How the Gold Game Could End 107 comments
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“It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” - Warren Buffett
After muting CNBC for years, I turned it on by accident yesterday and learned something very interesting. The gold ETF (GLD) is the 6th largest holder of gold in the world - the whole world, even ahead of China. When investors buy GLD they have to go out and buy gold to drive up the prices. This raises a little question - who will be buying this gold from GLD when investors will decide to sell it?
Gold is one of those weird assets where nobody knows what it is really worth. You cannot run discounted cash flow analysis to value it - it has no cash flows. It is an asset where perception and reality are deeply intertwined.
Investors buying the gold ETF (GLD) are influencing the price of gold which is fair for the most part as otherwise they’d be buying the real thing. Though of course the ease of buying GLD creates a slightly higher artificial demand, but still it is fair game. A violent sell-off in GLD will drive the prices of gold down dramatically unless a real buyer steps in (like another government sick of owning the US debt for instance) and the gold price could get cut in half overnight.
Suddenly, perception of not being a store of value will create a reality of gold not being a store of value. The gold game will be over.
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This article has 107 comments:
paper money comes and goes and is left to the whim of government debasement. This is the only reason to hold gold..paper money debasement and inflation that is it, nothing more. This is what we are seeing and will continue to see going forward. The Dow could reach 20,000 next year when the usd implodes, but in real terms gold will be at "x thousand" and will hold and gain in value to stay far ahead of all assets. This is why we hold gold.
Please continue to short gold and precious mining stocks...we will happily be on the other side of that trade.
Holders of the ultimate fear investment should prepare for a little personal fear.
You're right. Gold just sits there.
Well, u ask where the sellers come from... heh heh heh
Capt Brian
"A violent sell-off in GLD will drive the prices of gold down dramatically unless a real buyer steps in".
It would be beneficial to the reader if you could give a few reasonable scenario's that would cause a violent sell-off.
"Gold is one of those weird assets where nobody knows what it is really worth. You cannot run discounted cash flow analysis to value it - it has no cash flows. It is an asset where perception and reality are deeply intertwined."
Gold isn't weird at all. Gold has held its buying power over centuries. Even Greenspan admits that gold is the "ultimate extinguisher of debt". The fact that it has no cash flows is a frustration only to conventional economic thinkers (B schoolers, monetarists, etc). As far as perception and reality are concerned, maybe you could write your next article on the decision to "relax" FASB157 and return us to Enron-accounting "Mark to Fantasy" standards. Hey look! The banks are profitable!
Economic "authorities" are trying to literally force money back into their rigged game so it can be stolen; any of you who think you can beat the "hot money" crowd by investing in stocks or even trading, be my guest. The markets are manipulated, up and down, and you are the bagholders. Gold is the "opt out".
This is the greatest coordinated global reinflation effort in history, and it is obvious the PR effort is in full swing. No effort will be spared, including bashing the "opt out" play.
Is unemployment 8% or 18%(shadow stats).Is the USA producing jobs? ........on a path to energy independence?Physical responsibility?
I happen to believe the end game is dollar devaluation.Precious metals offer some protection from the above,although all the manipulation by the powers that be can make it difficult to hold at times.BTW the dollar has lost 30% of it's purchasing power over just the last 7 yrs.......while gold was just sitting there doing it's job.
bit.ly/10cMqY
there's not enough gold in GLD to crown a tooth.
Gold is for the apocalypse. Problem is your neighbor won't be selling his cow when you want it anyway.
This market has a "Rendezvous With Destiny." The end game is coming but not here yet. Then you will know why people buy gold, but the problem is that the listeners to CNBC will have nothing to buy it with.
gold is a store of value, paper currencies are an IOU's...
many parts of the world, india/middle-east..., value gold. It is cultural, but it has been around for thousands of years!
The article is short sighted in my opinion.
On Apr 19 11:11 AM User 397650 wrote:
> Please stop attacking every man/woman with a point of view. Yours
> is welcome too. It seems to me that this guy has Warren Buffet on
> his side. I hope that you have been doing better over the years.
My problem with gold right now is the price action. The bulls and bears are still battling it out...but it appears that the bears have the upper hand lately.
