Subscribe to:
Post Comments (Atom)
A Tribute to the Thoughts of Another and his Friend
"Everyone knows where we have been. Let's see where we are going!" -Another
Subscribe to the Speakeasy
$150.00 USD for 6 months
Paypal Account Is NOT Required - Just email me at fofoamail [at] gmail [dot] com if you have any problems
BullionStar.com (Singapore)
BullionStar.co.nz (NZ) BullionStar.com/?r=1025 (Shareable link)
Donate
Email Contact Info:
If you'd like to read more…
- It all starts here!
- Then here
- Here's more
- And more
- Some highlights
- Linkable ANOTHER (THOUGHTS!)
- Linkable Gold Trail
- Linkable regular forum 1998-2007
- Alternate regular forum archive
- Linkable Kitco forum 1997-1999
- Red Baron's LBMA EXPOSÉ
- AFTER (THOUGHTS!) 1-2 PDF
- AFTER (THOUGHTS!) 3-5 PDF
- My blog in portable PDFs
- Glossary of some acronyms I use
- POG for buyers and pot watchers
Total Pageviews
Evil gold hoarders, jerks, time misallocators and brainwashed cult members:
Disclaimer
The above is presented for educational and/or entertainment purposes only. Under no circumstances should it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simply reflect the opinion of the author alone on the current and future status of the markets and various economies. It is subject to error and change without notice. The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinions that may be offered by them.
306 comments:
«Oldest ‹Older 201 – 306 of 306vizeet, with central banks holding only 20% of the world's above-ground gold stocks, I see little risk of central banks buying up so much that there isn't enough left for anyone else. Besides, their act of increasing their collective share greater than ~20% may contribute to helping set gold free.
As FOFOA has said before, the fact that gold is the only non-fiat asset on central bank balance sheets is part of what gives it legitimacy as a store of value.
Xcsler, what are you referring to when you say "we expect the price of gold to go low"? Are you referring to Another/FOA's explanation that the futures market itself caps the rise of the $POG? Or FOFOA's speculations that there may have been official sector support for many years, and that support may have been withdrawn a couple years ago? Or Another/FOA's prediction that we could see a rapid decline in the $POG during the cataclysmic crisis event where long paper holders liquidate en masse right before the market shuts down and gold goes into hiding?
I think it is important to keep those conceptually separate!
Some sage of yore once observed, and here I paraphrase, "If voting really mattered they wouldn't let us do it." I'm more in agreement than not where that idea is concerned.
Some of Armstrong's stuff is good.
He has just enough ant-establishment to make him sound one of the outsiders.
The trouble is I think the price for 'da boys' to stay off his back is for him to knock Gold and to pump shares.
Swiss referendum. I fear it will be fixed like the Scottish referendum.
"ECB could buy gold to revive economy "
Yves Mersch, a member of the ECB’s executive board, said that gold purchases would be "theoretically" possible.
http://www.telegraph.co.uk/finance/economics/11235269/ECB-could-buy-gold-to-revive-economy.html
GLD + +/-3T
"there is nothing preventing the Swiss from having other votes post Freegold arrival thereby tweaking their holdings and where they are stored."
Exactly, second provision is similar to the current policy of China. The only difference seems is that China encourages its citizens to accumulate gold on top of the "second provision" in Swiss.
"For freegold to be successful gold should move freely. If CBs hold large volumes of gold then gold will not be free and so there can't be freegold."
I don't think CBs holding large amount of gold will hinder free gold. The only hinderance would be if they got together to manipulate the PMs market via Gold Pool or confiscation.
BSB wrote,
Some of Armstrong's stuff is good.
And then there's the landfill sized portion that isn't.
Here are just a few examples:
There is a difference between institutional and individual investment. Institutions cannot buy gold bullion for they need regular income.
Can you spot the problems-there's more than one-inherent in this view?
Hint: It's the presence and use of the term, investment, and the absence of the term saving. It is more than a little interesting- actually it's incredibly relevant- that the proliferation of folks who are in the business of "managing" one's money, and the mammoth number of investment advisers like Armstrong who purport to know better than the average Joe how to "invest" have proliferated like mushrooms following a rain storm over the last two generations.
In the next system, that's the system that Martin Armstrong assiduously avoids discussing- except to offer that there is *a chance" we will see a new monetary system in due course- most of the investment shops will cease to have a reason to exist at their present very bloated level. The great financial churn that is a hallmark of the present system, will be decommissioned as there will be no need for it. In the meantime, leaving out a thorough discussion on the crucial distinctions between specs, savers, and investors is, at best, unhelpful.
Now for some more ripe landfill:
Futures have existed since Babylonian times and have had the exact opposite impact as claimed – they expand liquidity and thus make that market more suitable for trading
Futures in gold naturally suppress the price because, guess what, gold doesn not function for humanity, for civilization, the way that genuine commodities do. So, if Marty's oft expressed desire to cut the bullshit is genuine, I strongly suggest that he incorporate that metal clad fact into his analysis toute suite.
Landfill again:
Gold is NOT systemically manipulated for it was, there would be no point in even buying it.
Being a real wiz, Marty ought to know that, as tempting as it is to do so in a variety of cases, one can not prove a negative. But, at the risk of appearing a bit tin foil hat, evidence exists, just as in LIBOR, that the "gold" markets are, in fact, systemically messed with. Systemic, I hasten to add, does not mean that they are necessarily mucked with all the time, it simply means that it is, more or less a steady feature. Let's put it like this, messing about with markets, any market occurs when it is thought to be necessary.
