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  • The Stock Market Is Rigged! The Stock Market Is Not Rigged! [View article]
    What utter drivel. The stock market is rigged simply because the financial system is not a free market, but manipulated to avoid catastrophic incidents. In doing so, the status quo is maintained and new blood prevented from gaining control of the decision making process. All good while it lasts, but far more damaging once the manipulation ends with default in that manipulated system.
    Apr 2 07:03 PM | 1 Like Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    Your asset is my debt until I am unable to service my debt. If secured, your asset can be redeemed for the proceeds of the collateral's sale. If the asset has no intrinsic value, you have lost wealth. Our system is prone to non-linear shocks as its long term sustainability requires growth in total debt, yet history shows credit cycles.
    Mar 6 10:27 PM | Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    Looking at a stockpile of the world's productive assets as an alternative to the global stockpile of gold, you are comparing apples and oranges. Raw materials are converted to productive real assets with the use of equity and debt - in other words the financial system. The process is extraordinarily complex and is akin, to my mind, to the transformation of a handful of common elements to the extraordinarily complex organism or a human being, through the process of abiogenisis and evolution. Along that road, there are many, many failures and dead ends and we only see what is successful. Similarly our financial system transforms only a few successful ideas into the massive productive assets that make up that stockpile. Gold is a financial asset that represents the labour (or capital) required to mine it - nothing more. As capital is created only by deferring consumption and consumption is only possible through income which in the first place created by labour, gold is distilled labour and as such it represents a suitable candidate as a means of exchange. Credit on the other hand is not and, in our current predicament where the world has amassed an unsustainable stockpile of debt, cycles according to whims and emotions.
    Feb 25 02:50 AM | Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    When did you make the choice to jump into the pool of infinite fiat?
    Feb 24 06:47 AM | Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    Just like there were stories aplenty of gold reaching USD$2500 and above when it was powering through the USD$1,800s, we're getting similar stories to the other extreme. Now might be a good time to buy gold just like it was a good idea to sell it with stories foretelling its unrelenting rise. Just saying...
    Feb 24 06:39 AM | 1 Like Like |Link to Comment
  • Central Banks Are An Unlikely Cause Of The Crash In Gold [View article]
    The fundamentals of the monetary system and the functioning of the bullion loan markets are not conspiracy theories - they are fact and are susceptible to Murphy's Law. Ignore them at your peril as one way or another, the lesson is always learned and the market is a tough mistress for sure but even a harder teacher.
    Apr 18 07:58 AM | 1 Like Like |Link to Comment
  • Central Banks Are An Unlikely Cause Of The Crash In Gold [View article]
    When gold is loaned out by the Central Banks guess what the bullion banks do with it? They sell it spot and buy it forward from the miners who want to develop their untapped reserves in the ground.

    Who buys it in the spot market? Central banks and ETFs, of course - as these are the characters who, up until now, have been happy to accept paper gold. But then what?

    That gold also gets loaned out again and again and again - that is the nature of paper gold it can form a Ponzi scheme. When there is demand by those who lent it to get their gold delivered, there is a massive squeeze. The only solution which allows the players to stay solvent is to cover the paper shorts with paper longs.

    So it is a matter of pushing the paper price down so owners in the ETF (and weak CBs) liquidate their paper claims. There is still a shortage of physical, but some time is bought. In the end it is just a store of value for those who hold physical.

