Mark McHugh

Gold Poised to Move Higher

While I generally agree with the author's views (especially long-term), I must dispute a few points:

The Central Banks are more powerful than ever, our government is borrowing unprecedented amounts of money to rescue private, for-profit banks from the federal reserve. The federal reserve is nothing more than a collection of private, for-profit banks.

Gold is not the contrarian investment it was in 2001. The trade-du-jour is long stocks - long gold (as evidenced by the lack of short interest in stocks). My spider-sense tells me that many of these players are employing leverage, which means that the gold price and stock indexes fates are tied together for now. I fully expect to see a margin squeeze in the very near future, that will take down both gold and stocks.

In the long run, I think Adam will be proven correct. But, I am not inclined to add new gold positions right now. If you are really afraid that you are going to miss the gold explosion, consider buying a call option on the GLD. Just keep some dry powder around in case the price drops.

Bernanke's Great Lie: The Gold Standard and the Great Depression

I have concerns that we may see something along the equivalent of the dust bowl. We put too much faith in genetically engineered seed, and there is this weird business about the bees disappearing (see colony collapse disorder). I don't know what this all means, but I certainly get the feeling that a massive crop failure is within the realm of possibility.


On Dec 26 10:02 AM aitvaras wrote:

> Socrateazz: you have earned your moniker.
>
> The Dust Bowl phenomenon was another major contributor to the Great
> Depression which receives no notice but created havoc across the
> country and prolonged the Depression. A comparable event is missing
> from the current scenario, and its absence will mitigate our current
> dillema as well.
>
> IMO

Enlightening the Gold Bugs

Guys, please listen.

I am a certified gold bug, but I just want to warn you; I think you will see gold trade much lower, before it trades much higher (which it will). You should create a strategy now for a big drop in gold. I'll try to list a few factors that I think will come into play very shortly:

1) The new year will most likely start a new wave of hedge fund redemptions (thanks to Madoff). Hedgies will liquidate gold to meet redemptions.

2)One point I agree with the author on is that something is way wrong with the Gold/Oil ratio right now. There is a glut of visible supply in oil and I don't think that's likely to change real soon. I don't think the OPEC members are going to stick to the production cuts they just agreed to. They're all hoping the other guys will cut (so they won't have to). They'll just keep cutting each others throats until a war breaks out.

3)The Gold chart looks toppy right now. Nothing goes straight up for very long, and while gold is the talk of the town, some players are going to take profits.

4) When any or all of the above start to happen, gold will get a additional push down by central banks sales or market manipulation (same difference). Investors panic, and you've got a full-fledged rout on your hands.

None of this changes the fact that the US dollar will end up in the fiat currency graveyard (3,800 failed attempts to make paper "money" and counting), but the gold road may have more bumps than you think. These guys who bash gold will have a moment in the sun, I think, make sure you are prepared.

Gold and Silver: Backwardation and Manipulation

Really good stuff Jake,

I can't dismiss what Jake Champion says either. Does anyone know where these notices of delivery are reported?

And another thing: Does anyone else find the COT a cryptogram?

Here's what I think is the thing right now: Hank and Ben are not going to allow gold to spoil their "deflation" party. I just don't think this is gold's moment. Patience.

Five Questions on Gold for the House Banking Committee

Great Article, Steve,

I wish that Ron Paul had talked less and made Ben squirm more the other day. I agree with Mr. Powell. Understand, I'm not bashing Ron, but he kind of let Bernanke off the hook.

I would have preferred it if he asked your questions.

The Gnomes of Zurich Will Have Their Revenge

Great article, Justice. Thanks

U.S. Mint Makes Drastic Cuts to Its Collector Gold and Platinum Coin Offerings

Far be it from me to defend anything the Treasury is doing, but...

Paulson has the right to suspend the sale of the collectibles coins and coin sets (basically all the products mentioned in the article), and needs no justification to do so. So, he is not breaking the law by cutting production of those coins (and that includes the Platinum Eagles).

The important thing to remember is he must produce gold and silver eagles (of the non-collectible variety) in quantities sufficient to meet public demand and has no discretionary authority to do otherwise. I was glad to see that KITCO is once again offering gold and silver eagles (just in the last week).

The treasury could do a whole lot more to nurture public demand of precious metals. Like making gold and silver coins available for purchase at banks (because the mint's other coins go there), post offices (like they're doing in India) or through the treasurydirect.gov website. I'm not too fond of the idea that they only deliver to a very small network of dealers, but the law on this is not very specific.

To me, the availability of the gold and silver production coins is the key issue, and as long as they are available, I won't be screaming for Hank's head. I'd also like to thank the SA community for tolerating my repeated rants on this one point, and to apologize for beating it to death.

