation or so down the road the kleptocrates collapse this new equity based system and go right back to debt based system we have now.
John,
Put the idea of gold "backing" right out of your head. The concept that informs Freegold is antithetical to gold (in some fixed quantity per unit of credit) backing the total aggregated money supply. Separating the medium of exchange from the wealth reserve- see the ECB's Consolidated Financial Statement- is essential to putting the global monetary and financial system on sound footing and, as such, backing credit with goldt amounts to a giant step backward.
The reset price is, perforce, not influenced by "backing" metrics, but rather, the requirement to get gold flowIng in size, and to compensate for the mammoth loss in value on bond portfolios. Central Banks will be re ap
John,
Put the idea of gold "backing" right out of your head. The concept that informs Freegold is antithetical to gold (in some fixed quantity per unit of credit) backing the total aggregated money supply. Separating the medium of exchange from the wealth reserve- see the ECB's Consolidated Financial Statement- is essential to putting the global monetary and financial system on sound footing and, as such, backing credit with goldt amounts to a giant step backward.
The reset price is, perforce, not influenced by "backing" metrics, but rather, the requirement to get gold flowIng in size, and to compensate for the mammoth loss in value on bond portfolios. Central Banks will be re ap
Well said Edwardo, and if I understand correctly, the price will be found by forcing paper claims in to physical.
This is interesting: http://www.tfmetalsreport.com/blog/4846/gld-deception-reaches-new-level
Yesterday, the GLD reported another drawdown. (Even though price had risen by over $40 since last Thursday...but I digress.) Yesterday's "inventory reduction" wasn't significant compared to some of the drops we've seen this year, it was reported at just 1.50 metric tonnes. The only thing that caught my eye was the round number of 1.50. That seemed strange so I made a mental note and moved on.
Today, the GLD reported another drawdown and this one really got my attention because...drumroll, please...the amount reported was another 1.50 mts. Exactly, right on the nose. Drill down even further and it gets more hilarious:
Monday GLD: 30,192,195.27 troy ounces
Tuesday GLD: 30,143,884.76 troy ounces
This is an AP withdrawal of 48,310.51 ounces. (As an aside, how the heck do you account for the extra 0.51 ounces anyway? Doesn't that seem strange, too? But, again, I digress.) Now check this out:
Tuesday GLD: 30,143,884.76 troy ounces
Wednesday GLD: 30,095,574 troy ounces
This an an AP withdrawal of 48,310.04 ounces.
Seriously, we're supposed to believe that paper gold went up $6.90 yesterday and fell by $12.90 today, all the while the exact same number of shares were tendered each day leading to the exact same physical withdrawal. As they say, "I might have been born at night but it wasn't last night". Exactly 48,310 ounces for two days in a row? Seriously?? Give me a break! Are you just fiddling around with me or what?!?
I personally don't put much stock in the "official" reporting of anything these days. If leaders will openly flout the law and break contracts, then they'll certainly manipulate every aspect of information flow.
Wow, some interesting concepts re-reading back to where I dropped out.
I always like Victor's stuff. Yes the FED has decisions to make. So does the BIS.
I would be interested in VTC's thoughts about those options as well.
SPaul,
You continue to read my mind. Amazing.
But I must commune once again with the flower, for my daily toil makes me weary, what with this treadmill I must run along to earn the paper of my masters.
I do so long for the day when the people work for real wealth, like the kind not just any man can dig up with the sweat of his brow (gold and oil) not the kind any man can issue to emslave another, because he and his fellows are "more equal" than all the rest.
I am inspired by these thoughts; the truth is hard to find until you come here.
Thus informs the flower ....
Wow, I am really bored.
I have my Harley torn down to the frame at a time I should be riding it. Bad timing, but soon that issue will be rectified. The machine is truly my therapist. She is getting a total makeover and will be something to behold in a few short weeks.
That leaves me watching the tedious, and quite boring I might add, self destruction of a once great country and idea. It happens to all good things I suppose, but nonetheless it would have been more convenient if it could happen have happened on someone else's watch. Bored stiff, I browsed my Feedly content stream and saw a Turd Ferguson article talking about time machines. It sucked. Just a rehash of everything that has happened since 2008 that should have been the manifestation of every gold bug's wet dream.
Just a bunch of stunned chumps standing around saying how right they should have been all along to own all things made of gold paper. Still no clue whatsoever that they didn't need a time machine in 2008 to see the future, just as they do not need a time machine today to know where the "price of gold" is heading.
How is it that this blog has more than 400 articles that describes exactly what is going on, and has predicted exactly the disconnect the long suffering bugs have agonized over, yet they bleat and blather about without a clue? Why talk of time machines? Why not talk about people and ideas that do not require them? So much simpler.
Jesus, I am bored.
I'm apparently more easily entertained than you Matrix. I am completely riveted to the daily grinding downward of GLD, the nosediving gofo numbers (chart it, it's a compelling visual), and the more and more pathetic pronouncements that the economic recovery is building steam!
Ashley, I share your keen cynicism over the grand pronouncements of the GLD numbers each day. They are so clearly being managed. It's breathtaking.
I spend my day shaking my head in wonder at what is happening right in front of us, and looking into the blank stares of EVERYONE I KNOW, who simply don't see anything at all.
Received another gold shipment today. Buying more tomorrow.
Strange days, indeed
Cheers
@byiamBYoung
"I spend my day shaking my head in wonder at what is happening right in front of us, and looking into the blank stares of EVERYONE I KNOW, who simply don't see anything at all."
I know that feeling. Unfortunately for me this includes my family. It gets to be a lonely feeling to prepare as best as one can without exposing the tin foil hat to too much scrutiny. I look forward to the day when my time misallocation is vindicated. Keep on Keepin On.
Yes, Jeb, that's right. Those paper claim's immense (phantom) value will be transferred to physical gold.
@P_O_D,
We drag our families toward the transition together, yes?
Cheers
it's official - bernank says no one understands gold.
http://bloom.bg/1bLEiFI
Someone should send him the link to FOFOA's blogspot
Ahhh Sentry,
Sometimes I think boredom is the bastard stepchild of unrequited disgust.
The sheople have been taught, almost since the beginning of time, that if they "obey" they will be "taken care of" (in this life and the next).
It is not that they haven't heard the truth, but that they FEAR it so overwhelmingly, that they collectively choose to ignore it. You can see it in their eyes as they turn away from the truth.
They would rather dwell in your MATRIX than to face the burden of reality we bear. For the vast majority of people in this world are followers, and their common motivation is FEAR.
As the flower unfolds, the only answer to this dilemma, for we who have chosen the red pill, is to acquire and hold gold.
Thus, if we defeat the matrix, we will be in a position to take advantage of the revaluation. And if we do not, we bask in the smaller glory that we have done the only thing one can do to defeat it.
Beyond that, a few drips of oil in the driveway are a small price to pay for the roaring freedom of a bored out hog.
We who take the red pill are truly Born To Be Wild!!
LD,
What a riot! And coming from the YES network (at least that's the pre-video ad I was served).
I think the 'Nanke understands (paper) gold (prices) better than most. I'd say he even got it mostly right in his famous brief description of the system's motivation for holding gold.
The problem is, most people truly do not understand the power or meaning of "tradition".
But they will.
Wil,
Pass me some of that flower.
I suppose the other side of the coin is that I am capable of disgust in this bored state of mind I find myself in because I can recognize my state of existence separate from a rock or tree. So many around me are just not capable of disgust. I think it's disgust and perhaps hunger that are two of the greatest motivators. Sheeple of the American variety have been largely inoculated against disgust by total immersion in fantasy, courtesy of the exorbitant privilege we are so familiar with here.
So in the spirit of the flower, indulge me a bit as I fill the cup.
I suppose there is hope when one can feel disgust when witnessing something unacceptably wrong. It shows spark. I suppose there is hope when one can witness something amazing and wholly unexpected and then wonder why you never considered the possibility. I suppose this life thing is really a pretty good deal when you consider the fact that you can speak your mind from a cabin deck, on the side of a beautiful North Georgia mountain, looking down upon the morning mist coming off a river, as I am currently doing. Not too shabby really.
