I'm extremely surprised by the markerts since March. Either this recovery is another house of cards waiting to blow over or last March's low was artificially talked down by BHO's depression D&G agenda. Either way the game is so rigged with corruption being in it using sound fundamentals is silly. How can value be set? That would require sound reporting. It's just and has been for quit some time a momentum market of rotation...a traders paradise.
No one knows when the music will stop or when fat ladies will sing except for the conductors at Government Sachs. Be nimble Jack.
I am curious if us giving up our promises to the Czechs and Pols has anything to do with some behind the scenes economic deal our leadership is trying to hammer out with Russia."
Comrade RG we are all socialist now! No since in asking for anything in return from the Russians, that would not be brotherly.
Israel will have to deal with Iran; Russia is not going to help us. They see us as weak, as they once were, and we are forced to cancel many things we can no longer afford.
<< <i>I am curious if us giving up our promises to the Czechs and Pols >>
maybe its just time to stop spending a trillion a year on an imperialistic military and bring them home.
but that wont sit right with the military industry >>
It appears we elected someone who agrees that we don't need to honor our commitments to our friends, and to not worry about potential enemies. You should be happy it sounds like.
However, that was not my point, this thread is about the economical implications of world events, and that is where I was going with my statement. Is this possibly some sort of prelude to Obama's UN Speech?
Will he now go along with some sort of new international reserve currency basket idea?
<< <i>I am curious if us giving up our promises to the Czechs and Pols has anything to do with some behind the scenes economic deal our leadership is trying to hammer out with Russia."
Comrade RG we are all socialist now! No since in asking for anything in return from the Russians, that would not be brotherly.
Israel will have to deal with Iran; Russia is not going to help us. They see us as weak, as they once were, and we are forced to cancel many things we can no longer afford. >>
The Chosen One looks to be a Chamberlain searching for his Munich. Back then it was Britain and France walking away from promises to the Czechs.
Willie does a nice hatchet job on Barrick but probably richly deserved. They are undoubtedly a good reason why gold isn't a lot higher now. Some suggest they have been in the back pocket of the Treasury/JPM/GS for a long time. And as I recall I thought I once read that the Carlyle Group or the Bush family was connected with Barrick or at least helped pave their way. JW mentions that 2 yrs ago Barrick claimed to have removed all hedges but recanted that to mean all "operating mine" hedges. So all the ounces in future and current mining projects were not included. Now 2 yrs later they are claiming to become 100% hedge free in 12 months. The only problem is that per the Barrick numbers it doesn't work out. JW states that 2 MILL ounces will still remain hedged. And this assumes that their $5.6 BILL goes to buy them gold rather than to continue to shore up the balance sheet with additional derivatives. An interesting read for those that trade gold stocks or wonder why gold didn't break $1000 well before March 2008. Note: most of the Barrick reference's are in the front and end of the linked article.
I didn't have any issues with what Eagle Eye posted earlier. Those that haven't contributed before are more than welcome.
<< <i>Will he now go along with some sort of new international reserve currency basket idea? >>
With all the debt and liabilities past Administrations have created and the trillions that this Administration has added on, we may have no choice. We are bankrupt. All the taxing in the world (including the middle class) will not make a dent in our growing debt.
The printing press has delayed the inevitable but time may have run out.
The dollar needs to crash and inflate a lot of the debt away. If that happens, other countries will demand a basket of currencies or an international currency with some of it backed by gold.
American Numismatic Association Governor 2023 to 2025 - My posts reflect my own thoughts and are not those of the ANA.My Numismatics with Kenny Twitter Page
I wonder if the barrick offering wasnt just a smart play to divert $4 billion dollars away from gold purchases. After all those who buyin become "gold vested' and have not taken any gold out of the market. Barrick can drag out the dehedging for years.
The end result is money diverted from the gold market at a very critical time.
<< <i>we don't need to honor our commitments to our friends, >>
Oh yeah, The Czecks and Poles have done so much for us lately that we really need to spend billions building them a huge missle defense system. Besides, who is going to nuke them?? The only nuke capability in the area is Russia and thier military could overrun them both in weeks. I doubt if it was ever about them and a lot more about the billion in profits for the defense contractors.
<< <i>I wonder if the barrick offering wasnt just a smart play to divert $4 billion dollars away from gold purchases. After all those who buyin become "gold vested' and have not taken any gold out of the market. Barrick can drag out the dehedging for years.
The end result is money diverted from the gold market at a very critical time.
<< <i>we don't need to honor our commitments to our friends, >>
Oh yeah, The Czecks and Poles have done so much for us lately that we really need to spend billions building them a huge missle defense system. Besides, who is going to nuke them?? The only nuke capability in the area is Russia and thier military could overrun them both in weeks. I doubt if it was ever about them and a lot more about the billion in profits for the defense contractors. >>
If Poland is so ignorant to have sent Polish boys and girls to war in Iraq to support this government, in return for something then they deserve to get fked. Just like ANYone who believe these lowlifes. Perhaps the Polish people need to wake up and realize that it's THEIR government who screwed them just like it's time WE wake up ( based on the protests in D.C. many of us have awakened ). They are not our family, they are not our friends, they are very hungry parasites who cannot stop stealing and spending.
This will continue to fuel the market in hard assets. And this is worldwide.
A long, long time ago, Ike visited Fort Knox. He approached the gate. A soldier saluted and said, "Sorry, Mr. President, I can't allow you to gain entrance."
Ike said, "I am the President of the United States. I order you to stand down."
The guard responded, "Sir, with most respect. I can't allow you inside."
"Why," asked Ike.
The soldier pointed at Fort Knox and said, "Because there's nothing inside that building."
Ike shrugged, spun on his heels, and yelled back over his shoulder, "Double the guard!"
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“I didn't have any issues with what Eagle Eye posted earlier. Those that haven't contributed before are more than welcome.”
Well-said RR
I also personally see no reason to remain the policeman of the world, but the money that might be saved on these ventures will not be spent to make the U.S. stronger.
Any money saved from these ventures is simply going to be spent in triplicate in the socializing of America.
Not only have we spent our blood and treasure over the last few decades on worldwide police work, but also we have spent our blood and treasure trying to make the U.S. a socialist’s country. Both of these are failed policies that have led us to ruin.
A Godless country where politicians believe they can change the will of the creator to equalize the destinies of all men is doomed to failure.
"The dollar needs to crash and inflate a lot of the debt away. If that happens, other countries will demand a basket of currencies or an international currency with some of it backed by gold."
...becoming more mainstream in the way people are talking and thinking. Ultimately something will have to happen as we are indeed in debt well beyond our ability to work our way out of it. Our fiat of the USD is only backed by the full faith in something that no one has any faith in anymore, in addition to not having any real liquid assets to back the buck other than our compromised GDP. Throw that in with a bunch of self indulgent political self preservationists vowing to debase our financial legacy even further with wild programs that only promise financial servitude instead of enduring freedoms and we have our current impasse. The stunning thing is that most folk seem completely oblivious to this failure and just wait for the economy to improve instead of taking to the streets and calling BS...well, sheep get sheared.
Basket of international currencies partially backed by precious metal reserves and issued as a global dollar or whatever...yeah, seems like a no brainer especially if we are going to respond to the global economy in some kind of sensible way; we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in. The concept of the Euro was built on this idea and it is time to take the concept to the next level. China may lead the way forward as they have the reserves and the global influence to push this to the here and now.
The dollar will have to be revalued or crashed or cancelled in lieu of some replacement currency as the age of dead presidents appears to have run its course. The only way to get rid of this crushing debt is to eliminate the basis of that debt, aka the USD; it's the same as declaring bankruptcy at the national level. The gov and people will have to visit that question of whether we sacrifice the currency to save the gov or lose the gov to a failed currency...gov should wins this one. Of course, there is the third option of a large scale war. Most folk just think this is a temporary liquidity problem.
we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in
Yeah, it starts out as that. Who actually thinks that an international body of governments, an international collective if you will - will administer an international currency any better than the UN administered "Food for Oil"?
