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G0ldfinger's GOLD Thread: Longer Term Aspects

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I listened to this on Friday and yesterday and found it most enjoyable. Bonner gives good interview.

 

Just read the Adrian Douglas article over on Goldseek. The analogy of "fractional reserve" applied to gold makes perfect sense for the criminally-inclined.

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picked up from hpc

 

small change i know but worth more than £139

 

link

 

# Queen Elizabeth II 2009 Uncirculated Gold Sovereign – Fantastic opportunity to enjoy your very own piece of British gold!

# Just released - Be one of the first to own Britain’s newest gold sovereign

# Privileged price of £139, a saving of £200 on the London Mint Office's regular release price and 30 days approval

# Accompanied by a Certificate of Authenticity – a testimony to its providence and gold content.

# 22 carat gold

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if you buy one of these are you then obliged to buy more at their silly prices or can you split after the 1 transaction ?

Please be very careful with this offer. The london mint have absolutely nothing to do with the royal mint. I have heard numerous bad stories about folks who took up some special offer previously only to be subsequently bombarded with other coins thru the post and payment demanded of them. Personally I would steer clear.

 

Conditions of Sale

 

Purchasing this coin entitles you to the preferential purchase rights for other British sovereign coins.

 

Applications will be handled in strict order of receipt. To apply, please complete the online application form.

 

The London Mint Office hereby confirms that:

• This coin is an original, minted during the reign of our queen, Queen Elizabeth II in 2009

• Successful applicants will be automatically entitled to a place on the reservation list and will receive further coins in the collection “Sovereign: era of gold, age of Empire” at the London Mint Office's regular price of £339 each, postage and handling included. The coins will be released by The London Mint Office approximately every four weeks although always sent on approval and without any obligation.

• Applicants are free to vacate their position on the reservation list at any time, or to return any coin within 30 days of receipt.

• Only one application per household will be accepted.

• Applicants must be 18 years or over.

• Applications are subject to status which may require a credit check through a licensed credit reference agency.

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Please be very careful with this offer. The london mint have absolutely nothing to do with the royal mint. I have heard numerous bad stories about folks who took up some special offer previously only to be subsequently bombarded with other coins thru the post and payment demanded of them. Personally I would steer clear.

Applicants are free to vacate their position on the reservation list at any time, or to return any coin within 30 days of receipt.

 

will be vacating the list fairly quick

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Please be very careful with this offer. The london mint have absolutely nothing to do with the royal mint. I have heard numerous bad stories about folks who took up some special offer previously only to be subsequently bombarded with other coins thru the post and payment demanded of them. Personally I would steer clear.

 

cheers Dr S, doesn't look worth the hassle to save 20 quid

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Another weekly high in gold even after the cartels actions last week.

 

sc-2-2.png

 

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if you buy one of these are you then obliged to buy more at their silly prices or can you split after the 1 transaction ?

 

I bought one of their offer coins. It was the £119 sovereign. Before I had paid for it, they sent me the coin in capsule with a load of other stuff, gloves and a card detailing the history of the sovereign which was a good teaching aid for my kids. I paid by cheque and enclosed a letter explaining that I would not be interested in any other offers and not to contact me again. I never heard from them again and they banked the cheque. Was ok really but a bit of a song and dance for a saving of £30.

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MSM getting bullish on gold, still far too conservative though.

 

Gold price 'set to double in four years' - Telegraph

Gold prices, which hit record highs last week, could nearly double again in the next four years.

 

Analysts at Edison Investment Research have predicted that the price of gold price could hit $1,879 (£1,185) an ounce by 2013, driven by the aggressive monetary policy of central banks around the world and a chronic shortage of the precious metal.

 

Charles Gibson, a gold expert at Edison, argues in the report that the peak in the gold price has been delayed because the world was still facing deflationary forces. Previously Mr Gibson had expected gold to reach $1,567 an ounce "in the near term".

 

The report says: "We reiterate our belief that gold is in the second phase of its bull run and that it has the potential to spike higher." It adds: "We believe that it will take longer than anticipated for quantitative easing and loose monetary policy to express themselves in inflation statistics."

 

The gold price hit an all-time high on three consecutive days last week, but the rally lost steam on Friday as the dollar strengthened and as traders locked in gains.

 

The price of gold for immediate delivery closed up 90c at $1048.10 an ounce on Friday, after hitting a record high of $1,062.70.