I actually laughed out loud yesterday with nobody else around. I was watching Prime Interest on RT, and it occurred to me that as a cold warrior from the Reagan era I was now watching a Russian news network, and enjoying it!. That's right, from a Naval Officer charged with protecting the world against the tyranny of Soviet Union and the scourge of global communism, to a middle aged citizen of a country who has voluntarily given away its freedom. I now find more value in Russia's propaganda than Uncle Sugar's. Now, I would of never have thought that possible as a 20 something year old Naval Officer practicing the art of nuclear warhead delivery all those years ago.
I would have never have guessed how subtle the process could be that results in the capture of so many minds and spirits. We are now them of years ago and they are now more like we used to be. The same questions I used to ask about the soviet block I now ask about Americans. Why can't they see what is right in front of their faces? Why don't they care enough to rise up? Of course these are rhetorical questions and I know the answers well enough.
Exorbitant privilege is not long for this world. Hunger and disgust is coming to America. Thank God.
The gift of understanding bestowed upon me from reading this blog these 5 years is priceless. I am heading for the donate button.
I wonder if Ben holds some gold bullion tucked away in his sock drawer?
I would be truly amazed if he doesn't. :-)
I would say Bernanke is really smart. Therefore I would presume that he owns enough gold to see him through the transition.
(for Milamber's eyes only)
Remember the old margarine commercials where butter was referred
to as the "high priced spread". Well, another "high priced spread" just
turned NEGATIVE. and I ain't talkin' GOFO. I'm talking Brent/WTI
Greetz! {:<)>
Edwardo said...
“Put the idea of gold "backing" right out of your head.”
You reminded me of another topic directly relevant to this blog post, namely the use of gold held in central bank vaults as a backing to fiat and yet in all practical terms is never circulated?
I have to ask why not just the claim the moon circulating safely in orbit about the Earth is what backs the currency? Just as inaccessible, safer than any vault and difficult to expanded quantity, as gold is. It reminds of the website where you can buy land on the moon.
Regardless, I think in a Freegold world this is altogether a false narrative, beyond whether the central banks fixes or floats gold relative to fiat. In fact I believe that for gold to constrain fiat it must circulate ‘independently’ of the central bank fiat amongst the net producers as a parallel and competitive monetary system. One obviously focused on maintain relative purchasing power over long time scales and less important in daily transactions. The key to enabling this is to remove any tax implications on a relative shift in exchange rate between the two monetary systems, in this case gold vs. fiat.
Hence why I believe the Central Banks the world over sit atop a mount of gold and governments tax paper gains of shrimps that hold it. They sit on it ‘not’ to back the fiat, rather they sit on it to prevent it from circulate as a competitive monetary system thus constraining the theft enable by forcing ‘all’ net production into various ponzi scheme debt instruments the future value of which they entirely control.
Reminds me of the Hobbit - Desolation of Smaug movie trailer.
It’s high time to slay the dragon and release the gold to once again circulate as honest money once again.
The lynch pin is the tax code. Under existing law any gain in gold’s relative to fiat is taxed as a capital gain. A fact that I think is unconstitional since gold and silver are both legal tender among states and thus by extension individuals based in the 9th and 10th amendments in the constitution.
In my mind legal tender is something that can’t by definition be assessed a capital gains tax. If my paper dollars buys twice as many bananas is it did yesterday I don’t need to declare a capital gain. Likewise if it buys half I can’t declare a capital loss either.
Thus perhaps the path to Freegold, at least in the US anyway, can be found by legally eliminating the capital gains tax on gold and silver? In my mind that is what prevents Freegold from coming forth. With this legal vehicle for storing purchasing power tax free over long time spans for net producers in place they would progressively migrate towards storing net production via gold and silver based on simple financial darwinism.
Maybe this is how we slay the dragon; its missing scale?
HI spaul67 ,
Have you ever heard the expression "all talk and no cattle?"
It is what I think of everytime I see discussion of Article 1, Section 10 of the U.S. Constitution, which enumerates the powers states *don't have*. It bars states from issuing their own money.
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts...
Utah's law just says people can accept legal tender coins from the US mint at face value, Brwer vetoed Ariona's attempt at something more frisky.
The US Constituion says nothing about the IRS's tax classification of gold. Nor does it say gold is money. It gives the Federral Government power to decise. And they have decided - the Coinage Act of 1965 states (in part):
United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts. 31 U.S.C. § 5103
The Federal Government defines legal tender. But no rational person would pay with the face value of US government legal tender coins. Like a gold eagle, which carries a legal tender face value of $50 for the one troy oz variety.
What once appeared to be an infinitely legged stool has been whittled down to one that is now precariously balanced on few remaining legs. Detroit, Philadelphia, Chicago, New York, LA, and on, and on... It is all coming to pass, as predicted, and I sit in awe.
USD continues on a sell with the S/L at 83.19
Target 79.71
GLD continues on a buy with the S/L at 123.25
Target 138.94
SLV on a sell but not clear so no position
NUGT continues on a buy with S/L at 5.83
Target 8.63
"That's right, from a Naval Officer charged with protecting the world against the tyranny of Soviet Union and the scourge of global communism, to a middle aged citizen of a country who has voluntarily given away its freedom. I now find more value in Russia's propaganda than Uncle Sugar's."
Well, at least you're not completely gone and still recognize it as 'propaganda'. There are vast societal differences between Russia and the US, and given their past and the fact a leopard never changes its spots, I doubt I will ever hold them in any regard.
MatrixSentry wrote:
I would say Bernanke is really smart. Therefore I would presume that he owns enough gold to see him through the transition.
And what would you say about someone who occupies a preeminent position of influence on monetary thinking and monetary matters who then intones on gold in a way that would, to put it mildly, fail to provide any impetus to anyone to acquire gold for themselves?
Victor,
I've had some more thoughts on your "GOFO post" and I would appreciate some clarification from you.
You wrote:
a) let the gold market die by protecting the bond market and the domestic value of the dollar "The Last Rubicon".
What exactly do you mean by the term "gold market" in the sentence above? I assume you must mean the paper gold market since the physical gold market isn't going anywhere.
The problem with the dichotomy of killing gold to save bonds is that sundering the paper market forces a revaluation which, as you know, fatally exposes sovereign debt. Perhaps you have some extenuating factor in mind that I haven't considered in which case I eagerly await your response.
Edwardo,
And what would you say about someone who occupies a preeminent position of influence on monetary thinking and monetary matters who then intones on gold in a way that would, to put it mildly, fail to provide any impetus to anyone to acquire gold for themselves?
There's one crafty sonamabitch.
[The] approach has much to do with re-framing the audiences perception, and perhaps very little to do with the senses. The minds of the audience members are distracted into thinking that an extraneous factor has much to do with the accomplishment of the feat, whereas it really doesn't have any bearing on the effect at all. "The true skill of the magician is in the skill he exhibits in influencing the spectators mind."
"crafty"
Yeah, not quite the word I was thinking. But certainly a controlled and manipulating SOB.
JR said...
“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts...”
Let’s say I propose and the bank accepts to take gold or silver in exchange for a clear title to my home at a fiat value higher than the face value of the coins. How is this a taxable capital gains event under the Constitution as articulated above? It’s a freewill transaction between two private parties using ‘different’ forms of legal tender under the Constitution to satisfy a debt, is it not? The fact that one party is willing to accept coins of lesser stamped fiat value than the fiat loan is frankly none of the Federal governments business is it not? The bank need not declare a loss upon selling the gold or silver for fiat thus I need not declare a gain.
If we review history it was the $ that was set by a specific weight of silver or gold not the other way around in the Constitution. Further when the government cut the last remaining link between gold and the currency (i.e. FDR) I would suggest that any attempt to conflate the taxation of one legal tender over the other was ‘also’ unconstitutional.
The last and only President that rejoined the two forms of legal tender ‘briefly’ via executive order was promptly murdered and his executive order reversed before he was even in buried. Food for thought vis via the dragon. Apparently, the dragon doesn’t see this as a ‘non-issue’ maybe we shouldn’t treat it as unimportant to our objectives either?