Throw the large international banks into the mix, and who actually thinks that things will work out well for the folks?
I doubt it.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in
<< <i>
We have that already. It's called gold. >>
Agree. No one has figured out how to print gold.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Volcker's comments will go right over the head of 99% of the country or just not be read. But I do find it strange that the administration plucked Volcker from the 1970's to be an economic advisor today. His opinion would be at odds with the Goldman Sachs' types also part of the current administration. But what he says is dead on. Whether TPTB have interest in acting upon it is a different story. Volcker may be there just for cover while the game is extended another few innings with the same rules intact. What do they care who pays their bonuses as long as they get a big fat one every year? The banks and hedge funds are in it for themselves even if it means taking down the financial system in order to profit. It's like giving the keys of your car to your 12 year old and telling him to be responsible with the vehicle (this is what Greenspan did by allowing the banks to become less and less regulated). The banks like the system as it currently stands and won't take changes lightly. Each time they don't get what they want they push the SM down until they got some money. It's a strange version of "free enterprise."
The IMF gold sales are now approved except for a timetable. But the sales won't start any sooner than 2010 and it will be piece-meal over several years just like the ECB sales so as not to upset the world gold trade. They might also decide to sell it to central banks in which case it would have little to no effect on the market.
AH makes a number of solid points in this article:
-gold in inflation adjusted terms is still only 43% of the 1980 high -the CPI has increased 2.8X since 1980.....gold has not. -broad based money supply mzm has increased by 11.2X since 1980 -gold spent 2 yrs following the 1980 peak above a $1000 inflation adjusted level (ie $1000 "real" level is really not new) -the 53 trading day parabolic blowoff starting in Nov. 1979 was at 6X the daily rate seen in the current market's best move. The mania stage of this market is still far away. -gold has nearly quadrupled since its secular bull’s beginnings in April 2001, a 297% gain compared to the S&P 500’s 7% loss over this 8+ year span. And pog is still only at 43% of 1980 real prices.
and the key point of the article:
-gold had been in a channel where the first attempt over $1000 was well above that channel. A sharp correction had to follow. Almost 2 years later that channel is much higher up and far above the base level of $650-$700 where gold moved from in August 2007. The new base is $200 higher than the older one. Gold has moved to the top of the channel but unlike the case of March 2008, is not far above it. A pull back to the bottom of the channel ($800-$850) would certainly not change the long term trend. AH simply states, gold is not stupidly overbought at $1000....it is merely "within trend." In 2008, $1000 gold was not within the channel trend, but today it is.
Now if $Cash4Clunkers offered prices rolled back to 1982 levels (like gold) then I probably would have become a Cash for Clunkers customer.
Droke is still presenting his down cycle convergences in 2012-2014. In fact he sees depression type conditions in the economy during that period. Hence one could call him a deflationist though he is simply a contrarian to whatever the popular sentiment happens to be. Therefore, with the sentiment of a Sept/Oct. crash looming he still feels the SM will climb its wall of worry through the rest of the year with a possible short pullback along the way. He also feels that gold and silver would be one of the few assets he would even consider in the "buy and hold" category over the next 5 years and feels their prices will be much higher by 2014. For the rest of this year he doesn't really see gold going higher than $1050 because of the economy, even though years ending in "9" have often produced big runs in gold as the 10 yr cycle peaks. He believes that if you are going to buy PM's that they should be at least 15-20% of your portfolio.
The gold naysayers should take a look at what Droke has to say. If Droke is positive about gold, that trumps a dozen of the typical gold bull newsletter writers. He marches to his own drum and therefore there tends to be little to no hype in any of his analysis. He just takes the information that the market presents and goes from there. He's not the type of analyst to look at $1,000 gold and say it's too high because it's 4 digits or because the bankers will never let it stay this high. He's already written about expecting a rally in the dollar and treasuries in later 2009, their last hurrah if you will.
Palha, like Droke above, is a good market tactician that usually has a different slant than anyone else. When the two of them are in agreement that's a convincing sign imo. I consider both of them to have views that are typically spot on for the big picture yet they don't seem to follow the hoard of other analyists. They keep things simple. SP is not seeing a housing recovery and sees years of headwinds coming. But like Droke, he recommends PM's on the pull backs. And these 2 guys are anything but gold bugs and have sometimes bashed gold/silver over the past few years when they didn't show any strength coming. Between Hoye, Droke, and Palha it's tough to find a better trio of sane thinkers in insane markets.
What's Money? Suppose this earth had no PM's and nothing that we place value on, or tend to hoard or save? No Gold, silver, platinum, nothing of value. Just food and water.
Trade your cow for a horse. Barter is 'money' for lack of a better word.
That becomes cumbersome, and someone says, why don't we all agree to use specially made token.
All nations want to and have to control their own money. (just accept that for a moment)
Since this hypothetical scenario does not allow for the token to be backed by anything like gold, etc, people naturally trust it just as they trusted a cow for a horse. As years go by, the idea of barter a cow/horse seems absurd.
Our idea that gold has value and is an asset is a temporary 'state of mind'. It exists now, but for no good reason other than 'that's the way it used to be'.
It is only that it was once connected to the USD that we are a bit ticked off.
Hey, I do not trust bankers or the fed or politicians a bit, but this is not about that, so bear w/me........
OTOH, we have trusted this fiat currency method of purchase..... yet we still feel compelled to hoard some silver/gold, etc. I do that myself out of habit. Then I thought about the barter scenario, and the risk of owning gold: confiscation and manipulation mostly.
Then looking at actual numbers, I see that the US would not be nearly as prosperous (yes, it's crappy now, but put it in perspective with other countries in the history of mankind).
1. there is not enough gold above ground to handle daily commerce in the US. It cannot back the USD, unless gold was valued at say $30,000 an ounce. Then there may be enough gold so people could buy things using something actually backed by gold. But, the US only owns about 10,000 tons...........out of 158,000 above ground supplies.
Also..........
The US GDP in 2008 was $14 Trillion.
Known gold reserves 'above ground' worldwide = 158,000 tonnes = $4.8 trillion if gold is $1007.50/oz.
The US has about 10,000 tonnes. The non-manipulated market value would need to be $30K/oz to back the FRN's.
sure, the dollar can be and is being devalued, but gold is not the 'easy fix to the problem' that many subscribe to. Same with silver. And, old has not kept pace w/inflation over the past 100 years.
Sure, if the dollar was backed by gold, it would have, but there is not enough gold to expand the economy to the extent that most americans decided they liked. They want their granite countertops and suv's and plasma tv's and suburbs. I do too, but hey, gold isn't going to solve any problems. It is so manipulated, I am surprised at the number of folks who buy it.
Does the amoung of PM's in existence necessarily need to represent the value of goods and services in existence?
My answer is - kind of. The value of fiat money must represent something physical, IMO, as opposed to just faith in a government. To that extend it does. Of course, any two people can always barter between themselves, but people are just nuts, IMO, if they are willing to trade something valuable for something worthless... but that is today's society.
Let's not forget that bankers and govt's came off their public/private gold standard whenever it suited them (wars, inflation, etc.). Why gold may not be a cure today, it wasn't the cause of any problems in the 19th centuries either. Fiat was and always will be the culprit. One exception might be the massive quantities of silver that were mined in the 1870's and 1880's and were forced down everyone's throat. In that case the money supply (ie silver) actually dramatically increased and caused inflation, just like printing boat loads of fiat does today.
Our idea that gold has value and is an asset is a temporary 'state of mind'. It exists now, but for no good reason other than 'that's the way it used to be'.
It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. Central banks don't claim to have hoarded 31,000 tons of it because it's not an asset. As far as recorded human history goes, it's always been this way with gold. Until that changes, I'll go with the trend. Whether it was connected to the US dollar has no bearing on anything. Gold is a store of wealth that cannot yet be mined or created in great quantity...hence it's value along with the various utilitarian puroses it maintains. It has also been once connected to every current and former fiat currency that ever existed.
