It may not surprise you to hear that the kind of interviews you are advocating for are already out there on the net. This one in particular has CM schooling Sean from SGT report on the question of peak oil vs. abiotic oil vs. other oil conspiracy theories, in May of 2012. The meat of the debate is between 3:50 and 10:00 in the first of the two parts. Note that SGT states clearly that he does not buy peak oil… and calls it propaganda;http://sgtreport.com/2012/05/chris-martenson-peak-oil-will-change-life-as-you-know-it-so-will-the-coming-collapse/
SGT report does a great service but effectively lacks ANY filter as it regards conspiracy theory… hence you get strong doses of truth in some segments, and over the line whacko in others (Chemtrails being one of these topics that just sets me off). Anyway, the portion I point to above is required listening for anyone who thinks there is not a rock solid scientific basis for peak oil and the nature of oil's origin… like for instance wroth5.
[quote=jcat3022]Jim Rickards covers it in his book "Currency Wars" which is a fantastic read.
[/quote]
Hi jcat,
I have just read 'Currency Wars' and plan to read it again just to make sure I miss nothing. I agree its a great read: - easy to follow, not too long [!] with a good insiders story to tell. I was thinking of the SDR. I just think there must be other alternatives available to the [so called] elites other than a crash and re-set with Gold.
An interesting main stream UK newspaper article from today:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9891082/Trade-protectionism-looms-next-as-central-banks-exhaust-QE.htm
It even mentions gold at $10k/oz …
Quote: 'Investors have of course been fretting about this for some time. Scott Minerd from Guggenheim Partners thinks the Fed is already trapped and may have to talk up gold to $10,000 an ounce to ensure that its own bullion reserves cover mounting liabilities. What is new is that these worries are surfacing openly in Fed circles.'
and here's the link to the report: Crunch Time: Fiscal Crises and the Role of Monetary Policy February 22, 2013
http://research.chicagobooth.edu/igm/usmpf/download2.aspx
[quote=DLClark91]
Charles Hugh Smith's writings in Survival + were also instrumental in opening my eyes to other measures of wealth during difficult times - the FEW (food, energy, water) things that make life sustainable. Glad you've added him as a frequent contributor.
Dan
[/quote]
Here is an example where Gold may be of lesser value than a tangible asset. From C.H. Smith:
Let's say that the fragile supply chain of remaining oil breaks down in a complex interaction of positive feedback loops. Oil would not just be costly; it would be unavailable to individuals. The government would undoubtedly ration what was left for essential services like agriculture, food distribution, police and hospitals, etc.
Let's say we anticipated this and responded not by hoarding gold but by buying a 100 KWhr/day solar power array, productive land in a mild climate, a store of fertilizer and a few electric vehicles to share with our family/community. We own zero gold but we own a power supply, the means to grow food and transportation that does not require petroleum.
Now would we sell these productive assets for gold? At what price, if they were essentially irreplaceable? What would we do with our pile of gold if we can't go anywhere, can't grow food and have no power source?
The holder of gold assumes that all goods can be purchased with a means of exchange holding a tangible value, i.e. gold or an equivalent commodity. But this may not be entirely true. Yes, we will sell some of our power/energy output for gold, but we will not sell our "wealth" i.e. the power plant for gold, which may or may not be able to buy a replacement. As a store of wealth, gold is no match for a productive source of energy.
[quote=sand_puppy]Franklin Sanders, at http://the-moneychanger.com/ has a program that encourages monthly savings program in gold and silver. They call it the "Monthly Acquisition Program" (MAP). It is designed for people who want to accumulate PMs over time like a long term savings plan.
[/quote]
Sand_Puppy,
What is the premium over spot? Is it fixed? or does it vary according to size of order?
Thanks,
OOG
…anyone who has not followed Jim H. work here (volunes of sensible data), has lost an opportunity for the pure logic of maintaining and holding on to PHYSICAL PMs.
I am NOT a Gold bug per se (I have no emotions up or down is what I visualize a Gold bug to be so I don't defend or boast) but the logic, and absolute need to hold money, that is NOT encumbered, that is money in every corner of the globe, and cannot go to zero, and has been, throughout history, proven to buy its value in goods and services (Deflation or Inflation) on a relative basis, and as I look out into the world, and see what I am seeing, is in fact risking myself to enslavement, to another individual or entity, and for that alone, in my world, is irresponsible. Again, I live for my charges, Barb, my sons, and to a great extent my families well being, so I must have insurance that should the unthinkable happen we are protected. That simple. I will own PMs until the alchemist have a suitable solution, and that ain't going to happen.
