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Gold's Regular Morning Mugging

A broad daylight crime-in-progress?
Tuesday, February 19, 2013, 9:38 PM

Not everyone is a morning person. And few people like Mondays.

But if you're a precious metals investor, mornings especially Mondays are brutal.

The Evidence

The precious metals are routinely sold off at or soon after the 8:20am EST morning open of the New York NYMEX exchange.

Below are the daily gold price charts (source: Kitco) for each Monday (or Tuesday, if Monday was a holiday) since early this year. The current day's gold price is noted by the bright green line. The morning takedown is highlighted by the orange oval.

Monday, January 7

Gold is taken down $10 immediately after the 8am NYMEX open

Monday, January 14

A late breaking rally begun on the London exchange is quickly contained at the NYMEX open, and then beaten down nearly $10. Notice that the previous Friday's gold price action (the bright blue line) also showed the same behavior at the same time, but with an even more severe response once the NYMEX opened.

Monday, January 21

The 8am sell-off is smaller here (only a few $), but still noticeable.

Monday, January 28

Again, a sell-off happens after the 8am open. Note again how the previous Friday's action was similar, but even more severe.

Monday, February 4

Finally, an outlier. While there was an initial dip in the first hour of the NYMEX, the price took off soon after. So let's not count this one.

Monday, February 11

An immediate $14 drop at the 8am open. The downward momentum started in London, but the vertical downdraft once the NYMEX opened is unmistakable.

Tuesday, February 19

While less sharp, the steady selling clearly begins at 8am, beating gold down $12 to the technically significant $1,600 threshold.

Volume & Timing

Running the above data by Chris, he noted two additional observations.

The first is that the price suppression is commencing increasingly in advance of the start of the NYMEX's open outcry process at 8:20am EST (i.e., how trading happens at the NYMEX). This suggests that it's being done on behalf of powerful players granted permission to circumvent the rules.

The second is that the volume levels in this pre-open trading is similar to that seen during active hours. That is very unusual in markets, and exceptionally high.

Silver

For those wondering, the daily price charts for silver indicate measurably similar action during these gold takedowns. Not in exact lockstep, but directionally similar both in degree and timing.

[Update: after initially writing this, I noticed Zero Hedge posted a related analysis today of the takedowns in silver for the month of February so far. Like gold, the selling is concentrated in the first few hours of the day on the NYMEX]

...they appear to be strangely collected in a brief four hour window at the start of the day... the black line is the average of the day's performance in February across the dates selected.

Charts: Bloomberg

The Conundrum

It's hard to swallow that these charts are evidence of a free and efficient market. Otherwise, a pattern this predictable would be quickly removed as traders and HFT algos piled in to a "sure" bet. 

Instead, this is behavior one would expect to see if powerful interests wanted to suppress the price of gold: hit the price hard and early at the start of the trading week to prevent the price from building upward momentum, as well as to make capital think twice before entering the gold market.

Who is doing this selling at the market open? Is it TBTF ("too big to fail") banks making profit on large short positions? Is it the Fed, through proxies, keeping the gold price contained so as not to signal how badly QE is devaluing the dollar? Allegations swarm across the Internet that it's one of these or both. But we don't know for certain. The exchanges don't make that information available to the public.

But while these charts above are not enough evidence to prove that the gold price is being manipulated, they sure exhibit the symptoms one would expect to see if it is.

So, the big question is: if the precious metals market is being manipulated, is it wise to be in it?

History is littered with the bodies of investors whose investment thesis was right, but whose timing was wrong. Even though precious metals investors may be correct in their fundamental rationale for buying gold, can the precious metals markets remain held in check (or driven further down) for long enough that it's not worth the risk of owning the metals at all right now?

The Decision

As I laid out in Time To Choose, investors are facing a junction where they need to make a decision. Since rising markets and fiscal policy have divorced themselves from fundamentals, the gap between "what is" and "what should be" is widening. The weighting of your capital allocation needs to be based on which side you see winning out here.

From our perspective here at Peak Prosperity, for all of the reasons explored in the Crash Course and discussed here daily, we firmly believe that fundamentals will ultimately matter most. And when they fully express themselves, there will be a tremendous re-pricing of assets largely higher for tangible assets that require energy to obtain, and markedly lower for paper claims on wealth (stocks, bonds, and their derivatives).

But as we've often said, the corrective process may very well take much longer than we ever expected to arrive. Frankly, we're amazed that the system has held together so well over the past 5 years with all of the thin-air money printing, trillion-dollar deficits, and $100 oil. If you are playing to the fundamentals, as we are, you need to be eyes-wide-open that you may be frustrated for far longer than you'd like to be.

So, if you decide to bet on the continued success of the status quo, your choices are easy: Get in the paper markets and go long. The Fed will be adding $85 billion of liquidity rocket fuel each month for the rest of the year to push the prices of your paper investments even higher.

But if you choose the fundamentals, here are a few important guidelines to keep in mind:

  • Build your core position in allocated (or better, personally held) physical bullion. It will never go to $0, you've removed or minimized counter-party risk, it can't be rehypothecated, and is often the most anonymous way to acquire PMs.
  • If you invest in "paper" gold, do it with money you can afford to lose. Risks of all sorts (price manipulation, counter-party risks, market shortages, rule changes, trackability, etc.) are all much higher. Read the prospectuses carefully, and make sure to only invest in those funds that fully back their shares with bullion (vs. futures contracts).
  • Don't use leverage. Don't let your enthusiasm make you vulnerable. Many leveraged ETFs lose money over time due to transaction costs even if the metals rise. And when the markets stay flat for prolonged times or worse, go down they can be widowmakers.

A Time to 'Hold Fast'

It's only human to have your confidence shaken when the market acts so completely differently than you think it should for so prolonged a time. Chris and I feel the same pain, both constitutionally as well as in our wallets, as much of our net worth is invested in the PMs.

But every time we go through the exercise of challenging our assumptions, we walk away feeling certain that our charted course is the correct one and that at some point, fundamentals will prevail.

As for what those fundamentals are, there's a seminal piece Chris wrote back in 2011 called The Screaming Fundamentals for Owning Gold and Silver that is even more true today. I highly recommend revisiting it.