And, gold has not kept pace w/inflation over the past 100 years.
It most certainly has from a price-wise basis. The old thumbrules of a good quality used suit (or is it 2? and a gun for one ounce of gold still rings true. About the same number of ounces of gold bought a Ford in the early 1900's as it does today. What hasn't maintained the pace with inflation are the prices of homes, education, health care, litigation, DOW, and a few other examples. Home prices and the DOW re on their way back to the norm vs. gold as we speak. The others may never come back. If you are talking about catching up to monetary inflation then gold still has lots to do from the overabundance of fiat printing and electronic banking ledgers since 1980....and it is currently working on it. The distortion of interest rates and exporting our price inflation overseas since the 1980's by importing cheap Asian goods was only a temporary reprieve. Within 5 yrs from today gold will have monetarily evened up the score with the dollar. Gold had a mere 9 yrs in the 1970's to try and even up decades of monetary abuse commencing in the 1930's. By 1982 a number of daggers were thrown into the PM's and commodities to keep them down for 20 years. Since 2002 everything but the kitchen sink has been tossed at gold and silver to keep them managed to a measly 300% increase over 7 years. Few other asset classes can claim that.
Sure, if the dollar was backed by gold, it would have, but there is not enough gold to expand the economy to the extent that most americans decided they liked.
The expansion of the US in the 19th century on the outdated gold standard was a thing to behold...and if you polled most Americans I think they would have approved...well, maybe except for the native Americans who had their property pulled out from under them. The oil industry, railroads, and shipbuilders seemed to have all the money they needed to expand quite rapidly. The nation went from a farming oriented society in 1800 to a viable world industrial power by the end of the 19th century, all that time maintaining a constant dollar value with zero overall inflation. And I suppose the expansion was done with an expanding monetary base that basically cheated the gold standard. Who was watching the banks to ensure they kept the proper gold backing? The few upsets along the way (ie panics) were caused by wars and other distortions in the paper banking system when govt and/or private bankers just got too carried away with their lending....the same old story. Fiat under banker control is always the cause...but blame it on gold is a nice refrain. If the US didn't massively expand in the 19th century I'd like to know what we call that? The "what me worry" instant gratification society is unfortunately an abberration born of unlimited credit is now shrinking away. It wasn't real as the gains were never going to be permanent since they were based on credit and banking smoke and mirrors. None of the paper gains were real either...except for those lucky few who cashed out early and diversified into tangible assets/goods that maintained their value.
Until the banks have 3,000 tanker ships of oil in their vaults rather than 30,000 tons of gold we'll have to stick with precious metals as the viable alternative for divisible and mobile money. 3000+ years of history supports it. Bankers hate the hard metal backed system (but love the metal when it's in their vaults).....good enough reason to continue to use it.
Speaking of taking land from the Native Americans, eminent domain was recently exercised in New London, CT where the case was ultimately decided by the United States Supreme Court. The homeowners lost and an entire several square block area was vacated. The plan was to build an impressive downtown addition with luxury hotels, etc. Well I toured that area a few weeks ago when taking a tour of the Coast Guard cutter Eagle. It looks like a 3rd world country with nothing by desolation as if a bomb went off. Nothing has been done to "improve" these properties except to bulldoze the homes/apts over. All plans were shelved because developers got cold feet when the economy started heading south. So until things turn rosy again and banks are lending, that part of New London, CT will remain a wasteland with appliances strewn about, cars left behind, and concrete housing foundations nearly everywhere. A "temporary" remembrance to eminent domain.
<< <i>It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. >>
If you can come up with some other medium of exchange that beats gold in portability, durability, and value/unit then by all means abandon gold. The fact remains that there is no better meium of exchange than gold. Food products are difficult to store and decay, or you have to feed them. Other commodities are too bulky and difficult to store or require maintenance. Gold really is the only thing that is superior in all aspects for a store of wealth, that I can think of...
<< <i>Jungle, a couple of concepts you allude to... Does the amoung of PM's in existence necessarily need to represent the value of goods and services in existence? My answer is - kind of. The value of fiat money must represent something physical, IMO, as opposed to just faith in a government. To that extend it does. Of course, any two people can always barter between themselves, but people are just nuts, IMO, if they are willing to trade something valuable for something worthless... but that is today's society. >>
I was just saying that the expansion of fiat dollars propelled the US to what it is today........ all based on the faith of the US Govt.
And wouldn't it be nice if something really did back the dollar?
So far it has worked, with the exception being ongoing inflation caused when the Fed was cobbled together. Then there is the old truism: all nations w/fiat currency have gone bust during the course of history. All of them.
I think we will work our way out of this by the cancellation of our debts by other countries for supplying them w/military support, as well as our ongoing protection of OPEC.
<< <i>Let's not forget that bankers and govt's came off their public/private gold standard whenever it suited them (wars, inflation, etc.). Why gold may not be a cure today, it wasn't the cause of any problems in the 19th centuries either. Fiat was and always will be the culprit. One exception might be the massive quantities of silver that were mined in the 1870's and 1880's and were forced down everyone's throat. In that case the money supply (ie silver) actually dramatically increased and caused inflation, just like printing loads of fiat does today. Our idea that gold has value and is an asset is a temporary 'state of mind'. It exists now, but for no good reason other than 'that's the way it used to be'. It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. Central banks don't claim to have hoard 31,000 tons of it because it's not an asset. As far as recorded human history goes, it's always been this way with gold. Until that changes, I'll go with the trend. Whether it was connected to the US dollar has no bearing on anything. Gold is a store of wealth that cannot yet be mined or created in great quantity...hence it's value along with the various utilitarian puroses it maintains. It has also been once connected to every current and former fiat currency that ever existed. And, old has not kept pace w/inflation over the past 100 years. It most certainly has from a price-wise basis. The old thumbrules of a good quality used suit (or is it 2? and a gun for one ounce of gold still rings true. About the same number of ounces of gold bought a Ford in the early 1900's as it does today. What hasn't maintained the pace with inflation are the prices of homes, education, health care, litigation, DOW, and a few others. Home prices and the DOW re on their way back to the norm vs. gold as we speak. The others may never come back. If you are talking monetary inflation then gold still has catching up to do from the overabundance of fiat since 1980....and it is currently working on it. The distortion of interest rates and exporting our price inflation overseas since the 1980's by importing cheap Asian goods is only a temporary reprieve. Within 5 yrs gold will have monetarily evened up the score with the dollar. Gold had a brief 9 yrs in the 1970's to try and even up decades of monetary abuse. By 1982 a number of daggers were thrown into the PM's and commodities to keep them down for 20 years. Since 2002 everything but the kitchen sink has been tossed at gold and silver to keep them managed to a measly 300% increase over 7 years. Sure, if the dollar was backed by gold, it would have, but there is not enough gold to expand the economy to the extent that most americans decided they liked. The expansion of the US in the 19th century on the outdated gold standard was a thing to behold...and if you polled most Americans I think they would have approved, except the native Americans. The oil industry, railroads, and shipbuilders seemed to have all the money they needed to expand quite rapidly. The nation went from a farming oriented society in 1800 to a viable world industrial power by the end of the 19th century, all that time maintaining a constant dollar value with zero overall inflation. And I suppose the expansion was done with an expanding monetary base that basically cheated the gold standard. Who was watching the banks to ensure they kept the proper gold backing? The few upsets along the way (ie panics) were caused by wars and other distortions in the paper banking system when govt and/or private bankers just got too carried away with their lending....the same old story. Fiat under banker control is always the cause...but blame it on gold is a nice refrain. If the US didn't massively expand in the 19th century I'd like to know what we call that? The "what me worry" instant gratification society is unfortunately an abberration born of unlimited credit is now shrinking away. It wasn't real as the gains were never going to be permanent since they were based on credit and banking smoke and mirrors. None of the paper gains were real either...except for those lucky few who cashed out early and diversified into tangible assets/goods that maintained their value. Until the banks have 3,000 tanker ships of oil in their vaults rather than 30,000 tons of gold we'll have to stick with precious metals as the viable alternative for divisible and mobile money. 3000+ years of history supports it. Bankers hate the hard metal backed system (but love the metal when it's in their vaults).....good enough reason to continue to use it. roadrunner >>
Yes, well said. (It's just the issue which happened in 1933 that has me a bit concerned about gold.) I'm hoping Americans are finally getting tired of 'things as usual' even when disguised as the current buzzword "change"... and that this recession will be painful enough so folks will take action to prevent further erosion of confidence in the US. There's no alternative really.
