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Why the Gold Cartel Will Fail to Prevent a Primary Gold Bull Market
Financial Sense Online ^
| September 3, 2002
| James Sinclair & Harry Schultz
Posted on 09/03/2002 12:52:50 PM PDT by Gritty
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To: Texas_Jarhead
How much? %? Housing prices, stable. Oil, falling. What is platinum? Silver? Copper? Tin?
Better yet, what is the commodities index?
21
posted on
09/03/2002 3:47:00 PM PDT
by
LS
To: LS
"Gold has been tested and has no takers."
Okay, you win! LOL!
To: LS
nice attitude. I'm no financial analyst but do sorta keep up with pork, beef, corn (agg commodities) prices. I was asking a sincere question since you seemed knowledgable but never mind
To: SteamshipTime
For a more indepth study, go
HERE.
Be sure to follow the links in the article to his "two previous essays" to get more background on the derivatives.
24
posted on
09/03/2002 4:27:02 PM PDT
by
Gritty
To: babble-on
If things really go wrong in the world, people will just come and take your coins from you by force.
You may be able to deal with honest people, if you can find them in the chaos that will follow the collapse of the financial system.
Having said all that, I have done the same as you and squirreled away a few coins here and there just in case.
Did you watch Citicorp stock today?
To: snopercod
canned goods and firearms, snopercod, that's where my portfolio is going.
To: LS
I think you are looking at gold purely as a commodity and ignoring its special status as a safe haven. You are also measuring its performance from a local high. Why not pick 1970 when gold was $35 and say that gold has risen almost 800%? Finally, the fact that gold has been in a 20 year bear market is irrelevant. By that line of reasoning, stocks would have been a bad investment in 1981.
27
posted on
09/03/2002 5:18:59 PM PDT
by
Soren
To: Soren
I'm not ignoring it's "value" as a safe haven. Ranch land in Wyoming is a "safe haven," too, but does you no good as an investment. Safe havens, like mattresses or socks, do not produce any wealth and neither does gold (the Spaniards found that out in the 1500s, when despite owning all the gold in the New World, their economy, well, sucked).
Yes, the price jumped the moment gold was "deregulated." But that is precisely why I look at it from that time: it hit an average of $300-350, and stuck. You cannot pay bills with anything that does not appreciate, and cannot eat a "safe haven" for very long. My point is that gold is no different than any other non-perishable commodity---as an investment, not good.
28
posted on
09/03/2002 5:26:08 PM PDT
by
LS
To: snopercod
Did you watch Citicorp stock today?Yeh. It was down on 150% of normal volume. It started out down and never looked back. But then, neither did the rest of the major Markets. A VERY ugly day! I'm happy I don't own any financials stock.
I don't think tomorrow is going to be much better if the trends continue. Already the NIKKEI 225 is down 130 points, and the Japan market just opened.
29
posted on
09/03/2002 5:33:23 PM PDT
by
Gritty
To: Texas_Jarhead
I was replying with a serious answer. I don't know the commodities #s. But they should be easy to get. I'm just betting that the index will be flat; that such things as copper and other commodities will be down; that perhaps a few items, such as those you mention may be slightly up---but you also have to check specific market effects. For example, what was the wheat harvest in Australia? Canada? Russia? I don't know, but it would be important information.
All I know is that there are three tried and true "symptoms" of deflation: interest rates, energy prices, and gold prices. Unless two of the three are WAY up, I'd say we're in deflation.
30
posted on
09/03/2002 5:34:44 PM PDT
by
LS
To: Gritty
This article seems to make the assumption that the supply of gold is fixed. Like oil, the supply is directly related to the price. As the price goes up, the less rich ore deposits become commercially viable, and supply goes up. Also a lot of gold mines will release product they've been holing back. That brings down prices down again.
Oh well, if gold goes way up I can always buy a gold dredge and go hit the motherlode.
31
posted on
09/03/2002 5:37:07 PM PDT
by
Hugin
To: snopercod
Thanks for the ping, John.
I own mostly Austrian Philharmonics (they have beautiful Vienna Philharmonic instruments – violins, violas, cellos, a French horn, bassoon, and harp – pictured on one side, and a the great organ from the Vienna Golden Concert Hall pictured on the obverse. And they are struck in 99.99% pure gold). Doesn’t get much more beautiful than that! But I guess bullion coin investing isn’t simply an exercise in artistic appreciation, huh? Drat! :)
No economic market in history has performed as gold has in recent years. Each and every natural price spike has been squelched by the gold cartel (most people capitalize that title. I can’t.) And the (simplistic, but accurate) reason they rush to bash the precious metal every time it threatens to rise to its deserved heights is that they are attempting to hide the true financial conditions of the central banks, the failed economic policies of the Clinton (and cohorts) administration, and their disastrous short gold positions from which they (someday) will not be able to extricate themselves. Their ruse can’t last forever.
The gold futures market is one of the smallest volume markets. But the short position in gold (a la derivatives) is one of the largest. A huge financial collapse is going to occur once the gold cartel loses control of the market. And that day is fast approaching. As this article says, a successful manipulation must always be in the direction that the market wants to take. Any other manipulation not only fails .... [but will result in a market] that goes further in the direction of its intention than it would have gone in the first place. Therefore, the result of the attempt by the gold cartel to hold the market down will be to propel it higher than it would have gone [without their interference].
