Someone emailed me yesterday:
FOFOA,
I was reading Turd Ferguson's blog the other day and he brought up a pretty interesting point about Western CB's not having any more gold left (based on Erik Sprott's research regarding the gold exports from the US) and it's impact on Freegold.
Would you be so kind as to share your thoughts on this topic?
I've included the link to his post below for your reference.
http://www.tfmetalsreport.com/blog/5041/fifty-five-thousand-dollar-question
Regards,
Paul
I read the article and followed the comments below it, Motley Fool's in particular. I see that he is very popular over there! ;D I also got a kick out of this comment by Nickelsaver:
One of the primary hypotheses of the gold bug/GATA camp that stands in stark contrast to A/FOA says that the Western central banks have surreptitiously emptied their vaults supplying physical gold to the market. The TFMetals article highlights this contrast in particular, pointing to the latest "smoking gun" which has been circulating for about six months since Eric Sprott wrote Do Western Central Banks Have Any Gold Left??? Part II last March.
The "smoking gun" is the net U.S. gold exports spanning 1991 through 2012 as reported by the U.S. Census Bureau which Eric Sprott says exceeded what the U.S. should have been capable of exporting based on supply estimates which excluded private sales as "unknown." The amount of gold exported in excess of what should have been possible (not counting private sales) was 4,500 tonnes over the 22-year period:
"We used this framework to analyze supply and demand in the US going all the way back to 1991, which is as far back as the FT900 documents go. Over the span of 22 years, the total amount of gold that the US has exported – above and beyond its supply capability – is almost 4,500 tonnes! A truly stunning figure. (See Table 3)."
Sprott discounts the possibility that the extra 4,500 tonnes could have come from private sales by claiming that Western gold investors have been net buyers over the last 22 years:
"Admittedly there is an unknown in our analysis, that being gold bullion acquisition and disposition by private investors. However, strong demand in ETPs such as GLD and PHYS and demand for gold coins provide strong evidence that the private investor has been a net buyer over the years. The inclusion of the private investor on the demand side would in fact skew the ‘gap’ of 4,500 tonnes higher to a figure that would lie somewhere between 4,500 tonnes and 11,200 tonnes, which represents the gross exports out of the US. The only US seller that would be capable of supplying such an astonishing amount of gold is the US Government, with a reported gold holding of 8,300 tonnes. The US Government gold holdings have not been audited or verified in more than four decades. The US trade data defines the export of nonmonetary gold as a sale of gold from a private seller within the US to an official agency. In September 2012, we espoused that the Western Central Banks have been surreptitiously selling/ leasing their gold through private channels in an effort to increase the available supply and in turn suppress prices. This new analysis using official US agency numbers seems to provide the strongest validation of our hypothesis to date. It is worth noting that our data only covers two decades and that the export ‘gap’ could in fact be significantly larger if earlier numbers were included or the real private investor demand for gold was known."
Note that this contradicts what Another said about Western gold investors trading their physical for paper gold.
Motley Fool did a good job addressing this weakness in Sprott's analysis in the comments over there:
Submitted by Motley Fool on September 10, 2013 - 7:36am.
I went ahead and read the only 'proof' you offered, being the two part paper by Sprott et al.
Sufficed to say the analysis is very weak, and has huge gaps.
Their figure for the 2012 disparity was 50 tonnes. The average for the period was just over 200 tonnes. The timeframe as 1991-2012.
They do not link the exact data, but this implies that most of the disparity came from the earlier period, rather than the later one.
Now think about gold and sentiment regarding it in the general public sphere from say 1991-2000. Horrid would be a good word. Hell, even today, despite a bull run the general public sentiment is an abhorrence for the barbarous relic.
Their weakest point in analysis is private supply/demand. I think it very feasible that that amount could have been supplied from private hoards, over the period, especially the first part ( where I am guessing most of the discrepancy arises).
Furthermore no differentiation is made between physical bullion, and say unallocated spot. On the demand side many 'sophisticated' investors over this period would have opted for the latter, which is in effect no demand at all. This lack of differentiation also skews the analysis.
Did the US public have the wealth to supply this differential? Yes.
I think this is the more likely explanation for the remainder in difference, once one makes a distinction between paper gold and real gold.
The author of the article, "Pining 4 the Fjords", then defended Sprott's claim that 4,500 tonnes is too much to have come from the American public alone:
Submitted by Pining 4 the Fjords on September 10, 2013 - 8:49am.
…Third, you correctly mention the possibility that this could have come from private sources. Indeed, Sprott et al noted that this was a possibility in their second article. However, they are positing that this much gold is too large to have come from private sources. So the question is, how likely is it that 4,500 tons would have come from private owners of gold in the US? Here is the list of gold reserves
Rank Country/Organization Gold (tonnes)
1 United States 8,133.5
2 Germany 3,390.6
3 IMF 2,814.0.
4 Italy 2,451.8
5 France 2,435.4
6 China 1,054.1
7 Switzerland 1,040.1
8 Russia 1,002.8
9 Japan 765.2
10 Netherlands 612.5
Now here is a list of the top ten largest holdings of physical gold in private hands worldwide:
Privately held gold Rank Name Type Gold (Tonnes)
1 SPDR Gold Shares ETF 1,239
2 ETF Securities Gold Funds ETF 259.79
3 ZKB Physical Gold ETF 195.53
4 COMEX Gold Trust ETF 137.61
5 Julius Baer Gold Fund ETF 93.50
6 Central Fund of Canada CEF 52.71[14]
7 NewGold ETF ETF 47.75
8 Sprott Physical Gold CEF 32.27
9 ETFS Physical Swiss ETF 27.97
10 Bullionvault Bailment 37.1[15]
Please note that 4,500 tons would be more than 2x larger than all of the 10 largest worldwide private holdings of gold combined! How likely is it that from 1991-2012 private owners of gold in the US sold the equivalent of what would be the second largest gold hoard in the entire world? Is it likely that they would sell (or even own) more than the top ten worldwide privately held gold hoards combined? I think not. That is why Sprott was saying they only reasonable source for this much gold was the US treasury. I still believe this is a reasonable conclusion…
MF then countered:
Submitted by Motley Fool on September 10, 2013 - 11:49am.
As to the first, yes I appreciate it.
As to the second and third.
No. This is their assumption.
"However, strong demand in ETPs such as GLD and PHYS and demand for gold coins provide strong evidence that the private investor has been a net buyer over the years."
I call BS.
"Please note that 4,500 tons would be more than 2x larger than all of the 10 largest worldwide private holdings of gold combined! How likely is it that from 1991-2012 private owners of gold in the US sold the equivalent of what would be the second largest gold hoard in the entire world?"
Yes. Over a period of 22 years. I think it is fairly likely. If he would, I would appreciate some input from 'Nick Elway' who I know comments on these forums as to the possibility US citizens held and were able to sell that much gold privately. He has some of the best data in the business, and I think his input would be valuable.
In their study they simply say that private supply/demand are unknowns, and proceed to ignore them. Since they provide no breakdown of the import/export data, it isn't possible to check, but are we then to deduce that they conclude that over the period from 1991-2012, no private holder of gold sold any of it to someone else outside US borders? Seriously? Not even an ounce? All of it 'must have' come from CB stockpiles?
And you wonder why I call their analysis flawed and weak. :P
…Much of this lies in the realm of speculation, as very few hard facts are available. Unfortunately we may not known the truth, till the chips are down. That said, the 'western banks have wasted all their gold' idea does make some assumptions which I consider insane, such as central banker stupidity.
MF
I documented this discussion here because I want to present another possible explanation for this 4,500 tonne "export gap," or at least part of it, that I haven't seen anyone acknowledge in the six months that Sprott's analysis has been circulating. As it is framed by Eric Sprott and Shree Kargutkar, his co-author, there are only two possible explanations (or a combination of the two). It was either public sales (unlikely says Sprott) or it was physical transfers (sales or leases) from the central banks into the physical market, with the implication that at least some of it would have come from the U.S. stockpile since we're talking about U.S. exports reported by the U.S. Census Bureau.
The Federal Reserve Bank of New York (FRBNY) holds mostly foreign gold and only a small portion (about 5% or 418 tonnes) of the U.S. stockpile. The rest of the U.S. gold (7,715 tonnes) is at Fort Knox, West Point and the Denver Mint. The FRBNY also reports how much foreign gold it is holding as "Earmarked gold". In his post on Central Bank Gold Leasing last November, Victor The Cleaner made a chart of foreign official gold held at the FRBNY from 1982 through 2012. This is Exhibit 1 in my alternative explanation:
As you can see from the chart, close to 4,000 tonnes of foreign official gold left the FRBNY between 1991 and 2012. Could that gold have shown up as exports in the Census Bureau data? Exhibit 2 is a conversation found in the minutes of a Federal Open Market Committee (FOMC) meeting on December 22, 1992. The Fed releases these minutes 5 years after the meeting:
CHAIRMAN GREENSPAN. Did I hear you correctly when you said that the gold exports in October appear to have come from the coffers of the Federal Reserve Bank of New York? Has anyone looked lately?Source: http://www.federalreserve.gov/monetarypolicy/files/FOMC19921222meeting.pdf
MR. TRUMAN. Well, I didn't want to tell too many secrets in this temple!
VICE CHAIRMAN CORRIGAN. Obviously, we knew what happened to the gold, but I don't think we knew what it did to exports.
MR. TRUMAN. What happens in the Census data is that the Federal Reserve Bank of New York is treated as a foreign country. [Laughter] And when a real foreign country takes some of the gold out of New York and ships it abroad, it counts first as imports and then as exports. However, the import side is not picked up in the Census data. So there you get the export side of it.
MR. LAWARE. Great accounting!
MR. BOEHNE. Great confidence building!
MR. TRUMAN. That's because you haven't been filling out your import documents!
MR. ANGELL. Let me run this by again. You mean a country owns gold and has it stored in the Federal Reserve Bank of New York and if they ship it out, that's an export?
MR. TRUMAN. And in the balance of payments accounts it also counts as an import, so it washes out.
