Posted On: Monday, January 21, 2008, 2:32:00 PM EST
Dear CIGAs,This is it.The DJII futures are down over 500 points.If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.
Everything you see happening is contained in the Formula, which will be the catalyst that takes gold again above $887.50 and to $1650.As long as you have followed my plea to have NO MARGIN on anything gold I see no problems.
If you have margin the rule is never meet a margin call, but sell whatever is needed to meet the call or more, never less.It is a better wager that the Fed will immediately drop rates by 1 full percentage point.
It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than ever seen before.
If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.
Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.Prices of hard and transportable assets rise regardless of business conditions.All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank."
<< <i>This just in from Mr. Sinclair, Opinions please!!
Posted On: Monday, January 21, 2008, 2:32:00 PM EST
Dear CIGAs,This is it.The DJII futures are down over 500 points.If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.
Everything you see happening is contained in the Formula, which will be the catalyst that takes gold again above $887.50 and to $1650.As long as you have followed my plea to have NO MARGIN on anything gold I see no problems.
If you have margin the rule is never meet a margin call, but sell whatever is needed to meet the call or more, never less.It is a better wager that the Fed will immediately drop rates by 1 full percentage point.
It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than ever seen before.
If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.
Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.Prices of hard and transportable assets rise regardless of business conditions.All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank." >>
He's dead on. But this race to the bottom has been going on for a while and will probably continue for many years to come. Reduce the rates and inject some liquidity and things will again stabilize.
This is likely to be a period during which things will proceed apace.
People should already be prepared but it's not the end of the world and those who haven't prepared still have time. When the last one makes the transition then the pendulum will reverse.
I believe the US Dollar will find solid support at .00
Only half kidding here.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>I believe the US Dollar will find solid support at .00
Only half kidding here. >>
In the long run this happens to ALL currencies.
Man fears time and time fears the pyramids. >>
Do you suppose the pyramids fear the Sphinx?
After all, it appears to be thousands of years older.
Tempus Fugit, indeed.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
CBOT Dow Jones Industrial Average (DJIA) and mini-sized Dow futures and options on futures have price limits and related trading halts. The trading halts are coordinated with trading halts at the primary securities market, the NYSE. These trading halts are often referred to as circuit-breakers.
NYSE Trading Halts:
-------------------------------------------------------------------------------- Successive NYSE trading halts are triggered by 10%, 20% and 30% intraday declines of the DJIA from its previous closing value. More precisely, circuit-breaker threshold levels are specified in index points and are calculated at the end of every quarter as 10%, 20% and 30% of the average daily closing value of the DJIA in the preceding calendar month, with rounding to the nearest 50 points. New quarterly circuit-breaker levels are announced on January 1, April 1, July 1, and October 1.
<< <i>Does the DOW have dandruff? I see head and shoulders. >>
I wrote the above on Jan 6. No one bothered to question what I meant. What I was referring to was a head and shoulders topping formation. Once the neck was broken at around 12,600, the next target is 11,000. There was alot of money to be made and equity saved.
This selloff was forcast about as clearly as Katrina hitting the Gulf Coast.
Hey I have an idea let’s turn our billions over to children with computers, surely they will make us a fortune!
Perhaps monkeys with darts was not such a bad idea.
Gold back up and headed to $1,000
“Jan. 24 (Bloomberg) -- Societe Generale SA said bets on stock index futures by a rogue trader caused a 4.9 billion-euro ($7.2 billion) trading loss, the largest in banking history.
Jerome Kerviel, 31, was the trader responsible, the Paris- based bank said today. Societe Generale plans to raise 5.5 billion euros from shareholders after the loss and subprime- related writedowns depleted capital. The Bank of France, the country's banking regulator, is investigating the alleged fraud.
The trading loss exceeds the $6.6 billion Amaranth Advisors LLC lost in 2006, and is more than four times the $1.4 billion of losses by Nick Leeson that brought down Barings Plc in 1995. An offer by Chairman Daniel Bouton to resign after the trades were discovered this past weekend was refused by Societe Generale's board, the bank said.”
``At first this seemed like a joke,'' said Nicolas Rutsaert, an analyst covering European banks at Dexia SA in Brussels. Societe Generale ``was a leader in derivatives.”
Cohodk...you da man! Your skills have been proven here again and again.
RE: SG SA...So, GS, you discount the chaos theory of economics eh? I suspect you could link people that were in the know about the problems at SG and with a little investigative effort, come up with a cause v.s. effect and see an interesting trail from discovery, to behind the scenes manipulation, to announcement. Actually, it appears that Ben played the cards correctly, for the moment (I wonder if he knew?). The 1, 2 punch of the SG situation in Europe with our housing market and associated toxic funds could have been a KO for the US financial markets. As it stands, we have taken some hits but we're still playin'. And...everybody that pays taxes and doesn't make toooo much money is gonna get a little cash from our uncle.