 

 

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Hugh Hendry sounding very sheepish about his "I am waiting for gold to hit $600" call:

 

From:

 

Sounding very coy about things now. I like that Hendry's bravado is subdued but he still cant bring himself to admit he made a bad call.

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Hugh Hendry sounding very sheepish about his "I am waiting for gold to hit $600" call:

...

LMAO!!

 

If gold should go back to $600, however, he would be celebrated as a genius.

 

But my guess is that many have missed the train. They will jump on between $1,500 and $2,000.

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LMAO!!

 

If gold should go back to $600, however, he would be celebrated as a genius.

 

But my guess is that many have missed the train. They will jump on between $1,500 and $2,000.

Yep some folks always manage to find a reason not to start accumulating a position. "Hendry thinks he can buy at $600"... "Prechter says we will see $400". This constant fear means many will never make that leap until the vast majority of the move up has already happened. I've pretty much decided to listen more to my own instinct and less to the financial pundits.

 

Hendry once said that "monkeys pick bottoms". He should listen to his own advice not try to time this market the way he is.

 

I want to protect what I've got and anything other than gold (and perhaps silver) looks way too risky.

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Yep some folks always manage to find a reason not to start accumulating a position. "Hendry thinks he can buy at $600"... "Prechter says we will see $400". This constant fear means many will never make that leap until the vast majority of the move up has already happened. I've pretty much decided to listen more to my own instinct and less to the financial pundits.

Reminds me of this list here: 10 characteristics of fraudulent gold writers

http://www.greenenergyinvestors.com/index....st&p=134451

 

Hendry once said that "monkeys pick bottoms". He should listen to his own advice not try to time this market the way he is.

:lol:

 

I want to protect what I've got and anything other than gold (and perhaps silver) looks way too risky.

Just like Bill Bonner.

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Coy or cagey? I'm not sure. 50% since 2003 sounds pretty good. His call and Prechters call now looks laughable. But who is to know how it all pans out?

This could be a case of 'he who laughs last, laughs longest'.

Don't get me wrong...I hope they are both wrong and we won't return to 400-600 lows. I'm more in the Bill Bonner camp myself but I don't think any of us know enough to ridicule these claims till time passes her final judgement.

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The Gold Basis Is Dead – Long Live The Gold Basis!

 

Antal E. Fekete - Professor of Money and Banking - San Francisco School of Economics

 

A year ago I conducted a Seminar on the gold basis and backwardation in Canberra, Australia. I suggested to my audience that the gold basis (premium in the nearby futures on spot gold, with negative basis meaning backwardation) as a “pristine indicator that, unlike the gold price, cannot be manipulated or falsified by the banks or by the government. Thus it is a true measure of the perennial vanishing of spot gold from the market, never to return, at least not as long as the present fiat money system endures.”

 

That was then. Today we are one year older and that much more experienced. We now know that the banks and the government have in the meantime found a way or two to manipulate the gold basis as well. Next month I have another Seminar coming up in Canberra. I shall address the problem of gold basis, giving a full account of what we know about the efforts of the powers that be in trying to falsify this most important indicator, the guiding star of refugees who have entrusted their fate to a golden dinghy on a stormy sea. To the government, the gold basis is like the naughty child who blurts out unpleasant truths. He must be gagged and silenced at all hazards. Fool’s gold basis is even more important than fool’s gold in terms of the number of people victimized.

 

The “Let’s get physical” movement could trigger a chain reaction

 

A prime suspect is the gold basis calculated using COMEX futures prices, or the forward gold price of the London Bullion Market Association (LBMA). Further suspects are: certain gold Exchange Traded Funds (ETF’s) such as GLD and their weekly updated bar lists; certain central banks such as the Bag Lady of Threadneedle Street (nickname of the Bank of England) that has rushed to the rescue of her agents, the bullion banks, trying to bail them out by offering substandard (22 carat) gold in settlement of contracts at the verge of being defaulted. Substandard gold stinks, as I shall explain below.

