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What Kind of Fools Are Buying Gold?
The Market Oracle ^ | 6-23-2013 | Jesse's Café Américain

Posted on 06/23/2013 1:05:52 PM PDT by blam

What Kind of Fools Are Buying Gold?

Commodities / Gold and Silver 2013
June 23, 2013 - 08:55 PM GMT
By: Jesse

On the whole, the world's central banks are now net buyers of gold, and have been for some time, after being net sellers for over twenty years.

Russia is one example.

Why do you think they are buying it? They don't understand money?

They don't know what they, and some of their associated central banks, are planning to do to recapitalize the deteriorating global financial system and dollar reserve trade regime?

Did they forget to watch CNBC to find out what they really ought to be doing?

I hear that J P Morgan has stealthily gone net long gold now after beating down the price. Would having the biggest banks go long gold and then letting it be revalued higher be one way to recapitalize them? It seems as though recapitalizing them through insider information is the mode du jour.

Silly idea huh? Well that is what the did in 1933. They took the gold out of official circulation, and out of the hands of the people, and then revalued it significantly higher, and used it to recapitalize the remaining banks after purging the insolvent banks during a bank holiday.

The only ones who seem to be saying that gold is not a good investment are the Anglo-American banking cartel and their enablers and supporters. They wish to maintain the confidence, and the buying of their paper which they are selling. But who knows what they are doing for themselves in private.

Such strange times. Such deception and disappointment. One can only wonder.

By Jesse

Welcome to Jesse's Café Américain - These are personal observations about the economy and the markets. In providing information, we hope this allows you to make your own decisions in an informed manner, even if it is from learning by our mistakes, which are many.


TOPICS:
KEYWORDS: centralbanks; commodities; gold
So?

What now?

1 posted on 06/23/2013 1:05:52 PM PDT by blam
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To: blam
Making The Most Of Borrowed Time (Central Banks Have Had Enough?)
2 posted on 06/23/2013 1:07:26 PM PDT by blam
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To: blam

Stubborn fools who throw good money after bad. Remaining buyers are a dwindling lot of “greater fools” essential to precious metal sellers.

Notice last week, everything sold off. Just like Oct 1987. Safe havens, beans & bullets.


3 posted on 06/23/2013 1:11:38 PM PDT by Broker (Obama, the devils fart.)
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To: blam
Why do you think they are buying it? They don't understand money?

Absolutely not.

4 posted on 06/23/2013 1:16:52 PM PDT by DManA (our)
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To: blam
Money is a tool. It is a medium of exchange. It is fungible. It can be put to work to make more money through equity, leverage or what used to be standard banking practices.

Gold is none of those things.

5 posted on 06/23/2013 1:20:05 PM PDT by elkfersupper ( Member of the Original Defiant Class)
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To: elkfersupper
Money is a tool. It is a medium of exchange. It is fungible. It can be put to work to make more money through equity, leverage or what used to be standard banking practices.   Gold is none of those things.

Picky Picky Picky; but besides all that...

6 posted on 06/23/2013 1:35:17 PM PDT by expat_panama
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To: expat_panama; elkfersupper

But besides all that, you can’t eat it, run your car on it, or use it to diaper your baby.


7 posted on 06/23/2013 1:47:18 PM PDT by Tax-chick ("The world understands that Putin means it and Obama doesn't." ~Mark Steyn)
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To: Broker

ALOT of people were buying at 300 bucks. No capital gain taxes, pure profit.


8 posted on 06/23/2013 2:25:19 PM PDT by Para-Ord.45 (Happily in tutelage by the reflection that they have chosen their own guardians.)
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To: blam

Gold, Silver, COMEX is a scam; if anyone thinks the USD is ok and bulling it’s way up and up, they are fools. Thomas Friedman’s rules of investment don’t apply here; they are fine and good when level playing field abounds, not during fascist times like now. Gold and Silver should be bought and held with excruciating due diligence; watch and see I’m right as it dips and the smart money will get back in on the cheap while others have lost their money. Hey, disagree with me, I won’t be offended.


9 posted on 06/23/2013 2:40:14 PM PDT by CincyRichieRich (He thwarts the plans of the crafty so that their hands achieve no success...Job 5:12)
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To: Para-Ord.45

Smart and good hold. They should be happy.


10 posted on 06/23/2013 2:50:21 PM PDT by Broker (Obama, the devils fart.)
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To: elkfersupper
Gold is none of those things. <<<...Au contrair!

Even Allen Greenspan understood the dirty little secret...
http://www.321gold.com/fed/greenspan/1966.html

11 posted on 06/23/2013 3:10:05 PM PDT by M-cubed
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To: blam

The kind of fools who understand what’s being done to our money.


12 posted on 06/23/2013 3:13:45 PM PDT by TBP (Obama lies, Granny dies.)
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To: M-cubed

It’s “au contraire” and Greenspan was not the sharpest knife in the drawer. All you have to do to realize that is find out who his wife is.