But far from making one not want to own such an item, such attention to gold, as opposed to the level of attention lavished on orange juice, pork bellies, copper, lumber, etc. etc. generally and sensibly translates into, hmm, this might just be an asset (see CB ownership from here to Korea, down to Chile and up to Russia) that is worthwhile to * save* in because the present system is, by Marty's own admission on the way out. Furthermore, while it may well be the case that if you don't like the present system, you won't like the next, so called paper stores of value will not be replacing the present so called paper stores of value in the next IMFS. That's all the landfill I have the time or the inclination to process at the moment.
@Edwardo
My my Edwardo so much angst. Did he stand you up on a date?
I didn't say I was in love with him; far from it. Did you read the rest of my post?
@BaronSilverBaron
You should stop being so sensitive. Edwardo wasn't attacking you - just pointing out a few things. You should be thankful, he's a smart cookie who has done some valuable research, appreciate it - not get defensive every time. It's not always about you, Bud...
It's good to see gold is still moving in size ... we didn't get the license plate on that black cargo van, the call sign of that grey cargo plane or the serial number of that drone ... but it's still moving.
Come on, what's unfair about a system where people sit around and act as vital intermediaries, ensuring your best interests; managing your money, your home, your insurance? Seems a rather ungracious lot here. Isn't that all MA is pointing out?
when freegold happens, will that be permanent?
or the authorities will find some method to turn that back into gold standard back to iredeemable and paper going down in flames again? of course we are talking about centuries after the people forgot about the horrors of papers burning in a currency fire.
@Robert
I was referring to the rapid fall as paper holders sell. Honestly speaking I don't know what "rapid" entails specifically although this
current paper price downward move could be part of it.
@vizeet @judy toy
I agree with Judy when she says:
"I don't think CBs holding large amount of gold will hinder free gold. The only hinderance would be if they got together to manipulate the PMs market via Gold Pool or confiscation."
With the Swiss intiative on repatriation now rekindling interest in the German initiative, I wonder why the BIS is never mentioned? We always hear talk of the "clandestine US FED leasing ops" but doesn't the BIS have the ultimate authority here? Why not enlist the cooperation of the FED's "superiors" in this matter?
I have a feeling someone will wake up soon,
for BIS to value yellow metal @ 55k would probably anger alot of folks, there might be a way for them to do it while keeping the collective confused.
how about if:
making those evil gold/asset hoarders into scapegoats and then revaluing gold at 5 and a half new global monetary units. go for a bank holiday and make 10k USD exchangeable for new global monetary unit. call it an initiative for unified global currencies/ political union . have the media start celebrating about crushing those evil gold hoarders, and none will be the wiser.
it gets even better if the authorities try to make the situation more convoluted if instead of quoting the prices in troy ounce they start quoting in milligrams, or flipping the numeraire for various pricing schemes. the point is the make it happen while getting the masses to scratch their heads wondering what happened and eventually just foggetaboutit.
conversion ratios may vary for different kinds of debts/obligation to liquidate the debts in real terms.
This current round of SM jitters should see DX take out 88 ...then 90 in short order. http://quotes.ino.com/chart/index.html?s=nybot_dx&t=&a=&w=&v=dmax
IF - that is, if it's left to its own devices.
It seems they may well be playing with fire here, a rising $PoG, oS (to hose down DX) could well put pressure on Physical offtake - as the Present begins to overwhelm the Future.
As per usual, $IRX could / should be the Canary IMHO.
It is almost comical to watch mainstream media try to interpret the gold market. One tries to explain record physical demand when prices and supply are falling. Another gives Western reasons for why the East is buying so much. Then there's this...
http://finance.yahoo.com/news/unusual-gold-moves-asian-hours-072321658.html
They use the V-word, volatility. The Western trader mentality cannot comprehend what the Eastern saver is doing.
I am so glad I found the trail.
runninggloves: "for BIS to value yellow metal @ 55k would probably anger alot of folks"
Who would it anger? Why?
"global monetary unit" Why would Russia and China use the units?
Curiouser and curiouser!
Lately, $IRX has been spending the best part of the (NY) Day at 0.03 (effectively Zero) ...only to "miraculously recover" to 0.15 in the late (day) trade.
Let's see what transpires tomorrow (Friday).
http://www.bloomberg.com/news/2014-11-20/deutsche-boerse-will-return-to-currencies-after-16-year-break.html
I was thinking the same thing Indenture, but couldn't be bothered to type it. I don't think 55K gold would make anyone angry. In the same way that 55K GOOG wouldn't make anyone angry. Can gold go to 55K without affecting the $price of a can of peas? You bet!
Damn right $55k gold would make a lot of people angry. $55K gold means freegold, a paradigm shift, a massive wealth transfer, at least a short period of chaos, likely hyperinflation of the dollar, loss of standing on the world stage for the U.S., lots of uncertainty as to how it affects the global balance of power, an end to the aura of omnipotence of the central banks, and end to the extremes of easy money, and unwind of trillions of dollars of carry trades and possibly a collapse of the whole derivatives structure. There would be winners and losers. My guess is that the losers would be pretty damn angry. But for the millions on the sidelines with no savings to speak of in any form whatsoever, it would be "Just Another Day".
