Posted on 07/01/2008 5:10:38 PM PDT by TigerLikesRooster
Gold futures close at two-and-a-half-month high
Dollar weakness, strength in oil feed gold's risk aversion traits
By Polya Lesova & Myra P. Saefong, MarketWatch
Last update: 4:23 p.m. EDT July 1, 2008
SAN FRANCISCO (MarketWatch) -- Gold futures climbed Tuesday to close at their highest level since mid-April, as weakness in the dollar and rising crude-oil prices burnished the precious metal's investment appeal. Carrying forward with its recent rally, gold for August delivery rose $16.20 to finish the session at $944.50 an ounce on the New York Mercantile Exchange. It climbed as high as $948.50 earlier in the session.
Gold's gains can be "attributed to both further weakness in the dollar and more near-record highs in oil," said David Beahm, a vice president at coin and precious metals retailer Blanchard and Co. Inc.
(Excerpt) Read more at marketwatch.com ...
Ping!
The dollar is getting soooooo weak. When we stop printing money to finance our ludicrous spending habits we will see the dollar stabilize. The federal reserve needs to stop messing with the market and Congress needs to cut back heavily on unconstitutional laws, acts, programs, provisions, etc. The federal government has usurped far too much power from the individual and kicked self reliance to the curb, all to “protect” certain groups (the poor, the less fortunate, the elderly, the blacks, the women), which it has no authority to do (not to mention these programs asre dismal failures).
What will hit 4,000 first, the Dow or gold?
Obama win, followed by massive Israeli bombing of Iran, followed by Iranian retaliation, followed by U.S. military attack on Iran.
If the Dow goes down a bit more, or oil keeps going up, we all know where gold could go.
If a measly 5 percent of the money in equities were to try to find a safe haven in gold we could be looking at $10,000 dollars an ounce!
The sky is the limit. But the next step would be for Pres. Obama to pull and FDR and outlaw gold, as a means of propping up a dying fiat dollar. Collapsing fiat looks at free gold as kryptonite, or antimatter.
Then Iran blocks the Hormuz, and oil futures go to $500, and the wheels blow off the global economy.
The price of gold is driven by speculators! Democrats in congress nationalize gold today just like 1933! The Gold Reserve Act of 1933 required that all gold coins and gold certificates be surrendered to the Treasury under FDR.
I suspect there are plenty of people out there with the know how to convert any gold you might have to jewelry.
Last I heard, ain’t illegal to own jewelry.
Actually we’ve all heard about the gold confiscation grumbles. I truly doubt it. The reason? All the gold in the world at current valuations ain’t a drop in the bucket compared to the hedge funds/derivatives/insurer default boondoggles.
There simply isn’t enough gold to cover those numbers unless you start pricing it in the six or seven figure range. It’s mind boggling.
Except, gold wouldn’t be contraband the rest of the world. It worked in FDRs day because the currency was still pegged at some level to gold, at least to foreign central banks. For these reasons and others, it isn’t really a viable option.
Sure it’s a viable option. 80% of Americans would agree, during a depression, that “America’s gold belongs in Fort Knox,” yadda yadda. They would believe that “gold speculators” were sabotaging the dollar, etc etc.
Another FDR 1933 would be easy, a stroke of the pen. And the govt would not care if you kept your hidden gold, only that you don’t spend it or use it in a parallel non-dollar economy. If you are afraid of govt stings and snitches, too afraid to dig it up or take it to the flea market or used car lot, your gold is of no worth to you and no threat to the govt’s fiat regime.
A drop in the bucket now, but a major economic threat to a new fiat regime after a paper money collapse to zero. With govt’s attempting to reestablish a fresh fiat regime, (”New Dollars” etc) loose, private PM’s would constitute the biggest threat their goal. A parallel monetary system outside of their control would not be tolerated. Gold would be banned. And they wouldn’t care if you had millions in a vault or buried.....if you were too afraid (of stings and snitches) to trade or spend it.
Um, you do realize the government _sells_ gold coins to the public? So, the government would find itself in the awkward position of trying to confiscate something they provided.
In any case confiscation wouldn’t do any good, in fact make things far worse. Foreign gold holders would be ecstatic. Would also posit if your scenario came true then that would be the least of our worries.
Gee, I wonder what my father’s old gold watch would be worth these days, just for the gold?
Well, using round numbers it’s a thousand dollars an ounce. How much does the watch weigh? A few ounces? That’s a few thousand bucks if its weight were all gold, which probably isn’t a bad approximation.