13 posted on 06/23/2013 3:22:23 PM PDT by elkfersupper ( Member of the Original Defiant Class)
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To: elkfersupper
Money is a tool. It is a medium of exchange. It is fungible. It can be put to work to make more money through equity, leverage or what used to be standard banking practices.

Gold is none of those things.

Gold is not fungible -- that part is true. Otherwise, your comment is wrong. Gold is ideal as money precisely because it's not fungible.

14 posted on 06/23/2013 3:25:56 PM PDT by BfloGuy (The Eurozone policy might best be described as "Laurel and Hardy Carry a Piano Upstairs.")
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To: Tax-chick
But besides all that, you can’t eat it, run your car on it, or use it to diaper your baby.

Why would you want to eat your money?

15 posted on 06/23/2013 3:26:58 PM PDT by BfloGuy (The Eurozone policy might best be described as "Laurel and Hardy Carry a Piano Upstairs.")
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To: BfloGuy
Gold is ideal as money precisely because it's not fungible.

Can you move it anywhere you want with the click of a mouse button?

16 posted on 06/23/2013 3:31:07 PM PDT by elkfersupper ( Member of the Original Defiant Class)
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To: blam; elkfersupper; BfloGuy; TBP; M-cubed; Broker; CincyRichieRich; Para-Ord.45; Tax-chick; ...

US oil production increased by 1 million barrels @ day in 2012. Oil production increases in similiar range are expected for the next 4-5 years. Leading to US energy independence.

These are the circumstances that increased US federal government revenues by 200 billion in last year. This reduced federal deficits to an expected 640 billion—with similiar decreases expected for the next several years.

As well rising US oil production decreases the US trade deficit which increases the value of the dollar—which will reduce the cost of oil.

Lower US borrowing and a rising dollar and lower oil costs ...all mean that for the next five years or so the price of gold will go down.


17 posted on 06/23/2013 4:13:41 PM PDT by ckilmer
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To: BfloGuy
Gold is not fungible -- that part is true.

Fungible---being of such a nature that one part or quantity may be replaced by another equal part or quantity in the satisfaction of an obligation.

The low level of knowledge on this thread is stunning.

18 posted on 06/23/2013 4:27:21 PM PDT by Stentor
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To: elkfersupper
Can you move it anywhere you want with the click of a mouse button?

emoney is not money, it's a promissory note. If the backer defaults, it's worthless.

19 posted on 06/23/2013 4:40:06 PM PDT by Oztrich Boy ("New Yorks Finest" are now "The Untouchables")
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

Goldbug ping.


20 posted on 06/23/2013 4:41:54 PM PDT by Jet Jaguar
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To: elkfersupper

PMs are unencumbered tangible fungible fractionable portable durable liquid insurance.


21 posted on 06/23/2013 4:49:23 PM PDT by SVTCobra03 (You can never have enough friends, horsepower or ammunition.)
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To: blam

Buy good scotch and other barterable items. Like quality toilet paper and tobacco.


22 posted on 06/23/2013 4:49:50 PM PDT by rabidralph (http://www.cafepress.com/westernwis)
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To: ckilmer

US oil production increased by 1 million barrels @ day in 2012. Oil production increases in similiar range are expected for the next 4-5 years. Leading to US energy independence.

These are the circumstances that increased US federal government revenues by 200 billion in last year. This reduced federal deficits to an expected 640 billion—with similiar decreases expected for the next several years.

As well rising US oil production decreases the US trade deficit which increases the value of the dollar—which will reduce the cost of oil.

Lower US borrowing and a rising dollar and lower oil costs ...all mean that for the next five years or so the price of gold will go down.


So, public land oil, gas, uranium, fracking DOWN, private land oil and gas up; debt and inflation upupup and supply of USD upupup, demand for oil is dropping due to slowdown...corrupt accounting practices in US, China and around the globe and Soros manipulation translates to lower gold? Huh...I didn’t know law of supply and demand had been altered. Shall I check on the law of gravity changing, too?

In all seriousness, I hope you are more vigilant and less trusting than your post leads me to believe.


23 posted on 06/23/2013 4:52:55 PM PDT by CincyRichieRich (He thwarts the plans of the crafty so that their hands achieve no success...Job 5:12)
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To: blam

The kind that buy low and sell high.


24 posted on 06/23/2013 4:59:41 PM PDT by Partisan Gunslinger
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To: elkfersupper

Anyone that wants to take my gold can’t do it with a click of a mouse button.


25 posted on 06/23/2013 5:23:41 PM PDT by Rusty0604
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To: CincyRichieRich

You’re dead right that all the fracking is taking place on private lands. And further that the fracking revolution is happening DESPITE every effort of the Obama people. You’re right too that there are plenty of interests out there that would like to throttle the fracking revolution.

Nevertheless the fracking revolution happening now. The fracking revolution is spreading. And its virtually unstoppable.

The only thing that could possibly stop the fracking revolution is price.

That too is well nigh in the cards.