What's an ounce of gold "really" worth? I have no idea what it'll be worth in three months...or three years. gdclarke asks the right question above...inflation or deflation? So far, I see no signs of inflation. As a hedge against, say, a "dollar collapse," I guess it makes sense...if the USD actually "collapses," it'll prove its worth. If it doesn't, then I have no idea what the "actual value" of gold will be in the future. Only time (and price) will tell.
Still, the author - and Buffett - have a point...it IS a "weird asset." Maybe that's part of the allure...its value is so "mysterious."
Should the dollar begin to resemble any of this paper those who now doubt gold will quickly become believers. Gold holds value because it is so rare and will rise and hold value because the paper piles have simply grown into mountains.
On Apr 19 09:10 AM Philo Beddoe wrote:
> In the article you state:
> "A violent sell-off in GLD will drive the prices of gold down dramatically
> unless a real buyer steps in".
> It would be beneficial to the reader if you could give a few reasonable
> scenario's that would cause a violent sell-off.
On Apr 19 07:51 AM DONE_SONZ wrote:
> And the reverse is true to the upside.Whats your point?
GLD is backed by some gold, but how much? Is it buying 'air' like the great deal of a timeshare? If I was going to invest in gold it would be coins - something that couldn't be taken away by the government at a whim by an adminstration that values polar bears over it's citizens lives and livelyhoods.
Short term gamble? GLD is as good as any slot machine in Vegas. Go for it or don't.
And India is buying gold as we speak. Using paper money that we give them for performing our outsourced jobs.
Maybe we can use that money to keep warm some day or play Monopoly.
You prefer, as money, pieces of paper backed by politicians who have authorized, to a group of bankers, to create, from thin air, 500 pieces of paper for every one you give them as a deposit.
Doug T.....The mutual fund guy
Go for the Gold--The bottom line matters
www.mutualfundwealth.com/
Should the investing public continue getting out of the gold trade, then GDX may have to start liquidating its gold holdings and that may happen at the same time that the IMF and others will be manipulating the market for lower gold prices. Should this happen, then the price will fall like a rock. $500 or lower gold prices might well be in the picture.
On the other hand, in the world wide fight to prevent a monster deflationary spiral, all the freshly printed fiat currency will produce massive inflation if, and only if, the money supply significantly increases velocity.
Indeed, both scenerios could easily occur. First, a massive decline, and then, a moon shot to $2000 plus per oz of gold.
Personally, I am not making predictions re what will happen. I was fortunate enough to ride AUY from gold's recent lows and after gold topped out at $1000 I got out at $950. Now I am waiting for the market to tell me when to get back in because I think there will be significant inflation in our future. I hope it will be much lower from here. It is all about timing. And both sides of the argument may well be correct.
Good luck all.
The game in gold has been going on for thousands of years. And while its price has gone up and down in relation to all currencies, especially fiat currencies, the game has never ended. Indeed, gold has essentially maintained its purchasing power in real terms (inflation adjusted) since the beginning of time.
As an inflation hedge, it has historicaly had no equal. But that does not mean profits in real terms. So, the game goes on. Speculation on when it is relatively low and relatively high. Yup. Buy low and sell high if you are a bull and sell high and buy low if you are a bear. Yes, the gold game goes on.
Good luck all.
You prefer, as money, pieces of paper backed by politicians who have authorized, to a group of bankers, to create, from thin air, 500 pieces of paper for every one you give them as a deposit."
Something most of you seem to be missing is rather simple but not commonly thought of: Gold does not EVER change price - it is the VALUE of the money changing against the Gold. Gold's purchasing power has not changed in any effective way in thousands of years. It is the money changing against the Gold - not the other way around.
If you look at GLD's website and read the fine print - it says nothing about actually having Gold. It is a trade in derivatives and useless as a way of holding Gold. CEF (Central Fund of Canada Ltd) actually guarantees to hold real bullion (roughly 40% Gold and 60% Silver) and even tells you the premium you are currently paying to hold CEF as a Gold and Silver investment. They even pay an itty-bitty dividend instead of charging you a holding fee. Keep it in mind for the future.
