Oldtent Archives 2007 - 2008

Richard Russell last night:

Gold Fundamentals — My old New York friend, Ron Rosen, provides some of the best writing on gold that I’ve seen anywhere. In a recent Internet report (”Precious Metals Timing Letter”), Ron notes that as of January 5, 2008, the national debt of the US was $9,197,435,162,839.30. In case you’re confused (which you should be), that’s nine trillion plus dollars. Ron writes –

“It’s rather obvious that the national debt of the United States has grown a heck of a lot faster than the price of gold. It has taken only 28 years for the national debt to grow from nine hundred billion dollars all the way up to NINE TRILLION DOLLARS. That means the national debt has grown 10 fold in only 28 years.

“Over the same 28 year period the price of gold has done nothing but go down and then back up to where it was when the national debt was only nine hundred billion dollars. That was a round trip from $850 an oz. down to $250 an oz. and then back up to $850 an ounce.

“The trip down from $850 to $250 for gold bullion was like being squashed by a giant metal press. Every last drop was squeezed out of it until it was hardly visible by most folks. There were a few who kept their eye on gold all the way down. That must have been extremely frustrating, particularly because the Dow Jones Industrial Average went from a low in 1974 of 577 to a high in October 2007 of 14,164.”

Russell Comment — What Ron is noting is that while the National Debt has been surging ever-higher, the price of gold was “squeezed” lower. For gold, this was like a giant force literally pressing down on the metal, compressing it from its 1980 high of 850 to its 1999 low of 250. But now gold has returned from the dead. Ever since its 1999 low, gold has been pushing up through the lies, through the ignorance, through the negative propaganda and now gold has finally broken out above its 1980 high. Suddenly, the great force that has been compressing gold, holding it back — has been removed. Now, all the stored-up energy of 28 years of compression is being released…

-END-

Thanks for your post.  Go…..Adrian!

The GS bastards need to be exposed for what they are.

It is very clear that the Goldman Sachs call to their clients to short gold in 2008 was a complete set-up. Looking at the deliveries on the TOCOM I found that Goldman Sachs took delivery of 5.5 tons of gold from TOCOM in December. They at one point in December had a long position of over 500 contracts. I had assumed that they had sold this position when it disappeared from their daily reported position but it is now clear that they stood for delivery. That tells me the Cartel is desperate for physical gold. Their usual source of metal is the dark, opaque world of Central Banks where no one knows where it came from. The fact they are now dredging the depths of the exchanges implies that supplies are very tight. The other aspect of this story is that Goldman recommended to their clients that they short gold while they themselves took delivery of 5.5 tonnes!!!…and that is only a trade that we know about! They have also been aggressively reducing their short position on the TOCOM for 18 months from 56,000 contracts short to 8000 contracts. A source has reported that GS has had “a lot of bad luck recently and they have been on the wrong side of many trades”. He says that they have been sending “mea culpa” letters to clients. I don’t buy it that GS has been on the wrong side of those trades.All this means is that Goldman clients have been on the wrong side of the trades and I wouldn’t mind betting who was on the winning side of the trade! Out of all the supposedly smart bankers only Goldman Sachs managed to be “short” the sub-prime mortgage market! If anyone thinks they have been blind sided by this gold move they need to think again. Goldman has their own man running the treasury and many others in government. I am willing to bet that Goldman Sachs does not have a portfolio that looks anything like what they are recommending for their clients. When the FED organized a bailout of LTCM and let the investment banks see the confidential positions that LTCM was holding Goldman Sachs used that information to bet against the LTCM positions!

This move in gold is going to be massive and surprise even many of the bullish observers. Goldman Sachs knew it was coming. They are not going to be on the hook…which means that the Central Banks are the Losers of Last Resort. This is going to be exposed by GATA in grand style very shortly in Washington.
Cheers
Adrian

Today we had Brian Belski of Merrill say that the commdity bull cycle was ending and it was time to start buying tech and financials, because they would lead us in the year ahead.

   Last week “The Fast Money” gang on CNBC said whoa - don’t buy gold stocks. One of them said it again today, but had a dissenter in the gang.

    How bout the Goldman Sachs analyst who said to sell gold before the end of 07′ ?

    I’m sure I’m just scratching the tip of the iceberg.

I hear ya on that one!! But it just goes to show that Joe 6 pak and wiffey have not even begun to invest in the PMs. I think that silver as ‘poor mans gold’ is very true and when the public starts buying we will see some fireworks in silver. IMHO

Cheers
Dusty

…Terrific…..hope you let him know he’s got lots of friends here ready to do whatever…Get some rest Pal….we need ya…

..but the link in your post is dead….can you fix it…or do you want us to do

I would of never guessed back in 2001 when the precious metals started this last bull run we would be looking at $888.00 gold and only $15.80 silver.

….in a wheelbarrow..

The last time we talked it was freezing cold.  Now it’s hot and muggy.  I don’t know which of the two I prefer.

Do you think we can use these

I think this is why we’ve stopped around 890 on Kitco. China started trading and immediately went up 10% - limit up.

http://news.xinhuanet.com/english/2008-01/09/content_7389678.htm

Gonna be tough on the boyz tommorrow methinks.

The powerful gold action, especially over the last couple of days, finally convinced me to re-enter the PM share scene. Have spent about 40% of dry powder in last two nights with fills on UXG, NGX, GOR, ABI and CS all on Canadian exchanges. Was going to ‘dip the toe’, but put a whole leg in !!

 Still pondering Aussie options, or should I say trying to decide which of ’FERret’s Picks’ to go for. SBM has sure roared up since I last dabbled there (3-4 years ago). Looks like they bought out the remains of Daughters of Gwalia?

And Hi Margaret.  Good to see some old friends about.

When you talk to Humanoid, tell him my prayers are with him.

Dusty