Gold: I smell a trap

[cypherdoc]

how ugly is this.  pm stocks getting destroyed again.  gold up slightly but not for long.  wave 3 down is here.

Honestly, if gold does not correct more, with the one that is coming down right now, its a very bullish sign. Gold is still up a lot from a year ago. Its normal to have a correction.

Also, I have not seen mentioned tha the gold and silver margins were rised 21% (http://www.tradingnrg.com/gold-silver-prices-cme-margin-hike-by-21-september-24-2011/) forcing a lot of people to recapitalize or remove some positions. 21% is  a lot! Its very "curious" that they have choosen to do so just as the next deflationary mini-crash was starting. With the know history of the USA gov to try to keep the price of gold (and silver) down to help the survival of the dollar, it is "like" if they want to create a psicological effect to try to beat down gold and silver prices.

Mid and long term Im bullish on gold.

as i said before, i'm slightly more agnostic towards gold denominated in non USD.  you being in the euro means gold could make sense altho i would still be worried.

[cypherdoc]

sliding down the slope of hope.

[Iseree22]

Gold will tank. May not happen yet, although I think its obvious, we currently have the most global uncertainty, yet the price has dropped suddenly. The only thing that will save Gold is if consumption magically doubles. With I think close to 40% of Gold being purchased for investment purposes, 10% for REAL economic activities, and 50% for consumption(Jewelery), there is a lot of Gold sitting around in the hands of investors.

Its been a good ponzi scheme, but now the Bears are awakening from hibernation, and their real hungry.

[MatthewLM]

Dollars has virtually no non-monetary and non-investment value.

Your point?

how ugly is this.  pm stocks getting destroyed again.  gold up slightly but not for long.  wave 3 down is here.

Honestly, if gold does not correct more, with the one that is coming down right now, its a very bullish sign. Gold is still up a lot from a year ago. Its normal to have a correction.

Also, I have not seen mentioned tha the gold and silver margins were rised 21% (http://www.tradingnrg.com/gold-silver-prices-cme-margin-hike-by-21-september-24-2011/) forcing a lot of people to recapitalize or remove some positions. 21% is  a lot! Its very "curious" that they have choosen to do so just as the next deflationary mini-crash was starting. With the know history of the USA gov to try to keep the price of gold (and silver) down to help the survival of the dollar, it is "like" if they want to create a psicological effect to try to beat down gold and silver prices.

Mid and long term Im bullish on gold.

as i said before, i'm slightly more agnostic towards gold denominated in non USD.  you being in the euro means gold could make sense altho i would still be worried.

You think USD will do very well because the federal reserve will stop creating money which is a ridiculous assumption.

[Iseree22]

Dollars has virtually no non-monetary and non-investment value.

So?

[cypherdoc]

Dollars has virtually no non-monetary and non-investment value.

Your point?

how ugly is this.  pm stocks getting destroyed again.  gold up slightly but not for long.  wave 3 down is here.

Honestly, if gold does not correct more, with the one that is coming down right now, its a very bullish sign. Gold is still up a lot from a year ago. Its normal to have a correction.

Also, I have not seen mentioned tha the gold and silver margins were rised 21% (http://www.tradingnrg.com/gold-silver-prices-cme-margin-hike-by-21-september-24-2011/) forcing a lot of people to recapitalize or remove some positions. 21% is  a lot! Its very "curious" that they have choosen to do so just as the next deflationary mini-crash was starting. With the know history of the USA gov to try to keep the price of gold (and silver) down to help the survival of the dollar, it is "like" if they want to create a psicological effect to try to beat down gold and silver prices.

Mid and long term Im bullish on gold.

as i said before, i'm slightly more agnostic towards gold denominated in non USD.  you being in the euro means gold could make sense altho i would still be worried.

You think USD will do very well because the federal reserve will stop creating money which is a ridiculous assumption.

MatthewLaMe:  no dipshit.  b/c the USD debt destruction is happening faster than what little printing Ben is doing.

[MatthewLM]

Dollars has virtually no non-monetary and non-investment value.

So?

Why do you think USD will beat gold?

MatthewLaMe:  no dipshit.  b/c the USD debt destruction is happening faster than what little printing Ben is doing.

If the derivatives are going to fail then this is bullish for gold I think. People will want a safe haven as they wake up to the mess of the paper markets and if the commodities paper markets fail then the manipulation in gold and silver will go away.

But the federal reserve and US government will try hard to keep the system running. It's going to fail eventually though, through hyper-inflation or through mass debt default (Possibly expect a mixture through monetary intervention battles with debt crises).

[Iseree22]

Dollars has virtually no non-monetary and non-investment value.

So?

Why do you think USD will beat gold?

Because unlike gold I can buy stuff with currency....... And I don't know to many people that want to carry around pieces of gold to do their trade. Then of course consumption doesn't satisfy supply. Then there is the anecdotal stories of firms like Goldman driving the price up, and then recently putting on massive shorts.

Then if your really into all that Austrian Non-Theory there are better 'mediums of exchange' like Bitcoin.

