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Are Gold holders "blinded" by their own bullishness?

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Are Gold holders "blinded" by their own bullishness?

J.D. & M.Hampton on FBB Podcast talking Gold, etc

=========================================

 

The ORIGINAL THREAD ON THE PODCAST was hijacked by DrBubb - see below.

There's a new thread for those who want to discuss the podcast itself: here

I have switched titles to reflect the change in focus - DrB.

=== ===

 

Trader Michael Hampton and wealth manager Jonathan Davis discuss gold, the stock market and the outlook for the UK economy and its housing market.

 

http://media1.podbean.com/pb/04dcdd1d992afabaca6de93bd43264e1/4f500dde/blogs/2516/uploads/jdandmh.mp3

 

http://commoditywatch.podbean.com/2012/03/01/talking-markets-gold-housing-and-the-economy/

 

images%2Fpages%2Fjohnathon_.jpg1fc3dd56ee2fbef7bcfaf924b53bbc7db753ac9a.jpg

=== ===

 

A Key Question:

A debate Question that I am fight hard to bring to the surface:

"Who owns the bulk of the Gold on this planet, and is a gold price soaring ahead of the rate of inflation something that ordinary investors should be supporting or not?"

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Here's the Gold/GLD versus DBA chart that I mentioned ... update

 

dba5yr.gif

 

Ratio: GLD-to-DBA

 

gldtodba.png

You don't have to be a genius to spot the potential top here, using the Gold-to-DBA Ratio chart.

(Yet I wonder: Where are the comments from the Gold purist gurus?)

 

Gold did much better than just "retaining its purchasing power". in relation to Agricultural commodities. What can we realistically expect from Gold as an inflation hedge against rising food prices? Isn't a 160% outperformance (relative to Ag commodities) big enough to start wondering if the relative price gains are overdone - at least for the time being.

 

Having asked this, I know there are those out there who think that Gold will go on beating inflation, because it will benefit from "seigneurage" which would come from using gold as a currency. Many gold purists would like to keep the supply of gold tight, and convince a large number of people that gold is the only suitable currency. This way, they might "pin gold to the ceiling" by backing currencies with Gold at a time when the price is high. If the Gold price is fixed, then the purists holding gold, could then offload and take their profits. The main beneficiaries may not be small private investors, but rather shadowy institutions (like the Vatican bank and others) that have hoarded gold for years.

 

Gold has an important role in preserving wealth IMHO. I own it now, and have owned it for years... and I buy on dips and sell some when I think it is overvalued. But we must not treat gold owning as a religion and/or build cults around gold hoarding.

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Where are waves 3 and 4? Is Jonathon looking at a linear chart??

 

I see Bubb's point about gold as an inflation hedge, but then that doesn't meet the arguments of gold buying deflationists. The problem facing thinkers today is how to reconcile the rise in gold with an on-going debt deflation. Until they start grappling with that, nothing new is being said.

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Here's a thought. Why not take markets as you find them. Accept the long term trend in place and then seek to give an explanation for it. Trying to get markets to conform with your own a priori reasoning is an exercise in futility. Irrational markets are not right or wrong, and is pointless to argue with them.

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Here's a thought. Why not take markets as you find them. Accept the long term trend in place and then seek to give an explanation for it. Trying to get markets to conform with your own a priori reasoning is an exercise in futility. Irrational markets are not right or wrong, and is pointless to argue with them.

That means being disciplined, and using stops, and looking at things like charts that compare Gold prices with other inflation measures, I reckon.

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Love the "debt bomb" song at the end Dominic!

Agreed.

I wonder who sang that? There some talent there

 

In edit:

Words by Dominic Frisby (great job!)

and Sung by Ian Virgo/Burgo (?)

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That means being disciplined, and using stops, and looking at things like charts that compare Gold prices with other inflation measures, I reckon.

OK... unless gold is not acting as an inflation hedge/ measure.

