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Thursday, March 11, 2010

It's Going To Implode: Buy Physical Gold - NOW

Evidence seems to be mounting that we are headed towards some sort of implosion in the paper Gold market, and perhaps the currency/bond markets in general. Let’s take a look:

Jacksonville, FL based EverBank – a bank with approximately $8 billion in assets and 1800 employees according to the company website – recently sent this notice to customers (courtesy of Warren Bevan):
 
"Non-FDIC Insured Metals Select Changes" -
Section 6.3.7. General Terms: We have added language clarifying our right to close your account. We may close your Metals Select Account at anytime upon reasonable notice to you. If we believe that it is necessary to close your account immediately in order to limit losses by you or us [GG: We really don’t give a s**t about you; it’s us that we care about], we may close your account prior to providing notice to you. Notice from us to one of you is notice to all of you [GG: the nerve of these people!]. If we close your account, we reserve the right to convert your Precious Metals to U.S. dollars and tender the balance to you by mail [GG: I am willing to bet my entire Gold stash that when you receive these "converted" dollars, they will be nowhere near the market price of physical. What did you think that whole "limit losses" thing meant?] .
If you have a "Non FDIC Insured Metals Select" account with these people, you can pretty much say goodbye to any chances of ever seeing your metal. This is a clear sign that the (already tight) availability of physical metal at the manipulated Comex futures paper price is in danger of vanishing altogether. Think about it. What is the scenario in which they avoid catastrophic losses while at the same time sending you the US dollar value of the metal? When the official or Comex price has fully decoupled from the physical price. Expect to see more such notices from banks offering Metals "Investments".

Citibank recently issued this notice to its checking account (remember the type of account where you thought you could withdraw your money whenever you wanted? Well, not anymore) customers (via Market Ticker):
 
Withdrawal Notice:


We reserve the right to require seven (7) days advance notice before permitting a withdrawal from all checking, savings and money market accounts. We currently do not exercise this right and have not exercised it in the past.

Hmm…let me see. Why would a bank need to impose withdrawal restrictions? Has this kind of a thing happened before somewhere? Could it be because of the danger of a bank run/capital flight from the United States? Why would Citibank fear bank runs? Why would money flee the US banking system/US? Could it be because the entire US banking system and the US Government is INSOLVENT and people - fearing a collapse in the dollar’s value (in terms of real goods i.e. for all you Prechterites out there) - rush to withdraw money convert it into real goods such as precious metals? You tell me. Also, could they maybe increase this notice period from seven to whatever the hell they want whenever they want? What will you do then? Even if you don’t buy Gold with it, withdrawing your cash from America’s insolvent banks is a very wise strategy at this point.
 
One of Mish’s readers Construction Insider recently sent him this little nugget:

Hi Mish


I work in the construction business and something has been creeping to the forefront of my attention for the past few weeks and now it seems to be moving full steam ahead.


Banks are forcing developers/builders (especially smaller ones) to give up their properties (unsold homes and lots).


Banks say the reason is that the properties in question are no longer performing assets. I am sure there are some loans out there that are not performing and the owners are going under. I am equally sure that there are plenty of developers that are still selling homes - just not at the pace originally planned on the pro formas.


Having inside information on one of these scenarios that happened today, I cannot help but wonder what is really going on? The bank told a small developer/builder I work for that they were taking back his ongoing subdivision.


He is selling houses and updated pro formas would indicate that the current sales pace would exhaust all remaining lots within 33 months. Yet the bank stated they would only give him until April 15 to find alternative financing. The bank is also willing to let him buy the subdivision at a 33% discount to what is currently owed.


If he is unable to obtain this backing, the bank will let him walk away without penalty or consequence so they can write it off.


I have been on the phone trying to put some of these pieces together. It seems there are many banks doing the same thing. However, there is apparently no interest [or ability - Mish] from anyone wanting to pick up land/lots at 30% - 50% discounts to today's prices.