On Apr 19 11:40 AM Amish Rake Fighter wrote:
> Warren Buffet is full of shit, he tried to corner the silver market
> in 1993 through a company called PhiBro.
>
> www.scribd.com/doc/142...
>
On Apr 19 09:24 AM Ishortyou wrote:
> since the beginning of ancient civilizations gold was seen as a trading
> asset, and like any other asset its price is determined by supply
> and demand, because it is not practical or more difficult to trade
> the real bar of gold the GLD fund was created, this is to supposed
> to be in practical terms 'real gold' but represented as paper in
> the market, you can take it like a dollar pegged to gold like in
> the good old days before the bolshevik of FD Roosevelt depegged it
> to print money and pay post war world debt (what a crook!). Because
> currently they are printing dollar paper massively to give liquidity
> or solvency to a current very recessive market and because the dollar
> is not peg to anything of relative value, many people are filling
> in their bones that a massive inflation is coming due to a worthless
> dollar, if China and Japan dump the treasuries because of this forget
> it god save us all, they will buy gold for sure at least they will
> think that is better than a paper dollar even if it is sitting in
> their coffers at least it shines pretty.
So nobody knows (you may think you know, but you don't) if gold will go up or down from here.
Therefore, physical gold is a huge risk, since it's so hard to tell the true quality.
Real estate, oil, ammo all have a purpose. So they are stores of true value. Gold is only valued at what people decide it's worth, it is not a necessary part of living the good life.
Gold won't pay your mortage, does not mow your lawn, you can not live in it, you can't run your car with it.
For all practical purposes, physical gold is worthless.
On Apr 19 02:55 PM realold wrote:
> Hence the case for calling for the fall of gold's value. If the
> government and press said "buy gold", they could not print money
> fast enough. So, they insist it is of no value. I think that corn
> or rice would be the ultimate store of value, but set them along
> side gold for a few years and see which one you can sell. Farm
> land is the utlimate store of value, gold is probably next.
>
> On Apr 19 09:24 AM Ishortyou wrote:
And Voila!! The only legitimate monetary unit, or currency on this planet is Born!
Everyone in their senses would be hoarding them, merchants would give you a discount for them, and the collective Screaming of Politicians and Bankers world-wide would be a joy to the ears.
Yet, most gold bugs are quick to bash it (I guess because they are hoping people will rush to by physical and drive up the price?).
Ican make money selling call against my GLD position, but I make zero cash on physical gold.
I don't consider something an investment unless it generates incomes WITHOUT selling it. Since I can sell options against GLD to earn income, it is an investment.
Physical gold, on the other hand, is pure speculation, because you can't earn income from it until you convert it back to greenbacks.
Maybe if I could pay my taxes with gold eagles, I would change my views here. But as of now, gold eagles are only worth something because you can trade them in for dollars.
On Apr 19 03:09 PM FDNY RET wrote:
> Just let GLD issue certificates in value of 1/20th oz each with the
> same transferability as say a Bearer Bond!!.
>
> And Voila!! The only legitimate monetary unit, or currency on this
> planet is Born!
>
> Everyone in their senses would be hoarding them, merchants would
> give you a discount for them, and the collective Screaming of Politicians
> and Bankers world-wide would be a joy to the ears.
-J. Gramer
This guy cracks me up, so I'm spreading the word. But as a curious fifth party, how many GLD's does it take to buy fort knox? Any takers?
On Apr 19 02:30 PM don miguel wrote:
> I believe you may be referring to the two Hunt Brothers...
J. Gramer - Representation of the Prokaryotic side of investing
"The organization aint really organized" - Donovan (not frankerfurter)
As for the GLD, yes, it makes it easier to buy it, but why shouldn't it be easier to buy a commodity. You are not arguing anything, yet you are trying to say gold is overpriced. Next time, say "Gold is overpriced, here's why..." and go from there instead of making some ridiculous statement, that is designed to drag everyone in talking about if gold is overpriced or not, which you have not given any information about.
I think gold will be a frustrating investment this year as other commodities catch up, but once that happens, I'm betting it will take off again.
