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Robert Kientz

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  • Bitcoin Vs. Gold [View article]
    He is right on the vulnerability of a software driven currency. To me, the idea is a complete farce. I have been in technology for 17 years, and there is no way I trust bitcoin to be a stable currency.
    May 17 10:21 PM | 2 Likes Like |Link to Comment
  • Near-Term Outlook Grim For Precious Metals As 2 Important Props May Have Been Removed [View article]
    Your narrative does nothing to dispel the notion that the markets are manipulated, which anyone that follows the metals markets for some time know is true.
    May 17 10:18 PM | 1 Like Like |Link to Comment
  • Time To Admit That Gold Peaked In 2011? [View article]
    Comparing two assets to the entire CPI? Sounds like selective data picking to me.
    May 13 04:23 PM | 1 Like Like |Link to Comment
  • Near-Term Outlook Grim For Precious Metals As 2 Important Props May Have Been Removed [View article]
    Investors cry conspiracy when the overwhelming magnitude of the 'paper' speculative short position in precious metals outweighs any sensibility provided by current and future economic or physical metal hedging conditions.
    May 13 04:08 PM | 1 Like Like |Link to Comment
  • New Gold Discovery At San Miguel May Make Shorts Cover [View article]
    Another one to watch. Thanks Jeb.
    May 13 04:02 PM | 2 Likes Like |Link to Comment
  • Bitcoin Vs. Gold [View article]
    I am finishing up a Masters in InfoSec at the moment. I also believe in the value of precious metals versus fiat currencies. That said, I have several major concerns with Bitcoin.

    First, bitcoin is nearly as much a fiat as paper currencies are. They are created out of thin air, without hard work. There is a cost: the energy required to computationally generate them, but this is scant compared to the cost to mine an ounce of a precious metal (see more below).

    Second, Bitcoin can be hacked. First, user's computers can be hacked and their accounts stolen. Second, exchanges can also be hacked (MtGox, BitFloor, Flexcoin, Poloniex, & Bitcoincia). Third, Bitcoin keys can be hacked from online wallet services that allow users to store their keys enabling Bitcoin spending ( & BIPS).

    Third, Bitcoin is subject to speculation (Cointerra). For those with access to more expensive computers, mining Bitcoins happens more quickly. Using Moore's law, every 18 months computational power doubles. Will the Bitcoin algorithm keep up or will it eventually collapse? If it collapses, Bitcoin loses intrinsic value which violates Aristotle's criteria for sound currency.

    Fourth, all software is eventually found to be outmoded. The open source nature of Bitcoin means that many developers can contribute, but that is absolutely no guarantee that the development work will keep the Bitcoin currency stable over time.

    I would rather place my faith in Mother Nature to regulate precious metals outside of human failings than to have humans try to keep the game going despite all previous failed attempts to create successful man-made currencies.
    May 13 03:47 PM | 2 Likes Like |Link to Comment
  • Lessons Learned From The Gold Crash [View article]
    Gold phyiscal market does not = gold paper market. You are analyzing the paper market which has no relevance to the historical physical market in gold. Therefore, your pronouncements have little value for those that invest in physical metals.
    Jul 25 02:48 PM | 1 Like Like |Link to Comment
  • My Quick Take On Gold As An Investment, A Currency And Money [View article]
    "That might sound reasonable, but deflation tends to be catastrophic if prolonged. If you see what's going on in Spain and Greece today you get the gist. They're locked in a single currency, trade doesn't rebalance through FX because they all use the same currency, the governments can't print money and so they're suffering through a depressionary deflation. It's a disaster. So I dislike the gold standard because I think it's like putting ourselves in a straight jacket."

    When gold was straight up money (and not backing paper fiat during the gold standard in which governments printed too much and broke their own peg to gold, thereby breaking the 'gold standard' with excess fiat printing without changing the peg), deflation was never an issue for gold holders. In fact, it supported users getting more for their money over time as deflation increased the value of their savings. This was a slow, steady and orderly decline in prices along the lines of a few percent per year. I have provided tables proving this in my book (amazon or free digital copy if you email me).

    I think your fears of deflation when using gold as money is unfounded based upon historical precedent. However, fears of deflation of fiat-induced money printing bubbles during times of paper currency regimes are indeed a serious consideration.

    The flaw in your argument using the Euro is there is once central bank creating monetary policy for multiple countries with different trade characteristics. When gold is used as money (and in no way pegged or attached to fiat which can be destablized by excess printing), gold prices simply reflect trade market conditions and in no way will destablize a country unless the country made bad choices to begin with. Gold acts as a measure of account, but is not the cause of financial instabilities.
    Jul 25 12:48 PM | 3 Likes Like |Link to Comment
  • Why Using Gold And Silver As Legal Tender Is An Awful Idea [View article]
    The article fails to understand the whole point of gold and silver as tender. It would replace fiat money which is constantly debased by the state. The price in fiat dollars wouldn't matter.