Chris has mentioned many times that this market feels an awful lot like 2007, when asset prices powered ever higher month after month, even though the underlying data was deteriorating fast. As then, he sees a high and rising potential for a violent correction that will take the market by surprise and vaporize a lot of wealth before players are able to react.

It's times like these when you need to have the courage of your convictions and hold fast to whatever course of action you have decided upon after careful, considered analysis. During these trying periods, it's helpful to converse with a community of like-minded thinkers who can help remind you of the facts underlying your rationale which is why I recommend joining PeakProsperity.com's Gold & Silver Group if you own PMs. It's a great source of both informational and emotional support. 

Chris and I will continue to closely track the developments in the precious metals markets and report back on any material changes to our outlook as they develop. In the meantime, we'll be holding fast. We hope you'll be doing the same, too.

(click on image if in need of dramatic inspiration)

~ Adam Taggart

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62 Comments

jcat3022's picture
jcat3022
Status: Bronze Member (Offline)
Joined: May 9 2012
Posts: 75
"Truth is treason in the

"Truth is treason in the empire of lies" ~Ron Paul

anexaminedlife's picture
anexaminedlife
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Joined: Jan 19 2012
Posts: 48
Crisis of faith?

When I discussed the case for PMs based on the fundamentals several years ago with those who disagreed with me  (not that I or those with whom I discussed really understood the fundamentals - but let's call it the fundamentals as we understood them from those we trusted), I always refused to argue about it and just called it a "belief" on both of our parts and let the conversation end with the statement that "history will tell who was right." I have no idea when that history ends but if it ended today, I was wrong.   So far the Keynesian beauty is winning the contest and I am seriously starting to doubt my beliefs. Appealing to "manipulation" strikes me to be a little like a Christian believer blaming it on Satan. Maybe there is manipulation, maybe there is a Satan too.

Of course, I felt the same way in 2005 or so when my gut was telling me the housing market could not stand but it kept roaring on. I didn't completely understand what would bring down the housing bubble but I intuitively knew it was a bubble that was going to pop. (Okay, there was a little more than intuition involved but not a whole lot of technical analysis.) While I realize my past experience doesn't predict the future, it is the same doubt I had about the run up in the housing market - but just knew I was right despite all the evidence at the time to the contrary -that keeps me "holding fast" today to the case for precious metals.

Woodman's picture
Woodman
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Posts: 1025
Those Monday morning wiggles

Those Monday morning wiggles don't seem to me to reflect the true worth of gold; the metal doesn't rust, decay, or depreciate, unlike like everything else I own!

robbie's picture
robbie
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What if the major markets couldn't crash?

As then, he sees a high and rising potential for a violent correction that will take the market by surprise and vaporize a lot of wealth before players are able to react.

The primary argument being made for staying out the market is generally agreed to be the risk of a violent, unprecedented, or significant correction that will destroy wealth in rapid fashion. The article above presents compelling data alleging the high likelihood of  manipulative intervention of the gold and silver markets, and quite probably others  What prevents the same intervention from blocking or ultimately reversing a major market crash? The common rebuttal is that the markets are too complex to allow for a "do over" in what would otherwise be the chaotic aftermath of a violent market crash, but are they really? Conversations I've had recently have me questioning whether the concept is as far-fetched as I once thought it to be. The increasing centralization and electronification of trading platforms permit large scale and unprecedented intervention in actively changing markets. The "flash crash" demonstrated that adverse events in the market could be reversed if deemed necessary by TPTB. Given the fragility and inter-related nature of the global economic system, why would we expect that a hugely disruptive major market event would 1. be allowed to occur, or 2. be allowed to stand without reversal? If a scenario is now possible where major markets are "immunized" against significant loss, the decision to hold hard assets in the short to intermediate term becomes more complex. I think everyone agrees the present situation is unsustainable, but as was mentioned above, it may be sustainable through artificial means MUCH longer than expected. Perhaps long enough  for precious metals holders to be punished signficantly beyond current expectations.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
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Posts: 1208
trend is your friend

That's the motto of any trade - stay in it until things change.

So in this case, the trend of the gold/silver market tanking prior to the NY open - I've observed the same thing, but it doesn't happen this regularly over the longer term.  This appears to be a particularly egregious phase right now.  But these things go in cycles.  Believe me, if it were this regular all the time - $10 moves each morning, every morning - I'd step up to the plate and join in.  Why not grab free money?  And I suspect rather than some shadowy force doing all the work, it might be a shadowy force occasionally doing some work, and a bunch more "me too" folks who notice this happening more rapidly than I do (perhaps they have better monitoring tools or they've studied detailed intraday historical information and they know what to look for), and then jump in there to...grab the free money.

But I believe the shadowy force can only profitably do this while there is a decent amount of speculative long open interest in the paper futures market.  You can see the spec longs evaporate during the huge spikes down - a massive number of shares get traded when certain support levels get breeched.  Once that open interest is gone (and right now its supposedly at the lowest level since Dec 2008), it will greatly increase their risk to force the market down since they don't have those spec long stops being triggered to help them cover their shorts.  I'd guess that's likely when prices will stabilize.  That's just my opinion though.

I only have access to public data at 3 points during the trading day - london AM fix (1030 GMT), london PM fix (1500 GMT), and COMEX settle prices (2115 GMT).  I did a study that examines these 3 time periods. The goal was to see in aggregate during what time period prices moved over the major gold bull market since 2000-01-01.  Here is what I saw:

  • Between London AM - London PM:  $-388 [avg -0.12 per day]
  • Between London PM - COMEX settle: $-1110 [avg -0.34 per day]
  • Between COMEX settle - London AM next day: $2824 [avg 0.86 per day]

Put another way, during a $1400 bull market move in gold, buying during London trading hours and selling at COMEX close would have resulted in you losing $1400.  Buying after COMEX closes and selling prior to London AM fix you'd be up about $2800.  However, the effect isn't pronounced enough for ME to actually make money, given spreads and trading costs.  If I had intraday COMEX data for the last 13 years I might be able to come up with something more interesting, but I'm just a simple guy with no access to that data.