Another interesting point is that the banks all state that they must have these situations written off or taken care of by the end of Q2.
Looks to me like DaBoyz are calling in the loans while the currency still has some value. Does the government plan some type of overt currency devaluation or expect the dollar to collapse on the currency markets of its own sorry weight? The cracks are already appearing in the Bond market. Foreigners are increasingly fleeing the Treasury auctions. The only thing keeping them going is manufactured "deflation" fears from time-to-time. A recent 30 year auction (10th February, 2010 to be precise) practically failed. This is what Mr. Denninger had to say about it:

Bad. Actually, let's go worse than bad and call it what it is - by any definition this is just one step off from "Failed."
The more-worrying factor here is that we've got this "mystery" direct buyers out here again taking nearly 25% of the offered amount (who is bidding for that undisclosed?) and another 11% taken down by The Fed for the SOMA account.


Yet even with this Treasury had to pay up to get it to go and the bid-to-cover was anemic at best.


Given the Primary Dealer system we have in this country, any BTC under 2.0 is an effective fail. To get an auction that behaves in this sort of fashion, complete with mystery direct bidders and heavy SOMA (Fed) participation, yet Treasury has to pay up in the form of a significantly higher coupon is not a good sign at all.
And this is what happened on 23rd February, 2010 for a 4-week $37 billion Treasury Bill auction (Per Graham Summers):

There are times in life when one witnesses something so outside the scope of normal experience, that at first you don’t see it.


Captain Cook’s diaries tell us that upon first seeing his ships offshore in Australia, the aborigines expressed “neither surprise nor concern.” Cook notes that it was not until he and his men approached the shore in smaller, more familiar vessels that the villagers reacted, arming themselves as “the sight of men in small boats was comprehensible to them: it meant invasion.”


Well, I had a similar experience during yesterday’s bond auction.


Roughly, 27% of the auction took place at the highest rate. This means nearly one third of the demand from competitive bidders (those who care about yield) came at the HIGHEST yield that was accepted. In plain terms, this alone tells you that investors want higher yields from Treasuries since nearly a full third of the debt issuance took place at the highest REQUIRED yield.


Of the competitive bids (meaning those bids coming from folks who care about yield), roughly 70% went to Primary Dealers (investors who HAVE to buy the debt and who usually turn around and try to sell it afterwards). To put this number into perspective here is the percentage of competitive purchases made by Primary Dealers in the last four 4-week Treasury issuances:


...yesterday’s auction featured MORE buys from Primary Dealers than almost any of those occurring in 2010. Remember, Primary Dealers HAVE to buy Treasuries. So to see them buying a high percentage of Treasuries at debt auctions means that few investors who can pick and choose what to buy are actually looking to buy US debt.
Of the remaining competitive buys (about $8.86 billion), only 32% came from Direct Bidders or those who bought debt directly from the Treasury: orders that can easily be tracked. The other 68% ($5.9 billion) came from Indirect Bidders: folks who we cannot track.


Even more bizarre, only $5.9 billion in Indirect Bidder competitive buys were ACTUALLY OFFERED. So we had a 100% acceptance rate for Indirect Bidder competitive buys.


Let’s put this in perspective:


This means that the Treasury took up EVERY single cent of competitive bids coming from indirect buyers. Remember, indirect buyers are usually assumed to be foreign governments (even the Treasury website admits this).


If this was the case yesterday, then foreign governments barely bought much of anything in yesterday’s auction (only 19% of total debt issued). Moreover, it implies that Primary Dealers (those having to buy) had to gorge on the auction to make up for the fact that few if any foreign governments are interested in buying our debt anymore (including even short-term debt).
So basically the demand from the indirects (i.e. foreigners) for US Debt is drying up and the Treasury is taking all of whatever miniscule amounts they are offering. As if that was not enough, we had another similar auction on 9th Match, 2010 (via zerohedge):

Two weeks after the indirect hit ratio in the 4 week auction came at a record 100%, today it was once again at almost at the all time possible high, with Indirect Bids of just $6.744 billion taking down $6.683 billion, resulting in a 99.1% hit ratio. The chart of the recent Indirect hit ratio in recent 4 week bill auctions is attached:

What’s more, the yield doubled from two weeks ago. What we are witnessing here, in my opinion, is the beginning moves of a complete and total repudiation of the US Bond market, and indeed, all dollar denominated paper financial assets.