CHAIRMAN GREENSPAN. The Federal Reserve Bank's basement is a foreign country. When they move it out of the basement into the United States, it's an import. Then, when they ship it out again, it's an export.
MR. ANGELL. That makes sense!
MR. TRUMAN. And sometimes when they sell the gold, it might be sold into the United States, so it should count as an import. It doesn't necessarily always show up as an export.
MR. BOEHNE. That really clarifies it!
MR. KELLEY. Does it have to get out of your vault at all in order to be considered an import and an export?
VICE CHAIRMAN CORRIGAN. Well, I'm not even going to try to answer that. In this particular case I know what happened, so I think the description you have is correct.
[Credit for dredging this out of the old FOMC minutes goes to Adrian Douglas of GATA who passed away this year. gata.org/node/8429 gata.org/node/12137]
I want you to notice a couple of very interesting things in that exchange. First of all, Truman says that in the BOP accounts it counts as both an import and an export so it "washes out," but in the Census data it shows up as a net export. And then he also says that if it is sold into the market in New York, like say to the bullion banks like JPMorgan, it would actually show up as an import. Extending that logically, if it was CB gold coming out of the FRBNY being sold into the market and then exported (which is Eric Sprott's theory), it would show up as an import first and then an export and it should be a wash rather than a net export. So the only way it should be a net export is if the foreign CB is taking it home and there was no transfer of ownership or sale into the market.
And finally, in the last two lines, it almost sounds like there may be cases where gold could show up in Census data as an import or export without ever leaving the FRBNY. So there's certainly plenty of room to question the Census data, especially as it relates to central bank gold. Yet Eric Sprott doesn't seem to have even considered this issue in his articles. Was he not aware of these FOMC minutes published by GATA three years earlier?
The approximately 4,000 tonnes of gold that left the FRBNY during those 22 years was not American gold because it came out of the "earmarked gold" which is simply custodial gold held on behalf of foreign governments and central banks. So there's no reason its movement should show up as "monetary gold" on any U.S. national account for any purpose. The only thing that makes sense in light of the FOMC minutes above is that physical transfers of foreign gold (as opposed to transfers of ownership) are being treated as nonmonetary gold movements for the purpose of import and export reporting. And if that gold was sold into the market, then it should have shown up as either a net import or a wash rather than a net export. But I can easily imagine how a CB gold repatriation (which is most likely what the 4,000 tonnes leaving the FRBNY was), especially if it was done in secret, might show up as a nonmonetary gold export in the Census data.
Thanks to releases by the Bundesbank over the past year, we now know that Germany moved 930 tonnes from London to Frankfurt in secret and only revealed the move ten years later. From a Q&A posted on the Bundesbank website on October 25, 2012:
"At the beginning of the last decade, we brought 930 tonnes of gold to Frankfurt from London and subjected it to a painstaking inspection. Part of the gold was melted down in order to create new bars which conform with the “Good Delivery Standard” which is customary nowadays in gold trading. Of the 930 tonnes of gold, not one gram was missing. We do not have the slightest doubt that our holdings in New York and Paris are also made up of the purest fine gold. We have at our disposal fully documented lists of the bars, and our partner central banks send us every year confirmation not only of the bars’ existence but also of their quality. We receive confirmation of our gold reserves, measured in troy ounces. The Bundesbank has been drawing up its accounts on this basis since it came into existence. All external auditors have confirmed our accounting practices outright since then."
Moving hundreds of tonnes overseas is serious business. You can imagine why it would normally be conducted in secret. Whenever physical gold is in transit, it is subject to loss by theft or even accident. Remember the story about the Indian van that broke down on the freeway while transporting official gold to the airport? And this isn't the old Bretton Woods era where national treasuries and central banks were the most adept at moving gold. Today is the era of the LBMA, when bullion banks like JP Morgan and private transports like Brinks and VIA MAT are the experts at transporting gold bullion.
So I can imagine that a CB who was repatriating some of its gold from the FRBNY might contract with these private firms to have its gold fully insured through the private sector while in transit, rather than pulling an Indian van stunt. And this would mean the technical "demonetization" of the gold during transit such that it would show up as nonmonetary gold the moment the FRBNY handed it over to Brinks or JP Morgan. And as Edwin M. Truman said above, that would technically be a gold "import" as it left the FRBNY but it wouldn't show up on the Census data; it would only show up as an "export" when it left the country.
It's actually quite interesting to think that the Fed treats these CB repatriation transfers as nonmonetary gold movements. It certainly makes sense from the $IMFS perspective! And it also tells me that they are likely transporting via the private sector, like through JP Morgan who has direct tunnel access to the FRBNY. That would be the "import" when it is moved off of Fed property into the tunnel, and then when it leaves the U.S. via JFK airport would be the "export" which should theoretically "wash out," but as Truman, a Fed economist, told the Fed bureaucrats in 1992, it shows up only as a net export "because you haven't been filling out your import documents!"
So the Fed bureaucrats don't bother with the "import" documents but JP Morgan or Brinks or whoever is flying it to Europe does fill out the export documents and it shows up in the Census data rather than washing out!
MR. ANGELL. That makes sense!
MR. BOEHNE. That really clarifies it!
MR. LAWARE. Great accounting!
Eric Sprott's research found that gross gold exports from 1991 through 2012 were 11,223 tonnes. Some of that must have been movements out of the FRBNY, else why would Edwin Truman have been explaining to Alan Greenspan how gold exports in October of 1992, appearing as part of the U.S. balance of trade, appeared to have come from the coffers of the FRBNY?
We certainly have a mystery here, but we also most-definitely have a potentially significant source of gold "exports" that was not even considered in Sprott's analysis. And by potentially significant I mean potentially accounting for up to 88% of Sprott's "export gap" which means, given an expanded statistical margin of error, potentially accounting for all of it.
By expanded statistical margin of error, I'm referring to two things. The first is that Sprott's analysis of the Census data had to convert currency terms into weight terms. The Census Bureau reports exports monthly in currency terms, so his analysis had to assume a monthly average for the volatile price of gold in its conversion delivering a considerable margin of error. The second is that, apparently, the Census Bureau receives some lower purity nonmonetary gold export data from the exporters in weight terms and then bureaucrats systematically convert it into questionable currency terms, and then when the gold bugs convert it back to weight it could be off by an even more considerable margin.
Yet while Eric Sprott's 4,500 has a considerable margin of error, the ~4,000 tonnes that left the FRBNY does not. It is also reported in currency terms, but no averaging is needed because the price of gold reported here was frozen at $42.22 per ounce for the entire period!
Sprott acknowledges one unknown in his analysis, that of the private investor, but doesn't even consider alternative explanations for the "stunning figure" of his "export gap" because it fits so nicely with the gold bug/GATA hypothesis. And again, we do know that at least some of the 4,000 tonnes of gold that came out of the FRBNY during those 22 years showed up as exports in the Census data because Truman said so in 1992, in the privacy of the "temple", and long before it was even an issue with GATA and the gold bugs.
So to answer Paul's question, I'd say that it looks like Eric Sprott spent a lot of time and words blowing smoke in those two articles and then tried to imply it was a smoking gun that you were smelling. So what do you think? Smoking gun or blowing smoke?
Sincerely,
FOFOA
509 comments:
«Oldest ‹Older 201 – 400 of 509 Newer› Newest»Congrats to FOFOA once again for correctly forecasting many more than 6 months ago that QE cannot be stopped by FED(ie no tapering), so long as budget deficit is greater than trade deficit.
I don't know that I would classify this as a correct call necessarily.
It's correct in the big picture, but they could have tapered a bit(half a step back), before scaling up again(two steps forward) without breaking such a trend.
Just saying, I'm unsure we should make a big deal of it. :)
TF
tcelfer
I certainly don't have any gold either. I sold it to buy errr pork bellies, yeah pork bellies. Great investment.
Oh and a cooler. Of course.
TF
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20130918000075&cid=1102
This is certainly interesting. Of course, if I wanted to depress gold prices and had the option, I would find such a mine too. Either way.
More QE is actually deflationary. It keeps the bond bull intact and the game of stock buybacks alive and well. The funny money isn't being put to productive uses. Plus HQ collateral is becoming shorter in supply.
@MotleyFool,
That gold mine in Fujian, China with an estimated 250,000 tons of gold .... is more than all that has been mined ? Estimated at 170,000+ tonnes of gold.
If the numbers pan out, to be remotely correct (even at 50% of 250k tons), it seems like - Not just THE MAN is moving gold to The East, but also Higher Powers are helping this happen? Very, very, interesting times! If true.
And we are told that China does not export their gold mined. Talk about establishing a long term wealth, wow!
@MF / tcelfer,
Coincidentally, I also have no gold whatsoever. Nope. None. Note here. No way.
Had a bit once, then there was that boating incident. I still have nightmares.
Cheers
Would you agree if I said that the real motivation for the Fed to continue printing money and buying bonds with it is not to spur growth in the economy, not to increase asset prices, not to reduce unemployment, but to allow the government to continue functioning at its current burn rate?
@Franco,
Yes.
Franco & TF
I see the lack of taper as a sign that the USG wants to increase spending. It seems that it has actually decreased a bit lately by some sources. Of course this would require a lifting of the debt ceiling and there would have to be a project to spend on but a war or some new proposal would work.
Bernacke has come pretty close to printing just what the USG needs. (Who knew that it would be so close to the exact same amount required to keep interest rates down and keep unemployment rates low.)
The plan unveiled today suggests to me that either a drop in revenue or some need for dollars by the USG is upcoming. Since revenues are close to all time highs due to a booming stock market I predict more USG spending. Maybe they see price inflation coming,or maybe Obamacare needs some help...or maybe that war they are itching for is getting some support.
@byiamBYoung
I'm surprised the gold didn't float....Were you outside of America waters? If so it may be because there is no paper gold out there and QE is deflationary.
Michael dV:
Or maybe they see foreigners being net sellers of US debt for the fourth month in a row and they know that the Fed will have to step up its purchases.
That Fujian mine simply can't be right. 10 million tonnes of ore giving 250,000 tons of gold? 25000gpt? Try dividing by 1000. A very very rich mine if divided by 1000.