As for CNBC, ABC, NBC and their ilk (EXCEPT FOX) they are all media WHORES! (Oh, oh, I may get banned for that) But, the truth hurts...and it will set you free! For those estute posters, keep buying, and for the so inclined, better hurry, because the day of reckoning (dollar demise) is near! God Bless us all...(except, the media W...above.)
"Gold is money, and nothing else." -- J.P. Morgan
I'll take ol' J.P. at his word.
As far as you know, it could be one big scam. How is it they have a limitless inventory of it? It can't be worth that much if there is so much of it.
On Apr 19 11:40 AM Amish Rake Fighter wrote:
> Warren Buffet is full of shit, he tried to corner the silver market
> in 1993 through a company called PhiBro.
>
> www.scribd.com/doc/142...
>
On Apr 19 11:40 AM Amish Rake Fighter wrote:
> Warren Buffet is full of shit, he tried to corner the silver market
> in 1993 through a company called PhiBro.
>
> www.scribd.com/doc/142...
>
Oh.... you must be talking about paper money.
(Hehe ... sorry, I couldn't resist.)
On Apr 19 08:53 PM JC700 wrote:
> The whole idea of investing in Gold always has made no sense to me.
> Yet it gets pumped all the time by the media. I'd like to see you
> go buy something with your hunk of metal... slap it down on the counter
> and ask for change. Its only worth what someone is willing to pay
> for it... kinda like selling an old car.
>
> As far as you know, it could be one big scam. How is it they have
> a limitless inventory of it? It can't be worth that much if there
> is so much of it.
regards
Gold on the other hand seems to be doing fine, not poorly, not spectacularly. Just fine, and that is the whole point in owning it. NOTHING else I own is doing fine.
Google "end the fed" to find out the particulars.
If you can write on this blog, you can write to your congressman and ask for his/her support of this bill.
And then, tell your friends and relatives to do the same.
On Apr 19 10:06 PM gatoralsoccer wrote:
> Until the World sees an unbiased, simultaneous, independently audited
> inventory of the gold hoard at Ft. Knox, West Point and the basement
> of the NY Fed, there can be no question that our faith in the honesty
> of our Government is one sided! Seems simple to allay our fears;
> DO the audit!!!
Yeah, Buffet, you are a genious...I have a piece of paper I would love to sell you...how would you like some Wiemar paper, how about some continentals? LOL, I hear you are a buyer of OTC derivatives, now there is some good paper for ya....hee hee hee
Inflation, by definition, can not occur during a massive monetary contraction.
Enjoy your gold though. Its a nice plaything.
On Apr 19 09:10 AM Philo Beddoe wrote:
> In the article you state:
> "A violent sell-off in GLD will drive the prices of gold down dramatically
> unless a real buyer steps in".
> It would be beneficial to the reader if you could give a few reasonable
> scenario's that would cause a violent sell-off.
Disclosure: short gold by holding DGZ (i.e. sold to you).
On Apr 19 12:30 PM Dotcom wrote:
> "many parts of the world, india/middle-east..., value gold. It is
> cultural, but it has been around for thousands of years!"
>
> And India is buying gold as we speak. Using paper money that we
> give them for performing our outsourced jobs.
>
> Maybe we can use that money to keep warm some day or play Monopoly.
>
I have always found gold to have a use in investing, though I consider it to be boring.
On Apr 19 09:03 AM yellowhoard wrote:
> Companies come and go. Bonds default. Real estate gets an annual
> tax bill. Governments print money.
>
> You're right. Gold just sits there.
Physical gold has no value for most people because only a small percentage of people know how to the quality.
I certainly can't tell the different between 22k and 24k gold, or even 18k. Therefore, I would never pay much for a gold coin.
So if society breaks down, your ammo will hold value, your coins will not (because there will be no expert around to tell what's its worth).
On Apr 19 09:00 PM mv1001 wrote:
> "As far as you know, it could be one big scam. How is it they have
> a limitless inventory of it? It can't be worth that much if there
> is so much of it."
>
> Oh.... you must be talking about paper money.
>
> (Hehe ... sorry, I couldn't resist.)
