Arthur: I encourage you to lead by example. You can very effectively show your faith in your own words by sending me a large number of these dollars you find so illusory.Mighty persistent illusion, isn't it? In this case, its the illusion of artificial scarcity.
Talk is cheap, as they say, but sending me all your dollars?
PRICELESS!!! :-)
A little less than 4% of my assets are in gold and silver (~70% gold / 30% Silver). I bought the gold at an average price of about $1,500/oz, silver at about $30/oz. I was lying in bed reading PP stuff the other night and contemplating the recent PM price crash and said to my wife, "honey it looks like the value of our gold and silver is plummeting and may go even further down based on various opinions out there". She looked over and said, "that's Ok we're in it for the long term, right?" then she turned off her light and went to sleep. We all should do the same. I did not invest with the idea I would sell in a year or five. I will sell it opportunistically in 20 years from now or give it to my kids. Store of value over the long term right?http://www.macrotrends.net/1300/gold-at-3000-only-if-bubbles-repeat
Markets are manipulated, always were, always will be, and the rules can and will change to suit those who make them. I'm long PM's cause at some point the manipulators will try to repeat what we saw in 1980.
I for one appreciate the continued campaign against Gold and Gold ownership. Keep it up. It improves my ability to buy with reckless abandon. We all have to place a bet somewhere, and I'm betting that this time is NOT different. No One Knows The Future. Good luck and keep badmouthing Gold!
Rector
Why would someone who was not manipulating the price dump so many contracts at the same time?Rector
… what!!!
LOL
Rector, that same actor who dropped 500 tons of gold has had that same power - to dump that many contracts, all at the same time, at any point during the last 13 years. Why choose now to do it? Because the market was vulnerable, that's why.This power has always been in place. The only reason it happened is (I believe) because the bids underneath the market had dried up, the actor figured it out, took the risk, and made a lot of money as a result.
The question I'd like you to answer is, why hasn't that actor used this power before? Did they just now get around to trying it out? Perhaps, they didn't think it would work before?
My suggestion: don't blame the hyena for choosing a sick and aged antelope to take down. The poor thing would have eventually expired of natural causes. The hyena just made it happen a bit quicker.
If we imagine we need to rid the world of hyenas, or perhaps shrink them in size, I guess thats ok. Fewer antelopes will die from hyena attacks - instead they'll die from natural causes - a lack of bids. Getting rid of short sellers means you have nobody to buy at the bottoms. Shorts buy at the bottoms because they are covering, and that's where you get those nice bounces. Nobody else has the courage to buy at that time.
As far as bad-mouthing gold - I admit it, I was - for a moment - being disrespectul of the central item of worship in the Church of Gold-Will-Always-Go-Up. My apologies. I should never suggest the price of gold could drop. Except, of course, under the assault from the sneaky, evil, dastardly manipulators.
Uh, did you notice I posted an article on a gold buy signal at 1230?
Man… I take a break from posting and DaveFairtex is right back to his subtle ways of making the current Gold price seem like it's somehow "real" or reflective of supply and demand where the buy side are defenseless antelopes waiting to be slaughtered. While there may indeed be times where there are a lack of bids on the Comex paper buy side, we should never mistake that for being representative of the broader supply vs. demand situation. It is not.1) Unlike stocks, where price is discovered in a supply vs. demand market place, and where shorters are at least supposed to borrow the stocks before they can short them, and where the futures (or options) markets action is determined by prices from the stock market… Gold is completely backwards;
- price determined in futures market, where naked shorting is acceptable.
2) Just remember this chart when DaveF plants his little negative thoughts like;
Fewer antelopes will die from hyena attacks - instead they'll die from natural causes - a lack of bids. Getting rid of short sellers means you have nobody to buy at the bottoms. Shorts buy at the bottoms because they are covering, and that's where you get those nice bounces. Nobody else has the courage to buy at that time.Lack of bids? Lack of courage to take a chance on Gold? The physical delivery market shows nothing of the sort - the Eastern block countries are sucking up Gold faster than it can be mined; The Gold price is manipulated. That does not mean it cannot go down farther.. it can. Never though listen to people like Dave when they try to help you believe that today's price is somehow the natural workings of the marketplace, reflecting a lack of bids. To learn more.. this is a great piece to read IMO; http://www.gekkosblog.com/2013/06/the-great-comex-paper-gold-dump-online.html
Nice to have you back. And hope you enjoyed your break from the blog world. :-)
Several years ago I visited my parents and discovered a wooden box containing 3 notes from the Weimar Republic. The collective value in Marks was indeed impressive. I shipped all three notes (at no cost) to a friend who wanted to frame them and keep them as a reminder about paper currencies returning to their intrinsic value. FWIW, the box also contained 3 US gold coins. I decided to keep them for myself as a reminder about gold retaining it's value.
We can take any slice to time in history and find periods of time when the masses prefer paper or gold. We are in that thin slice of time when it appears paper is winning the battle. My money is on gold winning the war.
[quote=davefairtex]
As far as bad-mouthing gold - I admit it, I was - for a moment - being disrespectul of the central item of worship in the Church of Gold-Will-Always-Go-Up.
[/quote]
Dave,
My point is not that Gold will always go up. My point is that Gold will eventually go up (or hold a constant value) and therefore I don't have to spend my precious days on Earth making short term trades in a high beta space. All I need to do is own some, and sleep well at night.