 

There seems to be circumstantial evidence that this month the gold exchanges are unable to honor their expiring contracts for which delivery notices have been issued in September. It has occurred in spite of a robust, even increasing, contango. Furthermore, circumstantial evidence exists that counterparties to these expiring contracts for future delivery — bullion banks, to be precise, the name of J.P.Morgan and Deutsche Bank being prominently mentioned — have offered bribe money up to 125 percent of the quoted spot price to holders of long contracts if they would take settlement in paper, on condition that the embarrassing affair will be kept secret. If true, these maneuvers are motivated by the desire to conceal the real gold basis, and to deny that gold is in or approaching backwardation. If the truth were widely known, then there would be a run on the bullion banks. The “let’s get physical” movement would trigger a chain-reaction culminating in all offers to sell physical gold being permanently withdrawn around the globe. “Gold would not be for sale at any price”, whether quoted in US or in Zimbabwe dollars — or, for that matter, in any irredeemable currency — the only kind of money people are allowed to have nowadays. The curtain would fall on the “Last Contango in Washington”. The day of permanent gold backwardation would dawn. The chapter on a reactionary episode of history, irredeemable currency, allowing the Treasury and its central bank to create unlimited liabilities out of nothing which they have neither the means nor the intention to honor, but could use them for check-kiting purposes to mesmerize gullible people around the world, would be closed and become but a bad memory.

 

“Honey, I’ve shrunk the bar-list!”

 

We must guard ourselves against falling victim to the rumor-mills, while keeping our eyes peeled for the very real possibility that the growing shortage of physical gold can no longer be papered over with paper gold (pun intended). Another story is about GLD, a leading gold ETF, which publishes its bar-list every Friday at the close of business, reporting the serial number of every bar in inventory. The list is customarily well over a thousand pages long. But, lo and behold, on Friday, October 2, and on Friday, October 9, the bar-list shrank to a mere couple hundred pages, with no explanation offered. Could it be that the management of GLD has taken a bribe, and replaced physical gold in inventory by paper gold, in order to save the face and skin of the bullion banks that have gone naked short and subsequently got cornered?

 

If so, it won’t get very far. The leadership of the US House of Representatives may well be able to put in deep freeze the motion of Dr. Ron Paul, seconded by over 250 other congressmen on both sides of the aisle, to audit the Federal Reserve, but it has no power to stop the auditing of the ETF’s or bullion banks as required by contract law. According to some reports independent auditors, at the insistence of parties holding expired forward purchase contracts to deliver gold, are descending on ETF’s and check their vault’s contents against their books. The noose is tightening around the neck of fraudulent banksters caught in the short squeeze.

 

Archimedian test

 

Reports are circulating that similar audits of certain Asian depositories have already produced “good” delivery bars (400 oz or 12.5 kg gold bricks) that have been gutted and stuffed with tungsten — a metal whose specific weight approximates that of gold, so that the famous test of Archimedes (fl. 287-212 B.C.) based on the Law of Buoyancy, designed to expose fraudulent goldsmiths, would be inapplicable. Isn’t it strange that criminal law punishes the fraudulent stuffing of gold bars, but allows the stuffing of gold assets in the balance sheet with paper gold? After all, the specific value of tungsten is much higher than that of paper!

 

According to a well-known anecdote, King Hiero II of Syracuse ordered his goldsmith to make him a new crown in the shape of a laurel wreath out of solid gold. When the finished crown was delivered to him, the king had reasons to suspect that he had been short-changed by the goldsmith who presumably diluted the gold with base metals. He called upon Archimedes to make the determination but without damaging the crown. After some hard thinking Archimedes solved the problem. He could determine the volume of the crown by submerging it in water, and from the volume and weight he could calculate the crown’s density. Comparing it to that of gold, the fraud would be exposed if the density of the crown were lower. It is evident that, if the goldsmith had had a metal at his disposal of the same density, but cheaper than gold, then Archimedes’ test would have been inconclusive. It is this property of gold that makes it second to none among the metals, along with other similar fine properties, explaining why it is a most desirable form of wealth.

 

The revenge of the looted coins

 

In 1933 F.D. Roosevelt did not stop at the mere confiscation of the constitutionally mandated gold coins of the realm. He sent them to the refinery in order to melt them down. He wanted to expunge the evidence from history that this great republic once had the largest pool of circulating gold coins anywhere, ever. Roosevelt betrayed his oath that he would uphold the U.S. Constitution and went ahead to rob the citizenry by calling in the gold replacing it with Federal Reserve notes, the value of which he promptly cried down by 56 percent, under the disguise of monetary reform. The melted gold was given the shape of gold bars and was stored in Fort Knox, West Point, and other depositories.

