Horrific gold ‘dump’?
Interesting article on gold and the IMF. I have no idea if these guys are credible but it is certainly an interesting data point.
‘Interventional’ analyst expects price plunge this week
Bolser, a trained physicist who developed dollar value commodity
indexes and 10 months ago correctly forecast the scope of the current
recession, expects more than 3,000 tonnes of gold to flood the market
Bolser, based in Florida, says the International Monetary Fund will
release the gold for sale on Wednesday, Dec. 10. The 64-year-old Bolser
says the price of gold subsequently will slide as much as 40 percent –
to $455 an ounce in coming weeks from its current $760 an ounce.
Would this not give investors a problem with there margins and therefore would be forced to sell the little they have.
After that it can be picked up for cheap by the banks.
Or am i reading to much into this?
Personally i have no stocks only physical gold at the moment. My uncle was not so lucky as he lost a lot when the bank raised their margins for blue chip stocks from 5-10% to 100%. Trust is not there anymore.
If there is a significant drop in gold prices, I would see it as a buying opportunity.
Gee why not $380? Powerful nations and people with lots of wealth know this game is fixed; any meaningful move to crush gold will be met with wild buying sprees. Then as the bungee cord is stretched to breaking, it will snap back in parabolic fashion taking paper gold control out of the elites hands. If it tanks it will be short lived. Besides the IMF has no gold them-self and sales are required to be announced months in advance and will occur only if a member nation agrees to sell some for the IMF. And then no gold actually gets moved; just one central bank logging entries to another blah blah blah same old game.This IMF gold sale scare tactic is conjured up every few months by the crooks at the top. Besides anyone who did not predict this event until 8 months ago
deserves no respect! Most here at the CC knew years ago this was coming.
[quote=Doug]If there is a significant drop in gold prices, I would see it as a buying opportunity. [/quote]
I would see it as a lot of CM’s members having heart attacks simotaniously
I think that I am like a majority of holders of precious metals. For me they are not an investment for profit, they are an investment in survival.They are a hedge against runaway inflation which will have us carrying money around in garbage bags to buy groceries and pay the rent. We all know that the banks and the international investment community is going to continue to play games with pm and attempt to prop up fiat trash in order to do what they do.
In the coming collapse of the currency, or in the coming hyperinflation and then collapse, we will need some kind of exchange medium that is acceptable to local/regional markets. One reason for holding US 90% coin silver is that it is still legal tender. If the paper dollar gets to the purchasing power that it represents, then a bimetallic standard may evolve.
You could go to your local businesses and say something like "If I pay you in US 90% silver, will you sell products to me at an exchange rate of x dollars silver for y dollars paper?" Suppose you agree on a ratio of 10 to 1. You could then pick out $100 paper worth of product and pay the businessman $10 silver. He then records sales of $10, and you pay any sales taxes on the $10 amount in paper. His income goes down, his tax liabilities go down, and a relatively stable exchange system could evolve. The more paper inflated the greater the rate of exchange, but until the US government makes it’s coinage illegal, it is a transaction concluded by using legal tender. Then a second market could evolve involving trading bullion for coinage so that paper had little role in the local marketplace. It would drive the banks crazy. it would also be better than barter or most other substitutes for an exchange medium.
Good job explaining the advantages, in the coming crisis, by using silver coins. The only real gold/silver is the one held in your hands that you can protect. Paper gold is a scam of the elitist wise guys in power to convince the sheeple to not hold gold.
In the last century, contrary to the US Constitution, (and 10,000 years of human history), the irredeemable-fiat-currency concept has gained the "upper-hand", over gold and precious metals specie as the "accepted" form of "money".
Universal adoption of the "irredeemable fiat-currency" concept is a recent phenomenon, having occured only over the last 2 centuries or so.
It is a system which, by design, a) benefits the few earning interest, at the expense of the many, and b) allows for Governments to more easily engage in overrun deficit-spending. Consequently, over this time, the world’s governments have alllied with Central Banks, to allow for private issue of "irredeemable-soveriegn-fiat-currencies" (i.e., paper and digital currency, backed only by human debt labor). Politicians and Bankers and Bankers and Politicians – a dangerous mix.
Today, there are no countries or governments which establish a fixed-measure for their currency, against any unitized, pre-paid asset, like gold.
The difference in concept, between; a) "prepaid" gold (and silver) as specie value, and b) irredeemable paper (or digital bits) as an "apriori debt-accounting for human labor", is substantial – they are polar opposites in terms of debt settlement. The former allows for individuals to exist as sovereigns independent of government rule, while the latter requires government intervention to enforce it’s use as a currency – i.e., to ensure the currency is "legal tender".
