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50sQuiff

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Everything posted by 50sQuiff

  1. 50sQuiff

    GOLD

    The sterling price of gold sovereigns at CoinInvest is down 4.1% peak-to-trough in this latest correction. Forgive me for not panicking.
  2. The funny thing is I listened to that same podcast. Eric King asked Sinclair "what price would put gold on a bullish stance," or something along those lines. Sinclair replied "$1735, and if it could manage it by the end of the week..." I'm not sure how that tallies with your comments. I can't possibly comment on your Super Stardom. I'm too lost for words. Your argument is basically "as long as the banks who underwrite derivatives continue to remain solvent, everything is fine with the derivatives system." This coming from a guy who created a forum dedicated to the unsustainable nature of the global economy! $16 trillion says your derivatives system is built on quicksand. Obviously oil would never go to $200 in your scenario, just like US house prices never fall on a national scale But let's say oil does go to $200 and our derivative contracts pay out a flat $1 million for each $1 on a barrel of oil. Let's say Bank A goes bankrupt due to losses on its mortgage portfolio. With oil at $200, Bank B had expected to receive $100m from Bank A, to net off the $90m it now owes to Bank C. But it doesn't receive anything, so all of a sudden Bank B has a net liability of $90m. Now let's say we mark Bank B's balance sheet to market and it's struggling to liquidate assets in extreme market conditions. It can't make the payment on time without admitting it's insolvent. So Bank C - which was relying on the $90m from Bank B to pay Bank D on its mortgage derivative contracts - itself now has a net liability of $90m as other banks pull collateral. Bank A needs $100m, Bank B needs $90m and Bank C needs $90m. Bank D, which hates the other three banks so it deliberately marks down certain assets to harm the balance sheets of its opponents. They all panic and liquidate assets at firesale prices, further destroying their own balance sheets. Trust starts to break down and the Saudis and Co start pulling dollar deposits. Liabilities are now off the scale and panic sets in. Now we have two choices. The system implodes, almost every bank in the world goes bankrupt and DrBubb starts wondering why his brokerage account won't load or why HSBC aren't answering his calls. 50sQuiff triumphantly calls his father to say "See! That's why I told you to hoard cans of tuna and Lloyd Grossman pasta sauce!" OR The Fairy Godmother guarantees the purchase of Bank A by Bank B, explicitly prints $90m and gives it to Bank B to give to Bank C, which then gives $90m to Goldma... I mean Bank D. It then buys all the worthless assets from Bank AB, C and D at par and doles out billions of dollars to all of them. FASB abolishes mark-to-market accounting. Warren Buffets steps in to invest in Bank D. This stems the international run on the banks and some semblance of calm is restored. Oil drops to $100 and thanks to the support of the Fairy Godmother, the banks increase their oil derivatives by 30% because nothing can possibly go wrong. DrBubb thinks his system worked beautifully and retires to a sustainable paddy field community bordering the Korean Demilitarized Zone. However trust in debt assets, debt-based currency and the system itself are irrevocably damaged. Gold's ascent resumes, characterised by a growing preference for physical outright ownership. http://www.youtube.com/watch?v=Sxz6gYIiFHc
  3. This isn't the first time I've pulled you up on this, but it will probably be the last. You're just deceiving people - willfully I think. The only reason why derivatives haven't blown up is because the Fed created and distributed $16 trillion in 2008. That's not conjecture. That is a fact that you're still in denial about. It's the only reason any of the major counterparties remained solvent and the whole system didn't unravel. I know you helped to create this system but by what objective standard could this be considered a success? A sane person might call it the most disastrous abject failure in the history of finance. But fortunately for you Alan Greespan pledged that the Fed stands ready to create money "without limit" to backstop such foolish attempts to 'eliminate' risk. And create money "without limit" they will. All the holders of this virtual debt-wealth will be made whole in nominal terms. Perhaps that will be considered a success too.
  4. 50sQuiff