It’s my guess that Kennedy was attempting to exploit this missing scale and take back the money power from the international banking cartel. The Kleptocracy attempting to cover this weak area is what likely initiated the 1965 Coinage law after his murder. A ‘mere’ 1965 federal law though cannot by definition override a constitutional provision, only the states can approve this change. This is just one of a long string of unconstitutional federal laws that over the years has transferred the rights clearly given to ‘sovereign’ citizens in the constitution to the Kleptocracy centered in DC and New York.
Anyway, I think discussions along these lines are more fruitful in achieving the objectives of liberating net producing shrimps from the debt gulag than what strikes me at times on this board as wishfully thinking with regards to the ‘inevitability’ of Freegold.
Under existing ‘federal’ law you can accumulate gold all day long but you’ll still have your net purchasing power destroyed via gold taxes. Hence why the kleptocracy even allows a gold and silver coin minting program to exist all. Under present law even directly held physical gold and silver is just another roach motel for the net producers, in life and after death.
I would really like to hear your take on Daniel Amerman assessment of using gold to protect wealth within the ‘existing’ legal framework.
http://danielamerman.com/articles/GoldTaxes1.htm
In my view this is a key weakness of the dragon and one that if exploited stands the best chance of bring forth Freegold which at its heart brings ‘back’ honest ‘constitutional’ money to the republic. Something that is absolutely essential if free market capitalism is to ever return.
Frankly everything else is just talk.
Physician, heal thy self.
And this just in... Detroit will get worse before it gets better
No chit Sherlock? Here's where disgust comes in.
The image that comes to mind regarding all that I have written above, is being one of the pilots of the Rebel Alliance (Freegolders) as we approach the Death Star (Kleptocracy). We all now know where the weakness is (i.e. thermal exhaust port = capital gain taxes on gold) and have the weapon in hand to exploit it (photon torpedo = physical gold) but the odds of success look really really dim as we approach.
“Look at the size of that thing”
Meanwhile the Death Star is rounding the planet Yavin getting ready to destroy all the accumulated paper claims on real wealth of the net producing shrimps on the little moon in orbit.
“We've analyzed their attack, sir, and there is a danger. Should I have your ship standing by?" "Evacuate? In our moment of triumph? I think you overestimate their chances.”
We shall see.
Maybe the role of Han Solo in the attack will be played by the need to maintain world trade post collapse?
I think Ben Bernanke's powers of prestidigitation are not so formidable as you appear to, JR, but whatever they may be, they aren't sufficient to conjure away an obvious moral failing if he owns physical gold.
JR - If I offer to buy an automobile or a house or whatever for 1 or more $50 Gold Eagles how can that transaction incur capital gains taxes? I just don't see it. It is a transaction between two people that happens to involve official legal tender coins is it not.
Hi Matrix.
Any time you're down my way I'll be happy to pass you that flower, and some Hennepin Belgian farmhouse ale to wash it down with.
Yes, as Joe Walsh would say, "life's been good to me so far". I was never drafted to storm the beaches of Normandy, nor have I really lived through any air raid drills. The exhorbitant priviledge has served us well.
And as for hope? Well ... I have only tried to reason with a few people since my "conversion" and the only one who listened with an open mind is my 21 year old daughter.
If there's any hope, it's with the young, as they have not yet been fully indoctrinated into the socio-political biases crafted for us by the ministry of propaganda, and their minds are open and pliant.
It is my responsibility to enlighten her to the ways of freedom, just as the familial banking dynasties likewise teach each new generation the ways of dominance over the lesser classes.
On a sidenote, the earliest childhood memory I have was the funeral of JFK. I did not know what was going on, but the look of despair on my mother's face was one I will never forget.
As a four year old infant that look said to me that "all hope is lost to us". And then my father came home and held me in his arms.
Frankly I was scared shitless, as I hardly knew the man, and he NEVER picked me up and held me, never before and never since. He always worked and I was in bed before he came home, and still asleep when he left.
What a shame, and the reason why? Yes, Spaul, he did challenge the system.
"The image that comes to mind regarding all that I have written above, is being one of the pilots of the Rebel Alliance (Freegolders) as we approach the Death Star (Kleptocracy)..."
Try reconciling that with...
"when a thousand hungry lions fight over one scrap of food, small dogs should hide with what's in their belly"
FWIW....
Saudis’ Unprecedented Break with Washington over Egypt
http://www.globalresearch.ca/saudis-unprecedented-break-with-washington-over-egypt/5343092
At the risk of contradicting a mind superior to my own, the correct
phrase is, "all hat, no cattle". (as in 10 gallon hat, but he don't own
a ranch) Everything else - priceless
{:<)>
enough,
Thanks for posting that piece on The House of Saud breaking with D.C.
Spaul,
It appears that you haven't read the blog (or disagree with the concepts here). I don't have the time or desire to address your points (which BTW have been discussed in this blog many times previously) but I will leave you with some links that may help. It is my opinion (based on my limited understanding) that gold miners will be the primary targets for high post transition taxes. One of the central tenets of this blog is that the "the gold must flow". I think it is to our advantage to view the world as it is as opposed to how we wish it to be.
http://fofoa.blogspot.com/search?q=indicium
http://fofoa.blogspot.com/search?q=how+to+dig+a+hole+to+china
http://fofoa.blogspot.com/2009/10/your-own-personal-freegold.html
+1 Nickelsaver
In my opinion we do not have an x-fighter in this monetary fight. We have simply found a nice view with which to see the entire battlefield. A view that affords us a once in a life time opportunity. One that comes from seeing that its not only obvious who is going to win this fight, but that the battle is already over.
We should not buy physical gold today with the hope that it will some day go up in value. That we rebels will drive a stake into the deathstar and then get our golden reward. We should buy it today with the knowledge that its value has already been determined by those who need it to balance international payments. The evidence of that is right in front of us to read and re-read on this blog. The timing for rolling out this information to the masses will come "soon" when the IFM knocks over her queen and admits checkmate. Unpredictable; but inevitably soon. The worlds need for gold to function is more important than our opinions on that matter.
Will, three things about the murder of JFK have concerned me for some time once I became aware of the history as reported.
The first is what I wrote above concerning what I believe are key vulnerabilities of the existing Keltopcratic order in maintaining its power over the purchasing power and distribution of money. Having read and talked to the likes of Bill Still I’m much more aware than some about how important this power is and in my opinion represents a serious blind spot for some on this board. The Money power is the key power of any sovereign nation; it is the life blood of the social order. The social order in turn writes the laws in a democracy hence the positive feedback loop via EBT cards and Obama phones etc.
Gold and Silver’s natural ability to form a competitive, universal and independent store of value over long time scales is locked between these two powerful forces at present (fiat(money) and capital gains(law)). So who ‘actually’ has this power is something I could easily see powerful people and organizations fighting over, sometimes violently if needs be. The dragon sitting on the pile of gold if you will.
The second was Jacqueline Kennedy saying ‘they’ killed him. They is plural not singular. While she could certainly be inclined to ‘conspiracy’ theories given the traumatic event she experienced I’m not so quick to discount her sense of it all either being his wife; those who are married may know what I’m talking about. Regardless, somehow she didn’t believe Oswald was a just a lone wacko with a personal axe to grind with JFK over Cuba was the whole truth. Also convenient is the only man caught ends up dead before he can talk and then don’t you know it his gun man dies shortly thereafter of ‘natural’ causes as well.
Third is how the Secret Service, which is under the US Treasury, has been entrusted with protecting the President? Logically as commander in chief it would make more sense for a special branch of the military to be given that responsibility, but the US Treasury, really? The military is already heavily involved in all other aspects of safely moving the president from point A to B, so it seems to me like a logically extension of that does it not. What does printing currency, paying bills, issuing debt and tracking down counterfeiters have to do with protecting the President? The same US Treasury that in reality is just a revolving door department of the international banking cartel. A bit too close of an association if you ask me.
Anyway not sure what a little ol-shrimp can do about the above beyond just being aware of it?