Here's a great and short read on the gold and silver ETF's. In essence, why they are possibly no better than old newspaper. An excellent analysis imo.
SO…YOU WANT TO SELL YOUR GOLD STOCKS AND BUY THE GOLD AND SILVER ETF's?
Richard J. Greene
I have heard from many investors inquiring if they should sell their gold stocks and just buy the gold and silver ETFs. The first thing they should understand is that doing so would prolong the time they must wait for gold and silver to reach their true market levels which are much higher. The gold and silver ETFs were created by such financial giants as JP Morgan and Barclay's Bank that also serve as custodians and sub-custodians. These are the very firms that have been involved in the process of short selling gold and silver in huge quantities. That they would be involved in creating the ETFs had to be considered as most unlikely unless they had nefarious purposes. What I mean by that is that when the gold and silver ETFs first came out the investment demand for gold and silver was just in the initial phases of taking off. The bullion banks and financial powers that have been involved in suppressing the prices of gold and silver needed an outlet to satisfy this additional demand for gold and silver when there was clearly no actual gold and silver to fulfill this additional demand.
Based on the surrounding circumstances you would have to be naïve if you believe that the gold and silver ETFs were created so that investors would have an easy way to get exposure to gold and silver without the burdens of taking delivery and finding a secure and safe location to store it. The one and only purpose was to fulfill a dire need to satisfy a growing and steady investment demand for gold and silver that has no hope of being fulfilled by the actual production or availability of real gold and silver. That no one can see this charade is truly amazing since it is so easily revealed that a second grader could understand it. I can give an example that should truly make the buyers of GLD or SLV seriously question their investment choices. There is simply no room for any additional demand for gold and silver, particularly investment demand which is already growing rapidly and exponentially. So what to do about this dilemma? If you are one of the big short sellers of gold and silver and see that the jig is up and investment demand has reached a level that will overwhelm your ability to keep it under wraps, how can you find an outlet for this demand? Why not provide a piece of paper that promises ounces of gold and silver since they know they can't produce the real thing? Gold production is in decline. The world's biggest producer, South Africa, reported a 12.7% decline year over year in production enabling China to surpass it as the largest producer.
The following example a second grader should be able to follow. Yesterday GLD traded at a price of $87.05 while gold futures were $882 and spot gold was at $881. I called my best sources and the best quote I could get for purchasing one ounce of physical gold was $897. So here is the question: If you were buying ownership of gold at an effective price of $870.50 for an ounce of gold by buying the gold ETF at $87.05, how does the gold ETF turn around and purchase real physical gold for you when the spot price is $11 higher, the futures price is $12 higher and the physical price is $27 higher? That is a neat trick. I wonder how they do it. YOU SHOULD START WONDERING TOO! Do you really believe the GLD ETF can survive loosing $27.00 for every ounce of gold that they buy for you? Now you know why the custodian and sub-custodian's agreements for these ETFs are so complicated and un-auditable. It would make sense that the GLD would have to trade at least $4-$5 higher than the price of gold if they were actually buying it, insuring it, guarding it, and delivering it. They say there is a sucker born every minute. This should help to prove that point.
If you can understand that the current economic and financial environment screams for protection through ownership of gold and silver, please stop shooting yourself in the foot by thinking that the ETFs will do anything but delay and muffle the rise of gold and silver and leave the ultimate holders with nothing but worthless paper at exactly the moment you will need gold and silver for your financial survival. Nothing compares with having the gold and silver in your own possession and the gold and silver ETFs are way down the list as far as safety goes, and far below even gold and silver stocks.
Richard J. Greene 22 January 2008 Clearwater, Florida www.thundercapital.com
We have discussed this before and I for one agree that one should take delivery of ones gold, at least up to a point, but then what.
If an investor has taken care of their other financial obligations, and wants to play in the paper markets during these volatile times, then what should they buy.
One cannot crunch the numbers on buying physical small amounts of gold and compare it to GLD.
GLD is not buying ounces they are buying tons, and yes there are management, storage, and security fees to be paid.
A year or so ago someone on the forum posted a thread called “gold or Google” The question was should one buy an ounce of gold or one share of Google?
I guess we have the answer to that question!
The answer would have been the same for GLD or Google.
If the pattern of the last few years holds, the dollar will get weaker as the Fed cuts the rates, and gold will go up. If someone one to make a few extra bucks buying and selling GLD in a quick electronic trade, why not? Perhaps these profits will give them more money to buy physical gold.
Regardless of the veracity of Mr. Green’s opinion, the world believes in paper, and they are going to invest in these vehicles.
