Oldtent Archives 2007 - 2008

With Professor Summers back at the wheel in the fast lane shifting gears, he may soon be in total disbelief when he realizes the attempts to push down the price of gold – to make the dollar look strong – are not working!  Although he is extremely bright, he’s famous for turning red and going ballistic when forces outside of his control don’t go his way.  Why should you care?  One reason is that the Treasury sets US economic policy for the value of the dollar, and he’ll be the magician behind the scenes.  Guys like him have a need to control and there is nothing more important in the world than the value of the US dollar.  With gold running in short supply, to support a Gibson’s Paradox policy he’ll be searching for ways to beg, borrow, or steal gold to support the dollar but it won’t be easy while the Fed is printing up trillions of dollars to fight deflation, and holding interest rates at zero. 

Beware!  If you currently own gold through an ETF it may not be safe.  With one little stroke of the President’s pen, it can be confiscated by the US Treasury for so-called national security purposes.  The government officials will claim they are out to protect US citizens from speculators whom they blame for the dollar collapsing, but in reality their policies that will force Americans, who actually want to save, to flee the dollar.   So, could the US Government grab your gold in an ETF?  

The act of governments stealing gold and robbing currency holders is nothing new, even in America.   President Roosevelt grabbed the gold and devalued it in the 1930 Depression, and Nixon jumped off the gold standard in the 1970s. In order to save the nation the government will need to save the dollar, and the right way to do this would be to run prudent fiscal policy with low budget deficits, and have the Federal Reserve raise interest rates to encourage savings.  But the easy short-term fix is to steal some gold now owned by a few who were only trying to protect their savings.

My nature is not to be an alarmist and I honestly don’t know for sure when and if the US will grab the ETF gold.  However, over the next two years the federal deficit, funded by selling new Treasury securities, is certain to be over 10 percent of GDP.  Holders of the dollar will want out and all that gold sitting in vaults makes it too easy for our federal government to come in and rob you of it in order to save the dollar and pay for socialism.  I understand the morality here:  Inflation is good so robbing savers (for the sake of government) is viewed as good!  Therefore, robbing savers of their gold is even better!

So, buying gold, silver, and precious metals is truly one of the few ways you can immunize yourself from the coming inflationary confiscation of wealth.  Owning physical gold and silver and keeping it safely in your possession is a good idea!  If you can’t get gold, buy silver, platinum, palladium, etc., all in physical form.  While you still can, think about moving into physical form any gold in ETFs you have; you won’t be sorry you did!

2009 - Likely Vintage Year for GoldBy: John Browne Senior Market Strategist, Euro Pacific Capital, Inc.

– Posted Friday, 19 December 2008 | Digg This Article | Source: GoldSeek.com

The Federal Reserve estimates that in the past year losses in real estate, stocks and mortgages have sucked out some $7.2 trillion of wealth from the U.S. economy. Some are now putting the figure at $20 trillion. A massive recession is starting and will likely spread throughout much of the world. These forces have exerted their classic strong downward pressure on the price of gold.

In addition, the $700 billion TARP fund to salvage the American financial system, and large amounts spent by other governments to protect their own banks, has greatly reduced the fear of a financial breakdown. As a result, the financial panic insurance value of gold was largely eroded, adding further downward price pressure.

2008 was a volatile year for gold. Prices have gyrated quite violently between the $700’s and $1,000, or by some 25 to 30 percent. This volatility alone acts as a depressing influence on gold prices as it discourages the belief that gold is a credible investment.

The world’s major governments long have sought to eradicate gold as a monetary measure in order to remove the last vestiges of monetary discipline and to clear the field for massive government over-spending and inflation.

In 1968, the London Gold Poll was abolished. In 1978, America forced a further move, via the IMF, to write gold out of the international money supply. In August 1971, President Nixon broke the U.S. dollar-gold exchange link.

In September 1999, the United States, while being careful to keep its own gold stocks intact, led other major nations, in the first of two so-called ‘Central Bank Gold Agreements’ to flood the gold market with sales of gold.

In 1999, the central banks held some 33,000 tonnes, or one quarter of all mined gold. The effect of government gold sales was potentially very bearish for gold.

Gold market observers, who have studied the pattern of IMF gold sales, allege that the sales are timed to cause the maximum volatility in the price of gold, to discourage investment.