Moves were more pronounced during a few different periods:

  • London AM-London PM: -942 [avg -0.50/day] when gold price above 50MA and 200MA (i.e. gold in a strong uptrend)
  • London AM Monday-London PM Monday: -368 [avg -0.55/day]
  • COMEX close Thursday-London AM Friday: $740 [avg 1.13/day]
  • COMEX close Friday-London AM Monday: $684 [avg 1.11/day]

To me there's clearly an effect, and it shows up over time.  If anyone has any studies they want me to perform, I'd be happy to do it and release the results to the site.

If anyone has access to intraday tick data for gold...well now.  Let me know that too!  :-)

mobius's picture
mobius
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Posts: 152
from Bob Farrels 10 Rules...

Good morning folks,

Browsing through BI, I came across this article, which may provide some (much needed) moral support:

http://www.businessinsider.com/bob-farrells-10-rules-in-charts-2013-2

Investor psychology cycle

For what it's worth, I keep to much purchase plan and buy the dips.  This is long term stuff, so I try to rationalise that one day, I'll be wondering why I worried so much about this stuff.

Also a point from my observations in Europe.  I noticed that the Euro unexplainedly gained against the USD in Dec/Jan.

I'm not technical, I just know a good price when I see one. 

Any comments/observations?

http://www.xe.com/currencycharts/?from=USD&to=EUR&view=1M

greetings, J

RJE's picture
RJE
Status: Diamond Member (Offline)
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Posts: 1369
I can live with these words completely...

Adam said:

"It's times like these when you need to have the courage of your convictions and hold fast to whatever course of action you have decided upon after careful, considered analysis".

Everything reverts back to the mean, and things are as frothy as they can get right now according to market fundamentals.

I have no expertise at all with the market, and rely allot on those who's character precedes them. I do know statistics though, and I consider my knowledge of them my strength, and I believe in the "gut feeling" as it has its place in a real pinch, plus I have a descent work ethic. So far so good then.

BOB

Oliveoilguy's picture
Oliveoilguy
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Posts: 361
PM prices will stabilize

davefairtex wrote:

Once that open interest is gone (and right now its supposedly at the lowest level since Dec 2008), it will greatly increase their risk to force the market down since they don't have those spec long stops being triggered to help them cover their shorts.  I'd guess that's likely when prices will stabilize.  That's just my opinion though.

Your opinion and your analysis are highly valued.  My buy signal is less scientific, it's when I start to become nauseous, and now the moves in Silver getting my attention. 

AndyG's picture
AndyG
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At the moment I'm quite

At the moment I'm quite pleased the price is pushed down - it give me more time to slowly improve my physical holdings!

I think most of us following PP are looking longer term and realised gold is preserving wealth, and a hedge against the future, rather than an investment per se. If I was an investor I would be worried. Since I'm an accumulator [like the Chinese, Indians etc] I am pleased to see prices drift down. More Oz to my £. Although with a weakening £ to $ for me that makes it more interesting smiley

RJE's picture
RJE
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Posts: 1369
Sometimes the fundamentals start showing themselves...

http://www.zerohedge.com/news/2013-02-20/foxconn-freezes-hiring-iphone-production-slowdown

Is this a tell Folks? We shall see. Gold, Silver, Copper and Oil have been acting funny lately.

BOB

tricky rick's picture
tricky rick
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The long look...

DavefairTex:  Ever heard of Ranting Andy Hoffman over at Miles Franklin?  He's been on the soapbox about manipulation for years!!

He's tracked and charted many many movements you might be interested in.

On the reality side (if there is such), serious consideration must be made for holding G&S as TPTB can, and probably will, change RULES and LAW to their purposes.  Bugs of all metal type could end up that selfish 1% whose holdings are outlawed or taxes into poverty for the good of the state.

LesPhelps's picture
LesPhelps
Status: Gold Member (Offline)
Joined: Apr 30 2009
Posts: 254
Thinking long term

If you believe the three Es, or whatever way you visualize the coming change, assets are a no brainier.

Of course there is risk.  What's coming is a dramatic increase in risk, across the board, including investments/speculation.

I'm not planning to sell any physical assets in the next five years.  A lot can and will happen in that time.

Personally, I appreciate the continued buying opportunities.

Les

Time2help's picture
Time2help
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Posts: 442
Knock it down, please

BTFD

gillbilly's picture
gillbilly
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Posts: 378
robbie wrote...

Given the fragility and inter-related nature of the global economic system, why would we expect that a hugely disruptive major market event would1. be allowed to occur, or 2. be allowed to stand without reversal? If a scenario is now possible where major markets are "immunized" against significant loss, the decision to hold hard assets in the short to intermediate term becomes more complex. I think everyone agrees the present situation is unsustainable, but as was mentioned above, it may be sustainable through artificial means MUCH longer than expected.

I think this is a very good question, and none of us know the answer or can read the future.  I think we all agree that illegal manipulation is nothing new. When I was daytrading back in 98-00 I used to sit and watch the ECNs and was amazed at how bad it was. IPOs, trading on insider info, obscure derivatives contracts, etc, I guess why would th PM market be any different? It seems to me the more those who control the mechanisms of the market try do so by artificial means the more volatile it will become.

This is why I think a flash-crash might be possible. Most of the integrity of the financial system is gone. This means it has become a system of obfuscation which equates to a high level of unpredicatability. I think we are seeing this on a daily basis. Markets are not reacting to the traditional rules, and therefore investors are sitting with their fingers on the triggers.

Although it seems there is an immunization to significant loss, I think that the this 'artificial' immunization  you point out actually creates significantly more loss since our markets are ultimately supported by the faith of people. When that faith is fracturing, a small catastrophe can be the tipping point. I believe that TPTB really didn't see the crash of 2009 coming. How could they? They were so immersed in the system that was feeding on itself, and were incredibly socially distant from those who were ultimately effected. It's the combination of all these factors that I believe could bring a flash-crash if the future brings us an unpredictable catastrophe...which I think is highly likely. When? Who knows.

Thank You

Jim H's picture
Jim H
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Posts: 1476
Comex options expiry

Adam,  Thanks for this thread, and for the reminder that you are Chris are cognizant of just how "non-free" these paper metals markets are trading.  I will remind anyone who is interested that there is in fact one market that reflects the true value of paper fiat money and trades free.. that is Bitcoin.  When I started talking about it a few months ago.. it was at $12 to the Bitcoin.  This morning, it is breaking $29.  I still have no position.. lazy me.      

