17 February 2010

Bye-Bye Gold Bugs

The IMF has had significant gold holdings, and it does not do them much good.

When you provide and loans, shoveling out gold does not work that well, you want to use currency of some sort, preferably something that can be transferred electronically, so they have been selling it off for some time.

Well, the, "central banks of India, Mauritius and Sri Lanka," have been buying up gold, for reasons that appear to be tied to batsh%$ insane medieval monetary ideas, so the IMF gold has not effected the commercial markets for gold.

Well, it appears that, "India, Mauritius and Sri Lanka," have finally had enough, and the IMF plans to sell 191.3 tons of gold, in order to be able to make low cost loans to poor nations that have been hurt from the financial crisis.

Basically, when everyone goes over crazy about an investment, it's time to get out.

If you own gold for speculative purposes, it's a good time to get out ………… Now.

If you are buying a gold wedding band, that's still cool, but take my advice: Elope, and use the money saved for a party.
Posted by Matthew Saroff at 8:26 PM
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6 comments :

DJ said...

Are you serious?

First. the 191 tons to be sold is the balance of the 400 tons that were slated to be sold late last year. It was expected that the "market" (other central banks) would negotiate the price dowqn as had been the practice in the past, for the purpose of making the price of gold seem lower int he terms of the fake (fiat) curreny of the day.

India, who is one of the most common users of the precious metals today, and, who, in the past, always withdrew when gold was up, bought the entire 200 tons without any question at $1045, freking out the other banks. It was supposed to be China buying, after a prolonged period taking the price down.

Have you ever asked yourself why the major holders of gold are the central banks, and why the IMF works in gold? It's because they know the true value of their currencies (nothing) and they don't trust each other in anything except what has been the true store of wealth for over 5,000 years, gold and silver.

Gold is just as much a barbarous relic as truth, honesty, and justice. When you set aside all four of those as values, the result is the excuse governments need to print up as much paper as they want to finance wars and pseudo socialist programs until the debt they have created is unpayable, which is what we have today.

What you are seeing over the last decades is the failure of the fiat currencies of the world, as measured in the "price" of gold. That is why gold, in dollars, has gone from $250 to $1,200, and is set to continue up from here, with feeble attempts on the part of the central banks of the world to try and slow its rise.

About a year and a half ago, precious metal coins began to be in very short supply. That condition has not changed. If you look at silver eagles, three years ago they typically sold for $1.90 above the spot price of silver. Today they are more than $8 above spot, and getting any quantity takes some time. This is not getting better.

Wake up and learn, you have been sold a bill of goods designed to separate you from your wealth through inflation and taxation. Remember, and ounce of gold would buy you agood suit of clothes in 1700, 1800, 1900 and today. What will a $20 bill buy you for clothes? a t-shirt at wall mart.

18 February, 2010 10:01
Matthew G. Saroff said...

First, I would note, and I do frequently, that my record on predictions sucks wet farts on dead pigeons?

That being said, everyone is talking about gold now.

Everyone was talking real estate in 2007.

Everyone was talking the dotbombs in 2000.

I think that the social indicators are that the Gold is over bought, and that it makes sense for people to get out.

It's about $1125/oz right now, and I think that this is likely not sustainable, particularly with the Fed throwing signals about kicking rates up.

18 February, 2010 18:18
Sortition said...

It seems you were visited by a member of a gold-worshipping cult.

18 February, 2010 22:49
DJ said...

Interesting comment.  Bubble territory reqires several things, one of the most relevant is an excessive abundance of supply ( such as vacant houses). This is not the case with precious metals, The quantities mined are decreasing annually, and there have been limits on what the mint has provided due to these shortages.

You are right that gold is in the news more these days, but the shortages indicate there is still a great deal of room to run, although there is the likelyhood of volatility on the way, but I bet that $1045 is a pretty solid support line for the time being.


The prices are far short of the 1980's if you take into account inflation.

And no, Sortition, I am not a member of a gold worshiping cult at all. Simply not in the cult that worships fiat currency. If you look at history, all, repeat ALL, fiat currencies fail. This country alone has had three fiat currencies fail in it's history, and this latest one (federal reserve notes) is in the process.

19 February, 2010 01:28
Matthew G. Saroff said...

I don't think that there will be a meeting of the minds here, but we'll see in the next 18-24 months.

If I wanted to do a precious metal though, I would do one that has uses, like silver, platinum, palladium, etc.

Gold is almostly exclusively a pure investment.

19 February, 2010 12:56
DJ said...

Actualy, I agree completely, my favorite is silver, for a number of reasons, including the potential medicinal value.

We will probably know sooner than 18 months on the direction of precious metals, but, the market could fool all of us!

The old saying is, "the market can remain irrational far longer than you can remain solvent".

Thank you for the talk, I enjoy the interchange.

19 February, 2010 16:48

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