Franco
yep, that is another quite possible explanation, maybe better than my ideas.
Daniel
Assuming the story is not complete fabrication then there is at the very least journalistic error present. The 10 million tonnes of gold bearing ore sounds a little on the low side to me. Now if that were 10 billion tonnes, then it gives a yield of 25g/tonne which is at least believable.
We will see how it washes out.
TF
Oops. I meant @DASK :)
@Sam: roflmao ... the truth finally revealed, Bernanke is a deflationist!
Taper Schmaper...yeah consensus here was that there'd be none. But outside almost all expected the minus 10-15billion figure. Quite a blow to the perception "all is well, US in good shape, economy up, tightening ahead, keeping inflation in check...". The perception will adapt, after an initial euphoric denial stage in stock markets and such.
Going to war with a looming debt ceiling, ROW bonds sales and taper in the cards surely was a bit too delusional anyway. For all to see now that the FED is in a corner.
It will be verrry interesting to see how the $ will respond to it. I guess OBA is now very closely watching his charts...
@ilpatino: you might want to get over the "us versus them". They hardly want to get more rich, its all about not losing as they have much at (an unmovable) risk in the old $ house. Giants can't exist just for themselves. A functioning system needs a good base. And the Forum here is public, but its every bodies free will to read or not.
Its in the giants best interest to create a long lasting and stable system. As you can grasp from the writings here, if they ever had a chance of avoiding the fatal mistake from 1922, they would.
As for the exchange rate $/euro, FreeGold will merely reveal the lesser role the $ has. I remember two old FOA numbers (from when POG was 300), that we're on the road to 30'000$/oz and that it would translate to 3000-6000euro/oz, implying quite some $ inflation/devaluation.
S P : "Is today the day that freegold basically won? It's certainly possible".
In the sense of 2001 when FOA's wrote that its now who will blink first! And one day in 2001 he came in "today is a great day, today is a great day!"- later that day Alan Greenspan blinked and cut interest rates!
Maybe its the opposite now, the absence of blinking aka tightening/cutting QE. Paving the way (passively, mind you) to HI?
@enough
"STOPPED OUT, huh Mr Phats?
or did you bottle out, throw away the discipline and still holding? I'll bet the latter....."
Uh, yeah, that's why I list STOPS. That's how the game is played. Well, at least by people seeking to minimize losses and maximize profits. I look forward to seeing your buy/sell recs (though I imagine you are just waiting around for FG with MF; the arrival time is unbeknownst to you and me and MF and...). The game continues...
By my system, GLD is a buy on the daily but has not confirmed on the weekly. For the 19th, assuming daily continues, BUY above 128.67 STOP is at 127.13 (adjusted as price changes during trading day; 5-minute trend data) with a TARGET of 138.94.
The market, in some form, will always be around for specs. Same as it ever was (or do you really believe FG will alter that?).
I have this one issue with the freegold framework, and hopefully somebody here can address this. I don't have a problem with the concept of gold being the ultimate store of value. I don't have a problem with gold going into hiding, the paper gold market being destroyed, and a new, much higher, "physical only" price being discovered later.
What I do have a problem with is the notion that sometime after the dust has settled post-revaluation, nobody will attempt to re-instate a paper gold market. Wherever there is opportunity for speculation, somebody will try to profit through some sort of betting system. You wonder if Britney Spears will be wearing any underwear next time she gets out of her limo? I'm sure you can place a bet on that somewhere. So what would prevent physical gold from being "shackled" again by paper trading? You know, after the memories of SHTF start fading and all. Thanks in advance for any replies.
Franco,
I doubt I sufficient understanding to answer this well. However, if physical gold is used to settle trade imbalances in the new IFS, and paper gold necessarily dilutes the value of physical gold, what nation is going to want to permit paper gold trading? It will just empty their gold reserves all the quicker.
Franco,
I'm sure someone will correct me if I'm wrong about this, but I don't believe FG is necessarily a solution that will never get corrupted. It is simply the most likely next step in our evolution.
It may take quite a while, but someone will likely screw it up eventually :/
Cheers
Dear Fofoa,
It is what it is. Major capital needs a place to park. That is the dollar. This will not change. However, what is changing is the shift from PUBLIC to PRIVATE. China is buying mortgage backs now rather than Treasuries. The US share market fell into the shallow September low and has taken off sharply running back to the highs. This is indicating PRECISELY what I have been warning about – we may yet see the Phase Transition in US assets and a bubble top in the US market for 2015.75.
Gold will rally when the crisis becomes obvious. But stories of $30,000 gold are not practical and gold will never be the haven for big money – it is way too tiny of a market to be a reservoir for serious money. It is the individual’s hedge
Kind regards,
Martin Armstrong
http://armstrongeconomics.com/2013/09/19/the-truth-behind-the-fed-the-curtain/
onedayfly
"Milton's mistake was two-fold. First was his knowledge that Arabian oil could be produced for one dime of real money, and that inevitable competition among OPEC members would surely keep the price close to cost of production. Second, and most importantly, Milton failed to account for the possibility that the government would abandon such reasonable monetary management to keep the dollar nearly as good as Gold. This fact was NOT lost, however, on the oil producing countries. Ask yourself, what would YOU do if your business or trading partners suddenly started offering you payment with Monopoly money instead of "real" money? Would you shun real money as though it were the plague, and embrace Monopoly money as the greatest thing since sliced bread? If you would, then I have got a job for you!! Bring your shovel and some work-clothes, you have been hired for life..."
- Aristotle from http://fofoa.blogspot.com/2010/04/gold-money-more-than-meets-eye.html
Uhuh. US trading partners will accept dollar promises in trade for real goods forever and ever, amen. Hahahahahahahhahahahah.
"But stories of $30,000 gold are not practical and gold will never be the haven for big money – it is way too tiny of a market to be a reservoir for serious money."
How tiny is it exactly if we work on the premise that gold is priced at $30,000 per ounce. Miniscule right? ;)
TF
Martin Armstrong is pushing it..
"Any discussion behind the curtain is to move the monetary system toward electronic money. That is where they are headed on every continent. They see that as 100% accountable for tax purposes. Any new currency will be a unit of account internationally with each currency converted into that, not the system of the Euro. That is failing. Can you imagine every country with the right to print currency. Talk about open chaos."
"The new currency will be electronic. This will be the RESERVE CURRENCY and that will not be used in each country to buy things. This will be up there with the SWIFT CODE system. You can buy gold if you like. The idea that money will be FIXED and backed by gold to make it tangible is a pipe-dream. Been there done that – such systems fail because there is a business cycle. Gold was money during the 19th century. The value of gold still rose and fell with discoveries. It did NOT provide anything tangible and stable.. Just look at the Inflation Index for that period."
"Buy gold for personal reasons and as a hedge against government. If you want money to be tangible and of some constant value, then you will never see a raise, your house must remain the same price, and no investment becomes possible other than money."
http://armstrongeconomics.com/2013/09/19/gold-new-currency/
Fofoa vs Armstrong logic vs financial wisdom..
Motley Fool
I don't agree with Armstrong for many reasons. His business cycle theory is based on computer models insread of logic and human behaviour.
Saving in debt when debt can never be repaid doesn't sound logical..
http://www.youtube.com/watch?v=OQfjIw3mivc
"not the system of the Euro. That is failing. Can you imagine every country with the right to print currency. Talk about open chaos."
Ummm....hmmm...he describes the $IMF, right? How could he think every European country can print? LD!
Armstrong=Bizarro Fofoa?
I suppose I should clarify....
When I said I BOUGHT a 1/4 oz what I really meant is that I just went to the shop and held it for a while and then paid them rent of letting me oogle it.
I don't actually _OWN_ any of my own -- I just rent time with it so I can see what it would be like if I was able to afford owning it :(
Though I have a small speculative bet that my stack of gold will revalue (hopefully found again after the shipwreck) it would be nice to think that the rest of the world will except our dollar promises in trade for real goods forever and ever. I live in America and I must say its been a sweet ride so far. To the fool with normalcy bias this might seem like the practical bet while $30,000 gold may seem impractical.
For me personally I think I'll place my bet with the CB's of the world, the oil producers, the Vatican, the Rothchilds, the world's youngest and best designed currency, and the world's most tested and recognized wealth asset. An asset 99 out of 100 people think they own but don't because of a paper market that served it's purpose and is no longer needed/supported. Yeah I'm good. Big money should put their wealth in dollars though. There's nothing like a credit in a system backed by the full faith and credit of a country in a system designed by a model that so far has a 100% historical failure rate.
What's the difference between $ 30.000 gold and $ 30.000 paper?
or
$ 30.000 paper and $ 30.000 digits
Perception mes amies...perception..
Quite some time ago Franco, I posited that the "paper gold market" would NOT be destroyed, rather it would be recognized for what it is, a derivative construct, 99% divorced from physical. And upon 100% cash settlement, which is coming, a 100% derivative market.
Now, BTW, we see Pete at 2 Short Planks coming to this same "revelation" with a grand warning.
Yes, there will be other ramifications, significant ones, but this matter of fact 1% change will only be significant in the overall recognition of reality that does come with FREEGOLD.
I have not interpreted Another's comment that "the current gold market will be destroyed" to mean what others seem to think.
I contended some time ago, in comments posted here, that the current PRICE DISCOVERY SYSTEM which is inherent to today's gold market (as referred to by Another) was what was going to be destroyed, not derivatives as a whole.
I contend that there will indeed be a derivatives problem, which may well trip the dominoes on FREEGOLD (or certainly be ONE of the first to fall) but I do not interpret this to mean the end of the paper gold market, only a realization (revaluation) of what it truly is.
One way to keep betting will be to play the spread between the true physical market and the remaining 100% PAPER "GOLD" MARKET (all pretense of physical delivery being stripped away) and another way will be to play the market simply for what it is, a derivative market betting on the price movements of gold.
So no, I do not see the destruction of betting, only that the stakes will be changed. Today, you bet with debt, tomorrow you will bet with equity.
I hope this explanation makes sense. Of course, this merely my humble opinion, and I am quite open to explanations as to how this cannot be so, but I think I've always interpreted that meaning from Another differently than perhaps some others here, and have always wondered why.