Regards
BOB
…is Golden or Gold. I have NO ISSUES with your opinion at all. What you have done or propose, and is saleable (is this a word?) to the grid because of over production then you have, I think, the perfect plan. I hold Gold because I am currently restricted from implementing these plans. I can afford too but local government, and my community currently oppose my further wantings for Resilience and Preparations.I have no issues at all with your Resilience, very nice in fact.
BOB
OOG, the premium is generally higher for smaller metal items (based, no doubt like most other things, on the premise that buying in bulk/size attracts a lower penalty for the buyer). I've averaged approx 6% for a 1kg bar of silver vs 9% on smaller weights. However, a lot depends on your local market, supply & demand, and your timing. Of course there's nothing to stop you negotiating a reduced premium on smaller-sized pieces for a large volume order.
[quote=anexaminedlife]
I would second that suggestion. These are very trying times for those of us who agree with the 3E message (at least on the economic front and to some extent on the energy front). I am holding my PMs because I believe the fundamentals demand I do so. But what if I am wrong? [/quote] I also try to see the other side of the argument, but the problem is I'm finding little credibility there. Can anyone interested suggest someone with a credible track record, someone who foresaw the tech and housing bubbles. Perhaps there is someone out there, but from my somewhat limited investigation, all those folks are advocating PM's.
Instead of only having interviews with people who agree with your viewpoint, how about some dialogue with those who don't. I think a civil discussion between you and someone who thinks the bull market in gold is over might be very enlightening to your readers. Also about some dialogue with someone who thinks we are going to be awash in oil instead of [?]
[quote=evad65]All of these gold bugs predicting $10K gold & $500 silver are living in a fantasy world.
[/quote]
I thought more about your comment. You, I, and everyone here cannot predict if, when and by how much the value of $1 will change in the next 5-10 years.
However, consider just these few factors alone: above-average annual inflation, budget deficits & their exponential impact on debt mountains, larger and larger money-printing schemes, bond yields, the proliferation of unbacked paper-based investments. Now consider what all of those – aggregated – are likely to mean for the value of money. Ever heard of the Time Value of Money, or Net Present Value analysis? Anyone who has covered the basics of business investment appraisal will be familiar with both. If you accelerate the devaluation of currency then how on earth is $10,000 an unrealistic price for gold? Hell, why not $20,000? My mother bought a house in Zimbabwe for ZW$7,000 in 1980. By 2002 it was worth ZW$1,000,000. I won’t go and research the cross values at those 2 date points to the value of gold, but anecdotally it wouldn't surprise me if the equivalent number of gold ounces were in the same ballpark as one another.
If Zimbabwe's experience can teach you nothing else then let it teach you that price and value are 2 totally different concepts in times of economic turbulence. It seems that you value the future in terms of today’s monetary price. That is very dangerous - and unbelievably naive - in the current climate. Try determining value in terms what your wealth can buy you, and the relative values of assets to one another. My guess is that some wild divergences between asset prices will start to emerge in the not-too-distant future. $10,000 may be worth diddly squat in 5 years' time.
It's no coincidence that there is an article on DIY solar power in the upper right of the main page today. and this on the upper left. OliveOilGuy is dead-on and in total agreement with Dogs-In-A-Pile about solar energy being a better investment for most than PMs. Not that we don't have some silver, but it's just a small amount. We are concentrating on getting more solar panels. The same goes for being able to produce food, especially for those of us that have very little wealth to store.
Go Google on this "A loaf of wheat bread or three loaves of barley will cost a day's pay. And don't waste the olive oil and wine." to see why I run the Agriculture & Premaculture Group here at Peakprosperity.com. In an overpopulated world facing rescource limits, having them means and the ability to feed yourselves and others may become the most important investmant of all.
First take care of food, (and that includeds energy for cooking), water (and that includes energy, if needed, for pumps and/or boiling), and shelter (and that includes energy for heat). PMs are great. I have them. But I don't expect to eat them, drink them, or live in them - or use them to keep warm.
I'd love to see an interview with Nicole Foss from The Automatic Earth for a slightly different perspective.