    GOLD

    GBP Gold down 1.68%. Premiums on sovereigns up 1.79%.
  5. Far from the "foreces of darkness" that you belive you're railing against, I think it's humanity as a whole that is remonetizing gold, not Jim Sinclair any government agency. They can just see that the die is cast and are doing their best to front-run the process. But let's speak hypothetically for now. If - hypothetically - gold is freed from banker manipulation and is once again adopted as the store of value (not necessarily currency) par excellence, who stands to suffer? Governments obviously, because they can't just inflate away people's capital. Bankers obviously, because they can't debase people's capital and force them to rely on debt finance. But I can think of two others that are more relevant to this thread: a) Derivatives traders. If ordinary people can once again save in gold rather than being forced to speculate, there won't be as much dumb money in the market for traders to exploit. In fact, bubbles will be far harder to inflate and profit from. And as gold is more widely adopted and understood, there is a concomitant distrust of paper assets. If people don't need to play the game, traders will be left to churn commissions as they compete with other pros and algos. Wealth managers. If ordinary people can once again save in gold rather than being forced to speculate, they don't need someone to tell them how to manage their portfolio and charge them fees for the privilege. They just buy gold. In their sock drawer, in their vault or warehoused by James Turk and co. In other words, there would be no need for hedge funds, mutual funds and financial advisors on the current scale. Remember, I am talking about a return to an old paradigm here. After 40 years of being raped by governments and bankers, the free market is returning to gold as a store of value. This has nothing in common with the credit-induced tech boom or housing mania. This is about the entire function of savings and capital as it has evolved throughout human history. I think people who compare gold with those 'bubbles' are missing the real story of gold. DrBubb, you seemed to like gold when it was associated with the prospect of you making boat loads of fiat money. But now there seem to be bigger things at play and gold is being recognised as tradeable physical wealth, you're railing against it with a lot of anger and fury. I half suspect this is because gold has the potential to end a lot of trading and investment management careers. Who knows, maybe if the distrust of paper becomes so great, their accumulated fiat profits could be wiped out entirely? No doubt gold will reach overvaluation against other assets, at which point I hope to exchange some for a house. But there will be no 1980 dollar-rescue and gold smash this time in my view. I don't believe central banks and people the world over will dump physical gold. Through network effects ('supply side economies of scale'), the more people that use gold as their objective reference point for value, the more people benefit. They will not give up this privilege and hand it back to the bankers for paper again - at least not for several generations.
  6. 50sQuiff

    Where's the Next Bubble ?

    I think the Bubble bubble will burst when we go hyper.
  7. 50sQuiff

    Pension Gamble

    Jesus, I only wrote one line. Didn't exactly trash it. That's why I asked, "am I correct?" And OP noted that it was worth the same now as it was when he paid in.
  8. 50sQuiff

    Pension Gamble

    Am I correct to be reading this thread as a cautionary tale about wasting money on a pension?
  9. A sneering post railing against er, people sneering? Such is the ever-present irony of the internet.
  10. He's no old fool, but he is an an old crony capitalist of an era dominated by the issuance of American paper. He's a man of his time. He rails against gold because he knows his time is up. I think you're confused about savers and investors Mabon. The notion that savers should have to buy Exxon to maintain their purchasing power is ridiculous. As is the notion that buying Exxon is some how morally superior and that gold depends upon a "greater fool". This from the guy who invests based on the market's mispricing of assets. Presumably Warren doesn't feel that exploiting the people (pension funds, mutual funds) doing the mispricing makes them fools? "Mr Market" is comprised of living breathing people (fools), no matter how badly the 'investors' try to disassociate from them. And the funny thing is, gold doesn't need a greater fool. It's the universal reference point for value. Given its unique stock-to-flow ratio, gold is the only asset that is priced by its holders.
  11. 50sQuiff

    Tax planning for the Big Kahuna

    Sovereigns because that's your tax planning taken care of: 0% FOFOA because he has some compelling arguments why gold transactions will not be taxed at an individual level. Production, he argues, could be taxed significantly.
  12. 50sQuiff

    Tax planning for the Big Kahuna

    Buy sovereigns, read FOFOA.
  13. We don't have a 'flexible currency' to let defaults occur in the payments system! Any and all debt that is systemically important will be exchanged for cash. I ran this through Google, but just to clarify, this reflects imbalances within the European payments system right? It looks like German vendor financing writ large.
  14. From the BoE museum: Oh yeah?
  15. 50sQuiff

    Hidden symbolism of BoE museum artefact

    Oh yeah Merv? Joking aside, I'd recommend the BoE museum to anyone. It's a very good exhibition and you get to pick up a 400oz LGD bar!
  16. 50sQuiff

    GOLD

    I may have been exaggerating a wee bit to wind up the dollar bugs But I feel that when this paper system - the system that enables flow of physical at such low prices - eventually breaks, it's going to break in truly spectacular fashion.
  17. 50sQuiff

    GOLD

    Indeed. Chanelling you-know-who for a second, TPTB can't afford paper gold to decouple so badly with physical otherwise real gold will 'go in to hiding'. This will drive the stock-to-flow ratio of gold to infinity, create dollar hyperinflation and destroy the USD Reserve system there and then. This is why we get the managed ascent of paper gold. I suspect the central banks are targeting the minimum paper POG possible to ensure the ongoing flow of physical. I think we're going to smash through the 1980-SGS CPI price in physical gold without breaking sweat. 1980 was just a dress-rehearsal for the end of the USD reserve system, with a superspike that I believe was caused by panic buying in size by the Middle East and some central banks (Iran, ironically enough) bidding for gold in the open market. Where is Volcker this time? Who is willing and able to impose mass poverty on the West with 20% interest rates? Let me give you some interesting reading Malvern Once you understand that hyperinflation is a demand side phenomenon and printing is the supply side response, it becomes somewhat clearer. The question of "how do you get the money into people's hands" is practically irrelevant and misleading. http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post.html http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post-part-2.html http://fofoa.blogspot.com/2010/09/just-another-hyperinflation-post-part-3.html http://fofoa.blogspot.com/2011/04/big-gap-in-understanding-weakens.html http://fofoa.blogspot.com/2011/04/deflation-or-hyperinflation.html And folks, please do drop by the golbu.gs chat room to share your forecasts, charts, pictures of rockets - whatever - as we watch this gold market unfold.
  18. 50sQuiff