And for Sir T,
"what nation is going to want to permit paper gold trading? It will just empty their gold reserves all the quicker."
Why would it do this?? there is NO gold involved, only FIAT.
But yes, FIAT will be equity based, that is, in a check and balance stasis with real gold, so be careful, but it is not PRETENDING or POSING anymore as a 1 to 1 flow ratio, or a 99 to 1, or anything in between. The reality of gold after all will have now been made clear, that is in essence a necessary definition of FREEGOLD.
Alas, help me BIMBY ... I may again have fallen, and may surely not get up. I'm not even sure if my LIFE ALERT necklace is still working after spilling that entire snifter of Glen Grant upon it.
Double posting again. Hmmm, sorry, a nudge from the flower perhaps.
ok...I almost called it the other day but here goes:
"Quite some time ago Franco, I posited that the "paper gold market" would NOT be destroyed, rather it would be recognized for what it is, a derivative construct, 99% divorced from physical. And upon 100% cash settlement, which is coming, a 100% derivative market."
Quite some time ago? Curious what your definition is of "some time ago". If it's no more than 6 days, ok, fine.
Secondly, I sense FAMILIARITY in this writing style;)
Survey says: Wil from yet another account???
oh, and do I need to mention the mentioning of the flower :P
I thought that was obvious JOJO, already explained. Was it only six days ago, I think I might have RE mentioned it then, maybe a few times in between whenever.
Sorry if you perceive the Roacheforque account as some form of trickery. Again, the purpose was to fire up a new blog anonymously for a different purpose and different audience than here.
Or is your true legal name JOJO?
And again, I am open to why this cannot be, or how my thinking is wrong.
Which is more valuable? A vast gold hoard or the power to control interest rates? Gold reserves or the CB franchise?
@Grumps
Why not ask the central bank of India?
Didn't I say months ago that if the Comex couldn't serve the market that another would pop up elsewhere? That miners could sell there?
Also do you know what the Big Squeeze means? New supply will be much needed. Can this new demand be met using Marxist means or private enterprise?
Also back to the GoldMoney hysteria. Why couldn't GM settle its obligations with gold itself? In a currency crisis, gold might not bid for dollars, but it will bid for goods & services. Why wouldn't Viamat accept payment in gold?
oh hey sorry Wil, I must have missed you outing yourself. I meant no issue with it...I was playing Guess the Poster is all.
There's many alternates around so of course there's nothing wrong:) Fun and games I say.
"Which is more valuable? A vast gold hoard or the power to control interest rates? Gold reserves or the CB franchise?"
"And, as we all are seeing, currency must not be saved. If it can’t be saved, some small part will find gold metal. My point is, in order for the giants to see their currency function; physical gold must flow in that currencies economy. It is each little transaction for physical that proves the currencies worth. Thus, if the political will of the currencies economy hampers the metal for currency transaction, that currency will be found wanting – it will not function. It will not be able to complete. It will be discarded.
It is good to see bullion transactions happening – this shows that our currencies are still alive!
Now let’s see which currencies honor the concept that strength will come from the flow of gold." Ender
Armstrong makes two crucial mistakes:
1) He thinks the dollar = America = strength. This is wrong. The dollar = American empire = weakness.
2) Currency does not move through gold. If it did, $30,000 might seem impractical. Rather, gold moves through currencies. Understand that and you understand that "no price will do" which basically means $30,000 is, in fact, fairly reasonable.
Also the comment by Armstrong that gold can never be a market for "big money" is laughable and in fact completely opposite from reality.
Gold is the biggest and oldest money of them all!
Wil, er, Roacheforque,
Have confidence in your Life Alert! Those bad boys are completely droolproof, and therefore by extrapolation are impervious to misappropriated spirits!
Cheers
Yes BIMBY, gold will be our LIFE CALL !
No harm Jojo, I probably took it the wrong way.
But here again, I hope the argument has enough debate value to at least temporarily interrupt our regularly scheduled Grumps show .. not for days on end mind you, just long enough to hear how it is that this argument cannot be sound in FREEGOLD.
Namely that it is the PRICE DISCOVERY SYSTEM inherent to the paper gold market that will be destroyed, not necessarily a 100% derivative based betting arena tracking the FIAT denominated price movements of physical gold, in the ways described above.
Because as I see it, that PRICE DISCOVERY SYSTEM must, I say MUST be destroyed, if gold is to be set free. Or another way to look at it, is of course that when gold is set free, by any other cause, the PAPER PRICE DISCOVERY SYSTEM becomes a casualty of that paradigm shift either way.
When gold's true utility MUST be deployed (the settlement of debt, as opposed to the rolling over of old debt with new debt under new terms as the EU had been doing in check with QEI before the bail-in trend began to take hold) that is when it's utility is realized, or revalued, like lifeboats on the Titanic, from worthless to priceless in an hour.
And at that time we will then have a gold (dare I say) standard, UNLIKE the artificially fixed version, but of the true market driven, not manipulated by fractional paper, kind.
And remember - like Rachel, don't let greedy burglars steal YOUR stack!!
Armstrong is seriously confused, incoherent and not at all addressing what the crucial part of the thesis A/FOFOA et. al is, namely the split money/reserve function, Triffin's dilemma and Gold prize discovery by a derivative-free physical market. Electronic money is explicitly fine with RPG.
Don't tell me he hasn't the intellectual capacity, it looks more like an intentional blind spot. And this is also the problem of Grumps and other similar posters, it always gives me the feeling that they are actors, with an agenda. What can't be, shall not be mentioned. Like a politician defending the party boss against all odds and till the bitter end.
Why can't we have more critics addressing the thesis and refute it with arguments? But please reconcile where we stand on the time scale and check the facts ("America is in full bloom, nourishes the whole world economy" ! ? ).
Otherwise I might conclude that they're living in a box, in an eighties box.
http://www.youtube.com/watch?v=0sq8VDXlWQk
On the the CPI versus asset classes, interesting graph on page 7 from a speech of SNB's Hildebrand, (very) unfortunately it doesn't cover the last (transitional) decade. So its about the past, but neither the Assignats nor the Roman currency can be found on it, if you get my drift.
http://www.snb.ch/en/mmr/speeches/id/ref_20060626_pmh/source/ref_20060626_pmh.en.pdf
I had followed Armstrong for a while, during his incarceration, and he appeared much more lucid then. Who knows what devil deals had to be struck to secure his release? Or perhaps he has been Sprottified? Whatever the cause, I can barely stand the mention of the name; and that goes for many more... Gross, Sinclair, Sprott, Maloney, Mish, KWN, and on, and on... Funny what happens when you become a suit. ;-)
A nice (and perhaps unintentionally revealing) story from one of Armstrong's latest posts (my bold):
"I was giving an Institutional Seminar in Toronto. A group attended from the Central Bank of Canada – about 20-30 people. Everyone there knew who they were. The audience began asking me questions what was the central bank looking at for policy. I addressed the questions plainly stating the market expectations were flat-outright insane/wrong and that the central banks were not concerned with the machinations the market assumed. Every one would turn to look at their faces, which they kept stone cold.
When I was done, I went up to them and apologized if anything I bluntly said offended them. They said it was great. They wished they could stand up and yell you morons, we could care less about that nonsense. But they have to publicly appear stone face not to give a hint of anything either way. I began to realize we were needed to get info out and that served their purpose. Likewise, there were people in the German central bank that were feeding us info back before 1998 because they were against the Euro but could not say anything. So they fed us info of what was going on behind the curtain."
@sean
Are you implying the BIS spoon-fed the story of freegold to whoever wanted to listen, while knowing it could be a lie?
First time poster here --
As a preface -- I must say to FOFOA and the myriad posters on this blog -- a tremendous thank you!
I can happily say that after much reading and thinking, I reached the "lightbulb" moment and now sit peacefully as a monk awaiting the transition...
One question I have to anyone willing to take it up is about QE. My understanding is that QE is essentially the FED monetizing the USG debt. I have seen some analysis that says this cannot be because the FED is purchasing treasuries in the secondary market. But to me, isn't this just a question of how recently auctioned these treasuries were? In other words, if a primary dealer buys treasuries and then straightaway sells them to the FED, technically this a secondary market transaction but the FED is practically funding the debt.
Is my understanding correct?
Thanks in advance.
PDs must bid on new issues at auction.
If none of them have excess cash in their reserves, they can't bid very high.
But if they sell off some USTs from their existing portfolio, they are in a more relaxed mood when they must bid at the auction.
Awight?
Blake
Yes. They need that thin line though for legal purposes.
I recall when I thought I first got it. And the many many aha-moments that followed. I still get some. :)
Happy trail.
TF
Thanks, TF!
Blake
You have it exactly right. It is a technical bit of artistry that keeps it legal. The Fed would never monetize debt. They will however do a lot of things that will have that effect however.
What we expect is for the Fed to keep the USG funded and to keep the system liquid. They will not admit it bit they will take bad debt and pay for it with cash. For now it is just government debt and mortgage debt. As things progress they will likely make other debt good too.
As I understand it some countries (Israel as I recall) even buy stocks. As things get bad who knows what they will do to keep things afloat. All the while they will be claiming that insolvent entities are merely 'short of cash, at the moment'. This will be the great 'front lawn dump' as the Fed pays cash for all debt and the result lands on us, the taxpayer and holders of existing dollars.
WTFox?
Jojo,
Hahah, WTF was that!!!! 40 million views of possibly the stupidest song ever made by man. Our species is doomed.
Chloe don't know better
jojo....I have been watching youtube videos for the last half hour and I couldn't remember why....lol
@Blake
Weclome! This is why you shouldn't expect deflation. The Fed will save debt at all costs, even buying it outright for cash.
Michael dV,
As I understand it some countries (Israel as I recall) even buy stocks. As things get bad who knows what they will do to keep things afloat. All the while they will be claiming that insolvent entities are merely 'short of cash, at the moment'. This will be the great 'front lawn dump' as the Fed pays cash for all debt and the result lands on us, the taxpayer and holders of existing dollars.