Heck even in what is on balance an ‘educated’ forum to debate such things I still receive ad hominem attacks from time to time even from those on this board like JR that clearly have a clue and yet can’t seem to get beyond magical thinking with regards to ‘how’ Freegold comes into being. Goodness and Truth in no way ever guarantee inevitability.
If so, what chance do I or anyone else have in convincing even a fraction of the other 99.99% of mankind let alone a working majority of the reality that stands in front of us let alone reversing the present order with its strong reinforcing feedback loop via social democracy?
The Death Star to X-wing fighter ratio may be worse than 1 to 20 I’m envisioning; maybe is more like 20 to 1? We are going to need more photon torpedoes I think, or a miracle. Further some of the x-wings will be shooting at us, “our list of allies grows thin”.
So if we think about what Another told us in that if we don’t like the current system (put me down as an affirmative on that one), we aren’t going to like the next one?
My guess is that what he was trying to warn us about is that even a Freegold system will be twisted somehow to support the Kleptocracy along with a few lucky golden shrimp that may front run the switch over?
Meanwhile the rest of our fellow net producing paper shrimps get wiped out in the transition thus being forced to start all over again and store value in +50K/oz gold produced by the mines and private stocks now owned by Kleptocracy?
Maybe that is what he was trying to tell us? Follow in the footsteps of giants was his advice? The current monetary paradigm is reaching the end of its life and is about to change?
Maybe what I’m having a hard time reconciling in my mind is that the next system will be just as unfair to net producing shrimp as it is now? That Freegold doesn’t equal freedom but just a new type of control that directs the net productive behavior of some to serve the rest.
This is beginning to feel a lot like the basic storyline of the Matrix. We are just the latest of many past monetary cycles and the version of Neo that finally breaks the cycle won’t show up for another hundred cycles or so?
And yes JR I know I’m stretching past and present popular culture to fit reality but as Joseph Campbell wrote the power of Myth is key component of how we come to understand and reconcile the human condition.
Let see looking above I have Star Wars, The Lord of the Rings, The Hobbit, and the Matrix. I’m sure if I try I can figure out how American Graffiti figures into all of this:)
P o'D: - the dilemma you speak of has been my constant companion for the past 15 odd years.
It seems the concept of ...and respect for "time"/ RISK simply isn't a priority in younger generations ...and what we (older types) percieve as imminent catastrophic systemic upheaval ...is met with generally much less even than a Ho-Hum attitude.
As we edge ever-closer to our own personal date-with-destiny, perception / clarity intensifies. FWIW.
victor: - Great GOFO summary ...and thanks for the reference - I had an opportunity to meet the Great Man (Fekete) several years ago (in Canberra) and sought to engage him on the issue ...however there was too much Gold-standard Drum-beating going on.
Having the utmost respect for your opinion, I find your assessment that the Fed can indefinitely prolong Bills rates at Zero + (and the described mechanism) will absorb my thoughts all this weekend.
"If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability."
- Henry Ford
GLD 19.7.: -2,71 t.
And a must read is this. REUTERS!
They are quoting Ned Naylor-Leyland from Cheviot Asset Management:
"… The bullion banks want to get gold back into contango and stop the movement of the remaining inventories by shaking the market lower, using paper leverage to do so," wrote Naylor-Leyland.
"It hasn't worked, indeed more and more investors are now seeking allocation, delivery and physical metal at the expense of synthetic products offered by the banks. The squeeze we have been waiting for is closing in, it is always darkest just before dawn."
Spaul,
There is no doubt in my mind as to who ordered the assissination of JFK, and why. But we cannot talk about these things because, as we said, the truth is far darker than most people can handle. We might as well be talking about Pearl Harbor(if you know what I mean).
Yes there will be a kleptocracy post Freegold, but they will have to be MUCH more creative than today. Today the theft is so obvious, even the sheople can begin to understand it (at east a few of the brighter ones).
Really I think the key is in understanding how debt "becomes" a liability, rather than an asset, when it defaults. Total opposites. Isn't that special?
Frankly, I have always eyed debt cautiously that way, but the dollar enshrines it as the asset par excellance.
So this strange dichotomy, where a thing truly is its polar opposite, or can be "transformed" into its polar opposite in a split second of indecision ... seems to be the root of much confusion.
But the strangest idiom of all is how we service debt with more debt, which is seen in my terms as servicing a liability with an even greater liability, thus the exponential expansion of debt and surety of default.
As Another alluded to "money is whatever we say it is? Not quite" and yet, in the end, mark my words here, in the final debt holiday, senior debt WILL demand payment in gold.
True, human nature never changes. And in the world of shrimp, fools and their newfound wealth are always easily parted, it's just the target that moves. There will always be a predator class that feeds upon the sheep (or shrimp).
But FIAT denominated by a free market in the world's preferred wealth reserve asset is certainly superior to the imbalance we have today, and far more equitable from a standpoint of monetary integrity, and social meritocracy.
I think that what Another was trying to tell us is that if you are a "mark" in this system, you'll be a "mark" in the next. In other words, Freegold is NOT going to eliminate gullibility.
It's just going to give common sense a leg up on the system.
I'll just add to the above that I long for the day when gold denominates fiat, instead of fiat denominating gold.
... and "debt-denominated" fiat at that. How absurd.
http://www.zerohedge.com/news/2013-07-19/jpm-eligible-gold-plummets-66-one-day-total-gold-fresh-all-time-low
http://www.silverdoctors.com/second-dutch-bank-to-follow-abn-amro-close-gold-accounts/
Wil, Spaul,
pls allow to step in only for a moment with the following remark:
Gold is not the only "hidden value" in this time. The phenomena "consciousness" is another one!
As the revaluation of Gold is a prerequisite for a substantial change of the financial system, so is a revaluation of the role and character of consciousness—this unknown, hidden factor of human life—the prerequisite for any substantial change of the social system as well.
Be informed: This revaluation is well underway, in the same way as the revaluation of gold is!
When future generations will look back to the 201xs, they will "see" two things: a huge tidal wave of a new thinking, behaving, wanting, triggered by consciousness based technologies (that’s the technical term BTW), lead to a profound rebirth of a natural, human style of living, worldwide. And secondly, embedded into this stream of a broader awareness to and knowledge of life (ongoing since the early 1960s), the sudden crash of the financial system triggered by some "accident" in the gold market, making all paper irrelevant and setting free again the one and only focal point of value and wealth.
Money became "normal" again afterwards. Together with many other things which became "normal" again: health system, education, agriculture, architecture, and, yes!, defense.
Time will prove this too! Again: It’s well underway.
End of "moment".
I hope you are right my German friend. I do wish for it.
The only thing we know for sure about every future us that there are always some surprises in store.
Usually some good ones, and some bad.
Some will see the glass as half empty, some half full. For my part, if what is in the glass is Balvenie sungle malt ... I will drink it!!
ein anderer,
Amazing article coming from Reuters. There isn't even the usual completely wrong-headed analysis.
"What is happening now is that the absolutely inevitable 'run' on the 100:1 leveraged bullion banking system is truly underway."
This article amounts to smacking average shrimps in the head and saying, "TIme to pay attention! Go get the physical gold!!"
Thanks for the link. Things are getting interesting in a hurry!
Cheers
We have seen the signs that "Freegold is nigh" before, and here they come again all around us.
Whenever that happens I try not to get too excited ... but it's a good time to chack and see what colorful comments the Jackass has to bray:
Pay close attention to this one:
For several months, if not a couple years, the US housing market prices have excluded the off-market bank sales to unload inventory out the bank back doors. The home price data is more corrupted than the price inflation data or the Wall Street bank profit statements or the official gold accounting by the USGovt. As much as the housing market is vulnerable to rising rates, the bank derivatives such as the infamous Interest Rate Swap contracts lie in the danger zone. They react very badly, with $trillion losses, whenever the long-term rates move just a moderate amount. Between August 2012 and April 2013, the 10-year USTreasury yield had been fluctuating from 1.6% to 2.0% in firmly controlled fashion. However, since May all hell has broken loose. This week, the reported TNX yield has zipped to 2.7% and come back to 2.55% in highly dangerous fashion. Expect major losses in IRSwaps very soon."