It's possible that a short term turnaround will happen post options expiry this Monday;

http://jessescrossroadscafe.blogspot.com/2013/02/comex-metals-option-exp...

For now it is just amazing to see how successful TPTB are in delaying the rush to PM's and miners.. and in fact making those of us who promote such ideas look like fools.  We know what the truth is... but it's near impossible to open anyone's eyes to this given the "signals" that the markets are giving.  Long term, the supply will simply dry up.  For now though, I am out of miners and using DUST to hedge the remaining metal I hold via PSLV and PHYS... there is blood in the streets with the miners now, and a buying opportunity coming for those with dry powder. 

For instance, has there ever been a more tasty value stock opportunity than IAG? (ImaGold);

P/E = 7.6,  EPS = $1.02, Div = $0.25 (3.2%!!!!!!).  Go ahead and beat it down more.. make my day!    

Jim H's picture
Jim H
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Posts: 1476
Paper money must be great stuff!

Because it is appreciating so fast compared to metals like Gold and Silver! 

source:  http://silvervigilante.com/bitcoin-runs-laps-around-metals-nearly-40-gai...

....As the currency wars begin to unfold, tangible assets will be the protector of wealth.
Everyone knows that the suppression of real market value in physical metals cannot
continue, it’s the final date that no one knows. For the extra savoy stacker, bitcoin
is perhaps the darling of the group right now as it the only asset that the wealth
destroyers cannot manipulate.

Rector's picture
Rector
Status: Gold Member (Offline)
Joined: Feb 8 2010
Posts: 335
Patience

Last time I checked, my PM's aren't getting any lighter.  This phase shall pass; its inevitable.

BTW what would you do if Gold were to jump to $6,500 by year's end?  Would you sell it and get back into paper?  Convert it to something you need?

When the price spike does happen (and it will) I fear that the situation will be so unstable that I will be afraid to sell into that environment.

I DO KNOW that if the prices were allowed to clear and PM's went where they are suppossed to go, then I would be DONE accumulating.  I'm OK with the program just like it is.

Rector

A. M.'s picture
A. M.
Status: Diamond Member (Online)
Joined: Oct 22 2008
Posts: 2311
A quick echo

Oliveoilguy wrote:

davefairtex wrote:

Once that open interest is gone (and right now its supposedly at the lowest level since Dec 2008), it will greatly increase their risk to force the market down since they don't have those spec long stops being triggered to help them cover their shorts.  I'd guess that's likely when prices will stabilize.  That's just my opinion though.

Your opinion and your analysis are highly valued.  My buy signal is less scientific, it's when I start to become nauseous, and now the moves in Silver getting my attention. 

Exactly this. 
When I see PM's taking a beating, I don't worry about my net worth, I start thinking that it just became less expensive to exchange my paper currency for tangible wealth.

Please! Keep beating Gold and Silver!
They'll be around long after the dollar, and I'm perfectly happy paying a few percent less, even if it means I'm a few percent less wealthy on paper.

Cheers,

Aaron

davefairtex's picture
davefairtex
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Posts: 1208
when to buy

@OliveOilGuy

Trying to pick the bottom in these things is quite difficult.  Traders who are far better than me slap me (metaphorically) in the head every time I try.  They say its better to wait for a reversal pattern and buy once you see that, since it is a much lower risk proposition than simply buying because something seems oversold.  The saying goes, "oversold gets oversolder, then it gets oversoldest.  And then it goes down some more before it reverses."

The internal nausea signal is a pretty good one, I think.  I'm most successful when a bunch of different signals all go off around the same time.  When the reversal pattern appears, bullish sentiment is really low, articles in MSM (and the talking heads on Financial Entertainment TV) hail the end of the gold bull market, articles saying George Soros has sold his gold (3 months ago, mind, but the article is for some reason just now showing up), the speculative longs have been mostly stopped out of the market, AND you have that sense of nausea - it all comes together to form a relatively lower risk entry point.

Are we there yet?  I'm not seeing that reversal pattern just yet.  The rest of it is in place though.  Gold miners can sometimes be a clue too.  If gold gets pounded but the majority of the miners hold ground or show reversals, it means big money is out there buying hand over fist.  That's another clue.  Big money leaves its mark.  Sometimes they'll pound gold in order to get people to sell their miners - they need volume to make the big bucks.  So to create volume, gold has to drop.  But you can see them buying when the volume is big, yet the stock price doesn't move much.

Its all just clues that taken together hopefully improve your odds of being right.  And unless you don't mind holding for a long time, putting a stop underneath your buy point will take you out with only a small loss if you are wrong.  God forbid, but it happens!

RJE's picture
RJE
Status: Diamond Member (Offline)
Joined: Aug 31 2008
Posts: 1369
Fundamentals?

http://www.zerohedge.com/news/2013-02-20/caterpillar-sales-latest-cratering-confirm-global-growth-slowdown

Remember, all wage earners are out a nice piece of coin since the calender turn, and they're already strapped for cash with lost hours and stagnant wages. We do have our income taxes due to arrive in a couple weeks, and that little wind fall is NOT being spent on Stuff. It will be saved for a rainy day, and what I hope is a falling market.

Will they allow Sequester? So much drama.

I own Gold and Silver folks, and Jim H. hardly looks foolish nor should he feel it. PMs are a bet that should something horribly go wrong you can chop pieces off the PMs to pay for food, water, clothing, and pay your bills. A no brainer to hold, is finite, and you must have as protection. Really very smart too have. 20% is a good thing and more than that creates ticker tape stress. I do not care about the price of Gold,  a loss or gain so what, you have to have it in today's situation.

I have no idea why China hasn't manipulated Oil in the furures market. Their the only ones really buying the stuff. Just a Hmmm moment.  A well placed Iran memo would do the trick too without using the futures market.

BOB

earthwise's picture
earthwise
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Posts: 824
Yep.

Rector wrote:

BTW what would you do if Gold were to jump to $6,500 by year's end?  Would you sell it and get back into paper?  

Rector

That's exactly what I'll do. Convert to paper and payoff my mortgage. That would be my bailout! With all other major preps complete I'd sell at $6,500 in a heartbeat.