We will likely find out, well after the fact, that The Fed, and operators acting in their stead, were buying all sorts of stuff, shares included, long before, any formal announcement of said activities is made. After all, there is a PPT and we know their remit can, at the drop of a hat, be made as broad as "they" like.
In the meantime, Fed heads continue to come out with their, "Stop, thief, or next time I'll do more than just yell stop" routine, what with Fed Governor Dudley (do wrong) BS ing away about how The Fed could taper in October, because, well, the economic data might be better by then, and, of course, it's all about the economy.
SV
That song is satire of modern day pop songs. I found it hilarious. I checked some more of their work. They do satire of pretty much every genre.
TF
awkward that they leaked a possible taper when the economy wasn't bad, the economy got better, and then they said they can't taper because of the economy. Maybe QE isn't directly about the economy? =)
Sleeping Village,
I had an identical reaction. Bullshit snark has been raised to a high art. We are doomed.
Cheers anyway
awkward that they leaked a possible taper when the economy wasn't bad
I have felt the economy has been on life support for years... and have never felt so strong about that till... today.
The Fed cancels a taper (how could they not?) and a day later the market plunges more than it has in a month. Their own key indicator is telling them it needs more. I expect the new Fed chair to increase 'stimulus'. I agree with Edward - we no not the lengths they are capable of going... but I sure feel like the jig is up. I took my boys to their skating lessons and told a fellow father to listen to the Canadian Billionaire (Ned Goodman?) YouTube video from the Toronto Cambridge Conference - which he did immediately on his phone. He looked at me afterward - I said 'I don't think there is much time left - a year or two maximum?. " He sat silently and stared.
Sam,
When people ask, as they are doing quite a bit right about now, "Has The Fed lost credibility", my thought is how could anyone with even a modicum of understanding not recognize that the story The Fed tells the world about why they are doing (or not doing) what they are doing has more holes in it than a moth eaten sweater.
The question someone needs to ask these jokers is why in the name of *&%# do they continue to intimate that there will be tapering when all it does is cause yields to levitate. Is it possible that they aren't aware of cause and effect in this particular instance, and, if not, one then has to ask why they would want to cause yields to spike. As one is so often confronted with when dealing with officialdom, the choices seem to be that they are either A.) incompetent or B.) mendacious.
@Edwardo
I can't believe the "officialdom" is somehow unaware. They are plugged into information we can only guess at.
So that implies that they are certainly making informed moves. And that this is probably the best-case managed situation.
This realization terrifies me. We are headed, I fear, for one hell of a whipsaw event.
I'm thankful to have gotten a little advance warning from this blog and the ongoing conversation.
Good luck to us all! And as always, it is good form to tip your host! Before the currency becomes worthless, of course. :/
Cheers
byiamBYoung,
Bullshit snark, I like that. I was thinking more along the lines of poop spoof:-) Where's Jim?
It was the 41 million views that scared me! Maybe I just woke up on the Wrong End of the Day
In other news...
I wanted to thank everyone for the most excellent insight I've gathered via the conversations here into what's really going on with the world economy and whatnot. Thanks to you all and FOFOA, of course. It really puts us ahead of the curve, so cheers to that and all of you.
Sessions of Light
Hi byiam BYoung;
"I can't believe the "officialdom" is somehow unaware"
Just my 2c, but there is "officialdom" and OFFICIALDOM, and in my
personal opinion, the vast majority at the Fed doesn't get it. That
doesn't mean that no one gets it; I believe that at least one person
does - Edwin (Ted) Truman. Unfortunately, his (and Treasury's)
preferred solution, which they actually believe can work, is a vast
expansion of SDR's (to the tune of $200 billion a year for 5 years).
Truman's proposal details what I believe Treasury's position is ( which I
believe to be no solution at all, because of the composition of the
SDR) in a speech which he gave at a conference in honor of (of all people) the late, widely admired Tomasso Padoa Schippoa. It is USG's way
of retaining control while giving the appearance of sharing it.
The speech is rather brief, and y'all might like to take a look. The
title, "Three Evolutionary Proposals for Reform of the International
Monetary System" by Edwin Truman, should get you there.
Greetz. {;<)}>
Here's a link to the speech Woland mentioned
Truman Speech
Bimby,
The real issue, at least for me, doesn't hinge on the very high likelihood that The Fed has much more (and much better) data, it's how do they process their plentiful supply of, presumably, very good data.There are ample instances throughout history of key figures and institutional bodies critically misreading the best information available.
The Vietnam War is instructive. McNamara was a systems man all the way, and collected reams of data of various kinds that he and his fellow warlords managed to overemphasize and misinterpret. Thrown into the mix, of course, is ye olde "group think", which, despite The Fed's purported divisions is almost certainly part of The Fed's operational dynamic from the standpoint that the Fed Governors are all, more or less, cut from the same economic cloth.
As FOFOA might observe, it's all about the lens.
Woland and I seem to be in agreement.
How many in the BIS 'get it'? Aren't they OFFICIALDOM? (the bold is one step up from all caps)
Indenture,
In truth, there's no telling how many individuals in the various banking fiefdoms are "in the know" but if what Another had to say is accepted, the European central bankers, particularly, the BIS contingent, "get it."
@Woland
“we can conclusively prove that we
need a flying object; inventing an airplane is another matter”
-Tommaso Padoa-Schioppa
Indeed. I agree with you that Truman's vision for said airplane is a little stubby in the wing department.
@Edwardo
You make a fair point, and I agree. Unfortunately, the idea that OFFICIALDOM (bold-italic-caps...the ultimate step up) has access to the best information available and repeatedly fails to accurately interpret it is even more terrifying.
Cheers
Gary
Canadian Billionaire (Ned Goodman?) YouTube video from the Toronto Cambridge Conference - which he did immediately on his phone. He looked at me afterward - I said 'I don't think there is much time left - a year or two maximum?. " He sat silently and stared.
Was it just me, or did Ned state that the US$ used to be "backed by silver".
@CharlieBravo
I suppose Mr Goodman was referring to the convertibility of paper dollars to Silver.
"In 1963, the words "PAYABLE TO THE BEARER ON DEMAND" were removed from all newly issued Federal Reserve notes." - Wikipedia
I still have a USD that says "In Silver Payable to the Bearer on Demand" HERE under the words "One Dollar".
His frank 'talk' about the end of the USD as Reserve Currency is HERE and he is in a panel discussion HERE... by the way that Danielle Park gal has no clue about Gold - I used to post in a Forum on her site and many of us tried to explain to her the necessity of gold in the monetary system. Unfortunately for her clients, she is of the 'barbarous relic' crowd... she actually claimed gold was a 'silly male thing'.
a small post script; I found it either amusing, or slightly strange,
when Truman, after praising his late colleague, wrote:
"I did not share Tommaso's view that flaws in the international
monetary system........ "
It made me wonder what I would think if a longstanding colleague
of Einstein, were to say, " I did not share Albert's view on the
maximum speed of light...."
But then, when Global Hegemony is at stake, which I believe
Truman clearly understands, you simply must try to "win this
one for the Gipper".
And there's the issue at its core, putting global hegemony, aka dominance, over global harmony, because, all thing being equal, the present system, and any proposed one that only nominally addresses the monetary system's ills, is standing in the way of the entire planet having as a good a kick at the ball as possible.
I may be wrong but I think of it in this way:
1) All central banks and the BIS are pretty much in the know, but there are some which nonetheless want to keep the present system going as long as possible (U.S., U.K., and Japan come to mind)
2) The metals people (gold bugs and miners, investors etc.) are sort of in the know, but still carry too much hard money and silver baggage
3) There are some Middle East oil families and old European families which are very much in the know, but nobody else knows exactly how much
4) Hundreds of millions of small savers in Asia are in the know (but perhaps without really knowing it)
5) A growing contingent of the "man on the street" in America have been groping around for answers, but I still wouldn't consider them in the know (and how can they be, with the present system designed to give them all sorts of goodies?)
Thanks to all of those that addressed my question above.
Another one I have been wrestling with is how QE is net inflationary because the Fed enables the USG to create brand new credit money by issuing a new base money unit to go with it.
My question boils down to how newly issued Treasuries directly represent USG spending in a QE transaction where Treasury auctions it's paper to primary dealers who in turn swap out that paper for reserves.
Thanks in advance.
Hi Blake, welcome to the blog. Some reading assignments for you:
http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post.html
http://fofoa.blogspot.com/2010/06/mad-world.html
http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html
http://fofoa.blogspot.com/2011/04/big-gap-in-understanding-weakens.html
Lisa, Woland
Reading this piece is confusing but it seems clear that Truman disagreed with something very specific (the dollar is a problem). The litany of things he seems to agree with are vague and couched in institutional language. I'm not sure what the sum of the suggestions of SDR contributions and various committee oversights means but I do understand "the dollar is a problem"
I wanted to strangle Truman for being bureaucrat half way through.
Hi Michael;
As they say (so they say) in the Cosa Nostra, "It's business. Nothing
personal." (Bang!) It's just part of the job at Treasury, going back to
Thomas O. Enders instruction of Kissinger in International Finance
101. Treasury has to deny the validity of "Triffin's Dilemma" which
is what Padoa Schioppa knew to be true. That is why Bernanke
had to conjure up the "savings glut" hypothesis as the source of
the imbalance problem. It had an element of truth to it in the wake
of the 1998 asian financial crisis, which led to "exaggerated" reserve
accumulation as a precautionary measure against a similar
recurrence. Now Truman is saying that the same "precautionary
reserve accumulation" is the source of the problem - NOT!
Time for me to shut up. I've rambled too much already.
[;<)}>
@Woland,
Your informed commentary adds much to the discourse here. I wouldn't worry that you have over-rambled.
Cheers
Thanks, Knotty Pine!
Franco,
At least in India central bank sold some dollar reserve to avoid rapidly depreciating rupee. I think since inflation is high in many countries dollar reserve is taking a hit.
QE is happening to avoid default and the more QE is done the more QE will be required. It increases velocity at which money changes hands or machines. We should see rapidly shrinking cycles of QE increase in time to come.
@ Eduardo
"the only thing standing in the way...."