Sorry, I don't know how to do italics.. :(
Dim: http://www.ehow.com/how_12016081_add-italics-blogger-commenting.html
@ Indenture
why would china and russia use that global monetary unit
someone would definitely ask that question, why not give china and russia a favorable conversion ratio , one that they would not deny, just because the USD gets 4 digits knocked off to make a new monetary unit, that doesnt mean the same is going to take place over there in russia and china. they can give russian and chinese currency a bigger stake in global trade by say instead of knocking 4 digits like USD, how about knock 3 digits or 2 digits from the yuan or ruble to make one global monetary unit. of course all will be coordinate via the BIS/IMF. then the BIS/IMF can make unlimited buy offers of gold instead for say 5 and a half monetary units per troy ounce. besides the chinese and russians dont have to agree if they dont like to, basically USD can be all converted into new monetary units, and will float against other currencies for those that refuse to join the initiative. its about revaluing the metal and devaluing the USD and its debt derivatives with maybe 1-2% of masses being aware of it.
to say gold becomes 55K USD is too obvious
Cheers Indenture
Robert - feel free to correct me on any of these, but I think:
$55K gold means freegold, a paradigm shift. Agree.
a massive wealth transfer. I’m not sure I agree with this. 10oz of gold is still 10oz of gold after transition, the thing that is transferring is the perception of wealth but not the wealth itself. If you are buying physical gold as a wealth reserve then you are already wealthy. I think if anyone is going to get angry over a ‘wealth transfer’ it would be the gold paper longs.
at least a short period of chaos. Agreed, at least until trade balances stablise.
likely hyperinflation of the dollar I think this would only be an issue until trade stabilises, again?
loss of standing on the world stage for the U.S. Not necessarily. Isn’t the US an economic powerhouse in terms of output? It’s just that US public sector consumption is currently too high. I think the US will continue to be a key global player after the transition due to its economic strength and existing infrastructure, resources and skills base.
an end to the aura of omnipotence of the central banks I don’t think the central banks would be angry at this. I don’t think they actually enjoy trying to make the economy do things it wouldn’t normally do. This blog has helped me understand that central banks aren’t inherently evil.
and end to the extremes of easy money . Agreed. But debt will still be available yes?
and unwind of trillions of dollars of carry trades and possibly a collapse of the whole derivatives structure. Agreed. Get ready for mass suicides as ‘perceived’ wealth disappears.
What do you think?
People who value and hold someone else's debt as wealth, to the exclusion of real and possessed wealth, will be very sad when they realize their understanding of wealth was so flawed at the critical point of death of the $IMFS.
People with no real wealth and laden with debt will be largely indifferent to gold. Indifferent before, indifferent after. They will be taken back initially at how much harder they will have to work in order to capture credit, and then service that debt. But, they will adjust to the new normal.
People who hold a healthy reserve in gold will be largely indifferent to the price of gold. Their gold was there for a purpose and it will have accomplished that purpose. Gold will continue to be held by these people. The need to hold a wealth reserve will not change.
A giant falls into the latter category. I walk in the footsteps of this kind of person, so I am in this category. Not many giants in this world. Not many crazy cult members like myself either. But nonetheless, add us to maybe 90% of the world that will be indifferent to the price of gold.
Who's left? The cult of fiat. They include new wealth and wannabe giants. We can also include our hapless goldbugs who own paper gold (fiat) in order to make a killing and generate a bigger pile of fiat.
The cult of fiat is a very small group as compared to our debtors plus gold stackers group (both giant and shrimp alike). Their pain and angst will not likely be noticed or given a second thought by the super-majority.
So lets look at the idea that if you don't like the current system, you won't like new one either. The giants and gold savers like our current system as long as they can get their gold. They will be able to get their gold in Freegold as well. What about the debtors? I would say they are indifferent regarding wealth and money. Their concern is that they want more, not what constitutes money and wealth. They didn't have enough before, and they will not have enough after.
What about our newly wealthy? They love the $IMFS. They will despise Freegold. Goldbugs? They hate the $IMFS. They will despise Freegold as well. Their paper gold and silver will burn and they will be pissed.
I find it amusing that this view targets the goldbugs as the only group that will hate both systems. LOL!
http://fofoa.blogspot.ca/2010/03/synthesis.html
well worth the full read, but here's some snippets:
"Here is an important question: Is it theoretically possible for a fiat currency to devalue, or more precisely, to hyper-depreciate against only one single asset without affecting the price of a can of peas?
Of course it is! Just look at any number of investments that have appreciated quickly by an order of magnitude or two. Look at GOOG! Or how about AAPL? When an asset appreciates against a currency can we not also view it as the currency depreciating against that one asset? Or more precisely, can we not say that the asset was awaiting massive revaluation based on market recognition of its value?....
The US dollar MUST devalue (one way or another) against the entire physical world. Think about this. The euro, on the other hand, might just hyper-depreciate against only one specific asset. An asset that happens to also be a MONETARY asset held by its member debtors....
By "targeted", I mean that the euro devaluation would be targeted to go only into gold. Gold can absorb a devaluation if you do it carefully, and in turn devalue the debt without causing inflationary havoc.
Of course this would cause the hyper-depreciation of the dollar as well. Only the dollar's collapse would be against all of creation, not just one asset."
Just another day on the road to Freegold.
http://www.zerohedge.com/news/2014-11-21/gold-repatriation-stunner-dutch-central-bank-secretly-withdrew-122-tons-gold-new-yor
@ Runninggloves
". they can give russian and chinese currency a bigger stake in global trade by say instead of knocking 4 digits like USD, how about knock 3 digits or 2 digits from the yuan or ruble to make one global monetary unit"
That is basically what they did in the 30's. They confiscated the peoples gold. revalued it by 40% and then ended gold convertibility for people within the US. But resumed with convertibility for dollar holders outside the US.
http://www.mineweb.com/mineweb/content/en/mineweb-independent-viewpoint?oid=260373&sn=Detail
"Returning to a gold standard – why and how
Fraser Murrell delves into the history of the Gold Standard and how a modern day version could be put in place."