As far as the bankers that control these funds, they are in it to make money. Why would they care if they make money long or short? Yes they have been big short sellers in the past but that was because they had inside information that the governments wanted the price of gold kept down and would manipulate the markets that way.
We are certainly getting to the point that the world governments can no long hold back demand, just like they can no longer contain the derivative monsters.
All that said, it is a very bad idea to have all of ones gold investments in these ETF’S. All paper is suspect at some point or another, and we can see what crazy games all of these folks play with our money.
Goldsaint, most of the topics we discuss tend to come around for an update. I found Greene's article a little different view of the ETF's. There are people who think they are buying the safety of gold via the ETF....some of them read here quite regularly.
Trading on the ETF is fine if you have physical bullion or a close substitute put away already. If one has no physical bullion I guess I can't quite understand why they would be playing solely with the ETF's. This article tends to support that reasoning.
<< <i>“Perhaps our elected officials can stop posturing”
Bear, Bear, Bear, this is all just to logical and the folks in Washington are NEVER going to do any of this!
As to the tax and give away money issue, I think it is important to remember that you can not give tax relief to the lower half of working Americans, they DO NOT PAY ANY FEDERAL TAXES!
Right now in our country if you are working and earning $37,000 per year you pay no Federal taxes and already get a rebate check in the mail for around $4,000.
True liberals think that anyone earning $50,000 plus per year falls in the wealthy category and must send in money to Washington to pay out the current rebates to the more than half of us that are already getting $4,000 in checks. >>
HMMMM last time i checked i thout OHIO was part of "OUR COUNTRY" i earn less than $37,000 a year and you bet your sweet you know what i pay FEDERAL TAXES!! and no i don't get $4000 back never have i've been at the same place for 19 year's, been married for 3 and every year are CPA has us file non-joint return and i owe each year the wife earn's around $55,000 and she get's a little back,SO if my CPA is stuped and you know somthing about filling tax return to get me $4,000 back, PLEASE ENLIGHTING ME!!! Thank's jpo
Ahhh, the sweet scent of gold crashing and burning! Sweet because I'm currently short, that is...
Salute the automobile: The greatest anti-pollution device in human history! (Just think of city streets clogged with a hundred thousand horses each generating 15 lbs of manure every day...)
The job loss figures today are troubling. We'll soon find out what effect a recession has on the price of gold / silver.
"Men who had never shown any ability to make or increase fortunes for themselves abounded in brilliant plans for creating and increasing wealth for the country at large." Fiat Money Inflation in France, Andrew Dickson White (1912)
I'm not buying this recent take down. We've had any number of these over the past few months. A little COT and PPT pressure to massively hit gold today at 10 am. I think it is more likely to spring right back. Sure, the Treasury Secretary says to buy stocks. And then yesterday GATA's $250K Wall Street Journal ad on gold manipulation is published. How ironic can you get? Talk about manipulation to try and buffer the GATA ad! Ok, the PPT juiced the dollar for one day. Let's see how they fare early next week. I guess the PPT wanted to show that they can still move the market down when they want. And what better time than to support Paulsen's words and difuse GATA's WSJ ad.
Nothing has changed with the banker's liquidity issue except that more and more "bad" news keeps popping up. If you were short, I hope you cashed out today already. It must have been the 17,000 jobs lost in January that boosted the dollar today (ie 30,000 jobs were expected to be lost....so this is actually good news).
Shorting gold is just another investment in paper. Knock yerself out! I'm simply tired government mismanagement coming home to roost in the form of hidden inflation. They can't hide the price of gold, now can they?
Q: Are You Printing Money? Bernanke: Not Literally
Well, it just took out 900 and has formed a nice plateau similar to when it held the 760 level for so long. Methinks 840-850 to 900-920 is a very comfortable place for the metal to reside for the near future even accounting for periodic volitility but mid-late February may help it find some appreciation. It wants 1000, folk are waiting for it to take 1000, it's come within touching distance of 1000, we'll just have to see but it could settle around 850 just the same. This is an interesting phenomenon and a fun drama watching the bounty of kings tussle with the modern paper boys...such fun, especially when you have a ticket to the game. To recall a quote from here, paraphrased of course, In times of a flood, which would you rather have, a boat or a certificate for a boat? PM, in the box. Everybody's a genius when things are going well, we will just have to watch the drama and see how it plays. In the meanwhile, steady accumulation can't have that strong a downside.
I'm still buying silver, this little dip is just a buying opportunity.
Trouble is, there is very little to be had locally.
As I posted in another thread, I checked the melt buy spread with 5 different shops last week. What I discovered was that they would all be happy to buy silver in any form, 90% or .999 but the problem was that people had been coming in in droves all over the city and trading gold for silver.