Is that a "kick at the ball"? or a "kick in the balls?" ???
http://www.huffingtonpost.com/ellen-brown/the-armageddon-looting-ma_b_3944739.html
Hi,
2000 Premium Transport
I genuinely loved this brilliant article. Please continue this awesome work. Thumbs up, and keep it going!
Comet ISON is reaching perihel on 28. Nov. 2013, might get as bright as Venus. Its a sungrazer, so might get ripped apart. An Omen? ;-)
http://en.wikipedia.org/wiki/C/2012_S1
Spaceship USA has officially entered the Galaxy of the
Baboons. Never is such a brief period have I been
treated to such a contradictory mess of "jibber
jabber", (to quote a prominent gold (chain) bug) as has
emanated from the mouths of 4 Fed Heads in as many
days. Yikes!!
{;<)>>>>>
Just got an e-mail from the Canadian Mint that they're releasing a silver coin, 1 troy oz, that is $100 face. Now the Canadian mint has done stuff before like make a $20 face value silver coin that was a 1/4 oz or 1/2 oz -- but never anything like this on a full size coin. 1 full oz with a face value of $100?!?I
It seemed a little odd to me, as I haven't seen them try this before. Seems rather curious to me placing such a high face value on a silver coin that is currently around 1/5th of the 'value'.
Thought someone else might find it interesting too.
Headroom.
How about that trillion dollar coin?
£100 coin.
UK just can't compete!!
Worthless? Can do!
@DP -- Ahh, I didn't realize that this is the 2nd in the series -- so I guess they did the same last year.
That makes this much, much, much less interesting.
Well, folks, you're welcome for wasting your time, haha.
Remember the earlier comments here and here on OBA's scenario of negative short-term interest rates.
In this Zero-Hedge excerpt, Bill Dudley nicely explains my remark on how they will prevent short-term interest rates from going negative across the board.
Note that he says "The purpose of the facility is to establish a floor on money market rates and to improve the implementation of monetary policy even when the balance sheet is large". My guess is that they will eventually have to expand QE while accepting unlimited reverse repos at a small positive rate, allowing the ROW to liquefy their Treasury debt holdings.
Bill Dudley: "Get the garden gnomes inside and clear the front lawn." (... joking...)
Victor
tcelfer: Thanks. I didn't know about the coin. If you find something interesting that you think the group would enjoy by all means post it.
I think we can trust that Another's assessment that the FED and BIS are anything BUT "typical government stupid" is correct and that the current round of "playing dumb" is akin to the Nanke's statement about "no one" really knowing how the "gold price works".
"When in uncharted waters, test them" seems to be the plan.
But as certain market moving forces do understand that QE to Infinity (QEI) is generally the biggest gun in the money printer's arsenal, it is important to maintain the facade that we "are not there yet". And let's be homest, this has worked.
Even I had second thoughts about Benny and the inkJets slowing down the money-spray, when deep down to our bones we ALL know that QEI is the final move in the end game, and we all know too, that there is no escaping it.
Its worth the risk to test the reactions, especially when we know that even if, as a final show of resolve, they do taper a bit for a time, they'll have toi come back witn QEI at a much faster pace and then the jig is up..
It's just another way to balance the can, instead of kicking it full force straight off that precipice it's dangling over now known as FREEGOLD
victorthecleaner ,
this looks like this reverse repo is like you had predicted.
I am getting a bad feeling nowadays, since it looks like it is following the script of "exeter pyramid" . Even if value does not flow to Gold, at least this is going to create high inflation.. I recommend everyone to buy a house and get a 90% mortgage and thus effectively short the long 30 year Bond.
@Victor the Cleaner,
once again thx for the insightful comment. If my understanding is correct, it seems that we are approaching point "c" of the scenario you depicted here:
http://fofoa.blogspot.com/2013/06/snapshot-day.html?commentPage=3#c2005370016537181459
quote:
"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)"
end quote.
thus, being "gold" paper gold..
If I understand correctly (definitely a question on this issue) then the reverse repo is a way to allow the shadow banking system extra collateral by somehow allowing the 'reserves at the fed' to be used and not just tied up with those banks who are allowed to have such accounts. Apparently the 2 trillion can not be introduced (at least through rehypothecation) into the greater pool of capital in the world. There were claims on ZH and elsewhere that good collateral was in short supply due to the fed sucking it all up.
This is some of the most complicated stuff I have read as it uses terminology I'm am not familiar with so straighten me out on this if I'm wrong...anyone.
http://www.zerohedge.com/news/2013-09-22/what-shadow-banking-can-tell-us-about-feds-exit-path-dead-end
I assume the reverse repo allows the dealers to use reserve to get back more fungible paper to use in the real world outside the fed system.
Michael dV,
You are right, understanding some ZH articles is tough sledding, and it's not helped by the fact that some Tylers use wildly incorrect or nonexistent punctuation and occasionally extra stray words that threaten to skew the meaning of a passage into the weeds.
It's all made even worse with hopelessly convoluted run-on sentences, continuous snarky commentary and daisy-chaining thoughts.
Talk about wooly language!
Your understanding makes some sense to me, although I admit to being pretty wobbly on a number of details. Hopefully, someone will offer some help on this one.
Cheers
Michael dV
There was a twitter discussion between Aquilus, DP and Victor on reverse repos in late August which might help - here is what I found, which does not include Victor's comments - who (I am paraphrasing) predicted we would see reverse repo and not taper by the Fed in September.
Maybe some of these brighter minds can pipe in and help you further
https://twitter.com/darenpa72/status/371986849369034753
What a strange trip it has been:
At 77 He Prepares Burgers Earning in Week His Former Hourly Wage
And this:
"While Palome worked hard his entire career, paid off his mortgage and put his kids through college, like most Americans he didn't save enough for retirement."
What is this strange obsession with putting your kids through college? Isn't that their responsibility? I know I paid my way through, why can't today's ute? And where are they now that he is 'struggling'? Yeah, many more such stories to come, I'm sure.
I do recall a 'discussion' where I posed a similar question to a fellow while playing Squash at the PAC. And the response was surprisingly sharp; "I'm not going to be the first person in my family that didn't cover his kid's college education!" No, thank goodness for tradition, but I will be reading about you in the coming years...
Forward FG!
That being said, I do admire his ability to overcome obvious hardships. I wonder if today's ute will fare as well? We are about to find out. ;-)
Regarding the reverse repo facility, perhaps this white paper will provide some insight.
Pay off a mortgage and pay for your kids college. To grossly overpriced bills people paid without thinking.
And now time for a GLD update. Weekly never confirmed the prior signal and GLD has the following structure:
SELL below 128.11 with STOP-LOSS at 129.64 TARGET 124.57 followed by 2nd TARGET of 122.10.
Another interesting development, perhaps just a counter-trend bounce (confirmed by weekly), is TLT: BUY above 105.47 with STOP-LOSS at 104.22 and a TARGET of 108.51 followed by a 2nd TARGET of 111.49.
Of course, all info provided for entertainment purposes only (since the market is the greatest show/casino on earth).:-)
Biju:
I don't think investing in a house by taking 90% loan over 30years is a good investment. Better to use the 10% you have to buy gold, which grows to 300% after reval. So you have 3 times the money used for the house.
Yes I expect that the reval would probably not be 30x in the first go, but it is likely that the house will itself be available at a much lower cost. You may get a better than 3x deal :-).
Also you can add more gold, over the time you will be paying installments. All in all buying a house is a waste of good money at this point in time.
Hi all,
I have been reading this blog for three months as well as Another. Needless to say I have since jettisoned almost all of my silver for gold (at a loss, ouch..)
I have a question on one of my favourite FOFOA posts which I hope someone can help me with; the Shoeshine Boy.
I 'think' I understand the mechanism for the ramp up in $PoG till 2011 and now the sudden drop "like a box of rocks". Gold has a funny way of drying up as the price rises- so big money has withdrawn from paper (redemption?) as they know there is little chance of obtaining physical.
My question is this, on a 30 year chart (which excites me for gold) why is silver copying gold? I figure paper silver supply has increased as the $PoS has (a la condom bubble), so did the physical silver supply dry up like gold? Perhaps the silver paper bubble had popped in 2011 and the $PoS is finding equilibrium based on physical silver's intrinsic value...?
Thanks all for the stimulating perspective.
Nice find, Edwardo;
That paper sheds some useful light on the "need for
collateral" issue. Unfortunately, the reliance on the
IS LM framework by Bernanke, Gertler et al undermines
the credibility of their work, as IS LM has long been
discredited, particularly by the man who INVENTED
it, John Hicks. Wikipedia does a nice n' easy job
of explaining why he repudiated it. Nonetheless, it
refuses to die.
{;<)>
The biggest flaw in my opinion is that the article only talks about the official gold holdings of private entities... Don't you believe there are many entities out there that, through the centuries, have gotten hold of a disproportionately large share of the 170,000 tons of historically mined gold? And that these entities try to keep a low profile on how big their stash is, just like all you smart people out there?
@Dim
I would say that a lot of people pay attention to silver but in reality a ton of things "copy" gold to a degree. This is why the world needs, and will hopefully soon get, an overnight revaluation of gold and not a continuing gold bull run. Right now our markets are dominated by paper derivatives with virtually no connection to underlying fundamentals. Therefore "ask the audience" determines that there should be a certain gold/silver ratio, gold oil ratio, gold platinum ratio, ect. ect. Gold can't go up on it's own because paper traders short gold and buy something else to earn a profit. When the paper market for gold stops functioning gold will have a new much higher physical only price. There will be no time (or means) for paper traders to maintain the gold to (x) ratios at that point.
Dim
The price action we have seen since $1900, is not really what was talked about in shoeshine boy. We are looking more for a very quick very fast drop.
While things are still 'working' correlation between assets will hold, and silver has traditionally been well correlated with gold. ;)
@Rein
Such as the vatican? Sure, why not. I think the biggest flaw you will find is that reading only one article does not give you a good idea of the plethora of matters relating to gold talked about here.