Jim Sinclair recently had two gentlemen from Poland and Russia speak up at his Toronto meeting. This is what they had to say (in Jim’s words):

Dear Extended Family,


I believe the most important event at our Toronto CIGA meeting was the testimony of two attendees.


Two men spoke independently. One is a Canadian resident from Russia and the other from Poland.


Both said the same thing, "All the signs that preceded our inflation of more than 100% per year are here now in the West."


What more do you need to know?


Regards,


Jim
Any unbiased observer who knows how to put two and two together will be able to tell that something very fishy is going on. The urgency with which trillions in debt is being shoved down the market's throat at the worst possible time for the US Economy has the distinct smell of the government trying to extract every last bit of money from those stupid enough to buy the bonds before it all blows up. Rest assured, a huge chunk of this money is being funneled to the insiders who are most likely covertly using it up to buy real assets for themselves while keeping the crowds distracted with the stock market circus.

The bond market is the backbone of the US Ponzi Finance system. When it goes – and the day is not far in my opinion - the whole enchilada will come crashing down. Any type of financial asset that has a counterparty – which is pretty much all the paper assets in the world – bonds, futures, any and all derivatives and yes, even the paper currency – will crash. What will they crash against? Yes, that’s right - Gold. All the world’s capital – trillions, perhaps quadrillions of it - will come rushing into the very tiny physical (NOT paper) Gold market. Remember, the world’s real physical capital – real assets such as land, oil-refineries, mines, infrastructure, etc. will not vanish, only it will be re-priced in terms of Gold and its ownership transferred to those who hold it. Since everything stays on this planet, it is a zero-sum game and the winner will be Gold. In other words, an ounce of physical Gold will command a lot more in real purchasing power than it does today. Just like a national currency is a claim on goods and assets within that country, Gold will be a claim on global goods and assets worldwide.

Paper Gold Will FAIL

Today what you think of the price of Gold is nothing but the price of paper Gold. "What is the difference between the two? We are still getting the metal at the price we see on the COMEX, are we not?", you may ask. Sure, but the key word is still. Even today you have to pay "premium" to the futures price to get physical ranging from about $50 for some coins to about $10 for bars. When it all blows, these “premiums” will skyrocket and the price of physical WILL decouple from the official paper price (this is what the guys at EverBank are scared s--tless about), as we already witnessed in 2008 – and this is the good scenario. Indeed, we may have a situation where there is no physical available at any paper price.

1. The GLD ETF

The problems with the GLD ETF are too numerous to enlist here but why bother when they have already mentioned 'em all in their prospectus! It is simply another Wall Street scam designed to rip off the retail investor and rest assured, when the SHTF, you will be the last in line since the insiders need somebody to hold the bag in order for them to get bailed out. YOU will be the one left holding the bag. Unless you have a direct line to Ben Bernanke, I suggest you get the hell out of any paper ETF’s such as GLD, SLV, etc. Remember AIG? It’s all good until it isn’t.

2. The Gold Futures Market

The futures market is nothing but a tool for the dollar managers (US Government/Fed/Bullion banks) to manage/control the price of Gold. Any rational observer with an iota of brain who has watched the gold market for any reasonable length of time can tell that the price is intentionally driven down during the Comex trading hours. If you don’t believe this, either you’re in denial or worse – collusion - and IT WILL end up costing you big time. Given the massive, concentrated and long-term (the entire past decade - they haven't been net-long - not once - during that time period) nature of their short positions, it really isn’t that hard to deduce that the banks do not nearly have enough metal to cover their shorts and that the sole intention of the massive short position is to control the price. Whenever the price rises (or threatens to rise) the big bullion banks ala JP Morgan create massive naked shorts introducing fake supply of Gold in the market, thus driving the price down. “But the price has been rising for the past decade, hasn’t it? So how can you say they are driving it down?”, many people ask. Well, the constraint on the bullion banks has been the availability of the physical metal. If the metal is not available, the fraud of the paper market is exposed and they lose their price managing ability. So they allow the price rise to a level at which there are some weak hands willing to sell and then they hold it there till all the sellers have been exhausted (I am assuming the Fed has already sold all the US Gold during the past decade). So strong are Gold’s fundamentals that despite the massive rigging, all they have been able to do is slow its rise. The weak hands who sell the physical metal at every price rise have helped them in this endeavor. But soon, as the bond market implodes, they will run out of sellers. Treat the availability of real metal at today's paper price a gift and buy as much as you can.