The way things are lookin', though, I've got quite a few more mortgage payments to make before that dream comes true. Meanwhile, just keep swimming  ..........

RJE's picture
RJE
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Posts: 1369
In a heartbeat indeed...

...but I would stop paying my mortgage and live rent free as I built the log cabin of my dreams. Literally, I would build it myself, on Lake front property I own just meters away to State lands in Black Lake, Michigan. I would fish, and hunt, and have roaring fires in a walk in fireplace. A bear rug on the floor and candle lit recliner to work at with my lap top. I would go all clean but scraggly, beard, dogs, double barrel over the mantle, Colt 45 cal strapped to my thigh. NO QUESTION about this. I would do it now but half my investments I figure are gone. If I could sell the Gold now knowing I had what should be coming to me I would have done all of this yesterday. No complaints Folks, I'm fine no matter what. The here and now appeals to me just as much.

BOB

RJE's picture
RJE
Status: Diamond Member (Offline)
Joined: Aug 31 2008
Posts: 1369
Fundamentals?

"Individuals are long term investors only as long as the markets are rising. Despite endless warnings, repeated suggestions and outright recommendations - getting investors to sell, take profits and manage your portfolio risks is nearly a lost cause as long as the markets are rising. Unfortunately, by the time the fear, desperation or panic stages are reached it is far too late to act and I will only be able to say that I warned you."

Gold will be sold and becomes a better BUY. Just understand that the physical metal is rare and finite. Is money, and has purchasing power world wide so what's the difference really between Reserve currency and Gold/Silver.?

http://www.zerohedge.com/news/2013-02-20/guest-post-visualizing-vince-farrells-10-investing-rules

BOB

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KugsCheese
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Posts: 649
Solvency Issues

As round two of the credit crisis washes ashore we should expect distressed persons to unload gold to pay off other debts.   If true, this should make it a buyers market for the next year or so.  It is quite possible one of these distressed players is doing a programmed stepped sell to not panic market.

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AustinHorn
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I would love to get Chris and Adam's thoughts

regarding the release of the January Fed minutes today.  It looks like they may be considering easing off the spigot before the labor/inflation targets are hit.  I'm guessing this would put increasing downward pressure temporarily on PM's, but since I'm a newbie as it relates to PM's I'll defer to Chris/Adam and the rest of you who have followed the PM market much longer than I have.  What are everyone's thoughts here?

Wade

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amusedtodeath
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Everything points to higher prices yet...

The debasement of currency is gathering pace, and yet Gold and Silver are falling. Not trapped in a narrow band but actually going down! This is so counterintuitive that it can only be manipulation on a grand scale.I don't like conspiracy theories but this one really is screaming out. If this is a genuine market correction it wouldn't behave like this, and with all the governments printing like crazy, the prices should be rising.

If you buy and hold PMs regardless of the paper price you have nothing to worry about.I'm buying on dips. I see them as a gift!

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AustinHorn wrote: regarding

AustinHorn wrote:

regarding the release of the January Fed minutes today.  It looks like they may be considering easing off the spigot before the labor/inflation targets are hit.  I'm guessing this would put increasing downward pressure temporarily on PM's, but since I'm a newbie as it relates to PM's I'll defer to Chris/Adam and the rest of you who have followed the PM market much longer than I have.  What are everyone's thoughts here?

Wade

I think it is just a Dog and Pony Show to make everyone think the FED is on top of things.   No way can the FED stop buying US T-Bills.   Who else would buy?

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RJE
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I think we need our leaders to lead and,

...the Fed are at their wits end. I believe many of them are voicing genuine concerns that only our Government leaders, specifically Congress needs to take a leadership role in. I hope that Congress lets all those Sequestration cuts happen. We must begin dealing with our Debt and Spending. The Fed will still do what they do but I really believe they are scared. It certainly isn't hard to see why either.

BOB

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Jim H
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Our leaders are not going to lead. We are on our own.

This is a great read.. .then look at the comments to see what others think about our elected leaders.

http://www.24hgold.com/english/news-gold-silver-the-great-gold-deception...

Excerpt;

The week of February 11, 2013 saw one of the most persistent, concentrated and vicious attacks on precious metals prices during the entire GENERATION -long bankster-orchestrated price rigging campaign. Prices suffered repeated, waterfall declines every single day, and often multiple times per day, on precisely zero news that might have explained them. In other words, these price raids were outright, collusive and pre-meditated slaughters, conducted one after another after another. As financial market experts know, such price action is totally unnatural and illogical; no legitimate, for-profit seller in their right mind dumps supply onto a market in this fashion, unless they know for a fact that their price raid will work, and continue to work. This is the case when the price manipulator controls the market. While we are told that price fixing is illegal, this is obviously false because certain well-connected elites get away with it whenever they want, and for decades at a time. If a cabal can manipulate a large, global market such as gold, it can steal staggering sums of money.

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RJE
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Jim,

...I will admit that our leaders have been MIA. I have no faith at all except at some point they have to do something, don't they? I say this with my head tucked in between my shoulders (think turtle). Then when you said it's on us I got all happy inside as that is really my wish anyways. That the vote will count and we hold who we put in office accountable but that will mean some street action, as in protests, and loud ones. Not violent, just a good peaceful, well attended shout out. "Hell No I'm Not Taking It Any More".

Be Good Jim

BOB

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nigel
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Confirmation Bias

"So far the Keynesian beauty is winning the contest and I am seriously starting to doubt my beliefs. Appealing to "manipulation" strikes me to be a little like a Christian believer blaming it on Satan. Maybe there is manipulation, maybe there is a Satan too."

It seems very fantastic doesn't it, however I would like to suggest you reach your own opinions from facts independantly verified, and caution you about confirmation bias.

I keep coming back to this blog, mostly because the facts talked about here are confirmed by independant facts sourced from other areas. In an effort to avoid confirming my own fears I try to read counter opinions, or articles in contrast with what we read here. The sad fact is that the this site is reasoned, articulate, and generally seems to be correct. It's sad because of the picture it paints of other sources and the pin's it pokes into main stream authority. It's no longer causes cognitive dissonance when i can't understand why gold is falling in an age of money printing, it just makes me feel sad for the people who aren't yet aware of the state the world is entering.