Yep on Foss but I think we all have done the Pro's and Con's to this, and I am still open to having my mind changed at a moments notice. When the market corrects I believe it will be a hard correction. Foss will appear right then. For the record I like her, she certainly isn't stupid, on the contrary. Lots and lots of paper laying around though. Fact is, The Automatic Earth is the balance I seek. Must have balance. BOB
Thanks for your last post, Wendy. With so many things that need a doin' it is very hard to prioritize. And when the price of PMs get slaughtered it is easy for me to get caught up in "I must buy now" frenzy.Securing food production, water, wood burning stove and a solar panel system sounds like really solid advice. I'll work on the garden, water storage tank, solar panels, and wood burning stove.
Anyone put in one of these 550 gallon water tanks?
http://www.tractorsupply.com/water-storage-tank-550-gal–2126933
What I smell here in this thread is an unwillingness on the part of many folks to take responsibility for their own decisions… or to do the research necessary to make their own decisions. In the "old" days, Chris used to say, "trust yourself" quite often, though I don't hear him say that much anymore (not sure why, as it really motivated me). Anyway… while I would be as entertained as anyone here with a cage match between Stoneleigh and Chris… I just don't see why it is necessary. Furthermore, I think it is being requested by folks who are skirting their own responsibility to themselves to educate themselves enough to come to their own decisions… to exercise their own critical thinking skills. I attended a very small, intimate presentation by Foss several years ago and have kept up with her thinking since. On the critical subject of PM's, which is the main area of contention between Martenson and Foss, it pretty much comes down to this;
Foss: There will be a giant, sucking deflation so great that it will take down the nominal prices of Gold and Silver with it… .there may be a buying opportunity then. No amount of money printing will be able to stem this deflation.
Martenson: He continues to be an advocate for Gold and Silver for the preservation of savings. Money will be printed, and it's buying power will decrease vs. real things. Chris is perfectly clear on the fact that he supports the purchase of Gold and Silver, now, for protection of savings.
Foss would have you believe that the current flatlining of Gold is in fact this deflation playing out… she does not acknowledge manipulation and is actually fooled by it. She uses it to feel like her prediction is correct. It is not. Central banks have been net buyers for a few years now. The amount of paper wealth in the world is HUGE compared to the amount of Gold and Silver at current prices. This is not, and has never been about the 99.9% of us that will get caught in either deflation, or inflation, whichever it is in the end… it is about the 0.1% that hold the vast majority of the wealth… and the pension funds, etc. When these entities decide that they want and need the Gold and Silver… the price will skyrocket, and you will be iced out of getting physical. If you want physical you need to accrue it BEFORE this happens… and this is why Foss' advice is so perverse… if you follow it, you will have no protection.
Jim,I have also attended a Nicole Foss presentation (and she was equally as articulate and persuasive as Chris). An audience member put to her a similar question that wroth5 asked and I am para-phrasing a bit here. "Who is there out there that has rationally analysed the same data yet holds different opinions?"
Very interestingly, Nicole immediately put forward Chris Martensons name as a person whom she greatly respected and said he would probably say she does not have all the evidence to justify all her conclusions.
Unfortunately I don't recall more specific details on where exactly she thought she differed from Chris other than being generally more pessimistic on impending financial catastrophes. She expected a break-up of the Euro zone before the end of 2012. You seem to have a good grasp of their differences on PM's.
On the topic of who Chris chooses to interview: I much prefer to listen to an academic who has done the research on all sides of an issue and come up with rational conclusions without bias. Most unfortunately are just too compromised by their vested interest to be taken too seriously. As an example, I place most people on financial sense news hour in this latter category (an exception is the guy from Shadow Stats). You can get almost any opinion you want on that site if you wait long enough.
Next best is someone else who has spent more time than me doing the hard work. I place you Jim in that category. As a kind of elder statesman of this site you are able to compare and contrast opinions and provide a valuable balanced view, just like you did in the previous post. But of course that is also what Chris and his team do and why we pay a subscription for the content.
Eric Sprott has a huge vested interest in PM's. The Harvey Organ thread on this site last year has over 300 posts including many from Erik Townsend, yourself, Bron Suscheki and others arguing over whether the PM market is rigged. It is easy to be convinced either way. Unfortunately CM was pretty silent in that thread and I came out of it confused. Eric Sprott sounds convincing too but he also stands to benefit enormously just by making people believe the market is rigged - whether it is or not.
So I sympathise with wroth5 and anexaminedlife. But I dont want to just hear alternate points of view for the sake of it.