To me its a no brainer, you just have to know when the ponzi game is up. Since the large institutions have a heap of shorts on I'm sure they will generate an event that will drive the price down further.

[MatthewLM]

I think you need to look up the definition of a ponzi scheme. Many of the paper markets could be seen as a ponzi scheme.

People do transact in gold and Peter Schiff is also making a gold bank debit card which is interesting.

Gold is seen as a store of value, so even if not used directly in exchange it is used in savings because it's perfect for that purpose.

Except the markets are ruined by intervention.

[Iseree22]

Yea a ponzi scheme is when there is no economic basis for price increases. Does Gold have any economic value?? Atm very little.

'Store of Value' what does that even mean??? It is either valuable or it is not. Is there something 'inside' the gold that makes it valuable?? No there is not.

Peter Schiff doesn't know how the economy works.

And the Dollar is not being 'debased'. You are the victim of a very sophisticated propaganda campaign.

[miscreanity]

as i said before, i'm slightly more agnostic towards gold denominated in non USD.  you being in the euro means gold could make sense altho i would still be worried.

Really? As though the dollar is in a bubble by itself? As if we haven't seen how currencies are dumped in favor of the real thing when the link is severed (CHF 2011, USD 1971, etc.)?

You'd be correct under normal circumstances, trading in a legitimate market environment geared toward price discovery instead of perception management. This is a non-linear aspect.

Exactly.

The most difficult hurdle to get over is one's own conditioning, belief, in the system.

The cold hard fact is this: JPM-GS, the Comex and the Fed function as one entity and they have unlimited access to FRNs (which means they control the markets). The CFTC is a lap dog. Congress is a purchased hood ornament and Obama is a dupe.

The Fed has, effectively, been the central bank of the world. They want that sweet deal cemented. It is the lynchpin of control.

Silver is the achilles heel.

Pay close attention to "central bank of the world" above. Also the point about silver, which applies even more to gold. The precious metals reasserting their monetary role through distributed public ownership is the real threat, yet impossible to stop - it can only be delayed to a degree that prevents catastrophic failure of the global economy.

Bitcoin is in the same situation, albeit garnering a marginal awareness. That factor is critical and will take much longer than the return to gold as money (I didn't say a fixed gold standard). Regardless, what's good for Bitcoin is good for gold (and silver, precious metals in general).

MatthewLaMe:  no dipshit.

Really?

[osmosis]

love that ignore button

[foggyb]

Because unlike gold I can buy stuff with currency....... And I don't know to many people that want to carry around pieces of gold to do their trade.

In Germany and Zimbabwe they had to print million and trillion dollar notes so it would easier to carry. Of course, prices of some commodities doubled every hour at the height of the hyperinflationary crisis. There is a book called When Money Dies where the Germany Weimar crisis is chronicled by eyewitness accounts. There were were several anecdotal descriptions of people using gold and silver to survive day-to-day.

Can't buy anything with gold is a bogus statement. I can trade or barter gold & silver as I wish locally. Sure, if I want to trade online, I have to convert gold to electronic currency. But its nothing close to the picture you paint where gold is no better than lead.

[foggyb]

An interesting side note:

I had been looking for a metal detector to do some coin-hunting on beaches, and after a little browsing, I started to get the idea that metal detector sales were going CRAZY. Youtube is full of videos of people running through gold fields with the latest high tech metal detectors and finding gold nuggets as small as the head of a pin. These are gold fields that have previously been scoured with older detectors that could not pick up the smaller nuggets. Makes me wonder, is all the easy-to-find gold starting to disappear?

Just recently in Sheffield, i believe, a kid found a priceless stash of Saxon gold artifacts in a field.

Societies still want gold, interest is increasing. Its not solely due to the rising gold prices, its because gold is a universal truth.

[miscreanity]

Because unlike gold I can buy stuff with currency....... And I don't know to many people that want to carry around pieces of gold to do their trade. Then of course consumption doesn't satisfy supply. Then there is the anecdotal stories of firms like Goldman driving the price up, and then recently putting on massive shorts.

Your participation in the discussion is appreciated, but it would be better to contribute hard data instead of opinion.

Then if your really into all that Austrian Non-Theory there are better 'mediums of exchange' like Bitcoin.

You'd be correct under normal circumstances, trading in a legitimate market environment geared toward price discovery instead of perception management. This is a non-linear aspect.

Exactly.

The most difficult hurdle to get over is one's own conditioning, belief, in the system.

The cold hard fact is this: JPM-GS, the Comex and the Fed function as one entity and they have unlimited access to FRNs (which means they control the markets). The CFTC is a lap dog. Congress is a purchased hood ornament and Obama is a dupe.

The Fed has, effectively, been the central bank of the world. They want that sweet deal cemented. It is the lynchpin of control.

Silver is the achilles heel.

Pay close attention to "central bank of the world" above. Also the point about silver, which applies even more to gold. The precious metals reasserting their monetary role through distributed public ownership is the real threat, yet impossible to stop - it can only be delayed to a degree that prevents catastrophic failure of the global economy.