I would like to suggest that every time you experience dissonance when reading an article, sit down and look at it with reason and try to find the problems with it. Chris and Adam would probably welcome a reasoned reply to their article. For what it is worth, I can't find an issue with this one at all. It's not the 1st time I have read this theme, from memory there was an article that said the same thing (may have been a GATA one). They said that on a year on year basis, there is a systemic patern emerging that a clever trader could use to make money.

Good luck.

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davefairtex
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my opinion on what is causing gold to drop

The short answer is, monetary deflation in the eurozone, and concurrent with that, a still-intact faith in the central bankers to "make everything come out right."

Monetary deflation (a contraction in the amount of money & credit) is easy to see on a chart.  Its real, it exists, and it is happening right now in Europe.  The data on money and credit is helpfully provided by the ECB itself, every month.  Right now, it is declining.  Banks in europe are withdrawing money from the economy, and the governments in europe are not borrowing enough to make up for it.  This happened also back in late 2011 when the eurozone banks were instructed to reduce their balance sheets - gold had troubles at that time too.  Deflation in the banking system means the amount of borrowed money that can be wagered on leveraged financial assets will decline - and gold (whose price is set by the futures market) is one of those assets.  While there may also be manipulation, such manipulation is much easier to execute on when a big chunk of the speculative money that might be willing to go long gold is sidelined by deflation.  In some sense, a fair number of the players in the game on the long side are effectively off the field right now due to deflation.

At the same time, physical gold acts as a hedge against government misconduct.  By misconduct I mean capital controls, intentional devaluation, confiscation, sovereign default and so on.  Physical gold is cash that the government can't monkey with.  Its a "rich person's internationally accepted safe haven" - if push comes to shove, rich people can load their car up with gold and drive across the border to a place that is engaged in less misconduct, so money tends to migrate to gold during bad times as a rich person's insurance policy.   Yet currently, the faith in governments, especially in europe, is still relatively strong as demonstrated by the spreads on peripheral bonds.  Basically the faith in Dragi to "do whatever it takes" still exists.  So the physical demand isn't making up for the loss in leveraged demand due to deflation.

So right now we're in a twilight world - deflation in the eurozone is going to cause ever more serious economic contraction as well as dropping asset prices as money gets sucked out of the economy, while faith remains in Dragi to rescue the situation somehow.  While deflation happens and faith in Dragi remains, gold will likely not do well.  It won't last - it can't, simply because deflation and resulting economic contraction will eventually result in the inability of governments to make good on their debts, which will lead directly to either default or a massive increase in government misconduct.  And that will spike the price of gold once again.

Of course nothing ever moves straight down.  There will likely be a bounce in gold coming...soon I suspect.  But without the return of leveraged money or a massive collapse in confidence in central banking, I don't see the price of gold taking flight.

That's my opinion anyway.

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janb
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China loves the US dollar?

I found this link on iTulip

http://www.telegraph.co.uk/finance/currency/9881410/China-loves-the-US-d...

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ao
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pressure and time

Great buying opportunity yesterday.  I couldn't resist.  No worries. 

And Jim.  You're going to lose a little in the short term (our bet on the silver price as of March 2013) but win big in the long term, as you know.  It's just your timing that was off.  My money is still on 2015 for the start of the biggest move (with possible extension to 2017).  We'll see.  Ultimately, it's all about this.

   

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Jim H
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Thanks AO

When the top finally blows off this PM pressure cooker.. you know I will be there   : ).   PM me an address and I will make good on my bet. 

Of note, Bitcoin has now broken $30;      https://mtgox.com/

Free market, bankerless, non-fiat money is an amazing thing to watch.  I know that many don't care for it.. but the market continues to speak.    

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Oliveoilguy
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Hold Your Gold

From JSMINESET:

"Anyone with any sense of history has already come to the conclusion the public has always been and will always be taken to the cleaners by the Street.

The only place where one can make a sound judgment call is in the Gold Market.  Just buy and HOOOOOOOOOOOOOOLD!  As long as money is being printed to keep the governments afloat, nothing but nothing in this world will alter the end result.  You can’t print gold.  Sure, you can go naked short in the paper markets or divert investment money from physical into the ETF’s (which in my opinion were created exactly for that purpose). They have also been accused of supplying shares, in lieu of physical which they or the COMEX couldn’t deliver. All I can say is that any new product offered to the public must be shunned.  It certainly wasn’t created for you.  But when the billionaires of this world are stockpiling the stuff and Central Banks are shoring up their currencies for an eventual global monetary collapse, you simply can’t lose by holding the real deal.

Remember, in 2004 the Rothschilds gave up their prestigious position as the Morning and Afternoon London Price Fixer in Gold and Silver.  When asked why, on the financial network in an interview, the response was “there was no money to be made in those markets anymore”(sic).  They are dead markets.  It was exactly at that time that gold and silver began rearing their heads in the beginning of a massive upwards trajectory. AS the Price Fixers, the Rothschilds were forbidden to partake in holding massive amounts of these metals.  They surely must have seen something UNBELIEVABLE on the horizon, for them to give up such a prestigious position.  They wouldn’t do this for a small pop in price.

Hold a gold coin your hand the next time you feel like investing in something.  It doesn’t lie to you.  It’s solid and feels it’s worth.  It’s honest as the day is long.  And more importantly, it won’t make a fool of you (it hasn’t for thousands of years) nor will it prevent you from sleeping at night.  Pleasant dreams all!

CIGA Wolfgang"

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Adam Taggart
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Your Regular Programming Will Continue Now

After yesterday's aberration when gold & silver rose slightly (shocking, I know!), we are back to our regular 8am takedown this morning:

Good to know all is as it should be </sarc>

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I found this telegraph report

I found this telegraph report rather a good balanced article:

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100022953/golds-death-cross-is-a-buy-signal-for-china/

Reassuring as well.

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jasonw
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A little humor for the upcoming Monday morning..

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treebeard
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Leaving this world behind

Can you eat gold or silver? Heat your house with it? Can cultivate your garden beds with it? Will it generate heat or electricity? Will it generate hot water? Will it keep you warm in the winter? Is it a good insulator? Can you repair tools with it? Can you prepare foods with it? Wiill it make you smarter?