So yeah you’re right about the known unknowns. For example, the Tesla electric car could well expand production exponentially over the next couple years. The guy who leads Tesla —Elon Musk— is in the same league of business leader as Bill Gates or Steve Jobs. So absolutely that is in the cards. Start shifting a million or more cars a year and the demand for oil declines—so does the price.

More directly in the cards is T Boone Picken’s famous Picken plan to shift large vehicles over to natural gas. That is already weaning large numbers of large vehicles off oil.

Electric cars and natural gas vehicles plus higher mpg vehicles plus high gas prices —mean that over the next decade—demand for oil is going down.

Join rising oil production with falling demand and you get lower oil prices.

Fracking oil is expensive. Baaken oil is said to need oil at 80@ barrel to be profitable. Oil prices are likely to fall below 80@barrel sometime in the next two years.

Another large chunk of US oil fracking needs at least 60@barrel to be profitable. I think the price of oil will reach 60@ barrel by 2017 at the very latest.

Oil prices below $60@barrel will seriously reduce US drilling and production—unless drillers can figure out how to bring the cost of production down substantially in the next two years. They’re working on costs and some breakthroughs have already been announced. But its definitely a race against time and the inevitable fall in oil prices.

So its not a sure bet that marginally lower oil prices will substantially slash oil drilling and oil production.


26 posted on 06/23/2013 5:25:45 PM PDT by ckilmer
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To: ckilmer

Unfunded US mandate projections : 100 to 200 Trillion.

USA is bankrupt, they just on`t know it yet.

Ergo BRIC and the loss of USD as reserve.

Then the SHTF.


27 posted on 06/23/2013 5:44:48 PM PDT by Para-Ord.45 (Happily in tutelage by the reflection that they have chosen their own guardians.)
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To: Para-Ord.45

Unfunded US mandate projections : 100 to 200 Trillion.
...........
Yeah true.

But the fracking revolution has created 75-150 trillion dollars worth of new oil to back the dollar.

Look if you’re 60 years or older you’ll remember the 1970’s.

We’re on the reverse side of the 1973 arab oil embargo.

What happened to the price gold and oil over the next seven years. (If you didn’t live through those years...look it up.)

The opposite of those years is what the most likely scenario is for all the reasons I’ve mentioned above.


28 posted on 06/23/2013 6:43:46 PM PDT by ckilmer
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To: elkfersupper

No, but then again anything you move with the click of a mouse button is also KNOWN to have been moved by said click.

It can also go “poof” at the click of a mouse button...


29 posted on 06/24/2013 7:09:21 AM PDT by Axenolith (Government blows, and that which governs least, blows least...)
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To: Stentor
The low level of knowledge on this thread is stunning.

Well, I took that to mean that, at the current time, gold cannot be easily substituted for dollars.

30 posted on 06/24/2013 3:12:57 PM PDT by BfloGuy (The Eurozone policy might best be described as "Laurel and Hardy Carry a Piano Upstairs.")
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To: ckilmer
Lower US borrowing and a rising dollar and lower oil costs ...all mean that for the next five years or so the price of gold will go down.

You simply cannot predict that.

Economics, despite what the currently-stylish schools tell us, is not mathematics. It's more closely related to psychology. Prices are based on billions of people's individual valuations on any given day.

But, we shall see.

31 posted on 06/24/2013 3:17:02 PM PDT by BfloGuy (The Eurozone policy might best be described as "Laurel and Hardy Carry a Piano Upstairs.")
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To: elkfersupper
U don't have to be the sharpest knife in the box when u see the truth......What part of the article do u disagree with and whats you're definition of money?....and yes...I know who his wife is...

For something to think about....ALL “FIAT MONEY” GOES TO ZERO....NO EXCEPTIONS!....gold and silver never have....Do your own DD

(BTW....do you have ANY kind of insurance?...life? health? house? vehicle? etc?)

32 posted on 06/25/2013 10:52:11 AM PDT by M-cubed
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To: elkfersupper

Excuse me....That should have read.... “Throughout all recorded History” ALL fiat money goes to zero


33 posted on 06/25/2013 10:57:39 AM PDT by M-cubed
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To: M-cubed
(BTW....do you have ANY kind of insurance?...life? health? house? vehicle? etc?)

I have vehicle insurance because the government orders me to do that in order to be on "their" roadways.

I guess I'll be forced to buy health insurance soon for the same reason.

34 posted on 06/25/2013 3:53:14 PM PDT by elkfersupper ( Member of the Original Defiant Class)
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To: Axenolith
It can also go “poof” at the click of a mouse button...

As can your "precious" metals for any number of reasons beyond a mouse click.

35 posted on 06/25/2013 3:59:55 PM PDT by elkfersupper ( Member of the Original Defiant Class)
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To: elkfersupper

Really? Can you point to ANY example of that other than physical seizure by force (in which case it still had value, it was just stolen)? I don’t think so...

Maybe if an evil super-villain irradiates them...


36 posted on 06/25/2013 10:52:57 PM PDT by Axenolith (Government blows, and that which governs least, blows least...)
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