It’s hard for them to simultaneously sniff at the uselessness of the barbarous relic, and also say that mere possession is so dangerous to the economic system that it must be banned. But then again, these ARE the feds we’re talking about here, who find it necessary to burn children alive (in Waco) in order to save them.
Thanks — I suppose I could sell it to buy gas for the car!
The watch is 14K gold throughout with mesh “bracelet.” Fairly heavy — probably worth selling now or soon. I would not sell it if it had been a family piece, but it was just a business gift long ago when it was OK to give business gifts worth more than $25 :)
A guy I know has about a quarter million in gold in his house. He’s had it for 30 years but its worth a lot more these days.
There was interesting news on the auction front yesterday.
75B of loans were auctioned off to banks - short term loans, 28 days worth.
From what I have been able to find, they are paying - in toto - for the 28 days, the amount of 2.34 percent
If this IS NOT an APR type number, but is the flat rate due and payable at the end of the loan, that ends up being way more than 30% Annualized Percentage Rate.
And I thought the credit card joints had a racket going on...
Wow. Still, he really lost his shirt profit wise. He has practically broke even at this point, in nominal numbers. I wonder how many guys like him with money hidden away - and they tragically pass suddenly. The family knows gramps had money, but where is it? Uh oh.
I don’t know what he paid for it but he was working overseas and making beaucoup bucks and he was single.
I’m sure the kids know where it is.
What’s his address? ;)
Well, Travis, they’re paving the way for a takedown tomorrow. Gold popped $2 today at the close, but the Plunge Protection Team hit the HUI for a 3% loss. That signals an organized takedown in gold and silver tomorrow. I can see them trying for a $40 down day in gold, but they may have to settle for $25-30 before they’re done.
Not all. Maybe 99%
IMHO, the takedowns have been a process of gold moving from weak to strong hands. Now, the rocket is primed and fueled. I think we’ll see 1,000 before we see 880. Just my hunch.
The fedgov won’t care about gold unless and until the dollar fails, and PMs are being used in a parallel economy, outside of their control. THEN they will care....a lot. They won’t permit the competition, as they try to breath life into a new fiat.
Um, you do realize that the govt sold gold coins to the public for many years before 1933, prior to them turning around and banning it?
Um, you do realize this?
Yes, I know the whole sordid deal. That was then, this is now.
So far it’s only down $10. Pretty weak results for an organized takedown. You may be right.
Interesting to follow, anyway.
By that logic though, they’ll ban cash before anything else.
Large bills were in fact recalled in the 60s, they aren’t illegal but they haven’t been printed for even longer. As a practical matter TONS of cash exists outside the US - something like 70 per cent of all cash outstanding - ; if you stop and think about it is pretty amazing that the same unit of account is still in service after so many years. Yeah, we’ve had a lot of inflation over the years but how many other countries can you whip out a bill from say, 1890 and spend it? (however stupid that might be, from a collectible antique standpoint) Most countries have had several periods where the “old currency” has to be turned in and exchanged for “new” money, etc. My dad used to talk about that in the 70s, he figured it would put all the crooks out of business real quick. “They’d have to take their cash into the bank”. etc.
But remember in 1933 the Feds paid the holders of gold almost double the amount for their gold in paper dollars. It was revalued from $20 to $35 per oz. And those paper dollars remained quite valuable for many years and eventually the people reacquired gold. If the Feds wish to pay me $1800 for each oz of gold I have. I will gladly turn over the gold. I am quite willing to take my chances on the future.
No, they didn’t, that was the whole idea. FDR raised the price incrementally to $35, after confiscation, netting the government millions.
The idea was to induce a mild inflation effect, since a Depression is the polar opposite.
I really do not believe this will happen again. In any event, neither Obama nor McCain will get my gold except over my dead body.
Surprisingly there isn’t a lot of information about those times. Officially, up to $100 was allowed to keep, and coins with “collector” value, whatever that is. The issue of confiscation made its way to SCOTUS, and of course he lost.
What really happened though, apart from absconding with public coinage, was abrogation of contract law. It was actually Britain falling off the gold standard prior that set the ball rolling here in the US probably - it was as someone opined “When Britain left gold, the world ended” or something like that. That was in ‘31. Difficult time, and the US dollar was an alternative to specie - in more recent times gold was dis-incentivized because it was considered a bad idea to give inordinate power to South Africa and the Soviet Union. The US still owns a huge official stash of some 8,000 tons, but in nominal terms couldn’t come close to being enough for the economy.
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