To those who think that the Comex shorts will be crushed one day and the price of paper Gold will do a moonshot, to them I will say that you are dreaming. The Comex shorts will be crushed, but not in their own casino! If and when a majority of paper Gold longs demand delivery a force majure (who do you think the US Government will side with?) will be declared with cash settlements and/or offers of equally worthless GLD shares (don’t tell me you didn’t know about this). By some accounts, this is already happening. What will happen to the paper price then? That’s right – it will utterly collapse even as the physical’s price is rocketing. Paper gold holders will dump it all to buy the physical – which, unfortunately – will most likely not be available at all. Yes, yours truly has been trading the paper [Gold] markets himself, but only with the objective of converting the paper profits onto the metal. Having said that, in light of the sum total of the recent developments mentioned in this update I think it is too risky to be trading right now and one should just sit 100% in physical Gold and some currency for day-to-day needs.

Additionally, there is increasing evidence that the Europeans have withdrawn support from Wall Street’s paper Gold market (COMEX and the LBMA, which also operates on a fractional reserve basis as documented here) and are in favor of setting up a physical only Gold market (this is quite a long story - for details, I suggest you go through FOFOA’s blog). Jim Willie had this to say in a recent piece (he’s been accurate on many things so far, so I at least pay attention when he has something to say):

Fast approaching is the event of GAME OVER for London, a condition that has already reached critical level, according to a key reliable source of information with London connections and direct experience with its market events. How long can a major metals exchange sell contracts but have miniscule supply of gold in their vaulted possession? The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious metal at prices considered reasonable is also vanishing. The London gold banker said,


"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace."
Wall Street and the US Dollar are being increasingly marginalized at the global level with China having instructed its companies to renege on Wall Street’s derivative contracts last year; Russia, Middle-East and China setting up their regional currency blocs; Germany calling for an end to the CDS casino and the recent exclusion of Wall Street banks from European Government bond market. For obvious reasons, none of this is getting much play in the lapdog US media.

Physical Gold in your personal possession is the only thing that will survive the coming financial Armageddon. What we are witnessing right now is nothing but the calm before the storm. Keen observers are hearing rumblings beneath the ground signaling an imminent volcanic eruption. Once it blows it will be too late to take action. Trading paper markets for paper gains is like picking up pennies in front of the steamroller. It’s time to stop trading and just buy the physical metal. The window of opportunity to convert your casino chips (fiat money) into real money, i.e. Gold, is getting smaller by the hour. He who panics first, panics best.

GET. GOLD. NOW.

61 comments:

  1. Hi GG,

    I understand your general concern about the dollar versus gold, and I agree the dollar going into hyperinflation would be very bad around the world, but can't we expect some other currencies to keep their value relative to gold?

    Thanks

    AD

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  2. @Aiken:

    Although I can't say with certainty, I expect the Euro and Yuan to perform much better. But no currency/financial asset will provide as much wealth preservation/appreciation as physical Gold. The simple strategy is the best strategy right now IMHO.

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  3. GG, do you consider silver a proper alternative to gold.

    Would you buy $2k silver over $2k of gold at todays ratio (around 65%)?

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  4. @Anon:

    At today's rigged prices, sure, Silver is a great bargain, but the greatest gains will be realized in Gold IMHO. Being the Central Bank/Government reserve asset, it will be hoarded in much larger quantities and thus greater nominal price as well as purchasing power.

    ReplyDelete
  5. Hi Gordon,
    Great post. I read it at ZH. Wanted to return, but comments (and site search field) were disabled today. Do you know why? Is this new policy to exclude nonregistered users from reading (and posting) comments?

    ReplyDelete
  6. GG i think when max keiser put your article up on his website everything just crashed. nobody on max keiser could read you on ZH and going crazy. well you kinda imploded the systems. so i learned a lot today from your article and comments. i am so dumbing down for real. i get US$'s are going to be worthless. it is hard for me to be female and feel so vulnerable with physical wealth. it makes me paranoid. gold is pretty heavy to carry around. it is a bit of a dilemma. i don't display my gold and diamond jewelry in some situations because you get tapped or outright robbed in daylight.

