jt

Gold: The Next Reserve Currency Player

What perfect timing. I'm going to reprint a note to Midas (Bill Murphy) at LemetropoleCafe today, sent him by someone known to all who subscribe to the site as MexicoMike. Most apropos to the above discussion, and esp what I just wrote. (BTW...I meant to write "skyrocketing"):

Hi Bill!
I have been trying to understand why there is no great sense of outrage among the general public over what has been ongoing for so long. The lifestyles for all of us are subject to decline as a result \of the actions of a few. Why have so many chosen to respond like sheep to the slaughter?

I now believe it is a question of mass denial. People understand that things are not good in the overall economy. But so far it is the other guy that has been hurt. Most people still have their jobs. Most people are still paying their mortgages. Credit card balances are high for the average person, but most bills are still getting paid. Our highways are still choked with SUVs. Overall, things are still pretty good on the surface. And even while the government announces one massive bailout plan after another, and the printing presses are running around the clock to pump money into the system, people are still not seeing any of the consequences from that. Yet... People still choose to believe the lies that are the official inflation numbers. It is easy to pretend that all of that debt that has been created on the national level will not have to be repaid, will not have a direct impact on individual lifestyles. Today, as the great annual treck to the mall is underway, I wonder how many people have begun to question how much longer this sort of thing can go on for?

The mainstream media have been telling us exactly what we want to hear, and we all really want to believe them. How many times have we been told that the problems are going to be contained? How many times were we advised that the markets had found a bottom? How many senior people from individual companies have appeared on TV to tell us their companies were in great shape? No matter how many times we hear all of these lies, we want to believe them and so no one is going to be too concerned. A new president has been elected on the basis of telling people exactly what they want to hear. He sold change, and somehow implied that the good times would be preserved without any cost. People loved it and really want to believe.

Sooner or later however the fallout is going to start hitting closer to home. Eventually, every one of us is going to be negatively affected by all that is going on, whether we are told the truth or not. No matter how much we all want to believe the lies, the consequences are the elephant in the room that cannot be ignored forever. And then, I think all that outrage is going to be expressed.

As long as it is only the minority that is facing the loss of their jobs, their homes, bankruptcy, etc. then its easier for the rest of us to pretend that things will be okay. When things have degraded to the point where the majority of us are tightening belts and facing serious financial problems; when inflation is forcing the average person to make difficult choices on what they can afford; when unemployment is running at double-digits; when the compounded interest of an ocean of debt has pushed people to the point where they can no longer make payments on their bills; when it finally dawns on the average person that all of that bailout money injected into the system did not make the big problems go away... THEN, we will see a collective sense of outrage that has been sadly lacking all the way through this mess. Unfortunately, I suspect it will be too late.

So here we are today. I cannot count the number of times that the gold spot market tried to rally above $815 and was severely pushed back down over the last 2 days. When a serious terrorist event occurs in the largest gold-friendly country in the world, one would expect that gold prices would surge. And that is exactly why gold has been so obviously and firmly capped. And since so few of us are willing to rise up and denounce the market rigging right now, and no one wants to see what is happening in real time in full view, and we all want so badly to believe the lies that they are telling us on TV, then nothing is going to change.

Now people like Dennis Gartman want to chuckle and suggest that goldbugs want to see bad things happen. What he fails to understand is that things are going to happen whether we want them to or not. We can choose to run with the herd and pretend that everything will be just fine. Or we can assess the situation and take appropriate steps now while there is still an opportunity to buy a degree of protection. The outrage is coming. Drawing a line in the sand and capping gold may keep the sheep in denial for a while longer but it will not halt the fallout from a decade of economic and financial stupidity on an unprecedented scale.

It is refreshing to see that Peter Schiff is now getting some measure of respect for having called the market correctly. Remember how they laughed at him early on when he tried to warn people what was coming? Now there is a video on YouTube where his comments have been highlighted along with the rebuttal from the bozos on CNBC and they are not laughing now. The denial phase is coming to an end soon Bill, and I hope then you may also get a measure of respect for your work to expose the gold manipulation scam. Gartman and Co. will eventually find that the smug arrogance they directed towards the goldbugs was misplaced. For now, its just groundhog day again.
cheers!

MexicoMike

Gold: The Next Reserve Currency Player

I think you're mistaken about Mr Lathrops...and it came with the 8th word in your comment. There are many out there, and the US contains way more than its proportional share, of ignorantly arrogant and arrogantly ignorant sheeple people like him who don't see the need to think or know anything except what they're fed by the MSM. What a waste of time...to think and become informed...when there is so much beer to drink and good times to be had.