    Breaking news from the House of Lords

    That's the mentality of a trader or investor, not a 'gold bug' or cultist, as you put it. I don't care about outperforming inflation on a year-by-year basis. Buying (and holding) gold is predicated on two things: 1. The existing monetary system that revolves around US Dollar-denominated debt functioning as the primary reserve asset and savings vehicle is approaching the end of its timeline. 2. That the best asset to hold through this transition, that is most undervalued currently and is the most likely to retain something of a stable valuation post-transition, is gold. Coming at the subject as an outsider I really don't share anything of your trader/investor perspective on gold. I think gold is best looked at through the dual lens of history and monetary theory so that's where my view on gold is grounded. Maybe the true believers and cultists are naive to do so. Perhaps the hard-nosed Gordon Gekko types that "buy low and sell high" and view gold as a means to grow wealthy at the expense of "greater fools" are correct. But what if they're not? What if they've spent their whole lives in a paper-trading paradigm that prevents them seeing the full depth and breadth of the story? My own view is that it's the gamblers with their leveraged paper vehicles who will be burned by this gold market, not the physical gold bugs. Of course, only time will tell, so in the meantime we get to have fun debating the future. You might come away from reading this post thinking "this idiot believes in a new paradigm" and that somehow "this time is different". Perhaps even "I can't wait to dump all my gold right at the top to suckers like him" and so on. Fair enough. That's the story of financial markets. But all these grizzled market veterans and internet pretenders to Jesse Livermore seem to ignore the fact that historically speaking, new paradigms are quite common. Things are regularly "different this time". When gold transitioned from being a lump of shiny rock to an evolutionary 'focal point' whereby humans universally perceived it as the ultimate barterable store of wealth, was there a new paradigm? When Rembrandt went from scribbling with some charcoal on a piece of paper to painting works universally regarded as masterpieces, were things different? When he died and the works became irreplaceable, was this a new paradigm? Are we still waiting for a mean reversion of the British Pound to most valuable currency in the world, even though it lost reserve status a century ago? Perhaps Merv has some plans I'm unaware of but it looks like we're still in that new paradigm to me. What about the German Mark, Mexican Peso, Assignat, Continental Dollar or Zimbabwe Dollar? I like to ask traders if they're waiting for the MACD to turn positive on those charts or are things different this time? I think we're entering a modern version of an old paradigm and I think things will be very different this time. I have to go out now. I'll try and address your "three points that gold cultists are banking on" when I get back.
  19. 50sQuiff

    Breaking news from the House of Lords

    I wouldn't make an investment decision based on purchasing power vis a vis mens suits. I understand that to be a parable about the timeless purchasing power of gold, as opposed to the paper currencies that have always become worthless. I don't think us goldbugs are interested in studying the gold-suit ratio to be honest. I have no doubt there are vested interests in the gold market and amongst the large hoarders of gold in the world. I really don't care to be honest. The vested interests that have preserved the present monetary/financial system have wreaked such havoc on the world that I don't care if the entities that have repositioned themselves in gold become rich and powerful.
  20. 50sQuiff

    Breaking news from the House of Lords

    Forgive my incredulity, but the GEI gold bear case often revolves around the 'Dragon family' fighting a war with the Rothschild Illuminati over hordes of secret gold. This isn't healthy scepticism - it's utter bollocks and should be dismissed accordingly.
  21. 50sQuiff

    Breaking news from the House of Lords

    Maybe you should ask the guy at your local petrol station what his oil price forecast is too.
  22. 50sQuiff

    Breaking news from the House of Lords

    All fairly eye-popping stuff. For what it's worth, if there is any truth in any of these stories (as well the whole 'Foundation X' thing), they're not going to be 'true' to the extent that there are hundreds of thousands of tons of hidden metal. That's just defying the geoligical and historical record. It will be because certain entities (sovereign, religious) value gold bullion far higher than we value the paper price. ANOTHER (supposedly a BIS insider posting on USA Gold in the late 90s) suggested that the BIS and the Saudis valued gold bullion far higher than the notional price in transactions relating to oil. Anyway, the name 'Yohannes Riyadi' is supposedly linked to a regular con along the lines of the Blackheath story. It comes up in the Fed's list of known scams here: http://www.ny.frb.org/banking/frscams.html The only thing that's really believable is that the Fed printed up 15 trillion and sent it to HSBC. I'd say that is consistent with their playbook.
  23. 50sQuiff

    HYPERINFLATION

    Spotted at my tube station:
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