 

Though I noticed you did mention the possibility of gold becoming a currency in the podcast. This is progress! lol. But shortly after you thought it was not a good idea. On the other hand, some gold purists think it's a brilliant idea that gold should become the sole form of money. Yet who's to tell the market what is or is not a good idea?? Won't the market do what it will do... in spite of our judgements? Isn't this the basic premiss of free markets anyway? This is why I often say 'what ought to be' has to be left out of it, and investors/ traders have to discipline and restrain their thoughts to 'what is and what is becoming'. Go with the flow in other words. Lest undisciplined thought lead to bias.

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... you did mention the possibility of gold becoming a currency in the podcast. This is progress! lol. But shortly after you thought it was not a good idea. On the other hand, some gold purists think it's a brilliant idea that gold should become the sole form of money.

Gold as currency, or currencies linked to Gold at a high fixed rate is not what the Dr orders.

 

The main purpose this would serve would be to lock in huge profits for the Gold bulls. Probably many Gold purists think that would be a fair reward for criticising excessive government spending. I do not think that way. I would rather see gold as a currency trading alongside traditional currencies than see gold-back currencies. As a competing currency, gold would continue in its role as a canary-in-the-coakl mine providing a measure of confidence in the paper currencies. But I do not want to see institutions that may have quietly loaded up on Gold be given a risk-free exit at a high price.

 

Imagine how it would have been if the Dollar had been fixed to gold at $800 in 1980. Gold production would have stayed high for years, and we would have been swimming in gold as Central banks were forced to buy it under "gold-backing" provisions. Eventually all the gold selling would have overwhelmed Central banks, and the larger gold stocks might have forced the price below even $250 when the Gold back provisions where modified or cancelled.

 

Do you really want shadowy institutions and gold bugs to be given such a windfall as would be provide if the Dollar were linked to Gold at $3,000 or something?

 

I hasten to add that Gold is a very useful store of wealth, for all the traditional reasons stated by the Gold Bulls, but using it to back currencies is not going to be the right thing to do, unless they can get the initial fixed price right. That may not be as easy as some think, and certainly the right price is not $850 adjusted upwards for inflation since 1980.

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Gold as currency, or currencies linked to Gold at a high fixed rate is not what the Dr orders.

 

The main purpose this would serve would be to lock in huge profits for the Gold bulls. Probably many Gold purists think that would be a fair reward for criticising excessive government spending. I do not think that way. I would rather see gold as a currency trading alongside traditional currencies than see gold-back currencies. As a competing currency, gold would continue in its role as a canary-in-the-coakl mine providing a measure of confidence in the paper currencies. But I do not want to see institutions that may have quietly loaded up on Gold be given a risk-free exit at a high price.

 

Imagine how it would have been if the Dollar had been fixed to gold at $800 in 1980. Gold production would have stayed high for years, and we would have been swimming in gold as Central banks were forced to buy it under "gold-backing" provisions. Eventually all the gold selling would have overwhelmed Central banks, and the larger gold stocks might have forced the price below even $250 when the Gold back provisions where modified or cancelled.

 

Do you really want shadowy institutions and gold bugs to be given such a windfall as would be provide if the Dollar were linked to Gold at $3,000 or something?

 

I hasten to add that Gold is a very useful store of wealth, for all the traditional reasons stated by the Gold Bulls, but using it to back currencies is not going to be the right thing to do, unless they can get the initial fixed price right. That may not be as easy as some think, and certainly the right price is not $850 adjusted upwards for inflation since 1980.

I'll re-post the other part of my previous post because your post above is doing exactly what I think investors can not afford to do with free markets, that is, exhibit a bias.

 

....Yet who's to tell the market what is or is not a good idea?? Won't the market do what it will do... in spite of our judgements? Isn't this the basic premiss of free markets anyway? This is why I often say 'what ought to be' has to be left out of it, and investors/ traders have to discipline and restrain their thoughts to 'what is and what is becoming'. Go with the flow in other words. Lest undisciplined thought lead to bias

 

Why not take a more descriptive approach as opposed to a normative one?