<< <i>It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. >>
If you can come up with some other medium of exchange that beats gold in portability, durability, and value/unit then by all means abandon gold. The fact remains that there is no better meium of exchange than gold. Food products are difficult to store and decay, or you have to feed them. Other commodities are too bulky and difficult to store or require maintenance. Gold really is the only thing that is superior in all aspects for a store of wealth, that I can think of... >>
I can't disagree, but those who control it concern me......Also, I've yet to hear any good point of view on having a majority (>50%) of one's assets in gold.
I've yet to hear any good point of view on having a majority (>50%) of one's assets in gold.
Let me assist you. For the sake of argument, I'll include "all precious metals" in the category, ok?
I contend that in an environment where all asset classes are rising, classic portfolio management theory is fine, i.e. - diversification of assets. In that environment, if one or two assets go south, the rest of the portfolio compensates.
I contend that we are no longer in an economic environment where classic portfolio theory works. We've not been in a global situation where "conventional" debt is sky-high, and where unimaginable mountains of BAD DEBT are floating around unaccounted for, in the form of financial derivatives.
My major concern is that the conventional, time-proven rules for normal investing and normal stock market evaluation no longer apply. The BAD DEBT can swamp any stock market (or any credit market) at any time.
We've already established that TPTB can default on THEIR obligations at the time of their choosing. And we know that the typical remedy is for the politicians to dump the defaults right back onto the taxpayers. It's really kind of a feudal system, only in a modern format.
Everyone thinks that the stock market has gone up too quickly and everyone expects a pullback. This tells me that the stock market isn't quite ready to fall. Pimco's Bill Gross just finished making a statement on CNBC that "there is still alot of money on the sidelines". That tells me that they are still trying to lure people back in for the kill.
And you can't think of a reason to have more than 50% in precious metals? Now, can you?
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in
Yeah, it starts out as that. Who actually thinks that an international body of governments, an international collective if you will - will administer an international currency any better than the UN administered "Food for Oil"?
Throw the large international banks into the mix, and who actually thinks that things will work out well for the folks?
I doubt it. >>
The consequences of being a "Global Subject" doesn't sound very liberating.
What are these socialists thinking? You cannot have socialism without the ability to print money and debt.
If we agreed to convert all of our dollars to a world currency, which is run by an International monetary fund, you just cannot print all the money or debt you like.
The countries of the European Union cannot just print all the Euros they want , they must get permission from the group as a whole.
If you cannot print currency and debt at will in the U.S. then you will be forced to balance the budget, and cancel many of the government programs such as Social Security, Medicare, Federal employees pensions, etc.
Perhaps this is not a bad idea? Like a spoiled child, America does need a keeper in Washington to force these socialists into budget control.
I wonder if Geithner ever ask the Brits why they did not want to join the EU?
There is no reason to believe anything they say. Oh, yeah they will agree to discuss a world currency only so that they can control the process and make sure it doesnt ever get done. If not then others might try to make things happen without them.
Its like telling the wife not to go to Home Depot because you want to plan out the new upgrades even though you have no intention of ever doing any work.
Orange County Register ^ | 9-23-9 The total cost of state regulations on businesses is $493 billion and 3.8 million jobs according to the first-of-its kind study.business-regulation-3 That’s an average of $134,122 per California business, $13,801 per household and $4,685 per resident each year. The California report is significant, according to the Governor’s Office of Small Business Advocate, because small businesses are 98% of the state’s enterprises and provide 52% of the jobs.
We here in Texas have enjoyed our relationships with the other United States, but what the heck nothing last forever, and we certainly do not want to become CA.
Therefore the majority of us are going to vote for the Russian plan of immediate secession!!
The only mining company that has gone down while gold has gone up. Lets get out and tout this doggy before it goes to a nickel. LOL
From Briefing.com.......
Tanzanian Royalty Exploration announces Technical Report has been completed for Ushirombo mineral property (2.82 -0.03)
Co reports that a National Instrument 43-101 compliant Technical Report has been completed for its 235 square kilometres Ushirombo mineral property in the Lake Victoria Goldfields of Tanzania. Among the most prominent geological features cited in the report is the fact that Ushirombo occurs in the same structural setting as the known gold mineralization at the Tulawaka gold mine 30 kilometres to the northwest. Both Ushirombo and Tulawaka are known to host extensive, gold-bearing quartz rubble at or near surface which in the former's case is largely concentrated around artisanal mining areas. The 43-101 compliant technical report recommends extensive follow-up exploration work in the core area of the Ushirombo property in an effort to confirm gold-in-quartz mineralization on surface and to extend the gold mineralization in the principal artisanal workings. As a result of the review process, co identified the "Ushirombo Gold Corridor" (UGC), a 12 kilometres long by six kilometres wide northwest-trending zone as the prime target area.. Most of the project area occurs in greenstones which account for the majority of global gold production
If it's stock touting day, here's a great one (TIRXF.PK)
The Letitna Zone is open for expansion in every direction and drilling to date has shown it to be a very wide zone with robust copper, zinc, gold and silver mineralization. In addition to large tonnage potential, results indicate the mineralizing system at Letitna had the ability to generate high grades of copper, zinc, gold, and silver. Drill results to date include intercepts such as 11.1m of 2.18% Cu, 3.80% Zn, 38.0 g/t Ag, and 4.0 g/t Au including 8.1m of 2.59% Cu, 4.70% Zn, 39.7 g/t Ag and 5.1 g/t Au (drill hole MR09-40) and 8.0m of 1.85% Cu, 1.39% Zn, and 1.6 g/t Au (drill hole MR 09-38) (see Tirex news releases dated July 7 and July 13, 2009 for details). The Letitna area has widespread hydrothermal alteration, presence of multiple felsic volcanic domes including coarse pyroclastic units (commonly associated with VMS mineralization) and strong geophysical anomalies.
It's defintely worth a look for any speculators: Tirex
The only mining company that has gone down while gold has gone up. Lets get out and tout this doggy before it goes to a nickel. LOL
You must be looking at different charts than the rest of us.
TRE went up 9X or more from 2004 into the 2006 gold peak. Unfortunately that was the top for many juniors of which most were crushed in the November 2008 dump where the majority of miners fell from 65 to 95% of their 2008 highs. Some juniors such as GSS peaked as early as 2004. TRE has gone up 3X since Nov. 2008 which is pretty much on par for many of the miners. If one looks back over the past 4-5 years TRE's gains are similar to many other gold miners. It's done better than Barrick which has still made money on its stock price.
Golden Star Resources, a fairly well thought of producing junior since the November 2008 dump, has not made money since it's peak back in 2004. Many juniors have basically counted 5 waves down since their specific highs in 2004/2006/2008. It's been a very slow process as all the attention was then shifted to the intermediates and seniors. It looks to me that most of the smaller miners have been under years of consolidation. Look at how far CDE and HL have fallen since their peaks. CDE was the favorite naked short silver play of the banks in the last smackdown. TRE has been one of their favorites to short to short as well. The hatchet jobs that Barron's has done on royalty companies only goes to show their lack of understanding of the process. TRE might go to a nickel but I doubt it since they are sitting on lots of real nickel and have leased rights on some properties to the Chinese. Let's see who gets to a nickel first: Citi, AIG, Fannie, Freddie, SLV, GLD, or TRE.