Dr Fraser Murrell | Nov 20, 2014
MELBOURNE, Australia
It was a real case of who blinked first today as DX took out 88 and $PoG, oS were driven up to contain it.
DX won ...as expected - and $IRX was left on the Floor, as it should be.
This Chart identifies the recent divergent nature of $PoG vis-a-vee it's Currency equivalents -http://stockcharts.com/h-sc/ui?s=$ONE:$USD&p=D&yr=0&mn=6&dy=0&id=p1452279647
It's all about systemic credence nowadays...or lack thereof.
Unfortunately stockcharts isn't cooperating - well worth the effort to overlay $PoG on the above ...manually tho.
@M
under the conversion scheme gold can also be convertible, just at a high price maybe 55k buy and 60k sell spread. there is nothing that forces the Russians and Chinese to convert into new currency, it is just an option. put it simply, yes the dollar get devalued against gold, although in a convoluted framework in which only a few will notice.
http://ftalphaville.ft.com/2014/11/20/2047952/ecb-qe-and-the-prospect-of-gold-purchases/#respond
Interesting discussion on the possibility of the ECB buying gold to implement QE!
@OBA
Maybe you've already explained in this blog somewhere but I'm curious how to read the chart you've provided. By lifting $PoG to "contain" DX, what do you mean by that? And what's so special about DX breaching 90?
Thanks
runninggloves: conveluted is the most coherent thing you have written regarding your 'knocking off zeros' scheme. Question, what happens to the Treasuries on the balance sheets of the worlds Central Banks when you devalue the Dollar and how will this affect the parity of their ledgers?
convoluted was convoluted
@Bosco:- The Dollar exchange (DX) has been going up strongly now for some time ...and, in keeping with my Here-n-Now prognosis, would be expected to continue on up exponentially.
$PoG (via the same prognosis) has dropped ...and we patiently await an exponential drop in concert with the DX rise. ...which will expose the price-discovery process for the sham it is.
To thwart this action, they seem to be managing to slow down the process ...but inevitably this too will fail - IMHO.
@bosco, @ OBA
OBA and FOFOA if i may ...
To better understand the analysis of OBA, you can read his blog artikels here:
http://onebadadder.blogspot.se/2012_01_01_archive.html
and also the blogs here on FOFOA:
http://fofoa.blogspot.se/2012/01/yonder-thur-be-dragons.html
(especially the comment section) and also the following:
http://fofoa.blogspot.se/2012/01/open-forum.html
It helpt me a lot to understand OBA's ramblings :-) (sorry OBA, no offence but i had a hard time to study your idea's :-)
Koba
@indenture
they can also knock off 4 zeroes from treasury and other debt assets. basically anything in paper form, bonds, and other debt securities, wages, Social security payments, you name it. if they want to protect the banks and break the people, well they can target specific assets held by the masses that which will get more than 4 zeroes knocked off. and maybe have 3 zeroes knocked off of assets that are held by banks.
for example
bank deposits mark it down by removing 4 zeroes (/10000)
maybe for credit cards debts mark it down by (/5000)
mortgage debts (/7500)
Social security payments (/20000)
medicare (/20000)
to sum it up. mark bank and government liabilities down more than people's liabilities
gold gets revalued at 55k ish in USD but call it 5.5 new monetary units so gold also gets "marked down" to 5.5 units. only a few will figure out that gold has been revalued as most people don't understand about money let alone gold.
@kobajashi and @OBA, thanks for the reply, I will check out the links see if I understand :)
What do you know? GLD is GREAT
Russia to push for free trade zone between EU, EEU
English.news.cn 2014-11-22 23:44:27 EXCERPT:
"MOSCOW, Nov. 22 (Xinhua) -- Russia calls for a free trade zone between the European Union (EU) and the Eurasian Economic Union (EEU), Foreign Minister Sergei Lavrov said Saturday.
The suggestion will be brought up at a ministerial council meeting of the Organization for Security and Co-operation in Europe in December in Basel, Switzerland, Lavrov said at the assembly of the Russian council on foreign and defense policy.
"The work is underway and it has become a part of the diplomacy. I am sure that we will come to the point, which is now called 'the integration of integrations'," Lavrov said..."
http://news.xinhuanet.com/english/europe/europe/2014-11/22/c_127241179.htm
http://www.zerohedge.com/news/2014-11-24/deutsche-banks-modest-proposal-central-banks-purchase-gold-held-private-households
So is this "Cash for Gold" by CBs, or something more significant?
For you European readers, did you have the same "Cash for Gold" business that was popular in the US for several years?
Those CB's will have to increase their bid significantly if they's gonna get any of my gold! :D
Ńot surprisingly the ZH/conspiritard segment is already out whispering about confiscation... Sigh.
Yes Lisa, we had the same kinda gold/jewelry buying shacks spring up for some years here. Not a hit anymore AFAIK...
Burningfiat,
The Cash for Gold shops have pretty much disappeared here also.
The ZH article seems consistent with the recent comments by various ECB spokesmen regarding assets which they might purchase (gold) as their version of QE
If the ECB did start buying gold,
'ECB cash for gold sign'
I wonder how they would respond to basic questions like, how much do you sell gold for? and, why do you only buy physical gold and not paper?
JC
As a central bank they would ordinarily only deal in large purchases or sales and it would be to manage the euro.
But yes, the question about paper gold might raise some eyebrows.
I'm not sure if the 'buy from households' issue was raised as a trial balloon or just an off handed comment. I suspect the latter as small purchases would do little to the POG and we expect them to try to effect a big change when they do act.