The ratio isn't right for that, but it has to mean something. Current ratios would indicate a trade the other way, but that's not what the bullion guys are doing.
All the B&M shops down here are flush with gold, so much so that it's affected the prices. I can buy K-Rands at $12 BACK of spot and Gold Eagles and Pandas at spot with a discount for multiples. When was the last time you ever heard of Pandas at less than spot, or Gold Eagles, for that matter?
We live in some weird times. Reminds me of the Hunter Thompson quote, "When the going gets weird, the weird turn pro."
I've been an incorporated precious metals trader/dealer/buyer/hoarder for many years now and I've never seen anything quite like this.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Iran Oil Bourse to deal blow to dollar Fri, 04 Jan 2008 20:45:41 Iran's Finance Minister Davoud Danesh-Jafari The long-awaited Iranian Oil Bourse, a place for trading oil, petrochemicals and gas in various non-dollar currencies, will soon open.
Iran's Finance Minister Davoud Danesh-Jafari told reporters the bourse will be inaugurated during the anniversary of the Islamic Revolution (February 1-11) at the latest.
"All preparations have been made to launch the bourse; it will open during the Ten-Day Dawn (the ceremonies marking the victory of the 1979 Islamic Revolution in Iran)," he said.
The Minister had earlier stated that the Oil Bourse is located on the Persian Gulf island of Kish.
Some expert opinions hold inauguration of the bourse cold significantly devalue the greenback.
dotcom bubble --> housing bubble --> ? next bubble all the cheap $$ is/will be running to ? instead of paying the piper.
Prescription = More 'salads' if overweight on 'Twinkie' debt. I like that analogy. The paragraph on what do we say to our neighbor showed too much common sense.
But it appears such a prescription is too painful for us Americans, so we get more promises to 'burn calories while you sleep.'
Don
(Thanks to RR for the link to the site.)
Do your best to avoid circular arguments, as it will help you reason better, because better reasoning is often a result of avoiding circular arguments.
the dotcom bubble was made up of venture capitalists, playing craps with 20 or so "start-ups".
if one hit the IPO gravy train...then the WHOLE investment paid off in spades. one hella money was 'given' to start-ups who did nothing but burn their money to buy furniture computers, spifs and perks ... cars and pad their wallets and hope to get bought out and then move on to the next. there was intense one upsmanship(sp), too.
others had the stock option tax issue of the dotcom craze, later.
office space on VC row was approaching 2k a foot on Sand Hill Rd (i think) ...all this near Stanford University / Palo Alto
To recall a quote from here, paraphrased of course, In times of a flood, which would you rather have, a boat or a certificate for a boat?
For the typical everything must be "easy" consumer, the boat certificate is the only way to go. It takes up less space, fits in a safe deposit box, and requires no upkeep. The only downside is that the line will be quite long at the boat shop when it comes time to cash in for the few boats still on the lot.
Difficult to argue with any of the postulations in that article. This is insanity for sure. When I'm happy to get 5.3% interest on my money, just slightly over the fed lending rate, then where is the benefit for me? Maybe I'm not getting ripped off but I'm sure not getting any love with my money. We are in some kind of socialist cycle where irresponsible lending behavior or irresponsible investing behavior is actually rewarded through economic stimuli, lending rate cuts, favorable IR s rules changes so they don't get penalized too bad. Hell, we sure don't what people going broke out there...bummer.
So, you get a no doc house for no down and maybe it's your family and you had a chance at the American dream and took it with an ARM in 3 years and now you're belly up because the ARM just jumped your payment another $600 and you were barely paying bills as it was. You're outta there, you walk for free, no IR s situation when the bank sells it for less than you owed (captial gains), two years and your foreclosure is cool with the credit agencies (better than bankruptcy) particularly if it was a business property, it's all good, just back up the uhaul and you're in an apartment before your credit is nicked and life is good. Much of the time ( I recall a 40% number) the houses were bought on speculation and the flippers just walked them and took no hickey because they didn't have any cash in them in the first place and if they were not renting them, they were flipping them. If you're one of the flippers, just send in the keys, no harm no foul. What the heck is that?
It's just astounding and there is the devil to be paid and he will get his money...his name may be Cheng or Ishmir but he will come to the door to get his money. So, everybody thinks it's all cool and the bad stuff will somehow just get fixed...hummmmmmmm. On the other hand, there is reason for optimism. There has been a lot of wealth created over the last few years both here and across the world. There are a lot of bad things in our economic system right now and we most certainly are entering a new, modern age and there will be changes. As 7 of 9 said on Star Treck..."You will adapt."