    Even if fiat was allowed to compete with gold and silver, the price of gold and silver would continue to rise regardless of actions by the Federal Reserve. Once gold and silver are free market money, the price of ETFs and COMEX speculative trading would decouple from precious metals as money. Most people wouldn't care what the speculators value gold and silver at.. the people using it to trade would be focused on PHYSICAL gold holding it's value over time, when compared to all of the fiat currencies worldwide have crashed to zero.

    No honest analyst who understands the relationship of gold and dollars believed the recent gold crash had anything to do with the real world. The crash caused gold and silver physical demand to skyrocket to the point they are very hard to find in any quantity, and current premiums are up substantially from normal precious metals market conditions. This would only be amplified in the event more states chose to support gold and silver as money (or just gold).

    Fundamentals of the US dollar are extremely weak, so any fluctuations in the price of gold and silver in fiat money are irrelevantto those who would use gold and silver as money, to trade for their services and goods and to hold as a store of value.

    As I have said 100 times on this site, the price you see for gold and silver has NOTHING to do with real demand, IE: money demand. It has only to do with speculative positions in paper (worthless by themselves) gold and silver positions. The only market that shows gold and silver's true worth as money (store of value and fungible currency) is the PHYSICAL MARKET, which is raging right now.

    Every price drop in the ponzi paper gold and silver markets only serves to increase demand for the precious metals. Gold is in permanent backwardation right now, and this will continue until the US dollar loses its reserve currency status and goes up in flames like 100% of fiat currencies in the history of the ball of dirt we live on called Earth.
    May 13 03:42 PM | 2 Likes Like |Link to Comment
  • Gold: A Bright Shining Lie? [View article]

    Yes.The paper market now has very little bearing on the actual physical commodities (anymore). The current physical market demand is very high, shortages are occuring, and premiums over physical spot (determined by paper trades) are rising, leading to a severe divergence in the price of fiat gold (gold paper such as futures) and real physical gold.

    In addition:

    You used periods of data in which 1) the price of gold was mandated static, not free market and 2) gold and dollar were fixed in ratio by government decree during a time in which many more dollars were printed than gold was mined, leading to a breakdown of the ratio, liquidation of US physical stocks by the French and Russians, and subsequent failure of the gold exchange standard in 1971.

    In short, your charting analysis lacks historical understanding of the relationship between gold and dollars.
    Apr 23 11:41 AM | 2 Likes Like |Link to Comment
  • Gold: A Bright Shining Lie? [View article]
    Take out all trading in the futures market not related to legitimate producer hedges. Then re-run your analysis, and I will read it again. Most of the price history you use in gold is for the speculative market, especially the last two decades.

    People hold PHYSICAL gold for a reason. They don't much care what price the speculators assign to it in their fantasy trading of massive amounts of futures that have no basis on the real production markets, or physical demand for that production.

    Chart analysis is fun, I do it myself. But the assumptions made in charting often lead to incorrect analysis.

    If the physical market followed the recent gold correction, you'd see people dumping physical gold all over the market. Not just current production, but centuries of past production. Instead, you see physical hoarding every time the price drops. That should tell you something about the physical versus the fantasy paper markets in gold.
    Apr 18 11:28 PM | 2 Likes Like |Link to Comment
  • Gold - What We Like And What We Don't Like [View article]
    Nice article, as usual.
    Apr 18 05:35 PM | Likes Like |Link to Comment
  • Is Gold Useless - Part III [View article]
    As filipo illustrated, gold would have value beacuse you need to trade even after a market crash. In the short term, food inventories and supplies would be bartered. But after that sorts itself out, when you need to resupply, what do you use?

    Are you going to be able to trade your skills for the food or gas you need? What if the other guy doesn't need your skills but something else? At a point in time, gold will not be tradeable, but then it will be again. It is a safe store of value. After a big crash, nobody will trust paper money.

    If we go Mad Max and never have society again, then gold won't have value. But as soon as a big crash happens, history shows people go about rebuilding pretty quickly.
    Apr 18 07:07 AM | 1 Like Like |Link to Comment
  • Is Gold Useless - Part III [View article]
    "If you want gold/commodities delivered all you have to do is buy futures and they will deliver gold, corn, pork bellies, soy beans............ "

    For any given contract, yes. But try to redeem all the contracts at once and see what happens. COMEX inventories of physical, for example, at are at very low positions compared to the trades placed. If a few large longs stood for delivery, the exchange would be bankrupted. The easy way to confirm this is compare the physical inventories versus the daily trade volumes.

    By the way, on April 17th, the US mint sold a record amount of US gold eagles. Like I said, physical demand is exceptionally strong.
    Apr 18 07:02 AM | 1 Like Like |Link to Comment
  • Don't Get Caught Up In Panic Selling And Capitulation In Precious Metals [View article]
    I think I touched a nerve with DT.

    US sells a record 63,500 ounces of gold in one day.
    Apr 18 06:51 AM | Likes Like |Link to Comment