All the beat down miners will have their say again when gold makes a new ATH and remains above $1000 for good. Even insolvent/bankrupt dogs of the Dow like C and AIG are having their day in the sun right now. It's not surprising that that tens to hundreds of billions (or even trillions) in govt ransom money and marked to myth accounting can do to one's bottom line/balance sheet...at least for a short period of time.
Comments
It's ok for Eagle Eye to create his own OT threads, just don't stray too far off the reservation yourself.
He's made no contributions to this thread, so I'm not sure why he's so concerned about it, either. Interesting, indeed.
I knew it would happen.
<< <i>Beware, he like's to complain about things he considers OT. Not sure why he is posting in this thread though.
It's ok for Eagle Eye to create his own OT threads, just don't stray too far off the reservation yourself.
He's made no contributions to this thread, so I'm not sure why he's so concerned about it, either. Interesting, indeed. >>
Agree 100%
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>
<< <i>Beware, he like's to complain about things he considers OT. Not sure why he is posting in this thread though.
It's ok for Eagle Eye to create his own OT threads, just don't stray too far off the reservation yourself.
He's made no contributions to this thread, so I'm not sure why he's so concerned about it, either. Interesting, indeed. >>
Agree 100% >>
No one knows when the music will stop or when fat ladies will sing except for the conductors at Government Sachs. Be nimble Jack.
R95
Comrade RG we are all socialist now! No since in asking for anything in return from the Russians, that would not be brotherly.
Israel will have to deal with Iran; Russia is not going to help us. They see us as weak, as they once were, and we are forced to cancel many things we can no longer afford.
You speak truth. In Russia is all about revenge. They look for America's Berlin Wall to fall....the dollar.
Comrade Renski
<< <i>I am curious if us giving up our promises to the Czechs and Pols >>
maybe its just time to stop spending a trillion a year on an imperialistic military and bring them home.
but that wont sit right with the military industry
<< <i>
<< <i>I am curious if us giving up our promises to the Czechs and Pols >>
maybe its just time to stop spending a trillion a year on an imperialistic military and bring them home.
but that wont sit right with the military industry >>
It appears we elected someone who agrees that we don't need to honor our commitments to our friends, and to not worry about potential enemies. You should be happy it sounds like.
However, that was not my point, this thread is about the economical implications of world events, and that is where I was going with my statement. Is this possibly some sort of prelude to Obama's UN Speech?
Will he now go along with some sort of new international reserve currency basket idea?
<< <i>I am curious if us giving up our promises to the Czechs and Pols has anything to do with some behind the scenes economic deal our leadership is trying to hammer out with Russia."
Comrade RG we are all socialist now! No since in asking for anything in return from the Russians, that would not be brotherly.
Israel will have to deal with Iran; Russia is not going to help us. They see us as weak, as they once were, and we are forced to cancel many things we can no longer afford. >>
The Chosen One looks to be a Chamberlain searching for his Munich. Back then it was Britain and France walking away from promises to the Czechs.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
Willie does a nice hatchet job on Barrick but probably richly deserved. They are undoubtedly a good reason why gold isn't a lot higher now. Some suggest they have been in the back pocket of the Treasury/JPM/GS for a long time. And as I recall I thought I once read that the Carlyle Group or the Bush family was connected with Barrick or at least helped pave their way. JW mentions that 2 yrs ago Barrick claimed to have removed all hedges but recanted that to mean all "operating mine" hedges. So all the ounces in future and current mining projects were not included. Now 2 yrs later they are claiming to become 100% hedge free in 12 months. The only problem is that per the Barrick numbers it doesn't work out. JW states that 2 MILL ounces will still remain hedged. And this assumes that their $5.6 BILL goes to buy them gold rather than to continue to shore up the balance sheet with additional derivatives. An interesting read for those that trade gold stocks or wonder why gold didn't break $1000 well before March 2008. Note: most of the Barrick reference's are in the front and end of the linked article.
I didn't have any issues with what Eagle Eye posted earlier. Those that haven't contributed before are more than welcome.
roadrunner
<< <i>Will he now go along with some sort of new international reserve currency basket idea? >>
With all the debt and liabilities past Administrations have created and the trillions that this Administration has added on, we may have no choice. We are bankrupt. All the taxing in the world (including the middle class) will not make a dent in our growing debt.
The printing press has delayed the inevitable but time may have run out.
The dollar needs to crash and inflate a lot of the debt away. If that happens, other countries will demand a basket of currencies or an international currency with some of it backed by gold.
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The end result is money diverted from the gold market at a very critical time.
<< <i>we don't need to honor our commitments to our friends, >>
Oh yeah, The Czecks and Poles have done so much for us lately that we really need to spend billions building them a huge missle defense system. Besides, who is going to nuke them?? The only nuke capability in the area is Russia and thier military could overrun them both in weeks.
I doubt if it was ever about them and a lot more about the billion in profits for the defense contractors.
<< <i>I wonder if the barrick offering wasnt just a smart play to divert $4 billion dollars away from gold purchases. After all those who buyin become "gold vested' and have not taken any gold out of the market. Barrick can drag out the dehedging for years.
The end result is money diverted from the gold market at a very critical time.
<< <i>we don't need to honor our commitments to our friends, >>
Oh yeah, The Czecks and Poles have done so much for us lately that we really need to spend billions building them a huge missle defense system. Besides, who is going to nuke them?? The only nuke capability in the area is Russia and thier military could overrun them both in weeks.
I doubt if it was ever about them and a lot more about the billion in profits for the defense contractors. >>
If Poland is so ignorant to have sent Polish boys and girls to war in Iraq to support this government, in return for something then they deserve to get fked. Just like ANYone who believe these lowlifes. Perhaps the Polish people need to wake up and realize that it's THEIR government who screwed them just like it's time WE wake up ( based on the protests in D.C. many of us have awakened ). They are not our family, they are not our friends, they are very hungry parasites who cannot stop stealing and spending.
This will continue to fuel the market in hard assets. And this is worldwide.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Ike said, "I am the President of the United States. I order you to stand down."
The guard responded, "Sir, with most respect. I can't allow you inside."
"Why," asked Ike.
The soldier pointed at Fort Knox and said, "Because there's nothing inside that building."
Ike shrugged, spun on his heels, and yelled back over his shoulder, "Double the guard!"
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mariner67, and Mikes coins
Well-said RR
I also personally see no reason to remain the policeman of the world, but the money that might be saved on these ventures will not be spent to make the U.S. stronger.
Any money saved from these ventures is simply going to be spent in triplicate in the socializing of America.
Not only have we spent our blood and treasure over the last few decades on worldwide police work, but also we have spent our blood and treasure trying to make the U.S. a socialist’s country. Both of these are failed policies that have led us to ruin.
A Godless country where politicians believe they can change the will of the creator to equalize the destinies of all men is doomed to failure.
We are seeing that failure NOW, be prepared!
Road Trip!
...becoming more mainstream in the way people are talking and thinking. Ultimately something will have to happen as we are indeed in debt well beyond our ability to work our way out of it. Our fiat of the USD is only backed by the full faith in something that no one has any faith in anymore, in addition to not having any real liquid assets to back the buck other than our compromised GDP. Throw that in with a bunch of self indulgent political self preservationists vowing to debase our financial legacy even further with wild programs that only promise financial servitude instead of enduring freedoms and we have our current impasse. The stunning thing is that most folk seem completely oblivious to this failure and just wait for the economy to improve instead of taking to the streets and calling BS...well, sheep get sheared.
Basket of international currencies partially backed by precious metal reserves and issued as a global dollar or whatever...yeah, seems like a no brainer especially if we are going to respond to the global economy in some kind of sensible way; we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in. The concept of the Euro was built on this idea and it is time to take the concept to the next level. China may lead the way forward as they have the reserves and the global influence to push this to the here and now.