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The problem facing thinkers today is how to reconcile the rise in gold with an on-going debt deflation.

No problem: gold is forward looking and for now seems to react more to money supply (which is increasing to replace private debt) than to (more stagnant) nominal GDP. This is no contradiction as money velocity is low. The key for understanding the forward looking aspect is that velocity (and also private credit growth) lags money supply growth, and therefore retail price inflation follows with a delay. The delay at the moment is pretty long, however, the coming calamity can be seen already in stubbornly growing prices in necessities.

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The question is almost non-sensical given we live with free markets. We don't have a philosopher-king who can one day say this is the way our money will be [mind you, Friedman gave it a good try with an attempt at scientific currency]. The reality is the market will determine the worth of gold. However, should capital one day start absolutely pouring into gold and abandoning economies then government will most probably then have a say out of a perceived necessity... that would be the end of the free market with currencies then somehow fixed to gold. Notice, none of this is about what ought to happen, but what is, and what perhaps could happen.

People may be asked to make decisions on this. Especially if the Gold Bugs can get enough public support for a Gold backed currency.

 

Personally, I am against a Gold backed currency, for a number of reasons. But the well-financed Gold Bulls will keep pushing for it.

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No problem: gold is forward looking and for now seems to react more to money supply (which is increasing to replace private debt) than to (more stagnant) nominal GDP. This is no contradiction as money velocity is low. The key for understanding the forward looking aspect is that velocity (and also private credit growth) lags money supply growth, and therefore retail price inflation follows with a delay. The delay at the moment is pretty long, however, the coming calamity can be seen already in stubbornly growing prices in necessities.

Thanks for posting that here, on this thread.

 

To paraphrase:

Gold is reacting to money supply growth (possible future price inflation), rather than to the actual price inflation.

 

Okay, I can see some logic in that. However,

 

1/ I think it is Money AND Credit that matter most, not just money growth. As Money growth has shot up, credit has shrunk and so has money velocity. This is why price inflation has lagged behind Money Supply.

 

2/ If you think that Price Inflation will one day catch up with Money Supply, and rising Gold prices, then maybe you should be monitoring the gap - as I am doing - and think about swapping out of Gold (at least partially) and into coincident indicators of Inflation, like CRB, DBA, and maybe even stocks and property, when the Gap becomes too big. A 150% outperformance by Gold is enormous. If food price inflation is going to catch up, why not buy food, rather than Gold?

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"Shadowy Groups buying Gold and Silver" ?

 

Here's some food for thought:

 

 

Who bought Buffett's Silver?

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No problem: gold is forward looking and for now seems to react more to money supply (which is increasing to replace private debt) than to (more stagnant) nominal GDP. This is no contradiction as money velocity is low. The key for understanding the forward looking aspect is that velocity (and also private credit growth) lags money supply growth, and therefore retail price inflation follows with a delay. The delay at the moment is pretty long, however, the coming calamity can be seen already in stubbornly growing prices in necessities.

Not everyone that hedges against inflation buys gold. Most inflation hedgers buy commodities and stocks. That commodities and stocks haven't risen with gold surely suggests that gold is being bought for another reason. The more consistent explanation is that in a debt deflation currency becomes more desirable, and that in a global debt deflation gold is the king of currency. Consistent and simple, it stands the test of Occam's razor.

 

...the coming calamity can be seen already in stubbornly growing prices in necessities.

Asset deflation + currency deflation/ depreciation = hyper-deflation.

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Just who are the REAL White Hats in this debate?

 

...it agravates people who follow him as the Guy does not come on here so can't defend himself! We all know your opinion of JS and the responces you provoke when you constantly attack him.

I would put it very differently.

 

JS doesn't defend himself against charges of ramping gold, and he SHOULD be made to do so.

 

I read and respond to the many comments here from people, including some (many?) comments which are unfair IMHO.

 

(I would appreciate it greatly, if there are any others reading this, who are also suspicious about the motives of Mr Sinclair, if those others we see that dangers of his ranmping would now give me some support. I am tired of fighting the apparent forces of darkness on my own.)