"When future generations will look back to the 201xs, they will "see" two things: a huge tidal wave of a new thinking, behaving, wanting, triggered by consciousness based technologies (that’s the technical term BTW), lead to a profound rebirth of a natural, human style of living, worldwide."
You don't say. While there are certainly periods of enlightenment, I have always been fond of the adage, "the more things change, the more they stay the same." Or " plus ça change, plus c'est la même chose" if you will. Human nature will always be human nature.
@ Matrix
I agree with your take on how boring things are these days. Just the last couple weeks have finally started to get interesting...
But even now, everything is looking similar 2007 again rather then the 1970's. The reason Schiff was convinced that everything was going to inflation hell in 2007 was because oil prices and commodities were rising, interest rates were rising (negative no less) and gold prices were rising. It looked like 70's style inflation was brewing. But it wasn't so.
Here we are again. The ten year is breaking out of its trend and oil prices are rising. But it remains to be seen if it will result in a speculative fallout like 2008 or some real inflation that will expose the Fed.
I've drawn the Blogs attention to THIS Ratio Chart on numerous prior occasions and given the IR discussion, thought I might chime in ...AGAIN!
The Ratio represents how many Short-term Yields ($IRX) go into a Long-term Yield ($TXY)
2012 saw the thing "relatively" quiet (the Fed piling into the long end like there's no tomorrow) but especially since mid-Feb, the thing has been looking decidedly uppity.
This doesn't tell us the $US is toast ...just that Mr Market thinks there actually WON'T be a Tomorrow! FWIW.
OBA,
Thanks for these charts and commentary you provide. I am a complete amateur at these charts so am trying to decipher what goes on.
I take it the fed wasn't buying into the long end in 2011? And this new development is happening while the FED is doing its best to maintain control and could be interpreted as a loss of control by the fed, because of the fear of tomorrow?
jeb: - Couldn't've put it better me-self Sire ;-)
Hmmm... For the TA phobics, still looking good with the play money. No changes except for S/L adjustments. Interesting to see how OBA's predictor will play out; hopefully I will be the contrary indicator, but the paper game goes on, for a while yet.
USD continues on a sell with the S/L at 83.24
Target 79.71
GLD continues on a buy with the S/L at 123.70
Target 138.94
SLV on a sell but not clear so no position
NUGT continues on a buy with S/L at 5.98
Target 8.63
OBA I guess I still need a little background.
What is the normal range of this ratio? It appears that it was lower earlier in the year and is now moving back up.
What is the significance of the ratio? I understand the basics of bonds and I understand that the bond market is big, but with changes in the ratio what kind of behaviors is it predicting?
We are now above the 50 day and 200 day MA but that was the condition in recent years. The numbers seem to have huge fluctuations. They vary from in the several hundreds to double digits.
As this ratio seems to have a history if large movements what are we to make of a current value of 178?
thanks
USAGOLD claimed yesterday the REUTER’s story (mentioned above) to be an »Important breaking story. . . .«.
Michael J. Kosares is commenting on the same page with a further astonishing information, quote (emphasis mine):
The current backwardation in the gold market is the latest in a series of events that traces its origin to the April takedown in the gold price. Physical demand globally at the low spot prices has depleted above ground stocks — a process that has made its way slowly but surely to the paper market. Just this afternoon reports filtered into the gold market that the JP Morgan gold inventory at the COMEX is all but depleted. Two years ago, JPM had almost 3,000,000 troy ounces of gold in storage at the COMEX warehouse. Now it has 46,000 ounces — just at one and a half tonnes!
For the record one correction. Jeff said that Sprott's PHYS didn't shrink and lost one 400oz bar only. Of course, GLD cannot shrink because it is a closed end fund. The only way the 400oy bar could be removed is that one of the owners had this bar shipped home. PHYS allows this, but has no other way of losing inventory (unless Sprott winds it down or reduces capital).
MF,
According to media reports of early July, the People's Bank of China is mulling the possibility of phasing out the dollar as the reference currency for the yuan exchange rate, and to start using gold as the reference point.
I suspect this is one of the goldbugs wet dreams, but doesn't have much in common with RPG (Reference Point Gold). Phasing out the dollar as a reserve would make sense though ;)
Sam,
It seems to me that letting the gold market die would be the right choice.
Yes, this makes sense to me. This would put the ball back into the other court (ROW): China and othe rmajor dollar holders and oil. Will they continue to use the dollar without getting cheap gold? If not, do they dare not to? How will they spin it? What exactly are they going to do?
Nickelsaver,
Could it be possible for us to see a partial crash of paper gold where LBMA survives being seen as a physical market, whilst the other markets crash, leading to a higher price of gold, yet not as high as we would see given a total crash?
A manufactured partial revaluation? Only if the other major international powers agree: Euro zone, China (other BRICS), OPEC. What's their incentive for doing so? I am thinking of the Euro zone.
Ashley,
Seriously, we're supposed to believe that paper gold went up $6.90 yesterday and fell by $12.90 today, all the while the exact same number of shares were tendered each day leading to the exact same physical withdrawal.
Another piece in support of the coat-check view? How likely is it that the APs needed the same number of baskets on two consecutive days? Much more likely.
Woland,
yes! WTI is more expensive than Brent! Please, tell me, why is this happening by WTI increasing rather than Brent decreasing?
Edwardo,
yes, I meant the London gold market, i.e. equating paper and proper gold. And I second Woland about the link. Btw what is that funny thing around Obama's neck? Did HE bring it to the occasion?
OBA,
your assessment that the Fed can indefinitely prolong Bills rates at Zero +
One downside would be that everyone would understand what they are doing and that the house is already on fire. 99% of the financial industry still believes that Bernanke (ond King) are concerned about the economy when they QE.
ea,
The bullion banks want to get gold back into contango and stop the movement of the remaining inventories by shaking the market lower
I am afraid this gives it away. He has no clue. If you want gold back in contango, you need to raise the paper price or supply physical gold to the market or a combination of both. Discussion was in "GLD talk continued".
Victor
If Brent stays steady in the Gold oil ratio and WTI increases; doesn't more gold flow to WTI producers? In other words the end is near and the USA is entering the race for gold. (not sure where the flow of gold would come from)
It just came to me that soon those with dollars will be like those with tulips the day the buyers failed to return to the marketplace.
Michael dV: - The Ratio is (was) normal until the mid - late 90's (at 3-5) which implied the Market view Treasury instruments as "riskless" across-the-board (Bills thru Bonds)
The last Decade has seen it to be anything but!
Currently, the "unusual and relentless" upswing suggests to me Mr Market is (a) commencing in earnest the abandonment of the Long-end (of the Curve) ...and (b) embracing the Short-end to ultimately breach the Zero point.
The Ratio then would be infinity ...and the current $IMFS will be toast.
TIME my friend gets no airplay in Financial thinking ...however all management machinations these last several years point to a concerted effort to prevent this which essentially is a systemic collapse into the Here-n-Now. FWIW.
VtC, thx. Trying to catch up with this theme too.
Just got around to reading this rant from
Jim Willie.
Man, they probably had to ice him down after that tirade.
He claims an insider informs him that there is 20,000 tonnes of gold under the Kremlin. Really? Is that possible?
byiamBYoung:-
No idea abut gold under the Kremlin but what we do know is this
"Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty."
http://www.bloomberg.com/news/2013-02-10/putin-turns-black-gold-into-bullion-as-russia-out-buys-world.html
http://gata.org/node/12816
http://gata.org/node/12816
Commodity trouble brewing? Mainstream media stories and links from Friday and today.
BY: - Thats the thing with GOLD ...it's never been "show and tell" stuff - so who'd know?
As an interesting aside to the USMint point, ALL the Silver contained in American Eagles is supposedly derived from US mining...and with the recent landslide at Utah / Kennecott, State-side Silver supplies have been cut by 20% + or -.
@Jeb,
Thanks.
Yup, it seems clear that everywhere you look, big players are quietly casting their votes for (physical) gold.