The dollar will have to be revalued or crashed or cancelled in lieu of some replacement currency as the age of dead presidents appears to have run its course. The only way to get rid of this crushing debt is to eliminate the basis of that debt, aka the USD; it's the same as declaring bankruptcy at the national level. The gov and people will have to visit that question of whether we sacrifice the currency to save the gov or lose the gov to a failed currency...gov should wins this one. Of course, there is the third option of a large scale war. Most folk just think this is a temporary liquidity problem.
Yeah, it starts out as that. Who actually thinks that an international body of governments, an international collective if you will - will administer an international currency any better than the UN administered "Food for Oil"?
Throw the large international banks into the mix, and who actually thinks that things will work out well for the folks?
I doubt it.
I knew it would happen.
<< <i>we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in
<< <i>
We have that already. It's called gold.
<< <i>
<< <i>we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in
<< <i>
We have that already. It's called gold. >>
Agree. No one has figured out how to print gold.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Maybe not, but they're still trying real hard to do just that.
I knew it would happen.
<< <i>Volcker Launches Bombshell on Wall Street and Washington >>
Great article ttown. If only our elected officials would listen.
roadrunner
<< <i>Agree. No one has figured out how to print gold. >>
Maybe when they have declared IMF sales for the 30th time and it doesnt work any more then they might try floating that rumor to bring down the price
Adam Hamiltion summarizes 30 years of gold and the current >$1000 price level
AH makes a number of solid points in this article:
-gold in inflation adjusted terms is still only 43% of the 1980 high
-the CPI has increased 2.8X since 1980.....gold has not.
-broad based money supply mzm has increased by 11.2X since 1980
-gold spent 2 yrs following the 1980 peak above a $1000 inflation adjusted level (ie $1000 "real" level is really not new)
-the 53 trading day parabolic blowoff starting in Nov. 1979 was at 6X the daily rate seen in the current market's best move. The mania stage of this market is still far away.
-gold has nearly quadrupled since its secular bull’s beginnings in April 2001, a 297% gain compared to the S&P 500’s 7% loss over this 8+ year span. And pog is still only at 43% of 1980 real prices.
and the key point of the article:
-gold had been in a channel where the first attempt over $1000 was well above that channel. A sharp correction had to follow. Almost 2 years later that channel is much higher up and far above the base level of $650-$700 where gold moved from in August 2007. The new base is $200 higher than the older one. Gold has moved to the top of the channel but unlike the case of March 2008, is not far above it. A pull back to the bottom of the channel ($800-$850) would certainly not change the long term trend. AH simply states, gold is not stupidly overbought at $1000....it is merely "within trend." In 2008, $1000 gold was not within the channel trend, but today it is.
Now if $Cash4Clunkers offered prices rolled back to 1982 levels (like gold) then I probably would have become a Cash for Clunkers customer.
roadrunner
Droke is still presenting his down cycle convergences in 2012-2014. In fact he sees depression type conditions in the economy during that period. Hence one could call him a deflationist though he is simply a contrarian to whatever the popular sentiment happens to be. Therefore, with the sentiment of a Sept/Oct. crash looming he still feels the SM will climb its wall of worry through the rest of the year with a possible short pullback along the way. He also feels that gold and silver would be one of the few assets he would even consider in the "buy and hold" category over the next 5 years and feels their prices will be much higher by 2014. For the rest of this year he doesn't really see gold going higher than $1050 because of the economy, even though years ending in "9" have often produced big runs in gold as the 10 yr cycle peaks. He believes that if you are going to buy PM's that they should be at least 15-20% of your portfolio.
The gold naysayers should take a look at what Droke has to say. If Droke is positive about gold, that trumps a dozen of the typical gold bull newsletter writers. He marches to his own drum and therefore there tends to be little to no hype in any of his analysis. He just takes the information that the market presents and goes from there. He's not the type of analyst to look at $1,000 gold and say it's too high because it's 4 digits or because the bankers will never let it stay this high. He's already written about expecting a rally in the dollar and treasuries in later 2009, their last hurrah if you will.
Sol Palha on the housing recovery
Palha, like Droke above, is a good market tactician that usually has a different slant than anyone else. When the two of them are in agreement that's a convincing sign imo. I consider both of them to have views that are typically spot on for the big picture yet they don't seem to follow the hoard of other analyists. They keep things simple. SP is not seeing a housing recovery and sees years of headwinds coming. But like Droke, he recommends PM's on the pull backs. And these 2 guys are anything but gold bugs and have sometimes bashed gold/silver over the past few years when they didn't show any strength coming. Between Hoye, Droke, and Palha it's tough to find a better trio of sane thinkers in insane markets.
roadrunner
Trade your cow for a horse. Barter is 'money' for lack of a better word.
That becomes cumbersome, and someone says, why don't we all agree to use specially made token.
All nations want to and have to control their own money. (just accept that for a moment)
Since this hypothetical scenario does not allow for the token to be backed by anything like gold, etc, people naturally trust it
just as they trusted a cow for a horse. As years go by, the idea of barter a cow/horse seems absurd.
Our idea that gold has value and is an asset is a temporary 'state of mind'. It exists now, but for no good reason other than 'that's the way it used to be'.
It is only that it was once connected to the USD that we are a bit ticked off.
Hey, I do not trust bankers or the fed or politicians a bit, but this is not about that, so bear w/me........
OTOH, we have trusted this fiat currency method of purchase..... yet we still feel compelled to hoard some silver/gold, etc. I do that myself out of habit. Then I thought about the
barter scenario, and the risk of owning gold: confiscation and manipulation mostly.
Then looking at actual numbers, I see that the US would not be nearly as prosperous (yes, it's crappy now, but put it in perspective with other countries in the history of mankind).
1. there is not enough gold above ground to handle daily commerce in the US. It cannot back the USD, unless gold was valued at say $30,000 an ounce. Then there may be enough
gold so people could buy things using something actually backed by gold. But, the US only owns about 10,000 tons...........out of 158,000 above ground supplies.
Also..........
The US GDP in 2008 was $14 Trillion.
Known gold reserves 'above ground' worldwide = 158,000 tonnes = $4.8 trillion if gold is $1007.50/oz.
The US has about 10,000 tonnes. The non-manipulated market value would need to be $30K/oz to back the FRN's.
sure, the dollar can be and is being devalued, but gold is not the 'easy fix to the problem' that many subscribe to. Same with silver. And, old has not kept pace w/inflation over
the past 100 years.
Sure, if the dollar was backed by gold, it would have, but there is not enough gold to expand the economy to the extent that most americans decided they liked.
They want their granite countertops and suv's and plasma tv's and suburbs. I do too, but hey, gold isn't going to solve any problems.
It is so manipulated, I am surprised at the number of folks who buy it.
LT
Does the amoung of PM's in existence necessarily need to represent the value of goods and services in existence?
My answer is - kind of. The value of fiat money must represent something physical, IMO, as opposed to just faith in a government. To that extend it does. Of course, any two people can always barter between themselves, but people are just nuts, IMO, if they are willing to trade something valuable for something worthless... but that is today's society.
Our idea that gold has value and is an asset is a temporary 'state of mind'. It exists now, but for no good reason other than 'that's the way it used to be'.
It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. Central banks don't claim to have hoarded 31,000 tons of it because it's not an asset. As far as recorded human history goes, it's always been this way with gold. Until that changes, I'll go with the trend. Whether it was connected to the US dollar has no bearing on anything. Gold is a store of wealth that cannot yet be mined or created in great quantity...hence it's value along with the various utilitarian puroses it maintains. It has also been once connected to every current and former fiat currency that ever existed.
And, gold has not kept pace w/inflation over the past 100 years.