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  7. As I recall, the "metals select" product from Everbank has not been available for new investment for some time. I suspect that the math on it was wrong and Everbank was outside their risk profile.

    Perhaps whatever hedge they had on for this product is going sour. I know that doesn't fit any sort of conspiracy theory, but people make dumb mistakes all the time and that is the most probable explanation.

    While long gold, I am sure that Prechter has a valid thesis. Not only that, but he also recommends an allocation in gold even if the price goes down in deflation.

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  8. And FOFOA? Come on. All you need to do is read the "original" "friend" comment stream to see that it was some zen mystic bullshit dreamed up by a guy that was long gold at a time when it was getting KILLED.

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  9. Nice post GG! I enjoyed it.

    I remember when Everbank was the only bank selling Icelandic Krona CD's in the US. It was early 2008 and they were paying 14% while US banks were paying something like 3%. Unfortunately Everbank was too small for its customers to get bailed out like IceSave in Europe after the Krona collapsed a few months later.

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  10. Thanks GG,

    Neatly summed up my attitude.
    I too pulled my paper out a few weeks back, and your steamroller metaphor is a perfect description of my reasons for doing so.

    Keep up the good work.

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  11. Great post. Any recommendations on reliable and trustworthy dealers for gold coins like Canadian maple leaf? I'm new to whole buying physical gold. Thanks.

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  12. I liked it too GG.

    What do you think about purchasing coin? Who is the best dealer? I have used Monex (not impressed) and APMEX (so-so) and Ebay (got some deals when MS / Paypal was running the 8% refund scam).

    I can't find 1 oz gold under $1450
    and silver eagles haven't dropped below ~$20 in a while.
    The prem is building!

    ReplyDelete
  13. Thanks for all your nice comments!

    @Anon:
    I think there must've been heavy load on the site at that point of time, so it could've been a temporary thing. I am not aware of any policy changes on ZH.

    @kathy:
    Thanks for your nice words. It is important that you do your own due diligence before investing in ANYTHING, including physical Gold.

    @Anon:
    If EverBank's Metals account is closed to new investment, why have they not mentioned it on their website. In fact they have an "apply online" and "call xxx number" link on their "Metals Select" account page.

    http://www.everbank.com/001Metals.aspx

    @Anon:

    About the A/FOA/FOFOA guys - I dunno but they've been pretty accurate on how things have transpired so far.

    @Anon:

    My personal preference is to go with big reputed dealers like Apmex, etc. Jason Hommel is also good I've heard. There are a lot of operators out there selling fake metal, so be careful and do your own due diligence before buying. A trustworthy local dealer who you can pay cash is the best IMHO. (Disclaimer: I have NO relationship with Apmex or any other dealer whatsoever)

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  14. anon says:
    "I can't find 1 oz gold under $1450
    and silver eagles haven't dropped below ~$20 in a while.
    The prem is building!'

    you must not be looking to hard. Kitco, Monex (never had a problem with them) and Blanchard all have Gold Eagles below 1200.00

    Since you possess a computer and the internet surely it couldn't be that hard to find sub 1450 gold eagles..took me 1 minute.

    ReplyDelete
  15. What do you think of Gold/Silver stocks... companies with metal in the ground?

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  16. Question and a good one to ask? I own gold bullion from 1 grams to 10 oz. I bought the small gram bars for barterring some day and any gold is better than dollars....My question is this....If the dollar is gone than what good is gold other than to barter with? There will be no value for gold (pegged to the dollar). What are your thoughts on what to do with the gold if someday the dollar is wiped out?

    Thanks!

    Lou

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  17. And what are your thoughts on palladium bars?

    Lou

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  18. @stockreflex:

    Where Gold is going, most likely the mining companies with worthwhile mining assets will be nationalized - kinda like state utility companies. Sure, their shares will be worth a lot more than they are today and you probably will be paid a premium by the government to acquire those shares, but the appreciation in these stocks will be nothing compared to the appreciation in bullion. Gold in your hands will be worth a lot more than Gold in the ground!