 

I think I have fought hard to bring light and debate to points and dangers that the liars and exaggerators (like GATA) have done their best to hide. GATA and others paint themselves as "the good guys" in the great gold debate, but I think that is far from true. they will not answer debate points (and strong ones) that I am fight hard to bring to the surface.

 

Here it is in a nutshell:

"Who owns the bulk of the Gold on this planet, and is a gold price soaring ahead of the rate of inflation something that ordinary investors should be supporting or not?"

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From the Main Gold thread/

 

The only undeniable gold-price statistic that I've noticed is the correlation between downward movements in the price of gold on the one hand, and the grumpiness of this thread on the other. The price has just suffered its biggest ever drop that I can remember ... and I've never known this thread to be tetchier, with nervous gold-holders being quite rude to Dr B.

 

I'm reminded of the observation of Dr Johnson in Edinburgh, hearing two women arguing across the street, from the upper storey of one house to another: "They'll never agree, because they're arguing from different premises".

 

Of course Dr B is right, that you can make more money trading than holding gold, if you get the timing right: that's just a mathematical certainty. But it takes time and skill -- and most of us haven't got much of either. And of course he's right, that those who only predict rises in the gold price are in danger of doing a disservice to their readers: we need to know (in good time!) when to sell ... and no-one's telling us that. Will they still be saying "hold", or even "buy" at and beyond the eventual peak?

Thanks. Wise words.

 

It seems to me that "buy & hold" is only half a strategy. For what purpose, and for how long, should I hold it? (I expect to be dead in the next thirty or forty years.) I'd like to hear more about exit strategies and timing: neither traders like Dr B nor hoarders lke GF give me quite what I need. When they dissatisfy me good-naturedly it's one thing ... but when this thread is both unhelpful and bad-tempered, I can do without it.

You are right.

B&H, should ideally be: Buy and Hold and Hold... then, Sell at the Top.

 

When is THE Top? I cannot tell you that.

 

But maybe you do not even need to know that. In 2001, I sold my London property. I sold it "too early", as many have told me over the years. My reaction did set some property bulls off, because I said:

 

"I do not care if I sold too soon. The main thing to know is: How much profit I made (4X my cost), and what I did with the proceeds: I bought Gold shares! I subsequently made something like 6X my investment in Gold shares, and then I sold those "too soon" too, in order to buy many properties in Hong Kong. I still hold the most valuable one of those, after having sold the other 9 properties "too soon." Do you see a pattern here?

 

My overall point is this: Selling too soon is not really a problem, provided you use the money to buy something else that is good value. You may then find - as I often have - that the new "cheaper" investment rises in vaue faster than if you had held onto the old one. What is wrong with that?

 

I tend to think in terms of relative value, and use Ratios to assess that. And I wind up exiting too early to please the purists/

 

If you want to exit Gold at the right time, you should keep a watchful eye on the alternatives.

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Agreed.

I wonder who sang that? There some talent there

 

In edit:

Words by Dominic Frisby (great job!)

and Sung by Ian Virgo/Burgo (?)

 

 

Yeah i agree, I loved the song at the end, It made the podcast!

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OK... unless gold is not acting as an inflation hedge/ measure.

 

Though I noticed you did mention the possibility of gold becoming a currency in the podcast. This is progress! lol. But shortly after you thought it was not a good idea. On the other hand, some gold purists think it's a brilliant idea that gold should become the sole form of money. Yet who's to tell the market what is or is not a good idea?? Won't the market do what it will do... in spite of our judgements? Isn't this the basic premiss of free markets anyway? This is why I often say 'what ought to be' has to be left out of it, and investors/ traders have to discipline and restrain their thoughts to 'what is and what is becoming'. Go with the flow in other words. Lest undisciplined thought lead to bias.

 

 

Lets face it. It dose not really matter if its a good idea or not. The same as it donse not really matter whether we go onto a gold standard or keep the same fait system that we have now. What ever we do Goverments around the globe will find ways to abuse it to suit there own needs. Always have and always will. that is why every system we have ever used has faild.