TF
@Motley
I read a few articles next to this one. The gold is less scattered than you think. Learn your history... As you know, everybody wanted the gold and sell the paper. Some were quite good at that. Just think of the major families that played a large role throughout history. They needed to hide their wealth in fear of confiscation..
Next to that it would be interesting to verify who controlled the gold mines the last 200 years, for you probably well know that the quantity of mined gold doubles every 50 years... It answers a lot of questions.
Rein
I recall making a guestimate of the spread of gold holdings.
http://fofoa.blogspot.com/2013/03/checkmate-2-slow-history.html?showComment=1363862302484#c3276295869323765868
Maybe you find that of use.
TF
Dim,
There can only be one focal point of value. Silver will always have value as a commodity, but not the value imparted to the wealth reserve par excellence. On this side of Freegold, silver will enjoy a correlation to gold because gold is acting more like a commodity than the premier global wealth reserve. Commodities all have a correlation to each other to one degree or another. On the other side of Freegold, gold will act exclusively as a wealth reserve. The paper gold element that drags gold down into the lowly weeds with mere commodities will no longer exist. Silver cannot follow gold and become "Freesilver". It cannot be the focal point.
The silverbugs will be diving from buildings right alongside the goldbugs as the price plummets during transition. The price of silver will go to and then remain at the commodity value that the market imparts to it. It will be mined and then largely consumed in production of other things and manufacturing processes. Gold on the other hand will transition into THE global wealth reserve, a renewed purpose for which it is best suited. It will do what it does best, it will sit in vaults, safety deposit boxes, and sock drawers.
It is a nice guestimate but useless since it can't be verified. where did yo get the numbers from? I assume that the Rothschilds and other families have a lot more than what the consensus believes.. That can neither be verified but it is a logically drawn conclusion from history and the ownership of gold mines.
Anand :
- you are right but then we don't know how long we have to wait for Gold revauation
- I am also right now mostly in physical Gold but also wanted to not develop ulcer when price of Gold plummets. So buying house will just be a insurance for my feeling and health. Even after I diversify, I will be still 85% in physical Gold
- Also I will have something to tell my family that I have diversified, when paper Gold price falls. also who knows if that falling will be dragged out.
@Rein,
"you probably well know that the quantity of mined gold doubles every 50 years..."
I've never heard that, and frankly doubt it's true. Have you got a source for that metric?
Cheers
@byiamyoung
this could be of use:
http://www.goldsheetlinks.com/production2.htm
Biju: Agreed, if you are using the investment only for keeping the Family on your side :-).
@rein,
Thanks. You are talking about cumulative gold mined. I made the mistake of assuming you meant annual production, which is pretty level at, what, 2500 tonnes or so?
So, it is true that the cumulative amount mined HAS doubled in the past 50 years, but it will not continue doubling every 50 years.
Cheers
@byiam
ofcourse it depends if the mined gold will increase with 1,4 % every year, for the next 50 years... This can't happen if the price of gold slips below average production cost.
Last 200 + years the total quantity of mined gold rougly doubled every 50 years. This means that from Waterloo until now the gold/money volume went up 16 fold. It is interesting to know who mined/controlled that flow...
@Rein
I found it interesting to learn who put the miners into gold ounce denominated debt with recycled petrodollars and then got them addicted to a paper hedge market that was used to drive the price of gold down to the cost of production.
Not only can you hide the true price/value of two commodities in a barter deal but you can even advertise a false price by adding a bit of medium of exchange to the mix. Such a brilliant move. Off the market oil in the ground for off the market gold in the ground and a few dollars for show.
Sam said
Not only can you hide the true price/value of two commodities in a barter deal but you can even advertise a false price by adding a bit of medium of exchange to the mix. Such a brilliant move. Off the market oil in the ground for off the market gold in the ground and a few dollars for show.
If I remember correctly, this mechanism was once described by FOFOA as one of greatest inventions and on par with discovery of Gravity by Isaac Newton or something like that.
LOL Let me ZH that for ya...
This just in: New/Old 1oz Gold Bullion Worth up to $55,000
Who said gold is not a commodity?
Whether pork bellies to eat or gold to drink it`s just the same.;)
http://gulfnews.com/life-style/food/features/dubai-cafe-serves-22-carat-gold-tea-1.1232883
Is the Fed operating on a 1 month time horizon!? No wonder a commenter made fun of it "oh, no taper in September, but SURPRISE!, taper in October!" and another said that the Fed is not credible. Not surprising that they act so nervous.
The Big Bluff, of tapering, was only good to make it to September, quasi the event horizon. Maybe Aristotle was right with his time frame target?
Oh and please spare me the slapstick around debt ceiling. Debt ceiling, the oxymoron of the century.
@jojo: thanks for that Ylvis piece, was listening to the charts on weekend and said omg, if that is all what mankind is capable of... so you made my day!
Yeah join the #fu** David Guetta etc. movement, all I say is ... http://www.youtube.com/watch?v=s_M8lJWLjsE
Musical rant off...
I agree with MF that the price action (freefall) from Shoeshine Boy is yet to come. I imagine it being like a paradox, the price of everything rapidly rising while spot $POG rapidly declines. Hundreds of dollars per day, hour or even minute.
That would be the moment known as "crucifiction of goldbugs". They will be trying to get rid of anything having the word "gold" in it, including physical gold.
Now, you may say, wait a minut, "I'm PGA not a goldbug"! "I know what I ought to do". Yes, but think again. In 4 years, it will be 20 years since Another appeared thinking the revaluation was imminent. Hence, there is a chance, however slim, that this could be drug out for another 15-20 years. And who's to say you won't be crucified in the meantime? ;-)
If anyone is interested in the Federal Reserve I found this a while ago.
http://www.whale.to/b/mullins5.html
Secrets of the Federal Reserve - Eustice Mullins
Dante_Eu, I agree with the sentiment. For me, my timing is always wrong because my judgment is distorted by my own greed. I think Another's timing was off for precisely the opposite reason. He was speaking out of fear: Fear that the transition might come before the Euro was in place. The introduction of the Euro was not as decisive as Another and FOA expected, at least regarding timing.
These days there is control fraud everywhere. The accounting rules have been thrown out, so banks can mark their assets to model, and then still turn around and offload them to the FED when they become worthless even according to the models. With no balance sheet transparency, I think "confidence in the system" can last a long long time.
However, it seems like a lot of bloggers are feeling more angst these days, as though we are on the cusp of something big. There is a more widespread realization out there that the system is fragile, that problems have not been fixed, and that the next crisis will result in a collapse in some shape or form. This all might become a self-fulfilling prophecy at some point.
These days I do not discount that someone might intentionally try to bring the whole system down. Ilargi argues that the new superpriority rules for derivatives have put the incentives in place:
http://theautomaticearth.com/Finance/derivatives-the-gift-that-keeps-on-taking.html
I can feel in my bones that something is coming, but I have been so wrong about timing in the past (always too early!), that I try to forget about it.
Dante-Eu wrote:
And who's to say you won't be crucified in the meantime?
Yes, some folks mettle will be tested.
Make that folk's.
Dante_Eu said: "Yes, but think again. In 4 years, it will be 20 years since Another appeared thinking the revaluation was imminent. Hence, there is a chance, however slim, that this could be drug out for another 15-20 years. And who's to say you won't be crucified in the meantime? ;-) "
It would be nice to see more discussion on this reality. As they say "markets can remain irrational longer than you can remain solvent." The whole talk of freegold-or-not wasn't as important when Gold was going up 17% a year, but now that we are sitting at 675 days into a -37.5% drawdown, the question of remaining solvent for anyone highly invested really is a serious one...
How much longer can one wait for the Valhalla revaluation if Gold remains depressed like this -- another 2 years? 5 more? 10? It may not be important for someone in accumulation but for someone near retirement this is quite serious.
A Chemist Explains Why Gold Beat Out Lithium, Osmium, Einsteinium ...
German version: hier.
Thanks all for the comments. Appreciate it :)
Au contraire Athrone,
Freegold is even more compelling with paper gold in its present condition than when it was riding high as part of a general commodities bull market. A few hundred dollars lower from here gold mines will cease production altogether- it's already slowed- and then what makes up the lion's share of the marginal flow will no longer exist. There won't be many sands left in the $IMFS hourglass by then.
Edwardo,
Put yourself in the perspective of someone who recently retired. For these people perhaps they would have preferred to still be in the paper bull market with Gold above $2000/oz... After 2011, someone who isn't accumulating would be down almost 50% including withdrawls...
So I suppose these people should feel solace that they have half the assets they did 2 years ago, but now there is a brighter hope for freegold -- after 16 years of waiting?
I would actually say the situation is more dire than it was in 2011 for these people because if freegold doesn't happen soon it is hard to imagine paper gold resuming it's run with Gold going back up above $2000/oz without pushing off the occurrence of freegold so far into the future as being a non-event.
Thoughts?
Athrone
"it is hard to imagine paper gold resuming it's run with Gold going back up above $2000/oz"
The longer gold spends at current and lower prices, the faster physical gets into stronger hands and the closer the transition is.
You are right that this is worrisome for those near retirement, though I will remind you of something.
Gold at present is not really for those of small means. If you have to worry about shelter, food and security, then you are not wealthy enough to merit gold ownership. We are simply lucky(or unlucky , whatever the case may be) enough to be along for the ride. But it will happen on the time-frame of those who do not share our problems.
TF
So I suppose these people should feel solace that they have half the assets they did 2 years ago, but now there is a brighter hope for freegold -- after 16 years of waiting?
If they have been waiting 16 years then they have seen a significant increase in their 'investment' in Gold.
If they bought 2 years ago - they should not have banked on a quick return. That would seem like gambling to me. Were they trying to time the market? Especially if they believe in FoFoA's version of what may transpire - where the paper price will decline BEFORE revaluation.
You also intimate that they need 'cash-in' their gold all at once to retire. This should not be true. This is thinking in terms of dollars and not ounces (again).
You seem to feel 'Freegold' has an expiration date. It does not. Sorry. It will happen, when it happens. If you run out of cash or time... too bad. That might be a reason to have children/ a Will - and think of your legacy.
To me, this seems like whining because the paper price dropped - something FoFoA predicted and seems totally consistent with an eventual FG revaluation.