@PS: - $XAU "activity" probably a ham-fisted attempt (successful short-term ie: 1 Day reprive ;-) to drive DX below 88.
http://quotes.ino.com/chart/?s=nybot_dx
The clock is ticking - LOUDLY!
And that´s it. DX above 88 again now. IF you are right OBA, one wonders what the ham fist will try next.
Any guesses as to when the Yen will get up the courage to resume it's plunge into currency oblivion? It looked to me they thought it might be dropping so fast that it could cause a panic. I'm sure Abe would like 145 but not in one week.
I think when GOFO 12 month is -ve and LIBOR-GOFO jumps rapidly and stays high. At that time gold fixing should stop and gold market should become unregulated. Before it probably will show buffer at higher level have disappeared.
I think that condition still have sometime because before that we should see gold for cash schemes from central bank.
I am expecting gold for cash schemes from some CBs which doesn't have enough gold or may be few others which are in desperate need of gold..
Ok so what happens to the Petrodollar in this oil crash ? The shale bubble is just a separate bubble it itself. I am not sure if it really has much to do with the big picture other then a wider US trade deficit and a junk bond crash.
I wonder if the morons in OPEC or the morons in Russia were actually recycling petrodollars into shale oil in the US. Talk about sawing off the branch you are sitting on.
The Ruble is crashing too. Common Putin. If you are so tough then mobilize your dollars in such a way that will damage the US. If George Soros can inflict damage on the bank of England then Putin can inflict damage on the US
There aren't many things one can count on in this world, but one thing I've come to rely on with at least as much confidence as heat in July is M posting something that demonstrates, yet again, that he has A.) not read the blog and/or B.) dismissed an overwhelming consensus view formed here.
To wit:
If you (Russia) are so tough then mobilize your dollars in such a way that will damage the US.
No big player is going to get caught red handed pushing the decrepit old duffer, aka the U.S. over the cliff. In the meantime, I'd say that the level of physical buying that Russia appears to be engaged is evidence that they are doing their part to terminally stress the physical gold market. What's more, it doesn't seem a stretch to imagine that their fervent acquisition of physical is coordinated in some meaningful way with their (closer than ever) pal, China.
@ Archer
Sometimes big day to day moves are commented on here and not always through the freegold lens. That's all I am doing. What else is there to do while we wait.
"No big player is going to get caught red handed pushing the decrepit old duffer, aka the U.S. over the cliff."
That may be true. But there is 2 sides to that coin. The US is also pushing the Ruble close to that cliff. And if you paid any attention to the internal politics of Russia, you would realize that Putin is under growing pressure from within Russia to push back on the US.
You make it seem like places like Russia, the OPEC countries or even Japan are sitting high and dry, in a comfortable place. Nothing could be further from the truth.
M,
I can easily imagine that U.S. government figures think they are pushing the Ruble close to the cliff. After all, these folks really only excel at exploiting opportunities for grift, particularly as those opportunities intersect with their main occupation of constantly angling for a higher status/paying government gig and/or perpetually planning for the next election.
When that's what the main bill of fare is on your plate, 24/7, deep and effective statecraft doesn't have much of a chance. So, the jokers in D.C. wouldn't have much of a clue that their machinations are far more vulnerable to blowing up in their faces than not.
But, going forward, I will endeavor to pay as close attention to the internal politics of Russia as you do. Alas, I'm sure that you're contacts "on the ground" provide you with a substantial edge in figuring out just exactly what the murky state of internal Russian politics consists of. As for me making it seem like Russia, OPEC nations, and Japan are, as you put it, sitting high and dry please be so kind as to point me in the direction of any posts of mine that characterize the aforesaid as collectively operating within a condition of low to no risk. Goodness knows it will be news to me.
M,
"Ok so what happens to the Petrodollar in this oil crash ?"
Oil producing nations will pull money out of the financial markets if the price of oil remained low or declined further to pay bills. That means they will sell both stocks and bonds. Interest rates would go up if they dumped large volume of bonds.
The fed had been buying bonds directly to keep interest rates low via QE. Since the fed tapered a few months ago, interest rates haven't gone up which doesn't make any sense. Many suspect the fed has been using primary dealers to buy bonds thru Belgium - back doors QE.
If the Chinese and Japanese don't buy the bonds which the oil producing nations will be selling soon if oil price stayed low for the next year or two. The fed will have no choice but to start up the print press again to keep the interest rate down.
If the fed don't print, rates will go up and we will have a melt down. If the fed printed, the ongoing melt up will accelerate which means the asset prices will climb as the economy deteriorate further.
"Sometimes big day to day moves are commented on here and not always through the freegold lens."
What 'M' meant to say is 'Sometimes I comment on big day to day moves here and not through the Freegold lens'.
http://www.abc.net.au/7.30/content/2014/s4136006.htm
Australian Broadcasting Corporation
Broadcast: 25/11/2014
Reporter: Kirsten Drysdale
"Estonia has become the first country to offer anyone, anywhere an 'e-residency' but what does that mean for ideas of nationhood and identity?"
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/11/petrodollar%20chart.png
"It has been decided by the Government of India to withdraw the 20:80 scheme and restrictions placed on import of gold," the Reserve Bank of India (RBI) said on Friday, without giving a reason for the change in the rule.
Sounds to me like India is interested in gold NOT leaving the country...sort of like China. Me thinks this is one more nail in the hegemony of the dollar coffin.
1. Trend shows that the Swiss Gold Initiative will only get about 22% +/- yes votes. As expected, just the HMS core seemed to favor it.
So the 1.20 line sFr./euro should hold now, there were suspicions about an attack from specs, on the back of the Gold initiative...