I'm going to post the link (hopefully for the last time), to the laws governing the Treasury and mint's coining. It's not fun reading, but worthwhile. By the way: the word "notwithstanding" means "in spite of" in legalese.

www.law.cornell.edu/us...

Attention Gold Bugs: Hyperinflation or Deflation?

"It seems to me that the most overvalued asset in the world is either the 30 year treasury or gold."

Yes Mark, one of them is the most overvalued asset in the world.

Using Futures to Buy Metals Wholesale

Brad,

Section (q) deals with the $50 gold Buffalo, not the eagle (sorry to keep arguing).

Seriously though, I really do appreciate all your effort. Most people are unwilling to discuss these things. All this talk of manipulation would die if the mint was producing coins to meet public demand and making them available directly to the public.

I looked seriously into crashing the COMEX party, but it's not for me. If we can't get coins from the mint, it is clearly the next best way to end manipulation.

Thanks again.

Using Futures to Buy Metals Wholesale

Section 5111 (a)(3) only applies to "sets of proof coins" 5132 (a)(2), not the production coin. No such definition exists in 5111

The production coin:
(3) For purposes of section 5132 (a)(1) of this title, all coins minted under this subsection shall be considered to be numismatic items.

The proof coins:
(C) All coins minted under this paragraph shall be considered to be—
(i) numismatic items for purposes of paragraph (1) and section 5111 (a)(3);

However,
Section 5111 (a)(1) does apply, which puts the decision (and shortage) right in Paulson's Lap. So, the burning question is, why has Paulson decided that the limited production is all that is necessary?

Because he is 100% complicit in the manipulation of the gold price.

Thanks for the discussion. It's always good to have someone force you to tighten up your argument.

First Fuel, Now Metals - Forecasts Lowered

Guess what my 12 month price target for UBS is?

Using Futures to Buy Metals Wholesale

Right from the code:

(1) Notwithstanding section 5111 (a)(1) of this title, the Secretary shall mint and issue the gold coins described in paragraphs (7), (8), (9), and (10) of subsection (a) of this section, in quantities sufficient to meet public demand, and such gold coins shall—
(A) have a design determined by the Secretary, except that the fifty dollar gold coin shall have—

The "may" that you are referring to is:

The Secretary of the Treasury may mint and issue only the following coins:

I'll say this, one of us has a reading comprehension deficiency.

Using Futures to Buy Metals Wholesale

Editor -

You are wrong about the coinage laws-

Here is the legislation link:

www.law.cornell.edu/us...

You are asking the retail investor to perform a service that our government is required to perform.

I contacted so many futures brokers looking for physical delivery (and I'm pretty sure Lind-Waldock was one), I only found one that would facilitate physical delivery of futures.

It was Ryan Fox of MF Global advisors (good guy) - [phone]. no mini's, though.

I came to the conclusion that it makes more sense to buy big bars from dealers (while they still have them) than to try to navigate the COMEX.

Using Futures to Buy Metals Wholesale

I appreciate the effort, but I've got a couple questions:

Can you name a single broker who will arrange physical delivery of mini contracts?

When I finally found a broker who would arrange physical delivery of contracts (not mini's), I learned that there are multiple fees involved with delivery, can you total the costs and determine how much above spot you will pay in the end?

What does it cost to have bars re-assayed?

What does it cost to have the metal made into smaller bars or coins.

It seems to me that you are echoing the CFTC party line that there are "no identifiable obstacles to physical delivery".

There is absolutely no real reason the US Mint can't produce coins for the public. Making coins is about as simple as it gets. The Mint is required by law to sell those coins directly to the public at market price (plus production and marketing costs). That's all, folks.

The fact that they can't (or won't) is a national disgrace at best.

Look,

Gold: War of Attrition

Excellent article James.

The NYMEX is a joke, and anyone who suggests that anybody can buy a futures contract, get delivery, smelt it and re-sell it hasn't done the homework to see what is involved.

The easiest way to end the precious metals price manipulation is to force the US Mint to sell coins at market price directly to the public (not dealers) at market price. Not because gold bugs want them to, BECAUSE IT'S THE FREAKIN' LAW!

www.law.cornell.edu/us...

Go to treasurydirect.gov - they sell all the bubblicious treasury products there, directly to the public. The Mint is part of the treasury, so why can't I buy coins there? Because, Paulson, while crooked as the day is long, is no fool and is unwilling to sell me gold at an artificially low price. The "we can't get coin blanks made" cover story has to be the lamest lie I've ever heard (yet, people like Jason C actually buy it).

The constitution states clearly that only gold and silver are money. So, unless there's an amendment I don't know about, we've let the CEO of Goldman take the real money out of the hands of citizens.

Sell the gold and silver, Hank, no more excuses.