Will it attract thieves? Will it occupy the mind with worry about it's value? Will it build trust amoungst friends?  Will those with power covet it and try and control its value?

Value is in the eye of the beholder

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ao
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everything has its place

treebeard wrote:

Can you eat gold or silver? Heat your house with it? Can cultivate your garden beds with it? Will it generate heat or electricity? Will it generate hot water? Will it keep you warm in the winter? Is it a good insulator? Can you repair tools with it? Can you prepare foods with it? Wiill it make you smarter?

Will it attract thieves? Will it occupy the mind with worry about it's value? Will it build trust amoungst friends?  Will those with power covet it and try and control its value?

Value is in the eye of the beholder

Treebeard,

Let's not join the ranks of those who dismiss the value of gold and silver.  There are already too many misinformation/disinformation personnel who are prowling the Internet doing just that.  Gold and silver are important ... but not ALL important.  Some level of concern about gold and silver is sensible ... obsession about it is not.  Your food which is eaten, house which is heated, garden beds which are cultivated, heat and electricity that are generated, hot water that is produced, etc., are also of importance but also can all be taken from you and all create the same social, psychoemotional, and spiritual problems that gold and silver can.  Everything has its place.  But these are all material concerns and are temporal in nature ... my first, foremost, and highest concern should be on things spiritual and eternal ... and that's true whether I live and thrive or wither and die.  All else will follow from that, whatever happens.  That's where the only true peace and security lies. 

Oliveoilguy's picture
Oliveoilguy
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From what planet are you?

treebeard wrote:

Can you eat gold or silver? Heat your house with it? Can cultivate your garden beds with it? Will it generate heat or electricity? Will it generate hot water? Will it keep you warm in the winter? Is it a good insulator? Can you repair tools with it? Can you prepare foods with it? Wiill it make you smarter?

Will it attract thieves? Will it occupy the mind with worry about it's value? Will it build trust amoungst friends?  Will those with power covet it and try and control its value?

Value is in the eye of the beholder

What planet do you live on dude?

Are you implying that you never purchase heat for your house or hot water system? Or that you didn't use money to purchase solar equipment? That you never bought insulation for a house? Did you harvest reeds from the swamp and grind them with a rock and place them in your walls made of natural materials?

Point being...most of us earthlings use money.

Now the question becomes what money is the safest, the most enduring. I  put Gold and Silver way ahead of fiat digits or paper dollars. I use dollars for commerce because I have to. I save in Gold and Silver so that I can purchase things in the future that I can't make myself.   

If you can demonstate to me that you don't use any form of money, then I might take your comments seriously. Or if you can convince me that there is more lasting value in a paper dollar note than in silver, then you have my attention.

With all due respect I have to question your perspective.

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Jim H
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Money

Some people just have a bad relationship with it.  

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phecksel
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If one were to start buying

If one were to start buying precious metals today, would they buy gold, silver, or both?  If both, in what kind of ratio?

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ao
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Jim H wrote: When the top

Jim H wrote:

When the top finally blows off this PM pressure cooker.. you know I will be there   : ).   PM me an address and I will make good on my bet. 

Jim,

I know you'd make good on your bet (as I would if you won) ... you're obviously a gentleman and a very smart guy to boot.  Just keep us updated on things G&S as you've done and that's good enough payment for me.  And let's hope we don't have to wait too long.   

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treebeard
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From 10,000 feet

Big picture, isn't the crisis of our times a spiritual crisis?  Haven't we come out of a long period where the accumulation of material wealth to the detriment of all other things been the root cause of our problems?  Aren't we a culture obsessed with wealth, fame and power?  Isn't the key in, a wonder and awe of the simple things that we are all to busy to stop and see?

If resilence is only about survival, isn't it a waste of time?  Isn't resilience really about reconnecting life around us  in the current moment, friends, family and the living world that sustains us?  Isn't that our best survival technique anyway?  New work on evolutionary theory indicates that it was the species that were best at cooperation that survived not those with at competitive advantage I think bears this out.

Are we confident that when the gold suppression game fails the guys playing at it are just going to say, "oops we loose, you win, we'll go quietly away now"?  Isn't the whole system a rigged game that allows a small minority of insiders, market makers, to accumulate extraordinary amounts of wealth from a economic form that has become so corrupt and rotten over time that it knows no moral bounds.  Isn't it naive to think that when things don't go their way they'll play by the "rules"?  Don't we already see the rules be changed on a regular basis to suit those in a possition of wealth and power?  Isn't it time that we walked out of the casino rather than trying to beat the house at its own game?

Why not invest in things that not only bring satisfaction into our present lives, gives us a sense of control, purpose and meaning and gives back to those systems and people who support and sustain us?  Money is the means of keeping score in a game, It doesn't matter whether you use gold, silver, sea shells, tally sticks or paper.  Its the way we are playing itself (living our lives) that is fundamentally broken.  We are faking the score to make it seem like the game is going well and you can do that with any means of account.  Its the playing of the game itself where our power lies, that how we can change with world, that is how it is changing now.

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Oliveoilguy
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Money the Goal or the tool?

treebeard wrote:

Money is the means of keeping score in a game, It doesn't matter whether you use gold, silver, sea shells, tally sticks or paper.  Its the way we are playing itself (living our lives) that is fundamentally broken.  We are faking the score to make it seem like the game is going well and you can do that with any means of account.  Its the playing of the game itself where our power lies, that how we can change with world, that is how it is changing now.

Who's keeping score? Not me.

Money is not a goal,  it is a tool that is used to navigate on this planet.

My goals are to sing more songs, to grow better gardens, to build more sustainable structures, to make lasting friendships, to see my daughters and their husbands prosper. Money, for better or for worse, plays a role in life. It buys my guitar strings, my garden seed, building materials, dinners with friends and it pays my employees.

Real money, as in Gold and Silver, represents honest value earned by honest labor.  Money in itself is not evil. The pursuit of money as an end is nothing more than stupid.

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anexaminedlife
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Posts: 48
Many questions, no ultimate anwers

Treebeard you asked many questions. I believe they are worthy and sincerely asked and I answer them from my heart.  

Big picture, isn't the crisis of our times a spiritual crisis?  

It isn't a crisis of our time, it is human nature. There is nothing new under the sun.

