Oldtent Archives 2007 - 2008

…i didnt remember when the Greenspan quote was from….May 06….huh?….I seem to remember a sharp drop soon thereafter….hmmmm….was that all the Discredited Factions giving up…?

I wish i knew how to edit that quote….but that would need Audept I think….you are right PM Fever..the date was significant…..

The other night you were wondering about premiums relative to various forms and denominations of precious metals.  I haven’t caught up with all posts since then, so I don’t know whether or not anyone has touched upon this aspect, but I’ll offer this:  I have two good local dealers that I have dealt with extensively, and with one, at least , I have discussed that very issue more than once. I have often wondered, for instance, whether or not is was worth the extra premium to get Eagles rather than the always cheaper Krugs, especially since my interest has been getting the most bullion for any money spent.   The most important thing I have come away with from those discussions was that there is no way to know for sure what the premiums (or discounts) to spot will be when it comes time to sell.  More than anything else, it will depend upon supply and demand for the given item at the time…. then, not now.

If, for example, things got  (or looked to get) really bad, and people wanted junk silver for its  barter and lower-denomination characteristics, you would expect to get more for yours from the dealer than you would get for, say, 100oz. bars. If there weren’t bags readily available for the dealer, so much the more.

In a similar supply and demand vein, if, say, the government outlawed the buying and selling of foreign gold coins, but still allowed Eagles, one’s Leafs and Krugs would be very hard to sell, and the Eagles would fetch a big premium.  Other examples are easy enough to imagine, but the point holds true: in his take, at least ( and he’s been in the business a long time), it will be supply and demand (and, of course, accompanying legal issues) that will determine prices and premiums when it comes time to sell.  Best.

At a Sanford Bernstein conference May 31, 2006, even one time gold champion Alan Greenspan recently said in response to a question about the recent strength in the gold price: “There is only a relatively small group of investors who very seriously believe that there is a high level of risk that the (financial) system could break down. You only need a relatively small group to believe this to move the price of gold.” In other words, the metal’s price behavior reflects the trivial obsessions of a discredited fraction of investment opinion. Or, if one prefers another fair weather explanation for the strength in the metal’s price, suitable for CNBC viewers, prosperous Asians just love the stuff. The bull market in gold has become an obscure footnote to the China story.

..Greenspan made this comment?  Wasn’t it in early 2007?

“There is only a relatively small group of investors who very seriously believe that there is a high level of risk that the (financial) system could break down. You only need a relatively small group to believe this to move the price of gold.” In other words, the metal’s price behavior reflects the trivial obsessions of a discredited fraction of investment opinion.
-Alan Greenspan

other:

I’m sure not a chartist but that copper chart sure tells me that copper doesn’t think we are headed for a recession. Thinking silver should be right behind it on the way up and through $20.
Best
Dusty

All a good night. Ct and family.

Posted On: Saturday, February 09, 2008, 7:19:00 PM EST

IMF Gold Sales Attract Large Buyers, Gives China Dollar Diversification Opportunity

Author: Jim Sinclair

Dear CIGAs,

China has a trillion dollars in reserves, wishes to offload dollars, and this is a perfect fit. The year of the Rat is a year of opportunity for some.
Any sales of gold have nothing to do with the market for gold, as not one ounce will ever see the free market. The buyers will be gold-poor central banks.
The history of IMF sales in the 70s is that all the sales did is allow huge buyers to enter the market at one price. That attracts the major buyers.
The OTC derivative market is $516 trillion, dwarfing $92 billion. In today’s FUBAR worldwide financial world the total of $92 billion is chump change.
One large banking entity could easily loss $92 billion on failed derivatives in the final analysis. The article is designed to make a mountain out of a mole hill.
I do not think the following means a damn thing to the gold price trend. The only important fact is that the IMF just demonstrated its total lack of financial sense as it might only hold depreciating paper promises to pay nothing at all backed by nothing whatsoever.
Selling of gold like this only occurs in bull markets and has historically been useless to stop the price increase. In fact these sales helped the price of gold higher by facilitating demand from huge interest in the 70s and even more so now.
COT could try to make this look serious, but it is not.
This has Chung Phat and Dr. No high-fiving as this indicates the price of gold is not even half way to its upside resting point. This was true in the 70s.

Finally those that control Black Gold also control Gold Gold. Those that you feel have caused the problem and are anti gold are NOT. To know this you need only the eyes to see and the ability to connect the dots.

This will be looked back at as great for the price of gold, as was the case in the 70s when the same entity, the IMF, proposed and did the same thing, only to stop before the buyers took all their gold. The same will happen if they even start.

Note that the proposed sales come when the US Economic rescue plan is to occur. The reason is clear.

G7 approves IMF gold sales - Italy econ minister
By Gavin Jones

TOKYO (Reuters) - The Group of Seven rich nations on Saturday approved the sale of gold by the International Monetary Fund from April as part of a broad reform of its budget, Italian Economy Minister Tommaso Padoa-Schioppa said.

“There was an acceptance among the G7 that resources should be raised by selling gold,” Padoa-Schioppa, who is also the head of the IMF’s steering committee (IMFC), told reporters after a meeting of G7 finance ministers in Tokyo.

He said the agreement would be finalised in April and would complement spending cuts being drawn up by the IMF under its new managing director, Dominique Strauss-Kahn.

“The current gold price means a flow of income can be ensured,” Padoa-Schioppa said.

Morgan Stanley analyst Stephen Jen said the Fund held 103.4 million ounces of gold worth some $92 billion at current market prices. That was up from $23 billion just five years ago.

More…

….she booked lots of doubles….Analysis first and then to the Dental Chair for a clean and fill….it was a riot

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If she kept everything straight, I hope she got a good XMas bonus!!

here you go