 

Careful as though Roosevelt was to cover his trail in getting away with the loot, he has made one major blunder. He failed to make the looted gold fungible. The coins were not made of pure gold: they were an alloy 22 carat in fineness. The reason was to make them stand up to wear and tear better in circulation. All countries striking coins for general circulation employed an alloy. Roosevelt thought that he could save the cost of refining the melted gold to the international standard of 995 fine (24 carat) so the gold bars in Fort Knox are only 22 carat fine. In consequence these gold bars are not fungible. They are easily identifiable as contraband, the proceeds of the Great Gold Heist of 1933. The shear quantity of this looted gold makes it impossible to refine it at this late hour. The U.S. gold stinks, and will keep on stinking.

 

The memory of the Crime of 1933 comes back to haunt the government that committed it. For 75 years nobody suspected that one day these gold bars may be needed to pacify the market. Everybody thought that they could rest in peace in the depositories till doomsday. But then, as the proverb says, ill-gotten goods seldom prosper. The Great Financial Crisis of 2007 struck and the dollar got into hot water. The U.S. Treasury ran out of fungible gold and had to dip into its hoard of looted gold. It is too late now; the bad odor cannot be expurgated from the U.S. gold hoard. Should this gold ever show up at an audit, or as bribe money, it will immediately be recognized. Everybody will see that it originated from the Great Gold Heist of Roosevelt and that the shame of the U.S. government is attached to it. Worst of all, it will also reveal that the U.S. has fallen upon hard times. The looted gold was released in desperation, in trying to stem the tide of burgeoning gold backwardation.

 

The result is that every time 22 carat gold pops up anywhere in the world, for example, as an offer to pacify angry possessors of expired gold futures contracts, it will be new evidence of the fact that Uncle Sam is cornered and tries to bribe his way out of the corner with looted gold. If Uncle Sam is trying to pay the blackmail on behalf of his cohorts the bullion banks, in offering 22 carat gold in settlement of contracts calling for 24 carat fineness, then the world will immediately know what’s up, even if the substandard gold is offered through intermediaries. Everybody will know that Uncle Sam is trying to cover up, or fend off, backwardation to prevent the gold basis from going permanently negative. The telltale sign will haunt him and make the gold crisis worse, not better. Most of the possessors of expired gold futures contracts will refuse to take substandard gold for settlement, but neither will they keep Uncle Sam’s secret. Apparently there are already two known instances where the looted gold turned up. Central banks, in coming to the rescue of their agent bullion banks that were caught red-handed in being naked short in gold, offered 22-carat gold to bail out their agents. This fact in itself makes the quantity of gold available for resolving the gold crisis smaller. Permanent backwardation in gold, the Nemesis of irredeemable currency, cannot be postponed much longer.

 

Blight on Humanity

 

Rob Kirby, the best sleuth we have to uncover government hanky-panky in the gold market, has castigated the cover-up of what he considers a severe backwardation in no uncertain terms. He calls central banks for their complicity in the cover-up a blight on humanity. In his opinion, the central banks are aiding and abetting the plunder of the sovereign assets of their countries to bail out their agents or friends in an attempt to “sweep the whole bloody mess under the carpet”. This assessment is apt. It is no exaggeration to say that the regime of irredeemable currency is a blight on humanity. The Uncle Sam will never be able to live down his shameful role in plunging the whole world into the monetary abyss.

 

Central banks are also guilty of corrupting the young — a crime that was punishable by death in Athens at the time of Socrates. They have hijacked monetary economics lock, stock, and barrel. They have commissioned scribes for hire to rewrite it as a eulogy of their sordid trade, the creation of fiat money. Graduates of our universities are no longer taught that this regime has a 100 percent mortality rate through the sudden death syndrome, pauperizing the population in the process. The role of gold in history is falsified and distorted. People are told that harking back to gold money is a sign of backwardness and reactionary thinking. Modern money is managed money — as long as they themselves are entrusted with its management. In this view the U.S. Constitution is a backward document not worth bothering with, so they don’t bother with proposing a constitutional amendment changing its monetary clauses to conform it to present practice.