John
Thank you for posting and for the kind words… Certainly you are right in saying that Nicole Foss is entirely sincere and her work comes from a place of scientific and personal integrity… she is a compelling speaker and has great depth in terms of the energy picture. There are others who are equally sincere and competent that are relatively anti-Gold. For instance, you will never hear Denninger advocate for Gold, though I read him daily and love the fact that he pounds home relentlessly regarding the mathematical unsustainability of all the deficit spending and debt build-up going on. The larger issue then is to understand whether the pundit is talking their book or not. Most are. Those that aren't can still be wrong from time-to-time : )
It is interesting that you bring up the Harvey Organ thread… and indeed, Chris (and Adam) has come out of the closet more lately in terms of his acknowledgement of manipulation in the PM markets.
Wild stuff is going on beneath the covers of the PM markets. Look at what happened last week, and cumulatively so far in 2013 in terms of GLD inventory… realize that when GLD is drawn down, it represents demand that does not show up on the supply vs demand Comex radar… you can pull craploads of Gold out of GLD without effecting price;
Just yesterday, the GLD saw a withdrawal of 8.88 metric tonnes. This followed a drawdown of nearly 23 tonnes on Wednesday. In fact, since the start of 2013, the GLD is now down 59.61 metric tonnes or 4.42% of "inventory".Almost 60 metric tonnes? That would place the Jan-Feb inventory drawdown in the range of Country #43 in the list of 110 largest Gold holdings by Country. So yeah, that is kind of a lot.
And yet the MSM would have us believe that price is going down because of lack of demand. Ha Ha.
Anyways, (I am Not a troll. LOL) if I see a transaction of 60 tons of Gold move to someone as 60 tons of Gold at current prices then I don't expect Gold to rise as Supply/Demand hasn't been effected (it's a push). Do I believe Gold is manipulated, I do, do the fundamentals favor Gold, it does, but the paying that extra hundred bucks an once hasn't yet occurred to cause the feeding frenzy. If expecting a crash. and that is a reasonable anticipation then only those truly convicted will hold, otherwise I sit and wait with powder dry to add, and I fear not as I will get a better buying opp. Yes? Until the wash, rinse, and repeat cycle convinces the 95% ers to buy and hold then Gold will have it's volatility. IMHOWhen a Man is trying to give away a Gold coin if you guess the cost and everyone shouts out the answer then it is too late. I don't know when I have seen an example of this except for the 70's. Even then it wasn't a frenzy in the sense because the dollar backed Oil. That frenzy ended around $2400 in today's cash? Then fell way back. Then again, the world hasn't embarked on a debasement collectively before. So, I think we have a leg up, and can be first to the switch. Again, I am no fortune teller but just trying to take care of Barb and I, and history tells me to own a core holding during times like this, and plan my exit strategy too.
BOB
Thanks for not being a Troll I love you too my friend.I would not be planning my Gold exit based in any way on the structure of the 1980 peak. Volcker brought the system back into equilibrium by making his money, the dollar, yield a strong positive real return vs inflation. This brought about much pain to bondholders. That will be impossible IMO once this next stagflationary cycle starts because the US cannot absorb the added debt service costs associated with even a mean-reversion interest rate shift. I can't imagine what forces you think might come in to play that will cause a mirror of this past event.
source is Denninger: http://market-ticker.org/akcs-www?post=217892 The worse news is what happens if The Fed is forced to back off. Let's assume that the One Year T-Bill rate goes back to the midpoint of its historical range (not including the 1980s discontinuity), or about 3.5%. What happens? The expense profile of the government does not rise by $355 billion in mandatory spending, it rises by nearly $900 billion annually in just two years time! This increase is approximately one third of all tax revenues and into a flat GDP there is no chance of collecting the taxes necessary to fund it. That in turn will provoke a discontinuous interest rate move.Unfixable is a word that comes to mind.... one that our buddy Chris used recently.
I wish I had an article I read about how he wished he had suppressed Golds price before his great policy action. With Volcker close at hand, he wants Gold suppressed and the Fed will do all it can. That isn't the point I was making as I agree with your overall view. Your work here speaks for itself. Chris has even mentioned our exit strategy (at some point) and is all I was referencing. I did this to make a point that: "This too shall pass", and owning Gold at some point will have reached its apex and selling would then be wise. My bad if that wasn't clear.
I normally don't talk Gold because I really do not care one way or the other. I just will hold it, and add as I'm comfortable. I like the other action way better, in-out, and learning is still my very highest priority. I feel in the last 6 months I have learned more than the previous 4 years. I love it. I need visuals, always have, and I can see things now after watching charts and reading all the great minds out there, then watching what is happening. If I see a Man lite himself up or riots in the streets, that is a major tell to me in comparison to the BS governments give. Good (well Bad too) stuff.