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...Always have and always will. that is why every system we have ever used has faild.

And that includes the gold-backed ones too.

 

Actually, Sterling has had a pretty good run. I think it is over 900 years now

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Just who are the REAL White Hats in this debate?

 

 

I would put it very differently.

 

JS doesn't defend himself against charges of ramping gold, and he SHOULD be made to do so.

 

I read and respond to the many comments here from people, most of which are unfair IMHO.

 

(I would appreciate it greatly, if there are any others reading this, who are also suspicious about the motives of Mr Sinclair, if those others we see that dangers of his ranmping would now give me some support. I am tired of fighting the apparent forces of darkness on my own.)

 

I think I have fought hard to bring light and debate to points and dangers that the liars and exaggerators (like GATA) have done their best to hide. GATA and others paint themselves as "the good guys" in the great gold debate, but I think that is far from true. they will not answer debate points (and strong ones) that I am fight hard to bring to the surface.

 

Here it is in a nutshell:

"Who owns the bulk of the Gold on this planet, and is a gold price soaring ahead of the rate of inflation something that ordinary investors should be supporting or not?"

 

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.

 

B) 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.

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Some interesting points, Quiff. But you've assessed me wrongly.

Far from the "forces of darkness" that you believe 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.

Probably, I need to explain myself again, because you do not understand my comment.

Everyone here obviously gets the point that excessive government spending, and excessive debt creation tends to lead to rapid money growth, and that in turn can trigger inflation. One of the "forces of darkness" would be those who over promise and over-print. Gold is protection against reckless governments. Years ago, you would have found me posting arguments here and elsewhere that it was important to buy gold as protection. In that sense, JS is on the side of light in communicating the perils of printing to all and sundry.

 

But he goes past that. He exaggerates the merits of gold, and sees conspiracies in places they do not exist - for instance, he way over-exaggerates the size of risks in the derivatives markets, and then uses the imagined risks as a reason that gold prices should be much higher. When they do not move up to match his expectations, he sees concerted manipulation of the price. He never admits that his targets, like $1650, are also a subtle form of manipulation, and those same "big bullion banks" that he reviles (were I once worked as an insider) not only push the price down when they sell Gold futures, but also push the price up when they buyback short positions. Does he really think that manipulation only happens in one direction, and from one side of the market?

 

I find it easy to believe that TPTB are operating on both sides of the market. The Fed and other Central Banks may be trying to hold the Gold price down and push it lower at certain times. But the larger picture is that if JS and many on GEI and other websites can understand the argument for higher Gold prices, then so can those behind TPTB. Do you think that rich and powerful people fail to see the Bull market in Gold? Of course they see it. And they are playing it too from the long side. When the Fed or JPM is selling gold to drive the price lower, and they scare people out of the market, do you think the only buyers at lower prices will be the Bullion banks? If I find it so easy to spot buying windows by doing things like watch key moving averages (like the 144d MA), do you think wealthy and powerful people cannot do it too?

 

I think there is as bigger Gold project underway. It involves manipulation of Gold prices in both directions, both up and down. The manipulators are not only folks at the Fed and the Big banks, but also people like JS and GATA. They are playing a game with a much longer time frame. JS/GATA want to create long term, B&H demand which will allow them to unload their Gold positions at the top. Those positions are big, and so they will need many who will have money, and also have confidence to be happy buyers when Gold prices are banging up to new highs. And even better will be useful idiots who may push their governments to buy Gold and peg the price of the currency to Gold at very high prices. This way, they can sell their gold to the CB themselves who will be charged with the task of maintaining the Gold peg.

 

The behavior of Mr Sinclair exhibits classic mind-control techniques. Look into his background. See who his father was and the sort of relationship he had with his father. I am sympathetic to a degree. It cannot have been easy growing up with a father like that, who must have drive young Jim crazy, through all the emotional dramas. I am not saying he is a villain, or even fully understands the game that he is caught up in. But when I saw those Angels and the precise dollar targets, I saw something that was designed to instill confidence in buyers, and get them to buy at progressively higher prices.