 

Aristotle on alibi

 

An axiom of Aristotle states that no substance can be present at two different places at the same time. The reason for gold’s monetary role is rooted in this very axiom. The same paper promise can be present in the asset column of the balance sheets of any number of individuals. The same gold coin cannot. This eliminates the possibility of a miraculous proliferation of money — putting latter-day money changers out of business. But once gold is removed from the monetary system, the miraculous proliferation of money starts in earnest. Central bankers will distribute it, if need be, from helicopters hovering overhead. The proof that this is beneficial to society is ad hominem. In this way, so the argument goes, the niggardliness of nature to release only so much gold per annum from the gold mines can be overcome. Money will get into the hands of those who need it most. They will certainly spend it. Never again will the economy seize up because of shortage of money.

 

The Quantity Theory of Money is a false doctrine because it describes the economy in terms of a linear model, when in reality the world runs on a highly non-linear pattern. Therefore we need a better theory to show that the miraculous proliferation of money is bound to come to a sorry end. It has been my ambition to construct a better theory. I am pleased that my theory of the vanishing of gold basis, and the ultimate permanent backwardation of gold under the regime of irredeemable currency has found resonance in some blogs and discussion groups, even if it is still taboo in the media and academia.

 

We have made great progress since last year’s Seminar in Canberra. This year’s Seminar will discuss the gold basis in the light of the very latest developments. The gold basis is not dead, it just needs to be correctly interpreteded. I shall show it to my audience how to do that through uncovering the hidden premium in the price of 24 carat gold available for immediate delivery; through the spread between the share price and the NAV of the gold ETF’s; through the popping up of 22 carat gold bars offered as bribe money, and other miscellaneous signs of a very real physical short squeeze in the market for monetary gold.

 

 

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Gold bears gathering, but gold bulls defiant

 

By Peter Brimelow, MarketWatch

 

NEW YORK (MarketWatch) -- Gold ends the week weakly, and the gold bears scent blood. But the gold bulls are still bellowing.

 

Last week saw the highest U.S.-dollar gold price ever, just over $1,070, and the highest London P.M. fix ($1,059.50). Yet by the end of the week gold was $13.50 off its peak, less than $3 up on the week. Many voices were to be heard predicting an important -- possibly short-term -- decline.

 

The bears cite a variety of technical indicators. The bulls deploy sweeping fundamental arguments, often very impressively. ( See Oct. 8 column.)

 

The trouble with these, of course, is that you can famously drown in a 6-inch deep river -- in other words, it there a pothole straight ahead? But to this crucial challenge, the Bulls do have responses.

 

For example, a lot of experts have suddenly emerged on India, by far the world's biggest gold importer. Specifically, they predict a big fall-off in Indian buying, now that the great Diwali Festival -- which occurred on Saturday -- is over.

 

To this, Bill Murphy's LeMetropoleCafe, which can lay claim to having pioneered using India as a guide to the gold market, simply reports that the country has been a steady buyer of world gold in the past few days, based on the local price premiums. (See Web site and Sept. 28 column.)

 

The site notes the recent strength of the rupee has protected the Indian buyer, and commented in mid-week that it does not recall ever seeing a discernable shift in premiums after Diwali. Its attitude seems to be that, on lower prices, Indians will buy more. Also, it reports, Vietnamese and Turkish premiums are high.

 

Gold bears are very pleased by the speculator position revealed in late Friday's data from the Commodity Futures Trading Commission. The Web site thebulliondesk.com NewsFlashed in hushed tones: "Commitment of Traders data for the week of October 13th shows speculative longs in all-four metals increased -- AU up 2M ozs to a record 32.46M ozs."

 

But gold bulls respond by pointing to sentiment indicators. The Hulbert Gold Newsletter Sentiment Indicator (HGNSI) has been stuck at 53.8% since Oct. 7. It has been as high as 89.58%. This lack of movement from the lower level is not consistent with a blow-off.

 

Neither is MarketVane's Bullish Consensus for gold. It showed an 86% close on Friday. This indicator actually lost a point on the week. During major tops, readings well over 90%, sometimes for a week or two, are the norm.

 

A powerful edition of the Australian gold letter The Privateer asserts: "We have what economists love to call a 'paradigm shift' in the US$ gold price. ... There is a HUGE difference between a three-figure U.S. gold price and a four-figure one. Now that gold looks to have consolidated ABOVE the US$1,000 level, the future of the U.S. dollar has become the number one item of global financial and economic analysis."