    @Lou:
    I won't say the dollar will be wiped out, most likely it will be devalued - a lot. There will still be a US Government issuing paper money - it just won't be worth as much. The dollar has been slowly devalued ever since the Fed was established; only that process will be accelerated a lot going forward with step devaluations as happened with the British Pound in the past. You will still be able to convert your gold into official currency and spend it. ook to what has happened in countries like Russia, Argentina etc.

    Sure, all hard assets including palladium will go up, but nothing will match the appreciation in Gold since it is and will remain a Central Bank asset.

    ReplyDelete
  19. from Harvey Organ:
    Rob Kirby with a fascinating find:

    Subject: looky here

    Go to the Fed's "flow of funds report" Q4/09 just released toady at this link:http://www.federalreserve.gov/releases/z1/Current/z1.pdfScroll down to page 24 [Flow of Funds with Rest of Word] and observe line # 14 on that page. It states that the U.S. Fed sold 190.7 billion dollars worth of gold / SDRs in Q3/09. 190.7 billion @ 1,000 per ounce would be 5,937 tonnes of gold .

    A Chartered Financial Analyst subscriber of mine follows this release every quarter and alerted me to the "back-dating" of the gold sales for Q3/09 in the release today. Note: In the same flow of funds report for Q3/09 at this appended link - there was no mention of gold / SDR sales - period:http://www.federalreserve.gov/releases/z1/20091210/z1.pdfI've attached the Flow of Funds Report for both Q3/09 and Q4/09 for comparison purposes.

    Question: has the Federal Reserve just "papered over" the disgorgement of nearly 6,000 metric tonnes of sovereign U.S. Gold bullion?
    best,
    Rob Kirby



    end.



    The report is from the federal reserve government releases and it shows the flow of funds in the 4th quarter.

    I checked the government data and sure enough on page 24, line 14 the usa sold 190.7 billion dollars of gold (SDR's translated into real oz). At 1000 dollars per oz that translates into 5937 tonnes of gold.

    The previous quarter on the flow of funds reports showed no gold activity. Looks like the usa is trying to paper over their sale of 6000 metric tonnes of gold.

    The usa has 8133 tonnes of gold so 73% of the usa gold reserves have been liquidated.

    The problem here is that the gold belongs to its citizens and not government. The government needs congressional approval to sell the gold.

    Trouble ahead on this front!

    PS blog was easier to read when black font on white background. :)

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  20. @capt goodvibes:

    Thanks for this info. Great find!

    Reverting to white over black :)

    ReplyDelete
  21. Thanks for your answer. What I wanted to know is if there is a new currency implemented to replace the dollar...would they repeg gold to it at like $30 even though gold in dollars was...lets say worth $5,000 the day they swap currencies? Who's to say they (fed & gov.)can't! and what makes you think the dollar will survive as you mentioned...After all the fed and treasury will never be able to pay the borrowed money even though they will tax the citizens to high helll soon!

    They are already rigging the stock market by pumping trillions into it and calling it prosperity....I don't trust our leaders one bit as all numbers announced to the public are bogus (unemployment, forclosures, banking fasb rule scam etc....). Please answer if you can about what you will think happens if we do get a replacement for the dollar...just speculate a little for me...Thanks Lou
    PS...I have some youtube video,s about the economy and how they the government lie's to the public everyday! " econbustsoon " is my youtube screen name ...check me out!

    ReplyDelete
  22. and what do you think about etf's (non-gold). Like srs, sds, faz, scc etc... are they a good holding or the gov will just make these go to zero 0 and continue the assault on the shorts?....or will these be like the gold etf's...unsafe?

    Lou

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  23. Hey Lou,

    Maybe you missed the gist of GGs post - physical gold is the only asset likely to come out the other side of this soon to be infamous chapter of fiat currency experimentation posting a relative gain for holders.
    Paper will become worthless or greatly devalued, maybe overnight. All paper. See Exters Pyramid diagram at www.runtogold.com

    When TSHTF there will not be time for anyone to reallocate their portfolios.
    Note that CBs hold physical gold reserves, not palladium, not etfs, not silver and they wish they had no FRNs.
    Get physical with a solid percentage of your portfolio is the advice here.