Now, you tell me what you would do by selling gold and holding the dollar. Buy over inflated real estate? Buy insolvent banks or stocks? Give money to govt who might default if not print? Put money under mattress only to know that the price of everything else may rise? Or, put it somewhere, like gold where hundreds of years of history is there to back up your capital.
.
On Apr 19 11:38 PM Alex Filonov wrote:
> India is not buying gold. In November-December India bought about
> 10% of what they bought in a year before. In the first quarter India
> did not import an ounce! They started buying in April, so far it's
> 50% compared to a year ago.
>
> Disclosure: short gold by holding DGZ (i.e. sold to you).
>
> On Apr 19 12:30 PM Dotcom wrote:
>Since 2003 gold has tripled from $300 to $1,000, outperforming every asset class in every currency
>BTW the dollar has lost 30% of it's purchasing power over just the last 7 yrs.....
So $1000 is now $700 and your $300 input is worth $700 in buying power today not the face value $1000. But the arguement is Gold prevents buying power loss.... not so
gold 770 by late june
Holding paper gold issued by most American financial entities like GLD is foolhardy, since most of us have already learned how trustworthy our financial institutions are. Do you trust that every certificate of GLD is fully backed? Better yet, can you be sure that the U.S.Gov't isn't manipulating the paper gold markets to protect the currency? Can you afford to be wrong when our currency or economy collapses?
If you want to hold paper gold, use Canadian funds like CEF or GTU; theirs is fully backed. Besides, the U.S.Gov't cannot confiscate that when (not IF) the time comes.
1. All gold coins (except rare fractionals, which are easily distinguished by being either half or a quarter or a tenth of an ounce) contain one ounce of gold (plus a small amount of alloys for strength). The weight is stamped on the coin. (The coin can be easily weighed on a postage scale or kitchen scale if necessary.) So it's easy to value a coin based on the current price of an ounce of gold. In Argentina, the general public even accepts links from gold chains in payment, so coins would be easier to trade.
2. It's not necessary for gold coins to function as a medium of exchange among the public. They would be a store of value that could be cashed in for the current medium of exchange via dealers. If a currency started to devalue rapidly, pawn shops, coin shops, flea-market traders, and even eBay traders would buy gold coins in exchange for, e.g., the devaluing currency itself, or pre-1964 silver coins, or trade goods like batteries.
3. Coin counterfeits are rare, and can be easily detected with the use of a scale and dimension gauge. There is even something called the Fisch device that does the job automatically. Here's the link:
www.fisch.co.za/princi...
The proof of the pudding is in Argentina and Zimbabwe.
> of the impending disaster? ---- see Google for Peter Schiff, he's on many programs and YouTube videos you can watch -- he hit the bursting bubbles perfectly, and was chided by all the "experts" at the time.
On Apr 19 10:27 AM Reserved For Fire wrote:
> "As I was watching CNBC" --collecting some very valuable tips on
> what to buy over the past 10 years--tech stocks, houses, Bear Stearns,
> Lehman, AIG. Has there ever been one of the talk hosts who warned
> of the impending disaster? We are waiting for a reply.
>
> This market has a "Rendezvous With Destiny." The end game is coming
> but not here yet. Then you will know why people buy gold, but the
> problem is that the listeners to CNBC will have nothing to buy it
> with.
Gold has been around forever. It was a currency standard and is still considered an inflation buster. This author must be from some other planet.
Folks, if you don't own gold or gold mining stock get some. We are gonna see levels of Jimmy Carter inflation 15%-22%. You cannot print $7 trillion dollars and not have inflation.
I don't care what Bernanke says, there is no way he will be able to guage when he can turn the interest rate faucet on and off to stop this from happening. He will always be behind the curve and cannot predict this.
Mmm...sounds like a lot of banks, or US currency trades. Gold will be worth whatever someone who has it says its worth to someone who doesnt have it. In the "New World Order" constructed by the banks supply and demand will be irrelevant. And BTW, who says GLD has any real gold anyways....no one reliable has audited their physical holdings.
Earnings are a crapshoot right now. The trailing earnings are meaningless now, and nobody knows what the future earnings will be. If what we're seeing from the banks right now is any example, there will be a lot of book cooking in the next few months.