It most certainly has from a price-wise basis. The old thumbrules of a good quality used suit (or is it 2? and a gun for one ounce of gold still rings true. About the same number of ounces of gold bought a Ford in the early 1900's as it does today. What hasn't maintained the pace with inflation are the prices of homes, education, health care, litigation, DOW, and a few other examples. Home prices and the DOW re on their way back to the norm vs. gold as we speak. The others may never come back. If you are talking about catching up to monetary inflation then gold still has lots to do from the overabundance of fiat printing and electronic banking ledgers since 1980....and it is currently working on it. The distortion of interest rates and exporting our price inflation overseas since the 1980's by importing cheap Asian goods was only a temporary reprieve. Within 5 yrs from today gold will have monetarily evened up the score with the dollar. Gold had a mere 9 yrs in the 1970's to try and even up decades of monetary abuse commencing in the 1930's. By 1982 a number of daggers were thrown into the PM's and commodities to keep them down for 20 years. Since 2002 everything but the kitchen sink has been tossed at gold and silver to keep them managed to a measly 300% increase over 7 years. Few other asset classes can claim that.
Sure, if the dollar was backed by gold, it would have, but there is not enough gold to expand the economy to the extent that most americans decided they liked.
The expansion of the US in the 19th century on the outdated gold standard was a thing to behold...and if you polled most Americans I think they would have approved...well, maybe except for the native Americans who had their property pulled out from under them. The oil industry, railroads, and shipbuilders seemed to have all the money they needed to expand quite rapidly. The nation went from a farming oriented society in 1800 to a viable world industrial power by the end of the 19th century, all that time maintaining a constant dollar value with zero overall inflation. And I suppose the expansion was done with an expanding monetary base that basically cheated the gold standard. Who was watching the banks to ensure they kept the proper gold backing? The few upsets along the way (ie panics) were caused by wars and other distortions in the paper banking system when govt and/or private bankers just got too carried away with their lending....the same old story. Fiat under banker control is always the cause...but blame it on gold is a nice refrain. If the US didn't massively expand in the 19th century I'd like to know what we call that? The "what me worry" instant gratification society is unfortunately an abberration born of unlimited credit is now shrinking away. It wasn't real as the gains were never going to be permanent since they were based on credit and banking smoke and mirrors. None of the paper gains were real either...except for those lucky few who cashed out early and diversified into tangible assets/goods that maintained their value.
Until the banks have 3,000 tanker ships of oil in their vaults rather than 30,000 tons of gold we'll have to stick with precious metals as the viable alternative for divisible and mobile money. 3000+ years of history supports it. Bankers hate the hard metal backed system (but love the metal when it's in their vaults).....good enough reason to continue to use it.
Speaking of taking land from the Native Americans, eminent domain was recently exercised in New London, CT where the case was ultimately decided by the United States Supreme Court. The homeowners lost and an entire several square block area was vacated. The plan was to build an impressive downtown addition with luxury hotels, etc. Well I toured that area a few weeks ago when taking a tour of the Coast Guard cutter Eagle. It looks like a 3rd world country with nothing by desolation as if a bomb went off. Nothing has been done to "improve" these properties except to bulldoze the homes/apts over. All plans were shelved because developers got cold feet when the economy started heading south. So until things turn rosy again and banks are lending, that part of New London, CT will remain a wasteland with appliances strewn about, cars left behind, and concrete housing foundations nearly everywhere. A "temporary" remembrance to eminent domain.
roadrunner
<< <i>It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. >>
If you can come up with some other medium of exchange that beats gold in portability, durability, and value/unit then by all means abandon gold. The fact remains that there is no better meium of exchange than gold. Food products are difficult to store and decay, or you have to feed them. Other commodities are too bulky and difficult to store or require maintenance. Gold really is the only thing that is superior in all aspects for a store of wealth, that I can think of...
<< <i>Jungle, a couple of concepts you allude to... Does the amoung of PM's in existence necessarily need to represent the value of goods and services in existence? My answer is - kind of. The value of fiat money must represent something physical, IMO, as opposed to just faith in a government. To that extend it does. Of course, any two people can always barter between themselves, but people are just nuts, IMO, if they are willing to trade something valuable for something worthless... but that is today's society. >>
I was just saying that the expansion of fiat dollars propelled the US to what it is today........ all based on the faith of the US Govt.
And wouldn't it be nice if something really did back the dollar?
So far it has worked, with the exception being ongoing inflation caused when the Fed was cobbled together. Then there is the old truism: all nations w/fiat currency have gone bust during the course of history. All of them.
I think we will work our way out of this by the cancellation of our debts by other countries for supplying them w/military support, as well as our ongoing protection of OPEC.
It won't be reported that way however.
<< <i>Let's not forget that bankers and govt's came off their public/private gold standard whenever it suited them (wars, inflation, etc.). Why gold may not be a cure today, it wasn't the cause of any problems in the 19th centuries either. Fiat was and always will be the culprit. One exception might be the massive quantities of silver that were mined in the 1870's and 1880's and were forced down everyone's throat. In that case the money supply (ie silver) actually dramatically increased and caused inflation, just like printing loads of fiat does today. Our idea that gold has value and is an asset is a temporary 'state of mind'. It exists now, but for no good reason other than 'that's the way it used to be'. It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. Central banks don't claim to have hoard 31,000 tons of it because it's not an asset. As far as recorded human history goes, it's always been this way with gold. Until that changes, I'll go with the trend. Whether it was connected to the US dollar has no bearing on anything. Gold is a store of wealth that cannot yet be mined or created in great quantity...hence it's value along with the various utilitarian puroses it maintains. It has also been once connected to every current and former fiat currency that ever existed. And, old has not kept pace w/inflation over the past 100 years. It most certainly has from a price-wise basis. The old thumbrules of a good quality used suit (or is it 2? and a gun for one ounce of gold still rings true. About the same number of ounces of gold bought a Ford in the early 1900's as it does today. What hasn't maintained the pace with inflation are the prices of homes, education, health care, litigation, DOW, and a few others. Home prices and the DOW re on their way back to the norm vs. gold as we speak. The others may never come back. If you are talking monetary inflation then gold still has catching up to do from the overabundance of fiat since 1980....and it is currently working on it. The distortion of interest rates and exporting our price inflation overseas since the 1980's by importing cheap Asian goods is only a temporary reprieve. Within 5 yrs gold will have monetarily evened up the score with the dollar. Gold had a brief 9 yrs in the 1970's to try and even up decades of monetary abuse. By 1982 a number of daggers were thrown into the PM's and commodities to keep them down for 20 years. Since 2002 everything but the kitchen sink has been tossed at gold and silver to keep them managed to a measly 300% increase over 7 years. Sure, if the dollar was backed by gold, it would have, but there is not enough gold to expand the economy to the extent that most americans decided they liked. The expansion of the US in the 19th century on the outdated gold standard was a thing to behold...and if you polled most Americans I think they would have approved, except the native Americans. The oil industry, railroads, and shipbuilders seemed to have all the money they needed to expand quite rapidly. The nation went from a farming oriented society in 1800 to a viable world industrial power by the end of the 19th century, all that time maintaining a constant dollar value with zero overall inflation. And I suppose the expansion was done with an expanding monetary base that basically cheated the gold standard. Who was watching the banks to ensure they kept the proper gold backing? The few upsets along the way (ie panics) were caused by wars and other distortions in the paper banking system when govt and/or private bankers just got too carried away with their lending....the same old story. Fiat under banker control is always the cause...but blame it on gold is a nice refrain. If the US didn't massively expand in the 19th century I'd like to know what we call that? The "what me worry" instant gratification society is unfortunately an abberration born of unlimited credit is now shrinking away. It wasn't real as the gains were never going to be permanent since they were based on credit and banking smoke and mirrors. None of the paper gains were real either...except for those lucky few who cashed out early and diversified into tangible assets/goods that maintained their value. Until the banks have 3,000 tanker ships of oil in their vaults rather than 30,000 tons of gold we'll have to stick with precious metals as the viable alternative for divisible and mobile money. 3000+ years of history supports it. Bankers hate the hard metal backed system (but love the metal when it's in their vaults).....good enough reason to continue to use it. roadrunner >>
Yes, well said. (It's just the issue which happened in 1933 that has me a bit concerned about gold.) I'm hoping Americans are finally getting tired of 'things as usual' even when disguised as the current buzzword "change"... and that this recession will be painful enough so folks will take action to prevent further erosion of confidence in the US. There's no alternative really.