Bitcoin is in the same situation, albeit garnering a marginal awareness. That factor is critical and will take much longer than the return to gold as money (I didn't say a fixed gold standard). Regardless, what's good for Bitcoin is good for gold (and silver, precious metals in general).

love that ignore button

+1

In Germany and Zimbabwe they had to print million and trillion dollar notes so it would easier to carry. Of course, prices of some commodities doubled every hour at the height of the hyperinflationary crisis. There is a book called When Money Dies where the Germany Weimar crisis is chronicled by eyewitness accounts. There were were several anecdotal descriptions of people using gold and silver to survive day-to-day.

Can't buy anything with gold is a bogus statement. I can trade or barter gold & silver as I wish locally. Sure, if I want to trade online, I have to convert gold to electronic currency. But its nothing close to the picture you paint where gold is no better than lead.

Yes, convenience is the name of the game. Stability from gold is now coming into greater favor than convenience of fiat paper. Gold's value relative to other assets has remained very steady compared to paper's valuation, and paper is only experiencing more disruption.

The ignorant and foolish will play while the smart and aware prepare: Donald Trump, chairman and president of The Trump Organization, explains why he will accept gold as a security deposit in lieu of U.S. dollars.

“The legacy of Gold as a precious commodity has transcended to become a viable currency and an accepted universal monetary standard,” said Trump. “Central Banks around the world are holding Gold as a reserve asset. It is also a terrific, potentially lucrative diversifier in a portfolio, especially with such volatility in the stock market.”

[Iseree22]

If you haven't realized we are not in Germany or Zimbabwe experiencing a hyper-inflation. Core inflation is around 3%, I would hardly call that 'hyper'.

I'm not stopping you from using Gold, if you want to use it fine. You can go around to all the shops in your community and make payments using gold. People might think its a bit strange, but if you think that you can achieve more economically using chunks of metal, than ATM cards or bank notes, then so be it. I'm sure many would enjoy the spectacle.

Gold has some value, but the fundamentals clearly show that the current price is inflated.

[foggyb]

If you haven't realized we are not in Germany or Zimbabwe experiencing a hyper-inflation. Core inflation is around 3%, I would hardly call that 'hyper'.

I'm not stopping you from using Gold, if you want to use it fine. You can go around to all the shops in your community and make payments using gold. People might think its a bit strange, but if you think that you can achieve more economically using chunks of metal, than ATM cards or bank notes, then so be it. I'm sure many would enjoy the spectacle.

You're out of your depth, grasshopper.

[Iseree22]

That ignore button works really well. Now I don't have to listen to those Newbs that think society is going back hundred years to the time we carried bullion around.

These Mongos don't realize that if people really wanted to do exchange in Gold, then people in Zimbabwe would be doing it!!! But despite massive hyper-inflation they would still rather use an external currency over Gold.

So that means, even if the U.S Dollar tanks, which it won't if anything it will become more valuable, people would start to use another currency before they use gold. But I bet you gold bugs think that all currencies around the world are all going to tank simultaneously. LOL

Once gold tanks, I'm sure that there will be traders that will want to employ you to count all the money they made from their gold shorts.

[cypherdoc]

i've noted that virtually everyone here as well as myself has invoked the "manipulation" theory as to why the price of pm's has been hit recently.  i also see this throughout the gold punditry blogs.  this has sparked plenty of emotions and animosity amongst all discussants.

but one has to remember that i have also outlined a clear, well defined, and logical analysis as to why gold may have peaked out here in the absence of manipulation.  and it has to do with the vast amounts of USD denominated bad debt that is contracting worldwide decreasing the number of virtual USD's in existence thru defaults.  as evidence of this just look at worldwide mortgage defaults along with the derivative instruments leveraged off of them.  the Fed's printing so far to the tune of $2 trillion since 2008 is small pittance compared to this.  this is the deflationary argument that is playing out across all markets and gold/silver has not been spared.

[cypherdoc]

In Germany and Zimbabwe they had to print million and trillion dollar notes so it would easier to carry. Of course, prices of some commodities doubled every hour at the height of the hyperinflationary crisis. There is a book called When Money Dies where the Germany Weimar crisis is chronicled by eyewitness accounts. There were were several anecdotal descriptions of people using gold and silver to survive day-to-day.

that is the path they chose to get money out into circulation and that choice was made under duress of the post War depression.

the US on the other hand, has created an astronomical amount of USD denominated debt over the 40 yrs since we depegged to get USD out into circulation during a mostly expansionary and favorable economic environment.  this is a distinct and clear difference btwn what is present now and what went on in Germany and Zimbabwe.  these are not paper USD's that can't vanish from the system or be burned in a furnace.  these are virtual debt USD's that can vaporize once the borrower defaults on the loan and the bank has to take the loss.  this decreases the USD money supply which is composed of the currency plus that same debt.  this drives up the USD value which we're seeing now and throws into reverse the bubbles we've seen the last 40 yrs in stocks, commods, RE, bonds, and gold/silver.