    When the penny drops and everyone realises there is insufficient global growth to honor all paper obligations - and in that I include the USD$100 trillion in bonds that cannot be repaid in constant dollars, gold will still have value, paper claims will not.
    Apr 18 12:33 AM | 5 Likes Like |Link to Comment
  • Goldman remains bearish on gold, lowering its stop to $1,400/oz as the latest data show an acceleration of gold ETF liquidation. That the pressure on Cyprus to sell its gold might spread to other debt-addled EU states could be the catalyst for the recent big move, suggests Goldman. Hedge-funder and hedged gold bull John Burbank notes many long the metal are very much un-hedged (i.e., John Paulson - famously long both the metal and the miners). GLD +1.2%[View news story]
    I am still waiting for oil to hit USD$120 on Goldman's call from 2011 (they subsequently made a fortune on their oil desk shorting it!) Why anyone would listen to them is beyond me - muppet masters!
    Apr 16 07:20 PM | 2 Likes Like |Link to Comment
  • Gold Takes Out Major Support: Next Stop $1,350 [View article]
    Funny path to that "next stop". Good luck on your short trades.
    Apr 5 05:38 PM | 1 Like Like |Link to Comment
  • Gold Takes Out Major Support: Next Stop $1,350 [View article]
    If in a debt based money system, there is an overall preference to repay debt, what is the impact on the solvency of the biggest borrowers?

    They are forced to liquidate assets and the system undergoes debt deflation where lenders and borrowers lose everything. It is rare but it happens and in such times it pays to have some unencumbered hard asset as insurance - not an investment, insurance. Right now there are very few who hold such insurance. But this is the reason the world's central banks are still the largest holders of gold.
    Apr 4 08:56 PM | Likes Like |Link to Comment
  • Gold Takes Out Major Support: Next Stop $1,350 [View article]
    A few questions for the author.

    At what point would you cease to provide credit to a borrower?

    What is the track record of default in bonds, stocks and gold?

    Do you acknowledge credit cycles exist and that our money system is nothing more than bloated over extended exercise in perpetual and endless credit?
    Apr 4 06:10 PM | Likes Like |Link to Comment
  • Gold Takes Out Major Support: Next Stop $1,350 [View article]
    Interesting chart concerning traders' positioning and the price of gold.
    Apr 3 07:28 PM | Likes Like |Link to Comment
  • Gold Takes Out Major Support: Next Stop $1,350 [View article]
    Technical analysis that pushes you to buy near highs and sell near lows in a ranging market, is not going to serve a trader well.

    Just remember that most buyers when a market breaks to new highs, are forced buyers - that is short covering.
    Apr 3 06:35 PM | 3 Likes Like |Link to Comment
  • Investing In Gold: Is A Bubble Popping? [View article]
    The way I read the current market, there is a growing realization that the risk models (adopted largely as a result of the ubiquitous acceptance of the EMH in the 1970s) are deeply flawed when there are strong interrelationships between market participants. The acceptance that risk is distributed in such a way - that we can estimate risk by using Gaussian stats models, saw a massive rejection of the role of gold in investment portfolios to diversify risk.

    We now know that market risk is more akin to a power law distribution than a bell curve and as such means and standard deviations of risk distributions cannot be estimated with anything like the confidence EMH implied.

    Thus there is an argument for EVERYONE who wants to protect their wealth from black swans, to hold some gold. Any rationale that advocates that this is not necessary, is abandoning the undeniable trend to a more active role for gold in limiting the excesses of debt and credit to mis-allocate resources.
    Mar 23 02:13 AM | Likes Like |Link to Comment
  • Investing In Gold: Is A Bubble Popping? [View article]
    Most who invest in gold are missing the point 99% of the time. As gold should not be regarded as an investment 99% of the time - it is an insurance policy, acting as a lightning rod to protect people who have wealth to protect, from financial black swans. We have confused credit with money and the stark differences between the two are now starting to show themselves courtesy of the moves in Cyprus and the potential bank run contagion.

    Money is a means of exchange and cannot be taxed when sitting in your pocket, credit is something that really is at the whim of the borrower to honour.

    Of course that means 1% gold is an excellent investment, but such times are characterized by panic because people do not have enough of it. I don't think a lot of people hold gold as an insurance policy but if there was a sudden desire to do such a shift, it would swamp those who, like Arthur, are advocating its abandonment.
    Mar 19 01:32 AM | 1 Like Like |Link to Comment