    ReplyDelete
  24. Great ZH article GG! Been reading your comments over there for a LONG time and the blog is great.

    I am a huge silver fan and think id things really pan out well for gold things will be pretty good for silver as well. Just in case, have both ON hand.

    ReplyDelete
  25. Just navigated over here from your comment on Zero Hedge. A bit late to the party but I am forwarding this article to my husband - his eyes glaze over most of 'my' financial stuff :-) but this is wonderfully clear and concise for him. A beautifully written summary, thank you!!

    We have as much physical gold and silver as we could afford to buy stashed away. Thank God! We're hoping to get more soon and now reading this, in light of the CFTC hearings, I'm worried that our time may be running out. This is the worst time to be poor, when it's so important to collect the good stuff, now when it's still priced in 'paper disguise'.

    Thank you again for spreading the word. People like you and A Douglas, H Organ, and Austrian economists are the best hope for us little guys.

    Gonna nose around here and see if you have anything on the CFTC stuff.

    ReplyDelete
  26. @Renfield:

    Thank you for your kind words :-)

    ReplyDelete
  27. Thanks for the article. After being out of work for waaaay too long, not yet retirement age, all savings are in mutual funds-read PAPER. Does buying hard metals in IRA's, Roth, etc. have the same risk of Gov't grab? Of the few gold-in-IRA custodians, are they LBMA backed, and hence, at risk?
    Liquidating these accounts to cash, I would take a very serious hit with taxes and penalties.
    Any help out there?

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  28. I have put around 20K in gold and silver in BullionVault, which guarantees physical possession of the metals and stores at Viamat in Swiss.

    GordonGekko: is this a good alternative to physical possession at home??

    ReplyDelete
  29. @Anonymous1:

    "Does buying hard metals in IRA's, Roth, etc. have the same risk of Gov't grab?"

    I would think so, especially now that the govt. is thinking of moving all retirement monies (401k/IRA) mandatorily to Treasuries as they run out of buyers in the bond market.

    @Anonymous2:
    I believe you sent me the email? I answered it.

    ReplyDelete
  30. Withdrawing funds from IRA/401/ROTH is a cruel twist of fate in order to buy a hard asset that the Gov't allows in your personal portfolio.
    The question is; Are the custodians playing the same game, i.e. leasing or offered to sub-custodians, etc. If the asset isn't allocated to an individual investor, you can bet that they are playing the same game that GATA exposed, and there is very little gold backing up your paper.
    I hope it isn't true, but we know the market is manupulated. I can't even begin to get my head around the retirement funds mandatory move to Treasuries!!

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  31. As a rule, anything the government can see, it can (will) steal.

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  32. Gordon, do you think the post CFTC meeting has started the implosion?

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  33. Absolutely, but then again, you should never underestimate the ignorance of the sheeple.

    ReplyDelete
  34. On page 23, line 28 of the Z1 report, there is what appears to be an off setting entry for gold/SDR sales/purchases.

    Can someone explain or shed some light on the subject?

    ReplyDelete
  35. Did they purchase SDR's with gold?

    ReplyDelete
  36. @Anon:

    Check out this link:

    http://www.financialsense.com/fsu/editorials/kirby/2010/0316.html

    ReplyDelete
  37. ahahaha a bunch of paper gold ETF and paper gold certificate will find out that eventually they're gonna be left holding the bag.. paper bag, that is :) BOOOOOYAAAAH!!

    ReplyDelete
  38. Hi GG

    Would you consider GoldMoney to be a safe place to hold your gold?

    Thanks
    Ozzy

    ReplyDelete
  39. @Ozzy:

    In the coming Tsunami, NO third party is safe. Even if the party is honest itself, there is nothing stopping the government from pillaging it. Your Gold should be a VERY private asset with NOBODY but yourself knowing about it. Take personal PHYSICAL possession of your Gold - NOW.

    ReplyDelete
  40. @Ozzy:
    That said if you HAVE to HAVE a third party for your Gold, then GoldMoney might be OK, but choose a storage location outside of the US/UK (perhaps Zurich?). If they don't allow you to choose a location outside these countries, then DON'T.