Most truly seem to believe the lie that "it can never happen here"...this is the YOOOnited States of America, after all!! And oh, BTW, there never was a Great Depression either...nor hyperinflation in Venezuela or Germany within the last century. Those were just myths to these people, conspiracy theories thot up and stuck into textbooks by the "nuts" to scare people...or if they were real, it's only b/c they were stoopid furreners and not us smart Amuricans. I say give him another beer...let ignorance be bliss as long as possible for him and them...b/c as much as they are ignorant blowhards before the fact, they are even bigger whiners and complainers after...so keep them happy blowhards for as long as possible.

And I can only agree about the ETFs being useful in terms of VERY short term investment vehicles...almost akin to futures trading. Who knows how fast the dollar will drop over the cliff when it does, or how fast the global devaluation or revaluation of the dollar could happen, or when force majeure could be declared on the COMEX. If those things happen fairly closely together, there's a chance those in the ETFs would get back only paper money that is very rapidly devaluing at the same time the prices of silver and gold are skyingrocketing. Best have a good hoard of real money first...physical silver and gold...before putting needed funds, for now or the future, into the ETFs...or really paper equities of ANY kind. jt


On Nov 30 12:59 PM Georealist wrote:

> Interesting comments..especially Mr. Lathrops..apparently he thinks
> we should stupidly stare at trillions in potential liquidity andmay..well..go
> play golf. The Gulf States taking steps to protect themselves sounds
> very reasonable to me...their geographic location is enviable and
> they have the monetary heft to carefully pull it off.
> Nothing wrong with the ETF metals funds...a physical position is
> always the best foundation but sometimes not the easiest to trade.
> If any of this gets further than speculation..and it has a very good
> chance of doing so...silver could e the biggest winner yet.

Is This the Death of Gold & Silver Stocks?

Wow...I see *Paul loves S&M* is all the way up to 50 words now!!!! Way to go paulie...usually you only make it to 25 before your mom calls you for lunch or supper. Keep working at it...one day you might actually be able to read an entire article to actually know what it says, or maybe write coherently or carry on a conversation with a real human (I've been told there are actually humans who would put themselves thru the torture of actually trying to converse with you!!!...can you believe it??...nah, me neither...)

If This Comes True, You'll Be Glad You Own Gold & Silver

Well said, Kelly. User 30121, it is frustrating, but don't give up. Every person has his/her tipping point, or reallife encounter, where all of a sudden the lightbulb goes on. Often the staunchest naysayer then becomes the staunchest proponent for the position s/he was just lambasting. Such is human nature, I'm afraid--"if i don't know it, it's not true." Most don't consider the possibility that they're ignorant...and I've found that the strongest opinions are put forward by the most ignorant. So keep putting out the facts for those who WILL read and think. Don't get stopped out by the naysayers...they will always be there...and those who actually KNOW as always will be in the minority. Some will have to learn the hard way...and it could get VERY hard very quickly now. jt

Getting Out of Leveraged Gold

"That’s either a sign that the market is really about to explode and cause a bubble that will (sooner or later burst, unsuspectingly), or actually the beginning of smart money selling into strength, telling people about their amazing profits"

The problem with making an "either/or? statement is that your investment choice universe is now limited to two choices. Unfortunately if both of those choices are wrong, that puts you in the unenviable position of being either wrong or wrong.

You haven't consider the possibility that the beach ball that has been held underwater for SO long by those who have made a killing holding it down under is finally escaping their grasp and heading to the surface many hundreds of feet above. The beach ball is the price of gold (and silver), those who have been holding it down is the Gold Cartel--the Fed and the Western Central Bankers, esp, using their bullion bank lackies, esp Goldman Sucks and JPMorgain4Elites-- and the "killing" is figurative both in the sense of making unfathomable amounts of money...and also in the sense of killing of the middle class of this country thru printing of fiat currency.

GATA has been shouting this from the rooftops for 10 years to mostly deaf ears...go to gata.com if you want to know about it...if you don't don't feel bad, you're in the majority with the rest of the sheeple people of this country tha actually believe you're receiving anything resembling fair and balanced from the MSM...the mainstream media. It would appear now that the jig is up and gold will start heading up to where it belongs. By the contrived CPI created during the Clinton administration that purposefully and grossly underestimates inflation, gold would need to hit over $2200 to reach its equivalent peak of $850 in 1980, but to hit its CPI-adjusted dollar value using the CPI from the Carter admin. and before, it would have to top $5000. And that's not taking into consideration the absolutely MASSIVE inflation of the dollar by the Fed (right now M3 is increasing by nearly 20%/year if not more--you do realize the Fed stopped publishing M3 in 3/06, yes?...and for only one reason...they knew how much they were going to start to inflate)...nor does it take into account the even more massive DERIVATIVE inflation of the dollar.

Well, I could go on. But I would recommend you rethink your choices and add a third one: Gold is just heading back to where it SHOULD be as the premier currency of the world for all time, along with its little brother, silver.