Of course the SNB can still buy Gold, if deemed necessary, there's no legal restriction. The ECB is considering it already, at least theoretically.
IF the ECB would buy Gold, it will be interesting to see how the SNB will act, any ideas?
@M: there's nothing bad with strong currencies, the sFr. IS strong. After the euro introduction it hovered at 1.60-1.70
and began to appreciate slowly. Before the 1.20 stunt of the SNB though the exchange rate got into a fast upward squeeze, businesses simply couldn't calculate anymore.
1.20 was a conservative number chosen, I heard asks of 1.30, 1.40, even 1.50 from the usual suspects. The economy still grew better that in the euro zone. q.e.d.
If the ECB would make a "FreeGold IPO" soon, on the back of a broad stimulus offensive, well then this 1.20 will become under consideration.
A last word, that the ECB considers buying Gold now made a lot of sense to me, seeing through the savers vs. debtors lens, the balancing act appears to get ever more difficult here.
"76,8 percent turned down the bid to force the country's central bank to boost its gold reserves to at least 20 percent of its holdings."
Everything is as it should be and is quite on schedule. Some joker at something called Sprout Money has stumbled across a concept that has formed bedrock on this quaint little blog for Evil Gold Hoarders, Jerks, Time Misallocators and Brainwashed Cult Members.
http://www.zerohedge.com/news/2014-11-30/will-ecb-buy-gold-check-balance-sheet
This character has figured out that gold makes up better than 50% of the ECB's balance sheet. Further, the ECB could simply buy gold rather than debt to add to its assets. Of course, in the end the wretched aroma of goldbuggery wafts about like a particularly heinous fart in an elevator. His conclusion that gold is likely to "go to the moon" rings suspiciously in this hoarder's mind. My bet is that he is referring to "gold" and not GOLD.
Nonetheless, that's his mistake and the mistake of others that hold such a flawed picture so close and dear. Fact is that buying GOLD is the armor needed to protect the Euro against the suicidal death march of $IMFS. The question is whether the ECB is ready for or perceives the death of the $IMFS is imminent. Buying gold is more like a nuclear detonation than a surgical smart bomb like purchase of a particularly distressed debt "asset" from its particularly distressed regions.
Seems to me the direction and amplitude of the USD move will be driving that calculus. The path is clear for the USD to launch higher from its recent consolidation pattern. The deflation meme is really catching a good bit of time in the media, especially with the collapse of oil ongoing. The dollar could go much higher. The USD is the lifeblood of the global system of money. Deflation will wrap the entire globe. How long will ECB tolerate deflation, when it appears within its zone? Not long I suspect. We aren't quite there yet, but we are going to get there and we will find out the mega-tonnage of the ECB's GOLD nukes.
I can't get that nasty taste out of my mouth. The author of that article does not understand that large scale purchases of gold by central banks cannot occur anywhere near current price set by the "gold" market. In fact, so far from current price that "gold" must break and go essentially no bid. This means "gold" can only go down, and down hard.
This thing is happening the way it must.
Hmm... take a look at this chart:
http://jessescrossroadscafe.blogspot.com/2014/11/us-debt-level-versus-price-of-gold-in.html
Interesting how US debt level follows debt ceiling, and then gold follows US debt until early 2013. At that point gold breaks correlation with debt. Another correlation breaks as well, the one between the debt ceiling and debt.
Cool huh?
Matrix
I saw the Sprott article.
I was amazed they had the guts to mention the ECB structure. If they follow through on their Thoughts, they'll wind up here...and THAT would be very bad for business!
London, we have a problem?
According to Mr. Jeremy East in the Alchemist #75 loco London GLD bars sold to Asia never to return, and "We are now seeing gold flows circumventing the London market".
This is consistent with the article in the FT (registration required) The London Fix: Making a golden molehill out of a Mountain . The money quote: "I have to fly gold from Zurich..because there..is not enough..in London."
When Mr. East says "We are now seeing a growth in supply from producers going directly to the Chinese market" I hear ANOTHER saying: "The Asians are the problem, by buying up bullion worldwide and thru South Africa they created a default situation on all the paper for the oil / gold trade!"
https://www.youtube.com/watch?v=EfK-WX2pa8c
Wow, these are interesting times to live in. I wish I had some wise words to add, but unfortunately I don't. Seem everything that can be said, has been said. It is just a matter of holding on tight and seeing where we go. 2015 appears to be setting up for a year full of turbulence and major events.
This chap had me shaking my head...
Gold's rising convenience yield
Could these short-term supply & demand problems crescendo into longer-term problems, resulting in inversion beyond 2015? I don't think so. Unlike oil and most other commodities, the supply of mined gold is never used up. Ounces that were brought out of the ground by the Romans are still in existence. This means that supply disruptions should never pose a significant problem in the gold market since gold necklaces and fillings can be rapidly melted down into bars and brought to market. While we care if Saudi stops all oil production or if the U.S. corn harvest is terrible, if South Africa ceases to produce gold—meh.
Good to know that a few rappers Gold teeth will be able to supply the global demand.
I think what is happening now is that more and more countries are ramping up their printing press. More and more are entering into a deficit spiral. The Oil is getting cheaper which will probably stay here till some countries drop out of oil production. Gold is dropping in price, and I think Supply is getting lower than demand. With lower oil, dollar goes higher and gold goes lower. With lower oil supply reduces and demand increases. Eventually, unless something else happens the fix would break. The something else could be a higher price of oil. It looks like we are heading towards a crisis.