"Make that folk's."
Make that folks'
If you can only see value in currency, you cannot see value at all.
http://www.youtube.com/watch?v=GcrJks0EQ3g
Jim Willie 2 weeks ago
Comex will stop trading, the gold price will go dark...for maybe 30 60 days...then the price will be decided some where else, maybe several centers...
This idea of a 'dark period' is not heard many places. I wonder if Jim is a closet fofoa reader...I have never heard this before (gold in hiding) anywhere but here.
As I have oft stated, very few will be able to stomach the gut-wrenching ride that I believe is dead ahead.
Nonetheless, it has also been clearly stated by FOFOA (et al) that one should only take on that amount of gold they are able to ride through this turbulence with, while at the same time being able to defend that stash (i.e. not having to cash in at the MOST inopportune time).
This isn't any different than playing the stock market or any other game of 'chance'. Risk management should always be your number one objective. PERIOD. Think of it in these terms; if you lose 50% on an investment, what gain is required to get that back? And then, consider your overall investing returns. Yeah, not gonna be easy to make that back. What's so hard to understand? Keep your emotions in check, be diligent and methodical, don't expect a quick return, never go all-in, and you'll come through just fine. Good luck.
PE for true believers it is maddening...does one wish to be stuck with worthless cash?...No of course not..Not knowing when things will happen really messes up plans even of the cautious. As we weigh the losses of future wealth that will be had from underinvesting in gold now vs the losses one would take if they are caught cash short as gold drifts below a thousand an ounce ...hey...I vote they schedule freegold for a time certain. In that way I'll be able to convert a bunch of cash into gold just at the right time......gawd I hate this down time...
M dV
Considering the hurdles that must be overcome for FG to be implemented, the agreements needed for shared sacrifice, is it any surprise that this could be drawn out much longer than originally thought?
Heck, I'm with you, I want to know exactly when this will happen. Yes, let's have our cake and eat it too. But the market is one cruel you-know-what, and most will not be along when this ride ends; it just can't be that way. That's just not how nature works. And nature hasn't been allowed to work for quite some time now, it will be ugly for the unprepared (and likely even the prepared for that matter), I'm sad to say. But onward we go, hoping for the best, planning for the worst, enjoying what we have now; at least that's what I'm doing... Don't waste your ute sitting in a bunker... ;-)
Former BIS economist William White says the whole system can break down, could be worse than in 2008 as debt is 30% higher than in 2007 (german text)
http://www.welt.de/wirtschaft/article120250576/Das-ganze-System-kann-zusammenbrechen.html
Debts 30% higher? Check of facts doesn't support the self-inforcing positivism in MSM.
Every day I check Jesse's Cafe for the links. I just read
one, which contained a quote I'd like to share;
"Hubris calls for Nemesis, and in one form or another it's
going to get it, not as a punishment from the outside,
but as the completion of a pattern already started."
Mary Midgley, "The Myths We Live By."
nice. {;<)>
FREEGOLD could come tomorrow or 10 years for now. If either of those times is a problem for you, stay in paper.
I think Randy Strauss advice is the best:
You meet your ounces target, without further delay, and then: You forget about it.
Or something like that. :-)
"You meet your ounces target, without further delay, and then: You forget about it."
If only it was that simple :)
Thanks for that Dante. It's a good reminder. It's what I aim for.
I've been accused of being a doomsday paranoid conspiracy freak for these crazy ideas I have about money, gold, oil, wealth, and saving. I've been told I should live some etc. etc. yada yada and while I get that, and agree for the most part, I came late to the game and so once I understood, it was like, holy shit, I HAVE to get to that weight target cause this is of course a true once in a lifetime foresight.
With that understanding, that gnosis, I fail to see how anyone in my shoes would relax :)
Phat Expert,
your comment was the last brick for my wall of cautiousness: Now I have no bad feeling anymore for holding cash at least for 6-12 months. Better like this instead of a much bigger loss in times of a declined POG.
Thx for FOFOA, hosting this blog: Donation follows again.
I don't about you guys but fiat burns in my hands, I can't seem to hold it and convert i.m.m.e.d.i.a.t.e.l.y to the precious. Just like an addict rushing to see the dealer! Exactly like it...
Got my bonus 2 days ago and it is already gone. Today bought a bunch of 10$ Libertys at 476€ each, great deal at less than 1% margin over LBMA pmfix.
Yes, yes, I know I need to have some cash but I just CAN'T DO IT! If I am caught with my pants down I will just become a beggar or whatever, we'll see. I must be sick... (gold fever?)
I am trying to have 6 months worth of food and other necessities, and 6 months worth of cash in euros.
After that complete your oz target, and then have fun :-).
Antal Fekete kindly responded to my question. Perhaps FOFOA could consider a response also.
Antal Fekete kindly responded to my question. Perhaps FOFOA could consider a response also.
Jojo +1
I have interim goals to drive my stacking, but no ultimate target.
It's not greed, it's a realization that I'll never get to any final target I would choose, because this economic house of cards just can't- CAN'T - last long enough for me to reach it.
I just plain started too late. So, I'm saving everything I can, as quickly as I can.
Cheers
ampmfix,
I feel you! I had that urgency for many years (fiat burning and all)... Since this summer I have felt an ease about it though, maybe correlating with reaching (a nice bit above) my original target amount and getting rid of last my debt... Now I spend more surplus on the pleasures of life and I like it!
My advice: Don't make it too complicated. Trust your instinct. Keep stacking if you have that feeling of urgency. When that feeling wears out, enjoy life... Nothing lasts forever, even urgent stacker syndrome :)
Perhaps look at it this way: You'll be handsomely rewarded for stacking after transition happens. Conclusion: Stacking is good. You'll be handsomely rewarded in the present for enjoying life. Conclusion: Enjoying life is good. If you maintain a mix of a good stack, ~6 months of necessities and a good amount of pleasure in life what could possibly go wrong? ...no matter what you choose to do from here!
Sometimes I'd wish us PGA's would utilize our huge stacks and the feeling of safety that comes with it, to show some surplus in everyday life. Let's relax and spread the love. Our foundation is solid already!
There's huge disagreement in the community on the timing of the transition anyway. Based on my own twitter survey, estimates range from _today_ to 10 years... :D
Allright BF and BY! My ounce target will never be reached (or maybe yes if FG delays 30 more years...). To be perfectly honest and forward, that figure is 1000 (so far away!...).
patience is bitter but its fruit is sweet..
a long long time ago a wise man said..
"gold and oil can never flow in the same direction".
nowadays..
dollars flow east
oil flows east
gold flows east
A journey of a thousand ounces begins with just one fractional.
ODF,
I think you will find that despite appearances oil still does flow asymmetrically with gold.
What appears to be changing is what it is denominated in.
Stacking reminds me of Tolstoy's "How Much Land Does a Man Need?"...just what I have....oooh and that one other little bit there..
my plan is to keep adding over time...I'll have what I have when the final bell rings. If it rings today I'll be fine. If it is in 10 years and I keep adding my offspring will be even better off.
All living organisms strive to live beyond their means... or they go extinct.
A man's reach must exceed his grasp...
Hmmm...
The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.
George Bernard Shaw
Chance favors the prepared mind.
Louis Pasteur
@Phat
Splendid and quite relevant quotes (now saved in my personal quote archive).
Cheers to all here who truly embody the concept of the "prepared mind."
Thanks for helping me advance toward that state.
Cheers
To survive 550 million years, a simple strategy suffices.
Move away from light, and the flow of air. :>###
http://www.zerohedge.com/news/2013-09-27/guest-post-finally-bubble
Where are you Beer Holiday, I expected you to post this. ;-)
We watch this Beer Market together, yes?
Appreciate the comments about intestinal fortitude required before the coming reset. It only strengthens my resolve to endure the bleed out
http://www.youtube.com/watch?v=_JC7Wsp_3qI
Here is an article about the coming economic collapse.
This is one mans' solution.
From Knotty Pine's link"White´s (the former BIS Chief Economist) statements are not only corroborated by the BIS report. They are also corroborated by the fact that we are experiencing a de facto backwardation of the gold market. Nobody really wants to speak too openly about it in order to scratch as much gold in at an already overpriced bargain as possible, but it has become almost impossible to buy any larger amounts of gold.
Nobody wants to sell at almost any price. The moment that this situation turns permanent the world will see the sudden end to global trade and the global economies. The crash may come, or most probably will come overnight, some time in 2014 or 2015."
STACKSTACKSTACKSTACKSTACKeat/movieSTACKSTACKSTACKSTACK
Cheers
@Bjorn, You beat me too it. Beer inflation - that's my kind of inflation!
Beer, yes, that most wonderful elixir... When I consider those brave souls that discovered the process of making Beer, sitting around throwing stuff into a pot and allowing fermentation to work its magic; I sit in awe and thank goodness for them. Aside from Asian and German beers, my personal favorite is Guinness Stout; too bad it is so difficult to find in most of China (the can version not the bottle; which isn't anywhere close to tap). Hmmm... but I digress.
The PMs have been acting most strange of late; whether due to opex or Fed, but here is the current pic as the system sees it:
GLD is a buy on the daily as of 27 SEP (short-term trade) but weekly has NOT confirmed. BUY above 129.49 with STOP-LOSS at 127.96 and TARGET 1 of 130.31, TARGET 2 of 132.88, TARGET 3 of 134.15
TLT continues on a buy (confirmed daily and weekly) since 12 SEP. BUY above 107.15 with STOP-LOSS at 105.88 and TARGET 1 of 108.51 and TARGET 2 of 111.49. Given current interest rate action and USD this appears reasonable at this point.
Provided for entertainment purposes only; though I do trade when an initial signal is offered.
Speaking of stout, this is my new favourite:
http://www.brewdog.com/product/zeitgeist
For the beer lovers, here is a link to a great brewing show produced by the Dogfish Head brewery
http://www.youtube.com/watch?v=g4nEKjof74E
@PE Do you like the local stouts? I like Yanjing stout. Good luck with your GLD trades.
@Bjorn, Thanks for the link, I'll try that stout if I can find it down under.
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