 

"When the price of something changes from $xxx to $xxxx -- from US$999 to US$1,000 in the case of gold -- holders of that investment AND people who are contemplating buying start looking ahead to HIGHER prices rather than LOWER ones."

 

This is not what the gold bears want to hear.

 

 

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http://www.bloomberg.com/apps/news?pid=206...id=a3w9OGzFRe3Y

Gold at $2,000 Becomes Inflation-Adjusted Bullseye for ‘80 High

...

Oct. 19 (Bloomberg) -- Gold’s rally to a record means prices are still 53 percent below the 1980 inflation-adjusted peak.

 

While gold rose 19 percent this year to $1,072 an ounce on Oct. 14, consumer prices almost tripled in the past three decades, eroding the metal’s value. Bullion hasn’t kept pace with the cost of bread, fuel or medical care. In 1980, gold hit a then-record $873 an ounce. In today’s dollars, that would be $2,287, according to the U.S. Labor Department’s inflation calculator.

 

http://gold.approximity.com/since1968/Gold_USD_CPI-adj.html

Gold_USD_CPI-adj.png

 

Gold is not at any peak,” said Martin Murenbeeld, the chief economist at Toronto-based DundeeWealth Inc., which manages $58.5 billion in mutual funds and brokerage accounts. “The world’s money supply has increased and gold hasn’t kept pace,” he said. “We’re now in a period where gold is catching up.”

This is 100% correct.

 

Gold would need to rise more than sixfold to top the 1980 record, using a more accurate inflation-adjustment, said John Williams, an economist and the editor of Berkeley, California- based Shadowstats.com. He said the government has understated the cost of living over the past two decades with adjustments in the way it measures the basket of goods and services monitored by the U.S. consumer price index, or CPI.

...

“If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record,” Williams said.

Now, there is a realistic number. :) Nice to see Williams' Shadowstats being mentioned on Bloomberg.

 

Since January 1980, the average price of a pound of white bread has risen almost threefold, from about 50 cents to $1.38 in August, and medical care has surged more than fivefold, Labor Department figures show. Gasoline and electricity prices have more than doubled.

Good to know.

 

Fed moves to cool inflation and the government’s revenue needs will stop gold, according to Jon Nadler, a senior analyst for Montreal metals dealer and refiner Kitco Inc.

 

“These wild calls for several-thousand-dollar gold are typical of times when gold goes into uncharted territory,” Nadler said. “The Fed will pull the interest-rate trigger and the Obama administration will, in addition, pull the tax-hike trigger before we get into any serious inflation. Once the man on the street gets in, the gold rally is likely over.”

Good to have at least one gold analyst who is always bearish: Jon Nadler.

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http://gold.approximity.com/gold_price_model.html

The APPROXIMITY Gold Price Model

 

The Approximity Gold Price Model is based on the MZM (money with zero maturity; read more) money supply measure as provided by the U.S. Federal Reserve and the U.S. Federal Gold Reserves.

 

The rationale of the model is fairly simple. MZM, i.e. financial assets redeemable at par on demand, is what the Federal Reserve system has to underwrite in the case of a banking crisis to avoid panics. If the central bank fails to underwrite sufficiently large parts (potentially all) of MZM, a panic might ensue where money could be withdrawn in such large amounts that it could become systemically dangerous. The Fed therefore has no choice: it has to underwrite MZM.

 

http://gold.approximity.com/since1959/US_MZM.html

US_MZM.png

 

However, what is MZM backed by once it has been underwritten by the Federal Reserve? Since the U.S. Dollar is a fiat currency and therefore intrinsically worthless, MZM is essentially backed by the most liquid (and in fact, the only real [i.e. non-Dollar dependent]) asset the Federal Reserve holds: gold. The size of the U.S. Federal Gold Reserves is therefore the second critical component of the model.

 

http://gold.approximity.com/since1948/US_Gold_Reserves.html

US_Gold_Reserves.png

 

The equilibrium price is now straightforward: divide MZM by the amount of gold ounces owned by the Federal Reserve.

 

On October 19, 2009, this equilibrium price is exactly $36,253.04 per ounce of gold.

 

At Approximity, do we believe that this price will be reached anytime in the near future? It seems unlikely unless we experienced some kind of hyperinflation in the United States. It should also be said that during the last 50 years this equilibrium price has in fact never been reached (there have been no major bank panics either).