Haven't we come out of a long period where the accumulation of material wealth to the detriment of all other things been the root cause of our problems?  

Long period? Like all of history? (Again) there is nothing new under the sun.

Aren't we a culture obsessed with wealth, fame and power?  

Yes, only because we now have easy connections (since the advent of electronic media).  I have little doubt that even "cavemen" would have worshiped wealth, fame, and power if they felt a connection to it.

Isn't the key in, a wonder and awe of the simple things that we are all to busy to stop and see?

Well yes, of course. Philosophy has been parsing our human faults for millennia.

If resilence is only about survival, isn't it a waste of time?  

Resilience isn't only about survival, it is about having a purpose and passing that on.

Isn't resilience really about reconnecting life around us  in the current moment, friends, family and the living world that sustains us?  

Yes, that is a wonderful description.

Isn't that our best survival technique anyway?  

I don't know about that. For me, it doesn't matter.

New work on evolutionary theory indicates that it was the species that were best at cooperation that survived not those with at competitive advantage I think bears this out.

Cites please. I am dubious.

Are we confident that when the gold suppression game fails the guys playing at it are just going to say, "oops we loose, you win, we'll go quietly away now"?

I understand what you are saying here is that the "gold suppression" players are pretty damn powerful and not going to give up -  they aren't going away. I agree. But there may be forces more powerful than they are.

 Isn't the whole system a rigged game that allows a small minority of insiders, market makers, to accumulate extraordinary amounts of wealth from a economic form that has become so corrupt and rotten over time that it knows no moral bounds.[?]

That  is definitely implied by the original post here. And whether and when those bounds run up against a boundary greater than what the very powerful can create remains to be seen.

Isn't it naive to think that when things don't go their way they'll play by the "rules"?  

I didn't understand anywhere in this thread that anyone is so naive.That premise appears to be mistaken.

Don't we already see the rules be changed on a regular basis to suit those in a possition of wealth and power?  Isn't it time that we walked out of the casino rather than trying to beat the house at its own game?

What? Like go off grid, check out, barter  and live happily ever after? Or maybe we can kumbaya and  make it all go away. (I don't mean to sound flippant) This isn't a casino in LV that you can walk away from. Tell me how you propose walking out.

Why not invest in things that not only bring satisfaction into our present lives, gives us a sense of control, purpose and meaning and gives back to those systems and people who support and sustain us?  

Go for it, nobody is stopping you (other than HOA's, CCRs and Govt regulators but never mind). If you have a decent amount of cash to invest in some land  then buy it and build yourself an off-grid house (made with products already produced) , start growing your own food and all the rest. It is an admirable life!  (Of course,  the wherewithal to do that does not grow on trees and free homesteads are hard to find these days.)  Investing in gold is tangential to your question as that investment  is more about preserving purchasing power.

Money is the means of keeping score in a game, It doesn't matter whether you use gold, silver, sea shells, tally sticks or paper.  Its the way we are playing itself (living our lives) that is fundamentally broken.  We are faking the score to make it seem like the game is going well and you can do that with any means of account.  Its the playing of the game itself where our power lies, that how we can change with world, that is how it is changing now.

Nice thoughts. Unfortunately we all live in a world that runs on money, however that money is defined.. There are some "experiments" (which I find worthy) that attempt to break this barrier. The most interesting of those that I have found is Auroville in India. Here is a link to a documentary about Auroville, founded in 1965, that I believe you will enjoy http://puresalvageliving.com/very-informative-video-about-the-auroville-community/

I admire dreamers for they are the doers of the future. 

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Petey1
Status: Bronze Member (Offline)
Joined: Sep 13 2012
Posts: 35
Time to Evolve

I read and appreciate everyone's opinions here. I agree that a lot of what we do is out of our control. You have to have some form of money to survive at this time. With that being said I agree more and more with the thinking of Treebeard. Human nature does play a large part but knowledge should go a long way in changing what we think and how we act. You can make large changes to the system by not engaging in destructive activities that are promoted at every turn. This time needs to be different or we might not make it  . With all the info out there and websites like this one it is hard to make excuses not to change. This is the first time in our history that you can see the effects we have on the planet as a whole.  

treebeard's picture
treebeard
Status: Gold Member (Online)
Joined: Apr 18 2010
Posts: 373
Human Construct

I think that we have anthropomorphized PM's, projecting our values and honesty and hard work onto them. Ultimately their value is a human construct, without a collective belief in the rule of law, no monetary system will save us.  We as human beings have to change the way we think about the world. Fundamental to that shift in MHO is understanding that human systems are a subset of natural systems and not the reverse.  We have projected our own dark side onto the world around us and have used that as an excuse for our own brutal and ultimately self destructive behavior.  We need to look at ourselves honestly or the gig is up.

What is the basis in the belief in PM's?  A long history of human beings in europe valuing it as money. Other  cultures have long sought for its beauty and artistic qualities, but seemed not to have developed quite the same relationship with it.  But isn't it after all the gold dealers and merchants who got us into this whole fiat currency mess to begin with?

Can PM's be part of an enforcement mechanism to help prevent currency manipulation? Maybe. But investing our belief in any inanimate object as a basis for moral human behavior is ultimately delusional. Through the long course of human history, both in the experience of the sublime and the horrific, and we have had plenty of both, our collective experience is ultimately guiding us towards a right livelihood and relationships.  We have to change, and current events are making that plain in a way that has never happened human history before.

To group together the Nazi and the Hopi in a verbal wave of the hand about human nature through all history and cultures is a slight of hand is to excuse our current indulgences and intellectual laziness.  Peoples throught history have organized themselves in dignified and beautiful ways, we have these examples to help guide is in our current perilous times.  It is possible to get this thing right, but human beings must change.

To play the game in this currently corrupt and collapsing system would it be prudent to own some PM's?  Maybe, but that is a side show to the main event.  We are at an evolve or die place in our history, the work to be done is reconfiguring how we see our place in the universe, to tell ourselves a different set of stories than reinforce a different set of values. To get through humanities terrible twos, so we can drop the belief that we are the center universe and take our rightful place in the world.

BTW Michael Tomasello at the Max Planck Institute has done some interesting research regarding evolution, it is a poor start, but it is a beginning.

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