 

Those who have made money with long term gold investments may be grateful to Jim Sinclair for having painted a picture that got them to see Gold as an appropriate long term investment. And, yes, trading Gold is not easy. And trading gold with high leverage is dangerous and can destroy wealth. Kudos to JS for getting people to be careful with gearing and over-trading.

 

But someday, when a large number of people have piled into gold, on the theory it can only go up in the long term, because governments are reckless with debt and money printing... Someday, those same folks who have bought with great confidence will find that Gold is not a one-way bet. The price will fall further and faster than they thought possible. (That day, or a period like that may even be dead ahead.) Then, when Gold has fallen further than they thought, perhaps because people like Robert Ian, or Jim Sinclair, or GATA told then that gold prices MUST go ion rising. Then they will realise reality isn't like that. They will get frightened and sell. They will wonder why they listened to the die hard bulls and their Gold gurus.

 

I have seen this pattern before. I know how the movie ends. I have a role to play too. It is the Cassandra that very few people listen to. Only in hindsight will the wisdom of these postings be fully understood. At the end, you will still see the Fed and JPM as villains who created the circumstances for a big rally in Gold. But there will be Black Hats who helped to inspire complacency, and convinced people that they should overstay, playing too long in a dangerous game. I may be wrong about Sinclair. In the end he may exit his Gold investments gracefully. He may even get some of ghis followers out. But when I look at his publicly-traded company, and learned from Tom Obrien that he was actually selling shares behind the scenes when he was publicly telling others to buy - That's when I say the very real possibility that JS may not be the wise and enlightened teacher that he pretends to be.

 

,,, to be continued ,,,

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,,, continued ,,,

 

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.

 

B) 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.

Well, I agree with most of that.

And it is worth noting that the 1980 rally in Gold was ended by a restoration of Positive Real Interest rates. There is a reasonable probability that this one will be ended the same way, if it does not "collapse under its own weight first." Another possible ending would involve news coming to light that PROVES that there is far more gold around than the estimates accepted by the mainstream. I do not give this revelation a high probability, but I want to keep it on my radar screen. I do think that many Gold bugs would HATE this sort of news, and would do their best to cover it up or hide it. So if it does come out, it will be interesting to see how the gold-owning community reacts.

 

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.

My posts are driven by a search for the truth, not an emotional reaction. Have you investigated the threads in the Fringe section and elsewhere, where I have invested several hours researching into some of the strange and far out rumors about the amount of gold which exists on the planet.

 

Example: http://www.greenenergyinvestors.com/index.php?showtopic=15617

 

I know some of the tales told by Fulford and Wilcock seem pretty strange, especially to those who have not heard them before. I take an interest because I heard similar stories almost three years ago. That's well before Fulford "broke" the story, and it is from a very different source. This alternative source gives me a greater confidence that their story is worth following. It also talks about VAST holdings by some shadowy organisations. The fact that the story does not go away has increased my feeling that there may be something to it.

 

Another thing to keep in mind is that I have seen and heard more "evidence" backing up the existence of the Illuminati and their methods of manipulation than most others who read and post here. That probably explains why I find it possible to believe that JS is working either voluntarily or unknowingly to support those organisations that will benefit from a rise in the Gold price.

 

I am frustrated that almost no one here seems to comment on the evidence that I have support that JS is behaving like a manipulator. Why is that? Could it be:

 

+ No one has read my post carefully enough to see the reasons?

+ People think the reasons are not credible at all?

+ They think the reasons make some sense, but simply cannot believe that such shadowy organisations exist?

+ They believe it is possible, but prefer to focus on other information that convinces them that gold is headed higher?

+ They are part of the same "mindset" as JS, and want to discredit anyone who attempts to get in the way of the Gold Bull argument?

 

I think the last reason may be real, and perhaps more people are in that camp than an unbiased observer would think.

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