Same old thing...steady accumulation of PM, active savings plan, no CC debt, keep your investments diversified, buyer beware, and keep your radar image minimal. Good Luck
Just found this about Silver-Zinc batteries. This company (Zpower) is planning on ramping up production in 2008 and has a lot of interest from various companies looking for smaller, less toxic batteries. This may impact silver prices over the next decade if the technology becomes dominant.
G7 approves IMF gold sales - Italy econ minister: "This is arguably a good time to consider selling some of these gold holdings and investing the proceeds in financial securities with positive yields."
Comments
Opinions please!!
Posted On: Monday, January 21, 2008, 2:32:00 PM EST
Dear CIGAs,This is it.The DJII futures are down over 500 points.If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.
Everything you see happening is contained in the Formula, which will be the catalyst that takes gold again above $887.50 and to $1650.As long as you have followed my plea to have NO MARGIN on anything gold I see no problems.
If you have margin the rule is never meet a margin call, but sell whatever is needed to meet the call or more, never less.It is a better wager that the Fed will immediately drop rates by 1 full percentage point.
It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than ever seen before.
If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.
Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.Prices of hard and transportable assets rise regardless of business conditions.All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank."
he is ahead of the button and raising all-in
<< <i>This just in from Mr. Sinclair,
Opinions please!!
Posted On: Monday, January 21, 2008, 2:32:00 PM EST
Dear CIGAs,This is it.The DJII futures are down over 500 points.If the Federal Reserve fails to take emergency action before the US opening tomorrow, you will see the DJII open down 1000 points as the public joins this professional panic.
Everything you see happening is contained in the Formula, which will be the catalyst that takes gold again above $887.50 and to $1650.As long as you have followed my plea to have NO MARGIN on anything gold I see no problems.
If you have margin the rule is never meet a margin call, but sell whatever is needed to meet the call or more, never less.It is a better wager that the Fed will immediately drop rates by 1 full percentage point.
It is a slam dunk that all Western central banks will cut loose and flood the world with more liquidity than ever seen before.
If central banks fail to cause a torrent of liquidity from their unending check books then $450 trillion of derivatives will take us to the world of Mad Max.
Monetary inflation ALWAYS causes PRICE inflation even without strong business conditions.Prices of hard and transportable assets rise regardless of business conditions.All currencies fall and the stronger currency is the laggard in the race to the bottom of the tank." >>
He's dead on. But this race to the bottom has been going on for a while
and will probably continue for many years to come. Reduce the rates and
inject some liquidity and things will again stabilize.
This is likely to be a period during which things will proceed apace.
People should already be prepared but it's not the end of the world and
those who haven't prepared still have time. When the last one makes the
transition then the pendulum will reverse.
Only half kidding here.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>I believe the US Dollar will find solid support at .00
Only half kidding here. >>
In the long run this happens to ALL currencies.
Man fears time and time fears the pyramids.
<< <i>
<< <i>I believe the US Dollar will find solid support at .00
Only half kidding here. >>
In the long run this happens to ALL currencies.
Man fears time and time fears the pyramids. >>
Do you suppose the pyramids fear the Sphinx?
After all, it appears to be thousands of years older.
Tempus Fugit, indeed.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
Do you suppose the pyramids fear the Sphinx?
>>
Those who would harm Rosteau (Giza) must fear the Sphinx.
4th Quarter 2007 Dow Circuit Breakers:
10% 1350
20% 2700
30% 4050
CBOT Dow Jones Industrial Average (DJIA) and mini-sized Dow futures and options on futures have price limits and related trading halts. The trading halts are coordinated with trading halts at the primary securities market, the NYSE. These trading halts are often referred to as circuit-breakers.
NYSE Trading Halts:
--------------------------------------------------------------------------------
Successive NYSE trading halts are triggered by 10%, 20% and 30% intraday declines of the DJIA from its previous closing value. More precisely, circuit-breaker threshold levels are specified in index points and are calculated at the end of every quarter as 10%, 20% and 30% of the average daily closing value of the DJIA in the preceding calendar month, with rounding to the nearest 50 points. New quarterly circuit-breaker levels are announced on January 1, April 1, July 1, and October 1.
Chance favors the prepared mind.
<< <i>Does the DOW have dandruff? I see head and shoulders. >>
I wrote the above on Jan 6. No one bothered to question what I meant.
This selloff was forcast about as clearly as Katrina hitting the Gulf Coast.
Knowledge is the enemy of fear
Perhaps monkeys with darts was not such a bad idea.
Gold back up and headed to $1,000
“Jan. 24 (Bloomberg) -- Societe Generale SA said bets on stock index futures by a rogue trader caused a 4.9 billion-euro ($7.2 billion) trading loss, the largest in banking history.