Yes, I wish I had 10 lbs. of gold at $300. But I don't. What I do have is a distrust of the global markets right now and confidence deficit spending is a Ponzi scheme.
We need to stop putting credence in what these guys say, people- all you have to have is one good eye to read the data and half-a-brain to interpret it. Go to shadowstats.com. Go to the Fed webpage. Look at the numbers. Yes, CPI is down- the Clinton-era-BLS-manipu... numbers, that is- but money just keeps being printed. Good for the government CPI-adjusted transfer payments, better for the government in private sector wealth confiscation. But I digress... National output is disintegrating, and has been for a few decades on real terms. The only thing bullish for the dollar is the bearishness of the monies on the other side of its basket. And if the IMF sells gold as Tax Cheat Timmy has been advising it to, that's only long-term bullish for the private gold-holders. One less government entity to manipulate prices...
Gold is an insurance policy, and physical gold only. GLD is the worst of all worlds- traceable by the IRS, dubious in its holdings, managed by banksters. If you want to have real alpha, buy gold equities or leveraged futures instruments. Silver is probably even more bullish. But absurd articles like this one are a waste of everyone's time.
It's better than paper money but certainly is not an absolute form of value.
What you have to realize is we are all inside of this system. Trying to plan for what happens after the system collapses while you are still inside of it is impossible. Buy some guns and some canned food and then get back to playing this game!
A Picasso can be worth millions, certain Ferraris the same. But my drawings aren't worth as much as a Kia. Even little pieces of paper with strange pictures printing on them in green ink have value. Value is ALL symbolic, ALL perception.
Gold has held a perception of value for thousands of years, and still does. Why do you think tons of it are put into guarded vaults the location of which is kept secret? People (lots of them) still think its valuable. Who cares if the value is merely symbolic? That's true of everything.
You would die in 3 minutes without air, yet air is free because it's not rare, it's everywhere. Gold is rare.
Oil has value, but only when its burned and converted into energy. Oil is efemeral, you always need to pump more because its always gone. 95% of the gold ever mined is still in human possession. Gold is permanent.
A perfect apple has value, but let it sit around a few weeks, and it's garbage. Gold doesn't tarnish, or rust.
Governments print symbolic value onto paper, but when they need a little extra, the temptation to just print more is irresistible. You can't print gold.
Actually the non-utility of gold is what makes it a good monetary instrument. It is a REPOSITORY, because its never consumed.
Where you been, man? What do you think FDR did in 1932? He made it a federal crime for U.S. citizens to own, hold, or trade gold, and decreed by an overnight Presidential Order that it immediately had to be turned in for paper dollars--and at a low rent rate, too. Good lord, where you been?
"If I was going to invest in gold it would be coins - something that couldn't be taken away by the government at a whim by an adminstration that values polar bears over it's citizens lives and livelyhoods."
On Apr 19 12:07 PM old trader wrote:
> Its my understanding that the IMF is sitting on a fairly tidy pile
> of gold. Given the growing problems in Eastern Europe, where the
> IMF has already lent a WHOLE lot of money, and might well need to
> lend more, its not out of the question that a sizeable chunk of their
> hoard might be sold to fund additional loans to "distressed" countries.
> (As an aside, various Western European banks have exposure to shaky
> Eastern European countries, so trouble in the East would spread quickly
> to the EU, hence the IMF's need to stamp out any financial brushfires
> before they spread.)
On Apr 20 08:39 PM wg wrote:
> See comment below.
>
> Where you been, man? What do you think FDR did in 1932? He made it
> a federal crime for U.S. citizens to own, hold, or trade gold, and
> decreed by an overnight Presidential Order that it immediately had
> to be turned in for paper dollars--and at a low rent rate, too. Good
> lord, where you been?