Strangely different from the mainstream blather machine. For example:
This nugget of wisdom
No wonder people don't know what is coming. There ought to be a law...
Cheers
OBA,
If that bit about the Eagles being minted from only US mines is from government supplied information, well, I'd just discard it.
Our government has developed a penchant for peddling BS. Sadly, we no longer can trust what they say. Wasn't that way when I was growing up....
Hell, I wouldn't be surprised to find that those eagles are now a wee bit aluminum. I don't have any data that indicates it, but it wouldn't surprise me. Not one bit.
Cheers
Jean Claude Trichet
The past present and future of the monetary system
https://www.youtube.com/watch?v=wJP2IWk4mW0
57.35s
"Then when you have your interest rates which are not necessarily at zero level or very close to zero level to start the non-standard measure, you might observe that the inter-mediation on markets does not function correctly , that you might have a lot of disruption of the normal functioning of markets that are hampering the transmission of your monetary policy and then you are countering (courting?) the disruption of the appropriate transmission of your monetary policy through the non-standard measure." He also points out that you should be able to withdraw from the bond markets once the private sector is functioning normally.
Now, lately we've had Ben Bernanke talk about tapering then when the market reacted badly he toned the tapering talk down and pointed out he would only withdraw when the conditions warranted it.
In my view, this was a test of the theory that the fed can withdrawn from the bond market; and the test failed. They may try again because this is their only option but the first glimpse of tapering was failure, which leads us down the path to OBA's ratio chart.
OBA, it is no longer the case that the mint must use US silver for its coins.
earthquake measuring 6.9 shaking the shit out of me while writing the above post...whole north island getting rocked and rolled last couple of days.
jeb: - They don't call 'em the Shaky Isles for nothing eh?
J-C T (that collar is SO irritating) highlights the "seat-of-the-pants" management techniques now being deployed in this first ever full-blown Global Fiat System.
They are hanging on for grim death IMHO.
OBA, I read your posts with interest. From a purely mathematical standpoint, the denominator $IRX of your ratio index ($TYX:$IRX) has the much greater effect. It only has to decrease from 0.02 to the long-term minimum of 0.005 and your index will rocket from 180 to 700+. So is what we are really watching just the $IRX and how close it gets to zero (or below)?
sean: - that is correct however - this latest uptick has elements of both indices diverging ...which tends to give the Chart it's current distinctive trend.
Individual Indices in Log-format are probably the best representations of IR movements, they (kind of) capture the exponential oomph as required to gain (or lose) each nominal pip.
When it spikes to (say) 700+ we can expect some pretty serious management activity ...or else!
...as it's beyond the Markets ability (arbs etc) ...OR inclination for that matter to arrest. IMHO.
Victor wrote:
yes, I meant the London gold market, i.e. equating paper and proper gold. And I second Woland about the link.
Thanks for your response. I don't know what Woland said regarding the link, but I'm more interested to hear your answer to this (burning) question from my post to you.
The problem with the dichotomy of killing gold to save bonds is that sundering the paper market forces a revaluation which, as you know, fatally exposes sovereign debt. Perhaps you have some extenuating factor in mind that I haven't considered in which case I eagerly await your response.
Brother Young,
I take Jim Willie (and his "Voice") with a grain of salt ... but he certainly did answer VTC's question to Sam, yes?
There are much more creative ways to exchange exhorbitant debt for a more useful means.
Happy Trail!
-W
spaul67
you comment:
Let’s say I propose and the bank accepts to take gold or silver in exchange for a clear title to my home at a fiat value higher than the face value of the coins. How is this a taxable capital gains event under the Constitution as articulated above?
How about reading it like this:
Let’s say I propose and the bank accepts to take [any asset] in exchange for a clear title to my home at a fiat value higher than the face value of the coins.
See it is not legal tender, its being accepted as an asset.
It is not legal tender, as the legal tender value is what gets marked on the coin. Its an asset becasue its treated as gold or silver or whatever asset, value at the market, not as legal tender whose value is defined by the government trying to apply (or stamp) the "money concept" onto the metal.
FOA:
To understand gold we must understand money in its purest form; apart from its manmade convoluted function of being something you save. Money in its purest form is a mental association of values in trade; a concept in memory not a real item. In proper vernacular; a 1930s style US gold coin was stamped in the act of applying the money concept to a real piece of tradable wealth. Not the best way to use gold, considering our human nature.
Moneyness
Lets say you have a Sacagawea/quarter "mule" and you want more for it than face - you aren't using it as legal tender (its money value as defined by the US), you are vauing it at market value (its asset worth) from being a numismatic oddity worth.
===============
See what the cosntitution says:
make any Thing but gold and silver Coin a Tender in Payment of Debts.
Gold or silver already exist, the only "making" going on is the act of "stamping" or otherwise making the already existant gold and silver legal tender by defining their legal tender value.
The sorta the opposite of letting the gold ro silve "float" in value ;)
=============
How is this a taxable capital gains event under the Constitution as articulated above?
Its a taxable event under the tax code, which Congress enacted pursuant to the authroity vested by the Consitution. The Constitution by and large doesn't define laws and specifics, its defines or enumerates powers os the federal government (and states).
MOneyness 2
It was only when governments stamped official denominations and numbers onto pieces of gold that we can say the money concept was applied to gold. But as I said earlier, it was the number recorded on the metal, not the piece of metal itself, which constituted the use of the money concept. FOA mentioned this as well. Again, from Moneyness:
To understand gold we must understand money in its purest form; apart from its manmade convoluted function of being something you save. Money in its purest form is a mental association of values in trade; a concept in memory not a real item. In proper vernacular; a 1930s style US gold coin was stamped in the act of applying the money concept to a real piece of tradable wealth. Not the best way to use gold, considering our human nature.
There is a key concept hidden in that paragraph. If we look at all of history we find a whole host of materials that have been used to record the money concept—electrum, gold, silver, copper, iron, nickel, zinc, paper, wooden tally sticks, Yap stones, even silicon microchips buried in secure computer servers for the last 40 years or so. But even from the very beginning this was a sub-optimal use of gold in particular, because it had naturally emerged as the leader of the pack of tradable wealth reserve items due to our list of "textbook qualities".
So what's the harm in not understanding this, in conflating the money concept with the physcial item?
But let's say that you reject this notion that money is really only the credit notation and insist that it is, instead, the physical item itself. What is the harm in that? Well, I think it leads to some horribly wrong conclusions, especially about how banks work.
[...]
It is a good read spaul67.
Give it a go, its full of funny old crumedgeons like Samuel Untermyer and George F. Baker. We all love commentary from a grumpy old man telling us what it was like back "in their day" and how us modern folks are all confused about reality.
ZH: Did A Raging Fire Burn Down JPMorgan's Gold Vault?
Maybe not, but figuratively speaking, soon it might. So, for all those vaults under the Wall Street, here's one preemptive:
The roof, the roof, the roof is on fire
The roof, the roof, the roof is on fire
The roof, the roof, the roof is on fire
We don't need no water let the *other*ucker burn
Burn *other*ucker burn
oh wait... :-)
The vault, the vault, the vault is on fire
The vault, the vault, the vault is on fire
The vault, the vault, the vault is on fire
We don't need no water let the *other*ucker burn
Burn *other*ucker burn
JR, thanks for your response regarding capital gains.
I think I now have a better understanding of the corruption that has occurred since the founding of the republic. When we began this little experiment in self-governance it was the weight of gold or silver that ‘defined’ a dollar now its has been twisted as the other way around.
It really consolidates in my mind the primary barrier that prevents gold and silver from forming a competitive monetary system right now. If capital gains on gold were removed we would effectively be in a freegold monetary system right now. It also brings forth just how dangerous those silver certificates would have been to the international banking cartel running the show.
Knotty Pine, I have already read but read again the links you provided. Thanks as well. Not the first time that FOFOA's posts read better the second and even third times around. Like rain on a desert it takes time to soak in especially for those who have lived their entire lives within the existing monetary order.