Jerome Kerviel, 31, was the trader responsible, the Paris- based bank said today. Societe Generale plans to raise 5.5 billion euros from shareholders after the loss and subprime- related writedowns depleted capital. The Bank of France, the country's banking regulator, is investigating the alleged fraud.
The trading loss exceeds the $6.6 billion Amaranth Advisors LLC lost in 2006, and is more than four times the $1.4 billion of losses by Nick Leeson that brought down Barings Plc in 1995. An offer by Chairman Daniel Bouton to resign after the trades were discovered this past weekend was refused by Societe Generale's board, the bank said.”
``At first this seemed like a joke,'' said Nicolas Rutsaert, an analyst covering European banks at Dexia SA in Brussels. Societe Generale ``was a leader in derivatives.”
RE: SG SA...So, GS, you discount the chaos theory of economics eh? I suspect you could link people that were in the know about the problems at SG and with a little investigative effort, come up with a cause v.s. effect and see an interesting trail from discovery, to behind the scenes manipulation, to announcement. Actually, it appears that Ben played the cards correctly, for the moment (I wonder if he knew?). The 1, 2 punch of the SG situation in Europe with our housing market and associated toxic funds could have been a KO for the US financial markets. As it stands, we have taken some hits but we're still playin'. And...everybody that pays taxes and doesn't make toooo much money is gonna get a little cash from our uncle.
Press GO.
Now that's an oxymoron if I ever heard one.
Here's a great and short read on the gold and silver ETF's. In essence, why they are possibly no better than old newspaper.
An excellent analysis imo.
SO…YOU WANT TO SELL YOUR GOLD STOCKS
AND BUY THE GOLD AND SILVER ETF's?
Richard J. Greene
I have heard from many investors inquiring if they should sell their gold stocks and just buy the gold and silver ETFs. The first thing they should understand is that doing so would prolong the time they must wait for gold and silver to reach their true market levels which are much higher. The gold and silver ETFs were created by such financial giants as JP Morgan and Barclay's Bank that also serve as custodians and sub-custodians. These are the very firms that have been involved in the process of short selling gold and silver in huge quantities. That they would be involved in creating the ETFs had to be considered as most unlikely unless they had nefarious purposes. What I mean by that is that when the gold and silver ETFs first came out the investment demand for gold and silver was just in the initial phases of taking off. The bullion banks and financial powers that have been involved in suppressing the prices of gold and silver needed an outlet to satisfy this additional demand for gold and silver when there was clearly no actual gold and silver to fulfill this additional demand.
Based on the surrounding circumstances you would have to be naïve if you believe that the gold and silver ETFs were created so that investors would have an easy way to get exposure to gold and silver without the burdens of taking delivery and finding a secure and safe location to store it. The one and only purpose was to fulfill a dire need to satisfy a growing and steady investment demand for gold and silver that has no hope of being fulfilled by the actual production or availability of real gold and silver. That no one can see this charade is truly amazing since it is so easily revealed that a second grader could understand it. I can give an example that should truly make the buyers of GLD or SLV seriously question their investment choices. There is simply no room for any additional demand for gold and silver, particularly investment demand which is already growing rapidly and exponentially. So what to do about this dilemma? If you are one of the big short sellers of gold and silver and see that the jig is up and investment demand has reached a level that will overwhelm your ability to keep it under wraps, how can you find an outlet for this demand? Why not provide a piece of paper that promises ounces of gold and silver since they know they can't produce the real thing? Gold production is in decline. The world's biggest producer, South Africa, reported a 12.7% decline year over year in production enabling China to surpass it as the largest producer.
The following example a second grader should be able to follow. Yesterday GLD traded at a price of $87.05 while gold futures were $882 and spot gold was at $881. I called my best sources and the best quote I could get for purchasing one ounce of physical gold was $897. So here is the question: If you were buying ownership of gold at an effective price of $870.50 for an ounce of gold by buying the gold ETF at $87.05, how does the gold ETF turn around and purchase real physical gold for you when the spot price is $11 higher, the futures price is $12 higher and the physical price is $27 higher? That is a neat trick. I wonder how they do it. YOU SHOULD START WONDERING TOO! Do you really believe the GLD ETF can survive loosing $27.00 for every ounce of gold that they buy for you? Now you know why the custodian and sub-custodian's agreements for these ETFs are so complicated and un-auditable. It would make sense that the GLD would have to trade at least $4-$5 higher than the price of gold if they were actually buying it, insuring it, guarding it, and delivering it. They say there is a sucker born every minute. This should help to prove that point.