 

The highest gold price to MZM equilibrium price ratio was established in January 1980 when spot gold reached approximately 25% of the MZM equilibrium price. At the time of writing (October 19, 2009), the spot gold price in the London Bullion Market stands only at 2.91% of the MZM equilibrium price (see chart below).

 

A repeat of the 1980 spike at current money supply levels would mean a gold price close to $10,000/oz. It is therefore no exaggeration to say that the current price of gold is very cheap in terms of money supply.

 

http://gold.approximity.com/since1959/Gold...rium_Price.html

Gold_Price_to_MZM_Equilibrium_Price.png

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IMO the author of that article deserves a round of applause. Very nicely done.

 

There's only one small point. That gold reserves chart. That flat line at the bottom looks a little 'suspicious' to me :unsure:

 

So far the price range for today ranges from about $2,000 to $15,000, and that assumes they don't make things worse!

 

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There's only one small point. That gold reserves chart. That flat line at the bottom looks a little 'suspicious' to me :unsure:

The question is: is the gold really there? :lol:

 

According to GATA, you can subtract another 50% or so, IIRC. So, all the numbers double. $20,000 gold, here we come. :o

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IMO the author of that article deserves a round of applause. Very nicely done.

 

There's only one small point. That gold reserves chart. That flat line at the bottom looks a little 'suspicious' to me :unsure:

 

So far the price range for today ranges from about $2,000 to $15,000, and that assumes they don't make things worse!

 

Reminds me of 'flatlining' on a heart monitor :lol:

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They are still buying... I didn't realise they are a Private Company. Isn't the FED a Private Company? hmm.....

 

INTERVIEW-Cash4Gold scraps for gold in European market push

 

21 Oct 2009 - 16:18

 

* Eyes UK sales of 50 mln stg/yr

 

* Targets global co value of $1 bln in 3 years

 

* Dealt with 30,000 transactions since UK launch in July

 

* To launch operations in Germany on Monday

 

By Lorraine Turner

 

LONDON, Oct 21 (Reuters) - Cash4Gold, one of the largest U.S. buyers of cast-off jewellery, is eyeing UK sales of 50 million pounds ($82.7 million) a year as precious metals prices soar and consumers fall on hard times.

 

The private company, which launched in 2007 and is now one of the largest direct-response advertisers on American TV, is taking on the pawnbrokers in Britain by offering cash for cast-off precious metals via its website and ad campaign.

 

"I woke up with the idea of going direct to the consumer to purchase their material ... so they wouldn't have the inconvenience of going to a pawnshop where they might run into a friend," Cash4Gold CEO and founder, Jeff Aronson, told Reuters.

 

"It's been a very, very strong and intense growth," he added.

 

After starting out as a spin-off from metal refinery Albar Precious Metals, the company has expanded out of its home market to Canada and the Netherlands as well as Britain.

 

It will begin operations in Germany on Monday and plans to launch in another six countries in the EU, to bring the company to the "1 billion dollar mark" in three years, said Aronson.

 

Cash4Gold, based in Pompano Beach, Florida, receives tens of thousands of packs per week in the United States, containing defunct wedding rings, single earrings or broken chains in gold, silver or platinum.

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They are still buying... I didn't realise they are a Private Company. Isn't the FED a Private Company? hmm.....

 

If I was a pawn broker I would be extremely p***ed off with this.

 

They steal your tax, bail out the banks and then setup new competition that gets the gold, melts it down, 'sells' it to the central banks who then dump it on the gold market to keep gold from going up in price...

 

This is going to end badly.

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DOUBLE POST

 

Just been taking a look round the Stewart Thomson (321gold writer) website (gracelandupdates.com) found this gem of a video:

 

https://www.gracelandupdates.com/video/j1/j1.html

 

Really helped me focus in on the key facts of the matter and filter out the noise.

 

+ Gold has broken to new all time highs but the dollar not even broken back through the low of 72 yet.

+ Even during the stock panic we only got back to 88. Far from the high of 121

+ Be careful if you are looking to play a dollar rally as it could get ugly soon

+ Be prepared for money that will flow into gold from institutions as dollar breaks to fresh lows

+ Keep reminding yourself USD has broken 80 again and now support at 76

+ Look at the massive head and shoulders pattern

 

+ We are going much much higher. Sure there may be pull backs but that does not matter as the final destination is way beyond that. Don't let the "market timers and traders flip you out of your position".

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