Those of us who want to see gold again used as the basis (and its value as the barometer) of a healthy monetary system should be buying that for which we are fighting – preferably holding a long gold position (comprised of a healthy mix of bullion, coins, and non-hedged stock). Gold is not, and never will be, dead as a monetary asset, and decades-old rumors to that effect (happily circulated by the cartel and its supporters) will be put to rest once the manipulators run out of steam and options. Their fiat money is beginning to be recognized as the worthless, baseless, most insidious form of pseudo wealth on the planet.
If you have to choose between trusting the natural stability of gold and the natural stability and intelligence of the members of the government .... and with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold....George Bernard Shaw
(For whatever it’s worth, I’d say you’ll be turning a profit on your Maple Leafs within the next eighteen months .... :)
32
posted on
09/03/2002 5:42:09 PM PDT
by
joanie-f
To: LS
sorry I misread your attitude, guess I might be a little edgy but I thought you were being a smart a$$. again my apologies
To: LS
My impression of the gold bugs I've met on various forums is that they view gold, not so much as a long term investment, but as a vehicle for wealth preservation. Most believe a relatively small portion of assets should be in gold for the long haul. However, at the present time, most also believe gold to be an excellent opportunity for speculation, as do I. In my view, these are extraordinary times. I believe wealth preservation will be investors main objective over the next 5 years and that gold will benefit from that.
Regarding commodities: prices bottomed out in 10/2001 and are up 20% since then based on the CRB Index. Check out this chart (scroll down to the weekly chart).
34
posted on
09/03/2002 6:07:20 PM PDT
by
Soren
To: LS
... what is the commodities index?CRB INDEX:
Here is some analysis from the charts:
Conventional Interpretation - Short Term: The market is bullish because the fast moving average is above the slow moving average.
Additional Analysis - Short Term: The market is EXTREMELY BULLISH. Everything in this indicator is pointing to higher prices: the fast average is above the slow average; the fast average is on an upward slope from the previous bar; the slow average is on an upward slope from the previous bar; and price is above the fast average and the slow average.
Conventional Interpretation - Long Term: The market is bullish because the fast moving average is above the slow moving average.
Additional Analysis - Long Term: The market is EXTREMELY BULLISH. Everything in this indicator is pointing to higher prices: the fast average is above the slow average; the fast average is on an upward slope from the previous bar; the slow average is on an upward slope from the previous bar; and price is above the fast average and the slow average.
You can check out more detail HERE.
The following are the CRB components:
35
posted on
09/03/2002 6:16:25 PM PDT
by
Gritty
To: LS
A kilowatt of energy/ounce of gold/dollar to be repaid in one year costs
x dollars. Of this amount, how much is due to monetary velocity or the money supply (however you measure inflation, how much is increased or decreased productivity, how much is supply and demand, how much is competition, how much is government regulation and taxes, how much is Federal Reserve open market operations and interest rate
diktats, and how much is the individual consumer's subjective valuation? When you come up with the formula, let us know so we have a chance to bid on it.
The competition is not for what will be the superior investment. Speculative risks on the outlay of capital will always be superior, when they produce a return. The competition is for what commodity will ultimately be the preferred medium of exchange: dollars or obligations to repay dollars with yet more dollars, or a marketable, fungible, and infinitely divisible commodity the supply of which increases very slowly, to the extent it does at all.
To: Hugin
To some extent what you say is true. However, a 20 year bear market has caused mining concerns to cut back on exploration significantly. Because of this, most projections of gold production over the next few years call for falling levels, which would be offset somewhat if the price rises as you noted. There is currently a significant deficit of supply relative to demand that is being filled by central bank sales.
37
posted on
09/03/2002 6:29:02 PM PDT
by
Soren
To: joanie-f; headsonpikes; LS
If we're gonna damn by association, or look for bad advice, I'd put G.B. Shaw right up there with Lenin.
Afterall, they were both marxists (hard to say which was the more committed).
Joenie-f, ya gotta worry about such citations. Shaw was a self-promoting radical who pulled shameless stunts to sell books. He grabbed on to every conspiracy train he could find, and launched a few himself, such as one about Jesus being a fraud. That one sold a few books.
He's an early 1900s Eminem: shocking society for money.
You may believe what he had to say, but you also do well to know why he said it.
38
posted on
09/03/2002 7:19:52 PM PDT
by
nicollo
To: nicollo
I rarely backpedal on anything I have posted here on FR (as a matter of fact, I much more often get cranky when someone tries to undermine a comment, or a source, of mine :), but your tactfully offered criticism is right on the mark.
I've always liked Shaw's comment on gold (thought it clever .... and accurate), but knew that the source of it was other than politically or economically 'pure' .... and I debated quoting him for that reason (even considered attributing the quote to 'a famous playwright').
You're right. Should've made my point without invoking the words of a Marxist to support it. Thanks for the comeuppance. (First mistake I've made in years .... :)
39
posted on
09/03/2002 7:52:07 PM PDT
by
joanie-f
To: joanie-f
Smiles back at ya. I, of course, never make a mistke.
So long as you and I agree on GB Shaw, we can disagree on monetary policy. If you want to give me a chance, bump me on your next rant.
Best wishes,
Nicollo
40
posted on
09/03/2002 8:37:06 PM PDT
by
nicollo
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