If you can understand that the current economic and financial environment screams for protection through ownership of gold and silver, please stop shooting yourself in the foot by thinking that the ETFs will do anything but delay and muffle the rise of gold and silver and leave the ultimate holders with nothing but worthless paper at exactly the moment you will need gold and silver for your financial survival. Nothing compares with having the gold and silver in your own possession and the gold and silver ETFs are way down the list as far as safety goes, and far below even gold and silver stocks.
Richard J. Greene
22 January 2008
Clearwater, Florida
www.thundercapital.com
roadrunner
RR,
We have discussed this before and I for one agree that one should take delivery of ones gold, at least up to a point, but then what.
If an investor has taken care of their other financial obligations, and wants to play in the paper markets during these volatile times, then what should they buy.
One cannot crunch the numbers on buying physical small amounts of gold and compare it to GLD.
GLD is not buying ounces they are buying tons, and yes there are management, storage, and security fees to be paid.
A year or so ago someone on the forum posted a thread called “gold or Google”
The question was should one buy an ounce of gold or one share of Google?
I guess we have the answer to that question!
The answer would have been the same for GLD or Google.
If the pattern of the last few years holds, the dollar will get weaker as the Fed cuts the rates, and gold will go up. If someone one to make a few extra bucks buying and selling GLD in a quick electronic trade, why not? Perhaps these profits will give them more money to buy physical gold.
Regardless of the veracity of Mr. Green’s opinion, the world believes in paper, and they are going to invest in these vehicles.
As far as the bankers that control these funds, they are in it to make money. Why would they care if they make money long or short? Yes they have been big short sellers in the past but that was because they had inside information that the governments wanted the price of gold kept down and would manipulate the markets that way.
We are certainly getting to the point that the world governments can no long hold back demand, just like they can no longer contain the derivative monsters.
All that said, it is a very bad idea to have all of ones gold investments in these ETF’S.
All paper is suspect at some point or another, and we can see what crazy games all of these folks play with our money.
It is pretty but PM in the box is mobettah for me.
Trading on the ETF is fine if you have physical bullion or a close substitute put away already. If one has no physical bullion I guess I can't quite understand why they would be playing solely with the ETF's. This article tends to support that reasoning.
Dr. Fekete discusses gold's monetary role
roadrunner
<< <i>“Perhaps our elected officials can stop posturing”
Bear, Bear, Bear, this is all just to logical and the folks in Washington are NEVER going to do any of this!
As to the tax and give away money issue, I think it is important to remember that you can not give tax relief to the lower half of working Americans, they DO NOT PAY ANY FEDERAL TAXES!
Right now in our country if you are working and earning $37,000 per year you pay no Federal taxes and already get a rebate check in the mail for around $4,000.
True liberals think that anyone earning $50,000 plus per year falls in the wealthy category and must send in money to Washington to pay out the current rebates to the more than half of us that are already getting $4,000 in checks. >>
HMMMM last time i checked i thout OHIO was part of "OUR COUNTRY" i earn less than $37,000 a year and you bet your sweet you know what i pay FEDERAL TAXES!! and no i don't get $4000 back never have i've been at the same place for 19 year's, been married for 3 and every year are CPA has us file non-joint return and i owe each year the wife earn's around $55,000 and she get's a little back,SO if my CPA is stuped and you know somthing about filling tax return to get me $4,000 back, PLEASE ENLIGHTING ME!!! Thank's jpo
Plus the feds will pay your 401k contribution, too.
"The silver is mine and the gold is mine,' declares the LORD GOD Almighty."
<< <i>That is one hysterical video!!
Indeed! Superb!!!
These will be the first six people in the reeducation centers.
Author! Author!
edited to add smiley.
world will end in 11 days...Have a nice day .
Camelot
<< <i>I have it on good authority, that the
world will end in 11 days...Have a nice day .
So I should probably just skip my hemorrhoid surgery then, huh?
Gold up more than $10 within an hour of the .5 point rate cut...impressive.
Lou Dobbs alert: Illegal immigrants may get rebates
Linkage
We have had some huge rate cuts and the dollar is sinking like a rock. When do we go to $1,000 GOLD????
We get $4000? Life is good.
(Just think of city streets clogged with a hundred thousand horses each generating 15 lbs of manure every day...)
i want to think i saw it coming. i sold a bunch of silver and i can
just picture a local person i sold it to thinking he is buried in it
i see silver back at 15 an ounce shortly. gold 850-900.
i held my gold though. i like it too much right now to sell it!
;-)
That's a mighty brave bet you got there.
If I was in your shoes, I know I wouldn't be able to sleep at nights.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Ah, the good old days.......................
I knew it would happen.
Nothing has changed with the banker's liquidity issue except that more and more "bad" news keeps popping up. If you were short, I hope you cashed out today already. It must have been the 17,000 jobs lost in January that boosted the dollar today (ie 30,000 jobs were expected to be lost....so this is actually good news).
roadrunner
the market is jumpy but things haven't changed
just the window dressing
I knew it would happen.
