Gold Breaks Below $1200!

Zero Hedge ^ | 06/27/2013 | Tyler Durden

[SeekAndFind]

From the moment Bernanke spoke, Gold and Silver began to accelerate to the downside. Gold legged lower into the NYMEX pit close and faded further in search of the $1200 round number (trading at $1199.90). Down around 12% from the FOMC (gold is now -38% from its highs in 2011).

 

 

Silver is following (down over 14% from FOMC) as the Gold-to-Silver ratio test 65x (double its lows in April 2011 around 32x) and back to the ratio that existed as Lehman failed.

 

 

As we noted yesterday, somewhat oddly, as goes gold so goes AAPL...

 

The other interesting on-again-off-again relationship of interest is Gold vs Housing (i.e. QE-driven excess vs the thing that supports QE or not)...

 

So to sum up today's remarkable market... Equities and Bonds are rallying hard on the basis that there will be no end to QE; and gold is crashing because QE is ending?

Perhaps some context is in order...

[DannyTN]

I would hope by now that it would be obvious to everyone that tying our currency to gold is a really stupid idea.

I wonder how much Ron Paul lost. Or did he get out of gold in time?

[Para-Ord.45]

New shorts running in to speculate.

1.8% US GDP !? Europe in official recession.

US in recession by 2014 ?

Au back up in 2014

[CodeToad]

“I would hope by now that it would be obvious to everyone that tying our currency to gold is a really stupid idea.”

When gold is tied to the dollar these wild swings don’t happen, so it is stupid idea not to.

[CodeToad]

What is so great about highly manipulated fiat currency tied to nothing?

[SeekAndFind]

RE: I wonder how much Ron Paul lost. Or did he get out of gold in time?

Ron Paul has been with gold since as far back as I can remember (2004 was the first time I read his newsletter and he was advocating it then ).

As the above chart shows, Ron Paul is still WAY AHEAD and if he wanted to dump Gold, he still has plenty of time.

[GeorgeWashingtonsGhost]

Buy gold if you can afford it. It won’t be going much lower than $1200/oz. Now is a GREAT time to do it!

[hadaclueonce]

Many Radio guys just took it in the shorts.

22 LR ammo has blown away gold as the new dollar standard.

[Regulator]

What is so great about highly manipulated fiat currency tied to nothing?

Oh, it's tied to something.

That would be YOUR LABOR...you know, the "full faith and credit of the United States".

Translation: the taxing power of the Federal government.

The collateral for the currency is US. We really are nothing more then debt slaves for the banks.

They're gonna kill the Income Tax when pigs fly. It's the basis for their scam.

[plain talk]

Beck and many Freepers jumped on this bubble. Bad idea to use political idealogy - left or right - when investing. Asset allocation / diversification is best.

[DannyTN]

That’s what they said at 1400 and 1300.

[catfish1957]

If you run a straight line correlation of the dips of the last 15 years, $1125/oz. should be a pretty safe entry point.

[DannyTN]

"What is so great about highly manipulated fiat currency tied to nothing?"

A lot actually. In the chart below you can see from the grey areas how much fewer and shorter durations economic downturns have been since we went fiat.

You can also see how much lower the year to year fluctuations in the purchasing power of the dollar have been (The orange line). Which is great for business.

[Theoria]

RP, myself and others has been buying gold since it was cheap, aka 280. The people having issues are the Gold 5000 bugs, ie Peter Schiff and co.

[hadaclueonce]

I believe that it was the first socialist president that got us off the gold standard.

[catfish1957]

Asset allocation / diversification is best.

Been preaching that for years here. There are ways to invest wisely to be okay in any scenario. I did pretty nicely and could have retired at age 44 if had I wanted to. (Waited until 55)

The key is staying obsessively focused, tracking/adjusting, being debt free, and not panicing at corrections or going crazy during over exhuberant bull markets. Heck, '08 - '09 was scary but some of the best opportunites I have seen in my 34 years of investing.

And as far as a SHTF scenario, set there too.

[Prolixus]

The value of $1 over time, in 1776 dollars

Taken from Wikipedia Monetary policy of the United States.

[CodeToad]

Nice chart, too bad it doesn’t show the entire picture.
A person that fails to understand history is doomed to repeat it.

[CodeToad]

“That would be YOUR LABOR”

It’s not even tied to that. It is now simple money laundering.

[DannyTN]

Yeah, scary looking chart isn’t it. But it’s not one that matters unless you planned to hoard dollars in your mattress for 100 years. Most people don’t keep that much in cash anyway, so the inflation doesn’t really hurt them. And it certainly didn’t hurt them as much as those deflationary depressions did. Better to be able to earn a dollar that loses a couple of percent a year, then getting free soup in the unemployment line.

The primary purpose of currency is to facilitate business transactions. It is not to be a long term store of value.

If you want a long term store of value, you take your dollars and buy something that you think will last, metals, real estate, baseball cards, jewelry, etc. Or you invest it in stocks because stocks will rise with inflation plus earn a return. Or in bonds where you get a fixed rate that is higher than the expected inflation.