If you know of a safer currency to be in, please let me know.
[quote=davefairtex]I'd love to hear from a guest that:
correctly called the rise of gold from 300
correctly called the top in 2011
now has a forecast for what will gold do going forward
[/quote]
How about 1 out of 3?
http://arxiv.org/pdf/1012.4118.pdf
The content in that PDF is above my pay grade but maybe just what you are looking for Mr. Fairtex.
I learned that Hyenas eat antelope.
Arthur has Gold inside of him.
Jim H. was gone, and the bid was never caught and gold goes down and up based on the manipulation of some rich guys who rule the world.
Some were rude, some admitted to it.
Everyone seems to get a good nights sleep, especially the wives.
Some buy gold at $1500 even though gold is at $1250 because gold is going to $10,000. Maybe.
Gold could still go down from here even though the demand for gold is at extremely high levels which should cause gold to go up but paper in some Comex market dictates price.
Frankly, I now understand why I own gold because nothing in this market can possibly be for real and anything can happen so you better have insurance (physical gold) and is why I can sleep at night. My wife, she don't care what I do so long as I don't wake her. 
Happy Holidays, I am gone.
Get to go at it over gold again. Here's how I picture Dave in my head:
Here's how I picture Jim H. in my head:
Hope you had a good laugh!
Welcome back Jim.
Damn… I hate the internet! That picture of me came from a photo modelling session that was never supposed to go public… I was young and needed the money. You never think about the future when you sign those damn release forms. You do know what they say though about the size of a man's sword …
All I had to do was google your name and that picture came up. I just like all the gold, it suits you.Nice to have you back. It was getting a little boring.
Well sure Jim if you just look at one part of what I wrote, I really do sound a little silly.My point, which nobody yet has had the ability to even challenge, is that all during the 11 year bull market the naked shorts had the magic power, and yet for some odd reason, they never used it. Why might that be?
- a complex conspiracy which has never been fully explained by rational argument
- supply & demand
I choose #2. Most of the buying during that 11 year bull market was paper buying. And then of course it follows that a good chunk of the selling in the 2 year bear move/correction is paper selling.
The reason why the shorts didn't dare drop 500 tons of paper supply during the bull move is - it would have simply been viewed as a sale, and bought up almost immediately. In other words, they'd have lost money, because the paper bids underlying the market were quite strong.
After no hyperinflation occurred, the paper bids that drove the market to its 1900 heights evaporated slowly. And yes, then the shorts pounced. And had their day. Like in every market everywhere. Things move up slowly, and then go down really quickly.
Come on guys. Its really not that complicated. Why make it into some conspiracy? Occam's razor, anyone?
JAG -Thanks for the article. Fascinating stuff. I've seen the work of Didier Sornette before, and I was intrigued. It offers us the tantalizing possibility of actually selling at or near the top in these hyperbolic blowoffs. [Of course with anything like this, once it becomes widely used, it likely won't work quite so well anymore, but in the meantime…]. I hadn't seen his techniques applied to gold, nor did I really get how it worked until this article. Perhaps its time to manufacture some charts…really, thanks!
The reason why these "magic chart things" tend to work is because the markets are an expression of people and their emotions - a mixture of fear and greed, alternating in cycles. Fear of being left out of the breakout, greed about making seemingly easy money, and then fear of losing everything after the drop has been too great, wanting to sell out when you get back to even, etc.
Of course if someone believes its all about virtuous physical buying going up, and dastardly naked-short-selling manipulation on the way down, they won't be interested in such material. That's the downside to faith-based approaches - no new information or techniques accepted, thanks, my worldview is already complete.
Buy and hold gold just in case we have a monetary problem - a fantastic idea. But, diversify. Gold is just a price, nothing more.
Ok, it is pretty. But thats as far as I'll go. :-)
OOG -You make great points. I agree - mostly. And for the record, I wasn't actually speaking to you with the "bad-mouthing", I was speaking to Rector. :-)
However there are times not to buy gold. Buying at a hyperbolic peak virtually guarantees you'll have an unpleasant gold experience, at least for a time anyway.
As to which currency is safer - if you mean "less volatile" well then historically that's USD. If you mean "holds its value over the long haul" (40 years, lets say) then its quite clearly gold. But that's rear-view-mirror stuff.
Going forward, which one will be safer? Depends on the outcome of our predicament. If we have a deflationary crash, the safer currency will be the USD. If we don't, then the safer currency should be gold. Jim knows the answer for sure, but I'm not as smart as he is, which is why I have one foot in each camp.
My odds-on favorite scenario is a deflationary crash first (which will trash gold), followed by a reflationary move. If I am nimble enough, I will be able to exchange all that USD I have for Even More Gold. But if not, no worries. Those who, like you, don't care to play this game (which I think is a perfectly reasonable position to take) buying gold, holding it, and forgetting about it makes a great deal of sense.
But just to be safe, its probably also a good idea to diversify. Eggs, baskets, etc.
Funny pictures.
Great site.
[quote=davefairtex]OOG -
You make great points. I agree - mostly.
Those who, like you, don't care to play this game (which I think is a perfectly reasonable position to take) buying gold, holding it, and forgetting about it makes a great deal of sense.
But just to be safe, its probably also a good idea to diversify. Eggs, baskets, etc.
[/quote]
Yes to diversification. Much to my chagrin, I have a heavy position in USD and treasuries.