    ReplyDelete
  41. What you going to spend an ounce of gold on?It will be no good for day to day living expences if TSHTF.It will preserve your wealth if you can hid it good enough i suppose.
    How long do you think it will be before you could 'cash' in your gold and reap the rewards in a stable currency? If its years ,not months , then your better off buying and storing 'stuff' with your cash.Maybe smokes are the way to go.

    Regards
    Ozzy

    ReplyDelete
  42. I suggest you read thru human history...such as what happened in countries like Argentina.

    ReplyDelete
  43. GG Can you explain me why a $600T OTC Derivatives bubble is still in tact? This whole chain of swaps, options, futures and other contracts seems to be going smoothly like nothing's ever happend. How many $ of these papers will default? Also noticing 450T consists of interest rate swaps. What are the underlying assets for these papers? How can it ever exceed such an amount???? It must have some value to be sustainable?

    ReplyDelete
  44. I assume it's all leveraged? And either of the contracted parties (bank - investor?) will eventually have massive exposure??? Explain.

    ReplyDelete
  45. LMFAO, i have never laughed so hard in my life. I suppose i just get a kick out of seeing people melt. From little old ladies worrying about carrying gold bars in their handbags to buy potatoes(which are also quite heavy), to daft young men probably hiding gold bars in their moms fridge...its comedy "gold". So, i guess im gonna get to shoot my gun soon, to protect my gold teeth?

    Keep up the good work GG, but try and get out and see the world a bit more.

    Ps I bet you are praying for armageddon just so you can say i told you so, ahhh what it is to be human and degenerate.

    ReplyDelete
  46. @Anon:

    We'll see whose laughing soon enough :-)

    ReplyDelete
  47. Yeah GG, we probably will see whos laughing soon... but i am laughing now, what do you make of that? I feel for you man, but you should have a bit of faith and stop trying to scare people into buying gold(of all the things to spend your time on, jesus where did it all go wrong dude?). For the record, Japan purchases of Trsy bond and notes alone rose $6.8bln to $14.9bln, the total agency purchases for Feb and March was $13.2bln...that was more than the previous 12 months combined! and a lot of paper. Maybe the Japs are in on it too! TIC data then showing a $104bln surge in Trsy purchases in March alone? $104bln!?
    If you have so little faith in your fellow country men, why dont you move to Singapore or Hong Kong? We'll be ok here, trust me.

    ReplyDelete
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  49. Gold doesn't lose it's value, correct?

    ReplyDelete
  50. Yeah, I know gold doesn't depreciate value. More so, its value goes higher as time passes. Because it's so hard to find it, people ought to take care of their gold once they grab hold of it. I've read a few more articles in BuyGoldAssets.com.

    ReplyDelete
  51. Gold is a favourable commodity to hedge against inflation as it largely retains its value compared to paper currencies during times of inflation. Monetary policies by central banks supported the price of gold last year, and saw it reach impressive highs. If further monetary policies are introduced this evening, it should support gold strongly.
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  53. Your article is dated 2010 and we are in q2 2013 with the spot price of gold falling. The only impending change is tapering of qe. Are foreigners still buying treasuries and what is the % of indirect buying interest as of today?

    So where is the crash and the inflation?

    ReplyDelete
    Replies
    1. Inflation is there: http://www.zerohedge.com/news/2013-06-29/presenting-inflation

      Yes spot price is falling in USD terms, but if you look at other countries such as India things have changed quite a bit. There are gold shortages now there due to government restrictions, and their currency has also fallen quite a bit so gold still hasn't fallen that much. Also the socioeconomic scenario has also worsened with outright theft occurring from bank accounts in countries such as Cyprus.

      Even though we had a good ride up to $1900 subsequent to this article, I admit the crash call turned out to be a bit premature, but none of us knew how long this drama (QE etc.) would play out and it is surprising as long as it has. Much of it has to do with the level of ignorance out there which I definitely underestimated. But no matter, its better to be early than late when things like preservation of your hard earned wealth are at stake. I hope you agree.

      Delete
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  55. Gold is a commodity which retains its value as compared to paper currencies during times of inflation.

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