<< <i>
<< <i>It's temporary similar to the fact that civilized man existing on earth is only temporary. Gold has been with us for 3,000+ years as a means of wealth/assets/money. >>
If you can come up with some other medium of exchange that beats gold in portability, durability, and value/unit then by all means abandon gold. The fact remains that there is no better meium of exchange than gold. Food products are difficult to store and decay, or you have to feed them. Other commodities are too bulky and difficult to store or require maintenance. Gold really is the only thing that is superior in all aspects for a store of wealth, that I can think of... >>
I can't disagree, but those who control it concern me......Also, I've yet to hear any good point of view on having a majority (>50%) of one's assets in gold.
sorry for hogging this thread............
Let me assist you. For the sake of argument, I'll include "all precious metals" in the category, ok?
I contend that in an environment where all asset classes are rising, classic portfolio management theory is fine, i.e. - diversification of assets. In that environment, if one or two assets go south, the rest of the portfolio compensates.
I contend that we are no longer in an economic environment where classic portfolio theory works. We've not been in a global situation where "conventional" debt is sky-high, and where unimaginable mountains of BAD DEBT are floating around unaccounted for, in the form of financial derivatives.
My major concern is that the conventional, time-proven rules for normal investing and normal stock market evaluation no longer apply. The BAD DEBT can swamp any stock market (or any credit market) at any time.
We've already established that TPTB can default on THEIR obligations at the time of their choosing. And we know that the typical remedy is for the politicians to dump the defaults right back onto the taxpayers. It's really kind of a feudal system, only in a modern format.
Everyone thinks that the stock market has gone up too quickly and everyone expects a pullback. This tells me that the stock market isn't quite ready to fall. Pimco's Bill Gross just finished making a statement on CNBC that "there is still alot of money on the sidelines". That tells me that they are still trying to lure people back in for the kill.
And you can't think of a reason to have more than 50% in precious metals? Now, can you?
I knew it would happen.
US backing for world currency stuns markets
<< <i>we really need a currency that we can all use for international and internal commerce across the globe that everyone collectively believes in
Yeah, it starts out as that. Who actually thinks that an international body of governments, an international collective if you will - will administer an international currency any better than the UN administered "Food for Oil"?
Throw the large international banks into the mix, and who actually thinks that things will work out well for the folks?
I doubt it. >>
The consequences of being a "Global Subject" doesn't sound very liberating.
R95
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
<< <i>U.S. to push for new economic world order at G20
US backing for world currency stuns markets >>
Both articles are a sign of complete insanity.
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I agree with this!
What are these socialists thinking? You cannot have socialism without the ability to print money and debt.
If we agreed to convert all of our dollars to a world currency, which is run by an International monetary fund, you just cannot print all the money or debt you like.
The countries of the European Union cannot just print all the Euros they want , they must get permission from the group as a whole.
If you cannot print currency and debt at will in the U.S. then you will be forced to balance the budget, and cancel many of the government programs such as Social Security, Medicare, Federal employees pensions, etc.
Perhaps this is not a bad idea? Like a spoiled child, America does need a keeper in Washington to force these socialists into budget control.
I wonder if Geithner ever ask the Brits why they did not want to join the EU?
Its like telling the wife not to go to Home Depot because you want to plan out the new upgrades even though you have no intention of ever doing any work.
obviously a positive sign for Au today
Orange County Register ^ | 9-23-9
The total cost of state regulations on businesses is $493 billion and 3.8 million jobs according to the first-of-its kind study.business-regulation-3 That’s an average of $134,122 per California business, $13,801 per household and $4,685 per resident each year. The California report is significant, according to the Governor’s Office of Small Business Advocate, because small businesses are 98% of the state’s enterprises and provide 52% of the jobs.
We here in Texas have enjoyed our relationships with the other United States, but what the heck nothing last forever, and we certainly do not want to become CA.
Therefore the majority of us are going to vote for the Russian plan of immediate secession!!
THE RUSSIAN PLAN:
http://english.pravda.ru/opinion/columnists/109452-0/
From Briefing.com.......
Tanzanian Royalty Exploration announces Technical Report has been completed for Ushirombo mineral property (2.82 -0.03)
Co reports that a National Instrument 43-101 compliant Technical Report has been completed for its 235 square kilometres Ushirombo mineral property in the Lake Victoria Goldfields of Tanzania. Among the most prominent geological features cited in the report is the fact that Ushirombo occurs in the same structural setting as the known gold mineralization at the Tulawaka gold mine 30 kilometres to the northwest. Both Ushirombo and Tulawaka are known to host extensive, gold-bearing quartz rubble at or near surface which in the former's case is largely concentrated around artisanal mining areas. The 43-101 compliant technical report recommends extensive follow-up exploration work in the core area of the Ushirombo property in an effort to confirm gold-in-quartz mineralization on surface and to extend the gold mineralization in the principal artisanal workings. As a result of the review process, co identified the "Ushirombo Gold Corridor" (UGC), a 12 kilometres long by six kilometres wide northwest-trending zone as the prime target area.. Most of the project area occurs in greenstones which account for the majority of global gold production
Knowledge is the enemy of fear
The Letitna Zone is open for expansion in every direction and drilling to date has shown it to be a very wide zone with robust copper, zinc, gold and silver mineralization. In addition to large tonnage potential, results indicate the mineralizing system at Letitna had the ability to generate high grades of copper, zinc, gold, and silver. Drill results to date include intercepts such as 11.1m of 2.18% Cu, 3.80% Zn, 38.0 g/t Ag, and 4.0 g/t Au including 8.1m of 2.59% Cu, 4.70% Zn, 39.7 g/t Ag and 5.1 g/t Au (drill hole MR09-40) and 8.0m of 1.85% Cu, 1.39% Zn, and 1.6 g/t Au (drill hole MR 09-38) (see Tirex news releases dated July 7 and July 13, 2009 for details). The Letitna area has widespread hydrothermal alteration, presence of multiple felsic volcanic domes including coarse pyroclastic units (commonly associated with VMS mineralization) and strong geophysical anomalies.
It's defintely worth a look for any speculators: Tirex
You must be looking at different charts than the rest of us.
TRE went up 9X or more from 2004 into the 2006 gold peak. Unfortunately that was the top for many juniors of which most were crushed in the November 2008 dump where the majority of miners fell from 65 to 95% of their 2008 highs. Some juniors such as GSS peaked as early as 2004. TRE has gone up 3X since Nov. 2008 which is pretty much on par for many of the miners. If one looks back over the past 4-5 years TRE's gains are similar to many other gold miners. It's done better than Barrick which has still made money on its stock price.
Golden Star Resources, a fairly well thought of producing junior since the November 2008 dump, has not made money since it's peak back in 2004. Many juniors have basically counted 5 waves down since their specific highs in 2004/2006/2008. It's been a very slow process as all the attention was then shifted to the intermediates and seniors. It looks to me that most of the smaller miners have been under years of consolidation. Look at how far CDE and HL have fallen since their peaks. CDE was the favorite naked short silver play of the banks in the last smackdown. TRE has been one of their favorites to short to short as well. The hatchet jobs that Barron's has done on royalty companies only goes to show their lack of understanding of the process. TRE might go to a nickel but I doubt it since they are sitting on lots of real nickel and have leased rights on some properties to the Chinese. Let's see who gets to a nickel first: Citi, AIG, Fannie, Freddie, SLV, GLD, or TRE.
All the beat down miners will have their say again when gold makes a new ATH and remains above $1000 for good. Even insolvent/bankrupt dogs of the Dow like C and AIG are having their day in the sun right now. It's not surprising that that tens to hundreds of billions (or even trillions) in govt ransom money and marked to myth accounting can do to one's bottom line/balance sheet...at least for a short period of time.
roadrunner