I think my primary frustration is that I know family, friends and co-workers that work really hard in putting aside what little net production they have after they pay for various ponzi schemes and taxes. At the same time I now have almost certain knowledge at this point that the wealth they are attempting to hold within the Kleptocratic system is about to go up in smoke. My frustration is further compounded by my inability so far to convince them to even put aside just 5-10% in physical gold.
At the same time maybe this is the way it has to be, in fact has always been when monetary resets occur? If even 10% of net producers followed my advice the entire physical gold market would completely lock up forcing a reset right now. In short, the Ark only has so much space. The simple fact is that more paper claims exist on real wealth than exists or will exist barring some Star Trek technology like breakthrough at present prices. Thus the loss for the vast majority of net producers has already occurred. Just like those holding pensions in Detroit and coming soon to the rest of world have already lost their wealth. All that is happening is realization of the theft that has already occurred.
The excess will collapse into gold, the only money all other currencies can’t value. Which is ironic because this brings us back full circle to the weight of gold and silver valuing currency not the other way around. From that foundation a new monetary system will arise and evolve over a 100 years or so gradually accumulate all the excess we see today.
jeb,
according to IMF data compiled by Bloomberg
Someone here did the due diligence and figured out that only about half of all countries report to the IMF. It must have been about 3 or 4 months ago. Costata perhaps?
Edwardo,
The problem with the dichotomy of killing gold to save bonds is that sundering the paper market forces a revaluation which, as you know, fatally exposes sovereign debt. Perhaps you have some extenuating factor in mind that I haven't considered in which case I eagerly await your response.
Assume you are Europe, Japan or Korea and you need to import energy while you export other things. Now the gold market shuts down, but oil is still available only for dollars. What do you do? In particular, what do you do with all your T-bonds?
Victor
Victor, while I can conceive of your scenario - gold market dies, bonds continue- coming to pass if it occurs in the interregnum before the revaluation/reset, it strikes me that this period stands a decent chance of being reasonably abbreviated because, as we know, the gold must flow.
it strikes me that this period stands a decent chance of being reasonably abbreviated because, as we know, the gold must flow.
If it doesn't, then what?
Victor
There is no then what, because at the right price it will flow.
http://www.tfmetalsreport.com/comment/332594#comment-332594 Motley Fool posted yesterday
spaul67:-
If capital gains on gold were removed we would effectively be in a freegold monetary system right now.
You'll find many (most) countries don't apply CGT to Gold currently mate - definitely not here in OZ.
Consider now that all modern financial crises are crises of debt, because the foundation of all modern finance is debt.
Consider also that no bank is "too big to fail" but rather it is the debt-based system that is too big to fail, and any "bailout or bail-in" is a bailout of the system, not the bank.
The bank is systemically important only to the extent that it holds systemically important debt, fraudulent though it may be.
So what makes some debt systemically important, and other debt not?
The systemically important debt enriches giants and the systemically unimportant debt exists in the realm of shrimp.
In essence, though we could say the systemically important debt is the senior tranche of debt in FOFOA's example of "who really owns this house (metamorphosis)?" another way to look at it is that it is the debt that Giants demand be saved, otherwise they will usher in FREEGOLD.
It is as if to say that "saving our systemic debt" is a rule of the system. Break this rule and we change the system.
But how do we differentiate the value of debt earned as in "hard earned wages" or "saved up in a 401K" as opposed to the fraudulent debt created by false valuations and securities so unmistakenly worthless that the issuers (at Goldman for example, notoriously) refer to them as "shit"?
Are our wages shit? Are our 401Ks shit? Or if not, do we steal from those to make "shit" whole?
Why? After all it is all debt, but perhaps some debt is "more equal than other" eh?
In the end, this question will be at the forefront of the coming changes, but the answer lies in the question itself.
Slaves are allowed to default. their debt is not systemically important, their debt is not necessary to save. Instead we take their collateral (if it exists) and their equity stake (by extension).
In the end we take the debt that is allowed to default and use it to "save" the debt that is not allowed to default. But it is all debt in the end ... unsustainable ... worthless.
In the dollar centric world, don't rant that 1 in 5 are on food stamps, understand that more than 1 in 5 QUALIFY for food stamps. This how a debt based valuation system extracts value from wage debt to save systemic debt.
Further, you will continue to hear FREEGOLD referred to as a "gold standard" in the coming months. While that term holds baggage that most will never truly comprehend, Feegold IS the true gold standard that always should have been, had governments allowed it to develop naturally.
It is a good enough description for an equity based system with RPG.
Hi OBA,
Regarding CGT in Australia, CGT does appear to apply to gold (http://goldchat.blogspot.com.au/2009/09/capital-gains-tax-and-gold.html) however recent changes in the tax free threshold have reduced the tax burden (http://www.bullionbaron.com/2012/05/tax-free-threshold-allows-tax-free.html) to the point where a modest lifestyle could be maintained tax free.
Regards,
DI
On another note, I just got this email from GoldMoney (my emphasis):
Dear Customer,
"We are excited to announce that on the evening of 23 July (UK time) we will be unveiling our newly designed public website. Please note that during the transition to the new site, you will be unable to access your Holding."
I hope that _transition_ doesn't take too long... (eek)
Thanks for the correction DI - Modest Lifestylists-R-US ;-)
Since the LBMA decided to grey out their GOFO 'data' I've decided to chart it in glorious technicolour
While we are the topic of capital gains tax and consistent with JRs responses regarding legal tender laws in the US how about this scenario?
Right now a 1oz Silver Eagle has a $1 face value and 1oz Gold Eagle has a $50 face value. From my read of JRs response they are both legal tender at those values in exchange for paper; transaction price levels above the stamped value require a price purchased, price sold calculation for capital gains. Also the implied GSR is 50 in law. Bad law but the law none the less.
So let say at some point in the future one could ‘trade’ 20 Silver Eagles for 1 Gold Eagle bypassing paper altogether. Again from JRs responses one would only need declare a ‘capital gain’ of $30x20 or $600 capital gains for each exchange. Now you are still trapped by capital gains if you liquidate your gold in the end but the upgrade from silver to gold should be largely tax free should it not?
I’m sure the Kleptocracy has this loop hole covered somehow though?
Is their anywhere on the plant where gold is not under some form of capital gain tax?
In fact I remember Germany was considering a ‘direct’ wealth tax because the indirect form of using inflation and capital gains isn’t generating enough wealth transfer?
Sorry messed up the math make that just a $30 gain.
@spaul67
Right now a 1oz Silver Eagle has a $1 face value
Although I have traded all mine for AU - I believe a 1oz SE has a $5 face value. Doesn't it?
Best,
Gary
Victor: What should the owner of oil accept as payment for his product if gold doesn't flow?
"It is good to see bullion transactions happening – this shows that our currencies are still alive!" Ender
So if bullion isn't flowing currencies are dead.
And if currencies are dead the oil doesn't flow.
Not to mention the world is dry humped with a corn cob so the answer to your question of what if is frozen worldwide commerce.
Sorry, I am wrong - it's the Canadian Silver Maple has a $5 face value.
Best,
GT
You traded out of silver, but what about your Plutonium :-)
http://www.youtube.com/watch?v=obNIeg2EHDU
Want to thank the responses I got to my question last week about Armstrong.
Have another one on my quest to understand freegold..
How do we explain that India is trying to prevent their people from buying gold? Isn't that counterproductive to the freegold theory in which nations would want their people to stock up on Au before a reset in order to gain wealth later?
John2
@SPAUL ... anywhere on the planet where gold is NOT under some form of capital gain tax?
The Netherlands and other EU countries don't tax capital gains but tax capital itself once the sum of your possessions exceeds € 21 000 or € 42 000 for the married. Real estate is excluded, PM's are included. Suppose you are over the limit (€ 21 000 or € 42 000) then you pay each year € 1,20 for every € 100 stash in coins and bars. Next year, when your stash is revalued to € 1000, you pay € 12.
The more friendly system? I don't know. Capital gain taxes hit hard but hit once; possession taxes are mild but hit every year.
John
http://fofoa.blogspot.com/2012/02/indias-gold.html
"BOOM!!"
