Whippet

High Gold Prices: It's the Oil, Stupid

Fitz- good article, but I think you misinterpret the correlation (it is definitely a post hoc ergo procter hoc fallacy, as noted by a previous commenter.) Gold and oil are correlated- strongly at times, weakly at times. The strength of the correlation is TIGHT right now because of an easy-money flight to hard assets. Oil and gold are BOTH inelastic on their supply curve- we reached peak gold even before we reached peak oil. Thus, the gold price cannot be considered relevant to the usage or non-usage of natural gas. Increased dependence upon NG would create elasticity in petroleum demand; this would relax price volatility but would not drop prices considerably (every barrel produced would still be consumed, albeit by higher value-added demand streams).

Think of gold as Money, and the oil:gold ratio as a cousin (in fact, a more applicable one) to the oil:dollar ratio. Price.

Junior Miners: Poised for Impressive Gains

Great point- and the IRS reporting requirements for bullion buys and sells are nonexistent for the smaller investor (<30 ounces of gold or 1000 ounces of silver, no reporting.)


On Nov 22 08:11 AM PYRAMIDHUNT wrote:

> More and more funds and investors will buy silver and gold miners
> because of the heavy 28% tax on GLD and SLV every year whether you
> personally sold your holdings or not since both are trusts. It was
> only recently that the media publicized this fact.
>
> www.thestreet.com/_yah...;cm_cat=FREE&amp;c...
> or just search "Your Gold Could Bring Hefty Tax Bill"
> l

Did China Buy Too Much Copper?

What an asinine pretense- With Trillions of FRNs, China cannot buy too much of any durable commodity. Period. End of story. There is not a market large enough for China to get rid of its dollars fast enough.

Goldman's Human Face

Right on. This is only about 0.5% of the money they STOLE FROM AMERICAN TAXPAYERS THROUGH AIG BAILOUTS AND THEIR CRONY TIM GEITHNER.

Felix, you are better than this.


On Nov 19 01:15 PM Donald Ingram wrote:

> Wow! $500 million! Of which they fully expect repayment with interest.
>
> Yet, they are expecting to dole out about $23 billion to themselves?
>
> Merry Christmas bonuses, for robbery well done!

Depressed Detroit: The Sale of the Pontiac Silverdome

The only thing uglier than the sales price and the architecture were the football games played by its home team.

Honestly, it seems like a crappy deal for the buyer. I don't see how you can make that sort os $hithole cashflow above maintenance costs in the depressed Michigan economy.

And outdoor soccer on astroturf is about the worst game imaginable.

Still the Worst Deflation in U.S. History

Wow- 55% of American workers work for firms with less than 100 employees. Why don't we just design legislation that will slap ridiculous excise and payroll taxes on these firms under the guise of "universal healthcare"? Brilliant!!

Gold's getting all the attention, but ratio charts show its sisters silver and platinum have been outperforming.

There has only been one direction for silver to move in this ratio for a long time now. Even a protracted "crisis" scenario will only see a temporary spike in the ratio - all of the fundamentals are on the side of silver in the long run. Gold is not consumed; silver is and has been at a tremendous rate since the turn of the 19th century- ironically at the same time the 15.5:1 crust ratio was violated and has never been restored.
Once the world wakes up and realizes that silver is AS SCARCE or even SCARCER than gold and has MORE, ENTRENCHED industrial applications, we'll see a ratio around 5:1.

A Brief History of Goldman Sachs Heads

Christian Scientists are like the Holy Roman Empire- which was neither Holy nor Roman nor an Empire...


On Nov 04 03:30 PM History Buff 24/7 wrote:

> If REAL Christian Scientists were in charge of the Fed, at least
> we wouldn't be spending tens of trillions of dollars trying to keep
> Wall Street intact in its present form.

Marc Faber: ‘Gold a Bargain Compared to S&P500′

No; they will raise the cost of SOME of the inputs (fuel, wages, new ventures) proportionately while others will stay the same (existing long term contracts, owned real estate). When you leverage the margin you see Very Nice returns...