As Chris has pointed out, however, the irredeemable-fiat-currency monetary concept has a mathematical flaw at the limits – it requires ever more debt, for ever more currency creation, for payment of the interest "agreed-to" in it’s own generation! – a true dilemma which insures an exponential "blowup", albiet one which benefits in interest-payments, the private Central Banks issuing that currency.
As Chris has also identified, the resulting distress this monetary concept creates "in the limit", is moving into the "hockey stick" region of exponential change (i.e., the "Credit Crisis", "Debt Crisis", "Housing Crisis", etc.), .
This distress is creating fractures in the foundation of the "irredeemable fiat-currency" concept.
The one critical requirement to sustain it’s use, is CONFIDENCE. This confidence in the aggregate populus, is required in exactly the same mechanism as that in a "money-making chain-letter" or Ponzi-style check kiting scheme. Currently this confidence is being eroded at an exponential pace.
As a result, this distress is creating a large counter-movement in the world, consisting of those who see gold (and precious metals) as retaining it’s role as the only and original "true money".
Indeed, over the long-term, it’s conceptual role in this regard is proven:
- 200 ounces of gold would purchase a house in 1680, 1780, 1880, 1980 and today (more or less), and could have been stored, without the need to earn interest, in peforming this value-retention.
- Had your Great-grandfather buried a weeks worth of $USD wages in a coffee can in 1926, and you discovered it today, you’d have about $75 in Federal Reseve Notes ($USD). Alternatively, had your Great-Grandfather first converted his weeks wages to the then 3 ounces of gold, and then buried the coffee can for you to discover today, you’d have about $2400 – still about a weeks worth of American wage (maybe even slightly more…).
- If you are lucky enough to find a gold coin dropped by a Roman soldier in your visit to Italy, it will have essentially the same purchasing power for you today, it held for him 2000 years ago.
It should be noted that this value-retention occurs WITHOUT requiring the risk of investment loss so as to earn interest. This value-retention attribute is enhanced during bear-markets and during times of distress. In any case, the above examples are testament to the value-retention of gold and precious metals.
So what is "at-stake" in this conceptual "battle", between irredeemable fiat-currency vs. the specie-value of gold?
It is probably safe to say that the bounty could probably be valued at a majority of the world’s GDP, and wars and every sort of human schemeing and treachery have certainly been employed for less.
With so much at stake, the world’s Governments, allied with the Central Banks, have spent amazing energy over the last century, and employed the power of political force and monopoly in countless ways, to avoid such a turning loss on the "monetary-concept battleground". In this regard, it is hard to dismiss Bosler’s projections out-of-hand.
Less obvious than confiscation, war, etc., the fiat-currency advocates discovered the power in "fractional-reserve-banking", and highly-leveraged derivatives (futures, CDS, CDO’s, etc) to wield market influence. The government’s monopoly on force is required for the protection of these mechanisms, but few laypersons understand how they work.
Consequently, it is these tools, in combination with Central Bank gold "leasing", the COMEX futures market, government and quasi-government (IMF) public statements, etc., which are employed to prevent both a loss of confidence and threatened return to gold as money, and sustenance of the fiat-currency mechanism.
In the midst of the current instability, can these tools continue to be wielded effectively? I would expect the world’s governments will stop at almost nothing to prevent this loss of wealth and power, and would not rule out anything. Again, hard to rule out Bosler’s statements as wild ideas.
But we shall see.
Suffice to say that the current price in $USD, of gold and silver, are at or nearing, just the costs of extraction from the ground. Many silver mines have processing costs in the $7-to-$9 per ounce range. This has led to a large shut-down of the mining sectors, which is occuring simultaneous with a very high demand for the physical product.
There may be more downside, but it is limited against dwindling above ground stocks and mine shutdowns. The upside is not. As they say – "You can squeeze the Bears, but you may get run over by the Bulls".
If you are a Trader, then timing is everything, and 10% here or there might be your difference.
If you see gold and silver as true money over a longer term, any continued drop in price for the physical would appear to be a buying bonanza.
This is my first post on these fora, trying to learn the way ahead. I’m long in GLD.
Will there be a point in our near future when it would it be inadvisable to hold GLD, as opposed to bullion?
If so, why?
The time not to hold GLD is now. It represents a promise. If you can not hold it and protect it it is not the gold in hand that has stood the test of time. Paper gold GLD can among other things be leased and shorted against you and naked shorted as well. Buy physical gold today before the paper promise vanishes any further. You can take delivery of Comex gold for the December contract in 100 ounce lots at paper price. Hence the reason the Comex physical is rapidly vanishing as we read.
Daily charts on the amount of physical gold being delivered from the
vaults at Comex. Some have said when all the calls are made, Comex
will not have enough physical gold to deliver. Hence the value of gold
will be determined by supply and demand.