^ The sound the "OBA index" blowing up today...
So what's Next? Think of a number bigger than 500 and divisible by zero...
I don't know what to make of this Jim Sinclair comment: "This is why I am doing all these Q&A meeting as it is too sensitive to write about in today’s world of computer word recognition."
???
"Computer word recognition"? Does he mean that he thinks secret government agencies are scanning his blog and using algorithms to determine if he is publishing some sort of hush-hush special inside information about their plans to rule the world? But that those same nefarious agencies would not send anyone to audit his $50 seminars to see if he tells any secrets that way?
I've tended to take the man's writings seriously over the last ten years but in the last year or two he's written some real head-scratchers that make me wonder if that belief was misplaced. For instance, publicizing "Bo Polny's" market-bottom predictions (who is that and why should we take his predictions seriously anyway?) which have been spectacularly wrong - and then publishing more of them a few weeks later. You'd think Mr. Sinclair would ease up on making timing predictions a little bit given his horrible track record of the last couple years. I haven't heard him talking about the "French curve" for a while now, which he used to mention was the secret to timing success.
sean: - it's getting hot in the Kitchen ...thats for sure!
THIS is next weeks Auction announcement ...and THIS is todays Auction result.
Whilst the secondary market is plunging the toilet, we'll need to see (a) an acceptance of negative bids in the Announcement (Note 2) before the party really gets started IMHO.
NB: open links in a new window svp.
...and congrats to the Duke and Duchess of Cambridge on the arrival of the future King of Australia. Hip-hip Hurray!
...whatsmore sean: - we're about to witness (a) a decided uptick in DX (the "natural" reaction) ...or (b) DX will wash out HARD (the management reaction)
Either / or is possible and I'd tend to favour (b)
...which incidently will excite the $PoG-o-philes ;-)
Yeah, this TA stuff really sucks... ;-)
So folks, on the subject of whether or not GLD's melting away (think Wicked witch scene from Wizard of Oz- after Dorothy Tossed the bucket of water), I was considering how likely it is that the slow drawdown was managed.
There are (I believe) 16 authorized participants who can request redemptions. Not 16 million... 16.
They are:
BMO Capital Markets Corp.
CIBC World Markets Corp.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Deutsche Bank Securities Inc.
EWT, LLC
Goldman, Sachs & Co.
Goldman Sachs Execution & Clearing, L.P.
HSBC Securities (USA) Inc.
J.P. Morgan Securities Inc.
Merrill Lynch Professional Clearing Corp.
Morgan Stanley & Co. Incorporated
Newedge USA LLC
RBC Capital Markets Corporation
Scotia Capital (USA) Inc.
UBS Securities LLC
Could this bunch (of 16, not 16,000) of financial main hubs agree to wind GLD down in a way to try and minimize a panic? I sure think so.
GLD stands at 931.26 tonnes tonight. Another tonne+ lost today. And on a day where (semi-paperish but also physical-ish) gold rose by, what 3%?
Drip. Drip. Drip.
A good FOFOA GLD link here
Cheers
Suppose you made 3 promises of future payment.
The First was to your landlord.
The second is a bank that carries a note on your family car.
The third is an allowance to your kids.
All three are debts, all three are credits that have been extended to you on your good name, but some are more important than others. You could call some of them systemic in a way as your whole lifestyle system would be changed quiet a bit if you defaulted on them.
So if there isn’t enough production to go around to service all three debts is it time to pick winners and losers of this household fiat credit system? Who are these three debts more important to? How do you rank them as a person in power? The answer is everyone INCLUDING your kids benefit from you paying the landlord and car payment. That is to say if push comes to shove defaulting on your KIDS allowance is in fact what is best for your KIDS. I think with a little thought and a check of the overnight temperatures this evening will make this concept become clear.
Many with hard money baggage love to talk about those in power and the “Giants” they serve. They are like the kids worried about not getting their allowance and angry that dad is going to make the car payment instead. Our international trading partners will come first and YOU will benefit from this as well as them.
So far the price increase hasn't turned the GOFO rate back to positive.
19-Jul-13 -0.07833 -0.06500 -0.05000 0.03500 0.15333
22-Jul-13 -0.07833 -0.06500 -0.05000 0.02500 0.14833
Maybe GLD needs to puke some more. Or maybe the problem is no longer going to be kicked down the road.
@Jeb,
In fact, the 6 month and 12 month have turned toward zero (and beyond!). It's interesting, to say the least.
Cheers
@jeb
GLD puking while the POG is rising. A happy site to behold. I wonder what nonsense will the MSM make of this?
Cheers
Supreme Court shutouts reveal reckless decisions: When the White House loses cases 9-0, the president is going too far
Those of us who follow Supreme Court decisions spend most of our time debating the contentious issues that divide justices 5-4 along predictable ideological lines....
But we might do well to pay more attention where the court rules unanimously, particularly when they go against the White House.
When a president pursues policies that require such expansive federal power that he can’t get a single justice to agree, something is probably amiss.
Such overreach, though, has become a part of our political culture. Administrations of both parties are often unwilling to accept constitutional limits on their authority...
In Horne v. Department of Agriculture, a decision issued in June, the justices unanimously rejected the Obama administration’s argument that raisin farmers did not have the right to go to court to contest the seizure of hundreds of thousands of dollars worth of raisins....
Horne was the administration’s third unanimous defeat in a property rights case in 18 months....
Obama isn’t the first president to promote dubious theories of federal power. George W. Bush’s administration, among others, did so as well....
The fault lies not only with the offending politicians, but also with the voters and political elites who too often excuse or ignore their unconstitutional actions.
Sometimes, the courts can protect us against overreaching administrations. But many abuses of power cannot or will not be litigated. If we want to enforce constitutional limits on government, we cannot rely on judges to do the job alone.
From Big Gap in Understanding Weakens Deflationist Argument
In parts two and three of my September hyperinflation posts I explained how the US government MUST respond to a currency collapse by printing more currency in order to keep its stooges doing its bidding. I explained the mechanism by which the hyperinflation will become a physical cash hyperinflation, not an electronic credit money hyperinflation because bank credit money will devalue faster than the cash
Q. Simply, what is the purpose of Gold in the future?
A. To protect your hard earned savings (production minus consumption) from the hungry collective.
As a collective society engaged in the stealthy proliferation of contractual paper debt, we have evolved a paradox in which it is commonly understood that more wealth comes from less work. The individual has forgotten the age-old wisdom that he is responsible for his own well being, and exchanged it for the illusion of collective responsibility.
The individual still claims all the rights which have been hard won through centuries of blood, sweat and tears, yet now he shifts the obligation of providence onto the collective. Now in full, unstoppable, political swing, this movement has turned the world's producers and savers against the infantile collective. Their goals and desires are no longer aligned. Their future plans no longer coincide. Their support for each other, no longer exists. The warning bell has rung.
This debauchery has led to the rediscovery of gold by individuals the world over as a self-defense reflex against the lust of the collective. Gold will increasingly be held privately and physically as all other "on the record" stores of value are taxed and pillaged to oblivion by the hungry collective. This cycle will continue, growing exponentially, until the hunger is broken through either starvation or a return to responsible production.
Gold Standard?
There are plenty of blogs about what we should do as a society. About how we need to start a new gold standard; a return to honest money. How we must return to a hard, commodity-based currency that will restrain the profligate governments and their greedy bankers from inflating the money supply at will. But what we must understand, what is often difficult to understand, is that there is a big difference between what SHOULD happen and what WILL happen. There is a difference between FIGHTING for something and simply OBSERVING the real world to plan your next move. There is a difference between being an ADVOCATE or PROPONENT and being a PASSIVE OBSERVER of the changes we are actually living through.
This blog takes the latter position in all of these cases. If you would like to be an activist for a better world, this may not be the blog for you. But if you are a hard working producer and a saver worried about how to protect your purchasing power from the hungry collective, this blog may be just what you are looking for!
Bright Aurum
I don't know what to make of it myself. All I know is that this year the gold market isn't the same as last years gold market. Cheers and Beers if this is another step in the transition.
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