On Nov 02 10:12 AM Doc 224899 wrote:

> If gold goes to $2000, what do you think happens to the dollar, or
> the yuan, or the ruble? Most scenarios that would bring gold to $2000
> are going to raise the costs of gold production proportionately.
>
>
> So here's the homework assignment: figure out what global market
> conditions raise the price of gold but raise the costs of gold production
> proportionately less, that would also permit Americans to profit
> from investing in international gold miner stocks (forget American
> gold miners - too many regulations and lawyers and environmentalist
> plaintiffs).
>
> My guess is that such a scenario would involve OPEC or China/India/Brazil/Russia
> replacing the dollar as the trading currency for commodities.

Marc Faber: ‘Gold a Bargain Compared to S&P500′

Neither does the FRN. And what good is a 5% taxable dividend yield in a stagflationary environment??? And stagflation is the best you can hope for.


On Nov 01 05:52 PM yblarrr wrote:

> You can't eat it. It doesn't get dividends.
>
> Just like stocks alot of you will be left at the top of the market
>
> wondering what happen.

After trading largely higher in the morning on a positive data dump, stocks spent the lunch hour headed straight for negative territory. At midday, the Dow -0.2% to 9,690. S&P 500 -0.3% to 1,033. Nasdaq -0.4% to 2,037. Crude +1.4%. Gold +1.7%.

Are we starting to see a long overdue de-coupling of commodities and equities? Stay tuned.

Paul Krugman says you need to read today's WSJ editorial "The Dollar Adrift" with an eye to the paper's long-term goldbugism: Focusing on currency stability over domestic recovery is a path to disaster.

Great- a second piece of evidence in the same day that the Nobel Prize committee is nothing but a bunch of tundra-dwelling Progressive brumhildes!

Yellowhoard- I thought you were putting this swine on the smoker! Did you run out of mesquite chips?

Can't wait to see the laundry list of NYT editorial-page gaffes. Just slap down another post hoc ergo procter hoc fallacy in the name of "economic science". The fashion designers, Broadway play actors and bums in need of toilet paper that make up 90% of his current readership can't pick up on that...

Despite representatives Ron Paul and Alan Grayson's entreaty to Sen. Chris Dodd to slow down Bernanke's reconfirmation as Fed chairman to determine whether he's "fit to serve," Dodd's expecting no roadblocks.

Paul wants to restore the Constitutional authority of Congress over the currency.
Grayson and Frank want to restore THEIR Constitutional authority over the currency.
Strange bedfellows, indeed.

Volcker Should Advocate VAT and Drop the Carbon Tax Recommendation

I love a VAT- it will enrage consumers even more than they already are. It's also a great whipping boy for the soon-to-be inflation apologists in Washington- "It's not inflation, it's the effects of the VAT trickling down. This is a GOOD THING for YOU, your CHILDREN, the PLANET, and the COUNTRY.

Hopefully, it will create more opportunities for a true barter trade underground. Consumers will find substitutes for manufactured goods, whether they be recycled, reused, rebuilt, or shop-made. Repairmen will have jobs again. We won't throw out our TVs because the part costs more than a new set.

Mostly, the fomenting of grassroots anger is what I'm rooting for in Washington these days. Utter rage by the serfs directed at their lords. When the government fears us, we will start to taste Liberty again (hat tip- TJ).

Beware Fortune Magazine's Gold Warning

Not to mention that the world's population has grown from 5 to 7 billion (40% increase), United States M3 has gone from $2 to $15 TRILLION (750% increase), and marketable gold supplies have FALLEN precipitously between 1980 and 2009. Central bank holdings have fallen dramatically. "Monetary" jewelry consumption has skyrocketed in the developing world.

Private gold owners are not selling. Western central banks/IMF are running out of gold to sell. The Chinese would buy more but would destroy their dollar holdings if they're too aggressive.


On Oct 08 09:43 AM Jeff Nielson wrote:

> Hi Chap08.
>
> For argument's sake, let's concede that the 1980 price was a "bubble"
> - instead of the new, REAL value for gold after the gold standard
> was abandoned.
>
> Even if we cut that price in half, gold STILL hasn't reached that
> level in REAL dollars - and its fundamentals are MUCH stronger today
> than in 1980. How much have the prices of everything else increased
> since then, 200%? 300%?
>
> Personally, I see that 1980 price as an accurate indicator of gold's
> wealth at that time - and what prompted a three-decade campaign of
> ruthless price-fixing.