>
>
> "If I was going to invest in gold it would be coins - something that
> couldn't be taken away by the government at a whim by an adminstration
> that values polar bears over it's citizens lives and livelyhoods."
arabianmoney.net/2009/.../
At a business conference last week, a good ol' boy with a bunch of Texas pins on his vest stepped on the elevator with me. He'd just come back from a "tea party" tax protest. I commented on his pins, and somehow the conversation turned to guns and how he was having a hard time finding ammo for his various firearms. Everyone's been buying it up, he said, hoarding because they are afraid that Obama and Pelosi are going to take away their guns and ammo. Now, I don't believe for a minute that the Dems have the desire or ability to take away our guns and ammo. But obviously enough people believe it to drive up the stock price of gun manufacturers. And enough people are buying up ammo to make it harder to get. Personally, I don't see much difference in hoarding mentality whether its old ladies buying beanie babies and canning lids, or militia wannabes grabbing MREs, gold and guns for their bomb shelter. Eventually people and the market tire of calling for the end of the world. But I've learned to never underestimate stupidity. Panic buying tends to drive prices much higher than anyone expects. But finally the bottom falls out just when all the hoarders are feeling very smug and secure. Can you pick the peak of stupidity? I know I can't.
On Apr 21 06:11 AM Peter Cooper wrote:
>
> arabianmoney.net/2009/.../
>
I Short You,
What are people "filling in their bones" with? I HOPE it's calcium and marrow!
On Apr 19 09:24 AM Ishortyou wrote:
> since the beginning of ancient civilizations gold was seen as a trading
> asset, and like any other asset its price is determined by supply
> and demand, because it is not practical or more difficult to trade
> the real bar of gold the GLD fund was created, this is to supposed
> to be in practical terms 'real gold' but represented as paper in
> the market, you can take it like a dollar pegged to gold like in
> the good old days before the bolshevik of FD Roosevelt depegged it
> to print money and pay post war world debt (what a crook!). Because
> currently they are printing dollar paper massively to give liquidity
> or solvency to a current very recessive market and because the dollar
> is not peg to anything of relative value, many people are filling
> in their bones that a massive inflation is coming due to a worthless
> dollar, if China and Japan dump the treasuries because of this forget
> it god save us all, they will buy gold for sure at least they will
> think that is better than a paper dollar even if it is sitting in
> their coffers at least it shines pretty.
How about turning that around - "dollars are one of those weird assets than no one knows what they are worth"
Except we do know right now $900 will buy an oz of gold.
- You think the world is going to end, you should buy real gold and gold jewellry (and bullets)
- If you think we may go inflationary and devalue the dollar, and want a hedge investment then GLD, or an equivalent investment probably works
- If you want a metal with historical value like gold, but that has more of an industrial flare, buy silver or SLV/equivalent (think Buffet, or the Hunts in 1980)
“It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” - Warren Buffett
And I say:
"It gets printed up on paper everywhere. Then we pass it around, put it in a tottering bank, and pay people to stand around pretending to guard it while it loses value daily. It has no utility. Anyone from Mars watching anyone who listens to Warren Buffet would be scratching their head." - Justice Kinky
On Apr 19 09:10 AM Philo Beddoe wrote:
> In the article you state:
> "A violent sell-off in GLD will drive the prices of gold down dramatically
> unless a real buyer steps in".
> It would be beneficial to the reader if you could give a few reasonable
> scenario's that would cause a violent sell-off.
I will just say as per National Geographic of all sources...."all the Gold ever mined still exists and would not fill two olympic size swimming pools".
The US government(s) on the other hand created several Trillion new dollars in the last few months.......hmmmm....... would the scarcity be.....?
If Buffett was saying this jokingly, one could understand. Otherwise, he does not understand what real money is. To paraphrase JP Morgan, "Gold is money, and nothing else."
Thousands of years of human history demonstrate the 'intrinsic' value of gold and silver as money, and after less than a hundred years of fiat currency, someone wants to say, "Suddenly, perception of not being a store of value will create a reality of gold not being a store of value. The gold game will be over." What a joke!!!
Take the hint.
On Apr 22 10:55 PM Hmm?! wrote:
> Rather than read the 80 whippings the author has likely taken by
> now, or any complaints to the contrary!
>
> I will just say as per National Geographic of all sources...."all
> the Gold ever mined still exists and would not fill two olympic size
> swimming pools".
>
> The US government(s) on the other hand created several Trillion new
> dollars in the last few months.......hmmmm....... would the scarcity
> be.....?
>