Oldtent Archives 2007 - 2008

It is not the area …it is the situation I am in…..I will be alright cause I have a horseshoe up my……..

i won a taco from ment on that one. i went to that rodeo in the 1980’s and lost everything but my wife, kids, furniture and two bird dogs. the only thing i can guarantee about the crude oil market is that it won’t be close to these prices in july ($20. one way or the other). don’t believe $10. crude? don’t think for a minute it can’t happen. you won’t be able to afford to fill up your car if it gets there because you won’t have any of the fiat they would issue and keep it in short supply.

there are many reminders of the past. one of my favorites is architecture. look around any major city and see when the mansions (for the time) and big business buildings were built. then look across the street at the modest buildings. then more mansions and then modesty. the housing cycle sometimes reflects and sometimes leads the business/war cycle. the war cycle is so screwed up now that we have no idea where we are or where we’re headed. nothing like a good war to jump start an economy. our economy has been jump started so many times we now need a new starter but nobody wants to get dirty replacing it.

decades ago when we were an agrarian society, events around the world could sometimes be isolated. now resources are shipped around the world. i think world leaders know we are going into financial catastrophe and are trying to get the blame shifted to someone/something that can’t defend itself. in true political fashion it’s “all for one, and every man for himself”.

probably the thing that worries me the most is the unknown power that rests in the hands of a dwindling number of people. not the military, industrial, political group but the relatively small group of people who grow the vast majority of food for the planet. farmers now comprise less than 4% of the worlds population. the technology, processing, and transportation network is now very complex and sophisticated. any major disruption in the chain and you have instant calamity. with the morons we have in banking, finance and government, that disruption is almost certain to occur within the next 5 years.

years ago when i was in the military(1967-1971), we had currency called military payment certificates (mpc). it was issued to keep american federal reserve notes out of asia. when they changed the mpc, everyone turned in the old and got new issue. in order to exchange it, we had to write our service number on the bills. the old mpc was worthless overnight. is there anything stopping our sleazy pear shaped politicians from doing that with federal reserve notes? if you had several thousand dollars laying around and could only exchange $1,000., what would you do with the rest? our government officials will reach new lows in sleaze before things start to get better. they may try to confiscate gold and silver or try to convince everyone that the new currency in sound and you don’t need the safety of gold. by that time, everyone will swear the nigerians have secretly taken over the government.

rno

what area of belize do you live….

cheers

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That’s  amazing -  we  both  have  the  same  financial  advisor  and  he  responded  the  same  way  to  both  of  us! 

Winedoc asks his advisor how his stocks are doing……..

www.youtube.com/watch?v=5P6UU6m3cqk

Winedoc

By Ari Levy and Margaret Chadbourn

Dec. 5 (Bloomberg) — First Georgia Community Bank of Jackson was closed by regulators today, the 23rd U.S. bank seized this year, as mortgage delinquencies and foreclosures surge to records amid a deepening recession.

First Georgia, with $237.5 million in assets and $197.4 million in deposits, was shut by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp. was named receiver. United Bank of Zebulon, Georgia, will assume First Georgia’s deposits and open the failed bank’s four offices southeast of Atlanta tomorrow as United branches, the FDIC said.

“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage,” the FDIC said.

Regulators have closed the most banks in 15 years, with the collapses of Washington Mutual Inc. and IndyMac Bancorp Inc. among the biggest in history. November was the busiest month in more than a decade, with five institutions closed, matching the pace in July 1994, according to the FDIC.

United Bank will pay a premium of 0.8 percent to assume the failed bank’s deposits, the FDIC said, and is buying about $60.6 million of its assets with the FDIC retaining the rest for later disposition. The closure will cost the FDIC’s deposit insurance fund, supported by fees on insured banks, $72 million.

First Georgia, the state’s fourth bank to fail this year, opened in 1997 and has offices in Jackson, Covington, Griffin and Locust Grove. Regulators closed Community Bank in Loganville, Georgia, two weeks ago.

Top ten albums Rolling Stone Magazine:

Sgt. Pepper’s Lonely Hearts Club Band, The Beatles
Pet Sounds, The Beach Boys
Revolver, The Beatles
Highway 61 Revisited, Bob Dylan
Rubber Soul, The Beatles
What’s Going On, Marvin Gaye
Exile on Main St., The Rolling Stones
London Calling, The Clash
Blonde on Blonde, Bob Dylan
The Beatles, The Beatles

Its a small group…….who do you love???

Cover of The Rolling Stone….

Gold Is King

Winedoc

Belikin 09 poster…Heck I am just tryin to stay alive down here until Monday.
Go Gold and Silver

Yes they did……well, sort of.

A few months back when gold touched $1000 and oil looked like it was going to run on up to the moon and the biggest debate was weather it would or not. I made the statement that we would more likely see $2000 gold before we saw $50 dollar oil.

RNO came back and said that if I though that there was no way that oil could drop to $50 that I was making a big mistake because it was very possible that it could. He didn’t actually ‘predict’ that it would but his words have proven to be right. Way to go RNO !!

December 05, 2008

The previous low point for the ratio of the XAU gold stock index to the price of gold was .16, when gold was trading around $270 an ounce in October of 2000. Today, the XAU is trading a mere 57% higher than it was in October of 2000, compared to a gold price that has increased by 184%. As a general rule of thumb, anytime the ratio is above the 25-year average is the time to sell, and below its average says gold stocks are cheap. With the ratio bouncing off the lowest level since the inception of the XAU index, it signals a SCREAMING buy for gold stocks!

Picking the bottom of any market is near impossible, but knowing when something is grossly undervalued can be easy. Gold has long been considered a hedge against inflation, and with trillions of new government bailout dollars ready to circulate into the system, buying precious metal stocks at these distressed prices is the chance of a lifetime.

Mr Fekete gives some rational that I had not considered, (Thank you old timer). Numbers are right, but inventories are much smaller then I had thought. And people may stop selling the real stuff!

I still don’t like the “action” over the last few days.

Whatsup

Assume that you mean 12,164 gold contracts for Dec Delivery?

12,164 contracts times 100 OZs/contract = 1,216,400 OZS of au

1216400 OZS times $800.00 dollars per OZ = ~ 1,000,000,000.00 (One Billion) dollars

Mere pittance to cover this month for the elite (unless something very unusual happens).

Only got C’s in rithmatic, let me know the error of my ways.

TRM

my south african miner mutual fund has had higher lows and higher highs since october 27. maybe we are on the right track now.

rno

backwardization, contango, and inverted are terms applied to markets in which “carrying” charges apply. carrying charges are imputed for succeeding months in commodities which can be stored and delivered on another contract. carrying charges usually consist of interest, storage and insurance. some commodities cannot be delivered in later months so carrying charges do not apply.

gold is a fungible, non perishable commodity. it can be stored and delivered later with no deterioration or aging. if the front months are trading higher than later months, demand is so strong that carrying charges are ignored. the “i want it now” syndrome. it’s very rare to see backwardization in gold because very few people want delivery and roll into later months before first notice day. december is in delivery and is higher than later months. that confirms that a much higher percentage than normal are standing for delivery. it also confirms that these buyers have deep pockets. the exchanges usually have longs post full margins and the shorts post full margin or a warehouse receipt for the gold after first notice day. the delivery day is at the option of the shorts (sellers). they can wait until the last delivery day if they choose. buyers are assigned delivery in order of date of transaction.

hope this helps.

rno