Trouble is, there is very little to be had locally.
As I posted in another thread, I checked the melt buy spread with 5 different shops last week. What I discovered was that they would all be happy to buy silver in any form, 90% or .999 but the problem was that people had been coming in in droves all over the city and trading gold for silver.
The ratio isn't right for that, but it has to mean something. Current ratios would indicate a trade the other way, but that's not what the bullion guys are doing.
All the B&M shops down here are flush with gold, so much so that it's affected the prices. I can buy K-Rands at $12 BACK of spot and Gold Eagles and Pandas at spot with a discount for multiples. When was the last time you ever heard of Pandas at less than spot, or Gold Eagles, for that matter?
We live in some weird times. Reminds me of the Hunter Thompson quote, "When the going gets weird, the weird turn pro."
I've been an incorporated precious metals trader/dealer/buyer/hoarder for many years now and I've never seen anything quite like this.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Fri, 04 Jan 2008 20:45:41
Iran's Finance Minister Davoud Danesh-Jafari
The long-awaited Iranian Oil Bourse, a place for trading oil, petrochemicals and gas in various non-dollar currencies, will soon open.
Iran's Finance Minister Davoud Danesh-Jafari told reporters the bourse will be inaugurated during the anniversary of the Islamic Revolution (February 1-11) at the latest.
"All preparations have been made to launch the bourse; it will open during the Ten-Day Dawn (the ceremonies marking the victory of the 1979 Islamic Revolution in Iran)," he said.
The Minister had earlier stated that the Oil Bourse is located on the Persian Gulf island of Kish.
Some expert opinions hold inauguration of the bourse cold significantly devalue the greenback.
MK/JG/RE/HAR
http://www.presstv.ir/detail.aspx?id=37468§ionid=351020103
dotcom bubble --> housing bubble --> ? next bubble all the cheap $$ is/will be running to ? instead of paying the piper.
Prescription = More 'salads' if overweight on 'Twinkie' debt. I like that analogy. The paragraph on what do we say to our neighbor showed too much common sense.
But it appears such a prescription is too painful for us Americans, so we get more promises to 'burn calories while you sleep.'
Don
(Thanks to RR for the link to the site.)
if one hit the IPO gravy train...then the WHOLE investment paid off in spades. one hella money was 'given' to start-ups who did nothing but burn their money to buy furniture computers, spifs and perks ... cars and pad their wallets and hope to get bought out and then move on to the next. there was intense one upsmanship(sp), too.
others had the stock option tax issue of the dotcom craze, later.
office space on VC row was approaching 2k a foot on Sand Hill Rd (i think) ...all this near Stanford University / Palo Alto
i think after typing i am in agreement
For the typical everything must be "easy" consumer, the boat certificate is the only way to go. It takes up less space, fits in a safe deposit box, and requires no upkeep. The only downside is that the line will be quite long at the boat shop when it comes time to cash in for the few boats still on the lot.
roadrunner
So, you get a no doc house for no down and maybe it's your family and you had a chance at the American dream and took it with an ARM in 3 years and now you're belly up because the ARM just jumped your payment another $600 and you were barely paying bills as it was. You're outta there, you walk for free, no IR s situation when the bank sells it for less than you owed (captial gains), two years and your foreclosure is cool with the credit agencies (better than bankruptcy) particularly if it was a business property, it's all good, just back up the uhaul and you're in an apartment before your credit is nicked and life is good. Much of the time ( I recall a 40% number) the houses were bought on speculation and the flippers just walked them and took no hickey because they didn't have any cash in them in the first place and if they were not renting them, they were flipping them. If you're one of the flippers, just send in the keys, no harm no foul. What the heck is that?
It's just astounding and there is the devil to be paid and he will get his money...his name may be Cheng or Ishmir but he will come to the door to get his money. So, everybody thinks it's all cool and the bad stuff will somehow just get fixed...hummmmmmmm. On the other hand, there is reason for optimism. There has been a lot of wealth created over the last few years both here and across the world. There are a lot of bad things in our economic system right now and we most certainly are entering a new, modern age and there will be changes. As 7 of 9 said on Star Treck..."You will adapt."
Same old thing...steady accumulation of PM, active savings plan, no CC debt, keep your investments diversified, buyer beware, and keep your radar image minimal. Good Luck
JMHO
For entertainment purposes only
This company (Zpower) is planning on ramping up production in 2008 and has a lot of interest from various companies looking for smaller, less toxic batteries. This may impact silver prices over the next decade if the technology becomes dominant.
Zpower website
Link to the full article