Be good Jim
BOB
Perhaps one of the more interesting posts on this thread is the shortest one, by Arthur Robey.
With all the apparent interest in alternative points of view, has anyone followed his link?
If you did, you would find an interview with academic Andrew Kliman, and while I would argue it has little to do (directly) with gold, he has a most interesting perspective on the causation of the current crisis which for me anyway, illustrates how far off base most of the commonly repeated explanations really are.
Much of the initial interview is a discussion of use value and exchange value, but right around the one hour mark he begins a discussion of the tendency for declining profits, and how this in his view is the root causality regarding the current crises. Not the Federal Reserve. Not Edward Griffin, not Ben Bernake, and not the size of the Federal debt.
He points to a structural tendency of capitalism to reduce to an ever decreasing margin of profits, ultimately, to a point where capital can no longer receive adequate returns to justify further investment.
One of the metrics to determine if this is occurring, might be if global corporations would be sitting on massive amounts of parked (inactive) cash. Another would be a data set that shows a consistent and substantial decline in the profit margins over a mutli-decade time interval. Professor Kliman points out both conditions are currently in force.
Kliman makes a compelling argument, but I did not post this to trumpet his claims as the de facto explanation of the financial crisis (which they may well be). Instead, I wish to present some other points of view that may seek to explain things in a different way, and these explanations may have a very different impact on a decision to own PM’s.
Also I agree that it must be right to use historic costs to value correctly the fixed assets of the capitalist sector in measuring the rate of profit. This is consistent with Marx’s analysis of capital and is what capitalists do anyway in gauging profits. On this basis, I’m entirely in agreement that the ultimate cause of the Great Recession must lie with Marx’s law of profitability and not with the alternative explanations of inequality and declining wage share (Husson, Reich, Wolff), or underconsumption or ‘over-accumulation’ (Harvey – see my post David Harvey, Marx’s method and the enigma of surplus, 13 November 2011) or excessive or uncontrolled debt (Keen – see my post, Bellofiore, Steve Keen and the delusions of debt, 7 october 2011 – or Dumenil, op cit) or financial instability (Lapavitsas). In that sense, the Great Recession was a failure of capitalist production, not a financial crisis (Minsky), nor one of the lack of effective demand (Keynes), nor the end of some special neo-liberal structural order of capitalism (Husson, Dumenil) .This passage outlines several competing theories on the cause of the great recession, all with ramifications that impact the potential value of PM’s. They are in summary form as follows: - Neoliberalism- e.g. income inequality and declining wage share. - Lack of aggregate demand e.g. underconsumption - Skyrocketing personal debt, necessary to replace declining wages in order maintain a sustenance lifestyle. - Financial instability, e.g. intrinsic instability (per Minsky) as investors perpetually chase more risky returns. Gold plays a different role and has a different meaning in each of these arguments. I hear a lot of reference to critical thinking, yet I can find not a single instance of any substantive discussion (save for debt discussions) of these alternatives, rather, it looks something like an Austrian echo chamber with a fait accompli outlook that a currency failure is inevitable and the root cause. This is particularly troubling to me for several reasons, one, it always seems to be an ideology in search of data to support it, rather than the other way around. If you have a belief system and you look hard enough you will eventually find some type of data to support whatever position you want to advance. So it becomes a sin of omission, as data that contradicts the premise is suppressed or ignored. Secondly, I find that all of the currency schemes as causation universally rely on the premise that the “system is being manipulated” to explain why the “fundamentals” so forcefully stated are not actually occurring as predicted by model. The truth is, if the explanation is singularly that the empirical does not match the theory because of manipulation, over and over again, that you really do not have a theory. This then becomes nothing more than an excuse to try and keep alive a dysfunctional premise. Yet, virtually any PM investment newsletter, or fund manager or anyone with any (financial) interest in the PM story will shout from the highest mountain- FRAUD- while they lose client’s money left and right. Lastly, I believe that the PM/currency failure/Federal reserve explanation does not accommodate any of the aforementioned factors of (intrinsic) declining profit margins, neo-liberal effects, or systemic financial instability (with remedy only in massive regulation), rather it is an island of explanation that cannot entertain anything other than a free market solution inherent to Austrian ideology. Conversely, these alterative explanations can all accommodate dysfunctional monetary policies and still carry their central premise. One might want to consider the possibility that one or more of these alternative explanations might have some validity before one bets the farm (or even hedges a portfolio) with PM’s. Thanks to Arthur for the link