I hope that the gold fix breaks first and causes the crisis. Rather than something else breaks and causes the crisis. Because if something else happens gold will go higher prematurely, and revaluation will be delayed, and the crisis will be much more severe. If revaluation happens first then many (gold surplus) countries will avoid the majority of the bad effects of crisis by using gold.
I think when the gold fix breaks a lot of money invested in XAUUSD will become worthless, and will cause a huge crisis for I believe large banks. For this lots of printing will be done. I don't think this crisis could be papered over. Eventually when revaluation happens the surplus (gold and otherwise) countries would be able to cut off from the in crisis world, and start their own trading using each other's currency. Only countries that can break off would be countries that are in surplus or are able to break even.
When the gold fix breaks, gold will become unavailable till the gold is revalued, but I don't think oil will stop selling during this time, because except for the 3, oil countries are also bleeding. I think the 3 will also not be able to avoid selling their oil. But the 3 would probably be the first to break off, as they would need worthwhile stuff for their oil. Gold would not be that important during the crisis.
I don't think the oil trade will be important to revaluing gold. But oil can be treated as a symbol for production. Production would want to settle at the time, and they would be settling among themselves. Gold revaluation will be required to let non-surplus but gold rich countries to get stuff. I would think Eurozone would be most interested as they have a lot of gold, and the poorer once would want to get stuff (particularly oil) for gold. They are all gold rich.
I guess in a way Oil will cause gold to be revalued, but it will not be like Saudi's will force the gold to be revalued. It will be Europe that will force the gold to be revalued.
I hope my understanding of the situation is correct.
Both Oil - http://stockcharts.com/h-sc/ui?s=$ONE:$USD&p=D&yr=0&mn=6&dy=0&id=p87313170980
...and Gold - http://stockcharts.com/h-sc/ui?s=$ONE:$USD&p=D&yr=0&mn=6&dy=0&id=p14522796477
pointing to Another strong DX uptick here.
Lets watch!
http://www.zerohedge.com/news/2014-11-30/will-ecb-buy-gold-check-balance-sheet
Anybody know why the article was removed from Zerohedge?
@steerpike The article is still there.
How about an over $70 intraday move in the goldprice? $1144-$1219 Business as usual or is there more to it, anyone any ideas?
Both $Gold AND $Oil had good up days today (4 and 3% ish) contrary to trend ..and driving DX sub-88 ...again! (a much less than 1% drop!)
SM's none too enthused however.
Seems DX88 is the new Line-in-the-Sand - it'll fall by weeks-end methinks.
@Steve
I hate to contradict you but on MY Zerohedge.com the
article has vanished.
Unless I'm going completely Altzheimer of course.
Besides,I'm positive that the article was there yesterday.
Steerpike-
Your Zerohedge was slave but has gone on and assumed the master role after OUR zerohedge (previously master) spoke too soon and almost spilt the beans.
Realizing the mistake, they simply downed ours and now YOUR ZH with no article is master.
Clear?
@matrix Launching the ECB GOLD nukes is what I had in mind when selecting my PANIC button! :-)
Clear?
Not really no.
But don't bother trying to explain it to me again.
Article still not showing though.
on MY zerohedge, that is.
@steve
If extreme volatility continues (and accelerates) intraday within a system used to gauge the price of a commodity or asset, wouldn't it call into question the credibility of said pricing mechanism?
If we had $500 price swings up and down every few hours would it make the case better then?
But of course, whether or not this is "business as usual" is determined "in the eye of the beholder".
;0)
@PS: - We (markets) are apparently in the final stages of a dis-inflationary downtrend with deflation / hyperinflation the end result...
...and make no mistake, these two (De-Hyper) are two peas in the one Pod.
As MS opined (correctly IMHO) ...this in essence is how it needs to be.
It is a - S L O W - process tho.
MS and OBA, I lack your faith when it comes to timing. "Quite on schedule"? "Final stages"? Hmmm. Final stages can go on a long time when history is S L O W. Just like I am coming soon, like a thief in the night.
"Happening as it must?" Perhaps so if one takes a really big picture view. But a lot of things can happen a long the way that were not part of the script. Even FOFOA said that Another and FOA probably did not foresee what would happen after China joined the WTO and started buying up all that US debt.
Having said that, it is refreshing to see signs of volatility and instability everywhere, like something might actually start happening.
ZH article at the top of the page (usually 3 of them) don't seem to be archived...those are the only ones I've seen disappear...is that where you found it steerpike?
tEON...maybe the dollar will die of convenience yield...just a touch doesn't sound too bad he suggests.
In some ways he could be right but he clearly does not worry about the dollar. He is living in a world where the dollar rules and always will. He does not seem to be considering the importance of gold in keeping trade going.
I suspect our differences with him are a matter of perspective.
OBA..I agree the 88 seems to be a line in the sand. Last night looked like the end of the world. When I woke up all was well. Nice trick but I don't think they can do it too often.
ZH article at the top of the page (usually 3 of them) don't seem to be archived...those are the only ones I've seen disappear
That's exactly what happened.
This article : www.zerohedge.com/news/2014-11-30/will-ecb-buy-gold-check-balance-sheet ?
Which can be found under contributors as is the norm for zh....?
Sorry to bring this back again, but I still haven´t read an explanation that clears this. Paper gold price was rose from $ 250 to $1900 a few years ago, right?
I was reading “Legs” and the subject came up again, because of these quotes:
“[Central] Banks do lend gold with a reason to control price. If gold rises above its commodity price it loses value in discount trade. “ Another
“Date: Wed Nov 12 1997 14:08
ANOTHER (THOUGHTS!) ID#60253:
All CBs will now slowly stop all leasing operations and allow the market to size itself. The important players, the oil states, will have their paper covered without question! But, for all others, the great scramble is about to begin!”
“Date: Fri Mar 20 1998 22:12
ANOTHER (THOUGHTS!) ID#60253:
I hope all persons could see the "new" true nature of the Central Banks this week. I call it "The change that did happen"! If you read the post of Sat. Mar 07 1998 13:08 Another, that was written for me, it speaks of it all. The [central] banks do want gold to rise now, and they will pull in physical gold to replace leases, even if they must "pay high on the market". They do not rollover these loans now.”
Now, If CBs wanted to let the Price rise, by not rolling over their leasing operations, and this was a carefully thought and intentionally executed plan then:
1- Why do some people here think that Cbs support the falling price of paper gold bt helping it “levitate” at “reasonable” prices? This goes completely against the first quote.
2- If the Cbs were behind this, why did the they stop doing it in 2011?
3- Why is it that many people in the forum expect the paper gold to fall instead of rising exponentially? I know, paper gold trading is XXXXXX:1 on physical, so if you flood the market with paper gold it will drop its price. Then why were the CBs expecting a rising price?
I don´t know… Every time I read the archives there is at least one little piece that just doesn´t add up…
@Anand
"When the gold fix breaks, gold will become unavailable till the gold is revalued, but I don't think oil will stop selling during this time, because except for the 3, oil countries are also bleeding. I think the 3 will also not be able to avoid selling their oil. But the 3 would probably be the first to break off, as they would need worthwhile stuff for their oil. Gold would not be that important during the crisis."
The 3 is Saudi Arabia and 2 others I assume?
(3 biggest oil producers)
Can you explain this a bit more?:
"But the 3 would probably be the first to break off, as they would need worthwhile stuff for their oil."
Break off production?
Robert,
I am not talking about checking off a list in time. I take the time element out of it and reference events as either accomplished or pending. I consider progress to be movement toward completion of the list.
I believe a discontinuity in time will ultimately lead to the rapid completion of the list. Call it a Black Swan event. So it will be meaningless to make predictions of events in time. We will know the discontinuity when we see it. I thought it was 2008. It turned out that the greatest stick save of all time prevented the discontinuity and the resolution via death of the $IMFS.
The best we can hope to accomplish is to observe the symptoms of the dying patient and prepare for the death event. Another 2008 is going to happen. It may look the same or it may look different. However, it will require the same type of stick save, a massive raft of USD. This of course suggests that the USD will be in massive short supply relative to demand for other currencies. The DXY therefore will progress rapidly up and to the right on the chart in an exponential manner. That is your warning that a discontinuity looms large. Exponential processes always end in a non-linear dislocation.
I am happy to see the USD appreciating, a very important event that has to occur. I am happy to see pressure on gold, which has to occur in order to sever gold from the system of money. Likewise, I will be unhappy to see sustained and linear reversals of those trends. If that were to occur, I would have to re-examine my viewpoint in order to reconcile with my belief that we witnessing a one way process of death for the $IMFS.
I don't know anything about Dmitry Kalinichenko, the author of the piece linked below, but the article presents an interesting view of what is going on between Russia, China, and the west.
Putin's golden trap
I'd sure like to hear some opinions on this theory...
...and yet MS, the Time element is intrinsic to understanding both Money ...and GOLD.
Apart from that I agree wholeheartedly with the above comment.
DX seems to have put 88 behind her it seems.
BYoung
I read the article "Putins Golden Trap". If the Russians have surplus income from the oil/gas trade it only makes sense that they trade it for gold. That is what I would do. It remains to be seen how much surplus is available but I think the Russians have shown that they are able to endure doing without things in the near term for a long term gain. I would not bet against this idea.
Motley Fool
Thanks for pointing out the contributors' file.
Testing,
When the CBs wanted to absorb physical from the civilians, they allowed gold price to raise in order to entice the sheeples to sell - Cash for Gold stores sprang up everywhere. The big boys are accumulating gold.
When CBs wanted to repatriate gold from the fed, they allowed the price to drop 200 points overnight which triggered stop loss and forced margin call/liquidation of paper gold in order to justify extraction of physical from the GLD ETF. The big boys are shipping gold eastward for the Chinese who no longer desire US Treasury and the Dutch and Germans who no longer trust the fed.
I think that is a solid conspiracy theory.
Judie Toy:
Are you sure that CBs accumulated gold while the prices were going up? Do you really think their motives are making profits? That too in currency that they can print freely.
Phil,
The thing that struck me about the article was this: I had always thought of Russia and China buying physical gold to try and catch up before the whole $IMFS went poof. As I read the article, I considered the possibility that Russia and China are intentionally stressing the physical gold market, and the west is essentially powerless to stop it.
This could be an attempt to bring down the global monetary system, or it could be a masterful bluff to bring a quick end to sanctions.
Or I could be completely misunderstanding the situation, which happens often.
Cheers
Byoung
I think anyone that buys physical in size is stressing the gold market. Russia/China buying gives them real assets and a side benefit (for them) of bringing king dollar to and end. China has a lot of dollars to get rid of before they want to collapse the system. I doubt if they will be able to convert all or most of their dollars to gold before things fall apart. Interesting times we live in. ......Wait a minute isn't there an old Chinese proverb about that.
Eerily quiet these last 24Hrs for $PoG,$PoS ...and markets in general, despite solid DX uptick. It now too is flat-lining.
Calm before the Storm?
Maybe!
Halloween is over, kids, a new post is up! ;D
Post a Comment
Comments are set on moderate, so they may or may not get through.