More recently, there are allegations that the Government has allowed certain institutions to engage in massive naked short selling of gold and silver. This has caused distortions in the gold price that do not reflect genuine market pressures. In short, they amount to market manipulation.

A fair conclusion is that gold is cheap and that its present price does not truly reflect market conditions.

On December 16th, the Fed announced, as we have long forecast, a further cut in interest rates to between zero and 0.25 percent. It also announced ‘unlimited’ support to buy assets from beleaguered institutions.

The amount of debt and new money injected into the economy should progressively raise inflation alarm bells. The fire of future inflation is being stoked alarmingly, but the recessive forces of deleveraging are concealing it temporarily.

The Fed looks desperate. This could lead to feelings of panic and upward pressure on the gold price.

Investors should also especially be concerned as to who will repay these massive debts. The conventional answer of politicians is “taxpayers”. But this is a serious understatement. Any depreciation of the U.S. dollar means that every American citizen and every single holder of U.S. dollars throughout the world will suffer from monetary loss and a severely reduced standard of living.

In 1934, facing a depression President Roosevelt first confiscated gold from every American. Then, he unilaterally devalued the U.S. dollar by 75 percent against gold.

At a stroke, FDR wiped out 75 percent of the dollar denominated debt of the U.S. Treasury.

As both President-Elect Obama and Fed chairman Bernanke are students of FDR, we face the real possibility of a massive devaluation of the U.S. dollar against gold in 2009.

For a more in-depth analysis of our financial problems and the inherent dangers they pose for the U.S. economy and U.S. dollar, read Peter Schiff’s just released book “The Little Book of Bull Moves in Bear Markets.” Click here to order your copy now.

For a look back at how Peter predicted our current problems read his 2007 bestseller “Crash Proof: How to Profit from the Coming Economic Collapse.” Click here to order a copy today.

www.gold-eagle.com/editorials_08/maloney121908.html

news.yahoo.com/s/ap/20081221/ap_on_re_us/airport_accident

I, as a hobby have collected coins since I was a kid. It started by picking out Mercury dimes, Buffalo nickels, and even the occasional though rare Indian head cents that could still be found in circulation. As the years passed, the love for old coins never left me. I still find myself looking at coins that I have no business even considering buying. Numismatics and gold and silver investing are not totally separate, however, one must be very careful in the numismatic world. Education is the key here and it takes a lot of study to understand the coins and the market. A lot of the posters here at the Tent know gold and silver stocks very, very, well, and I suspect (heck, I know they have spent years studying them). Numismatics is no different. Self education is the key to success in any investment vehicle.

One of the safest, IMO numismatic investments there is, is the generic pre ‘33 US Gold coins. By ‘generic’, I mean common date. But the key here is to know when to buy, as in a stock. A particular stock may be a great buy, but if you buy it at the upper resistance line, well…………….it could very well go down. Does that mean it was a bad stock, probably not, but the timing was wrong. The same goes for numismatic coins. Last summer, generic Saints in grade MS 63 could be bought for about $150 over spot. When one has to pay $20 or $30 over spot for an Eagle or Maple Lief, I think $150 over spot for a pre ‘33 one oz coin in MS 63 is a good deal and posted such at the time. Today those same coins are bringing around $550 over spot. I would not be a buyer at this time due to the high premium but I think you can see that if one watches the market and is prudent in his purchases one can do well.

Best to you and Merry Christmas!!
Dusty

stockcharts.com/h-sc/ui?s=&p=W&yr=1&mn=6&dy=0&id=p25925869952

  I suppose anything is possible. I would also suppose that the assumption is that gold will enter (or is already in) a bear market.

  Not likely IMO

…whats yur record so far in this bull…?

..when did you get in and when did you get out ?

…do you hold Physical ?

..also have you done any work on Gold ?….do you see sub 300 Gold with your 36 HUI ?

…Last time HUI was 36…Gold was 250 !….and what about the Dollar….it was…120 in 01…with HUi 36!

….so do you see a much higher Dollar ….even though the Fed just printed 10 Trillion of them and Interest rates are …ZERO ?

…put me down for…No Way Jose !

but….cheers FGC

….I guess in your chart world…Fundamentals dont matter…..its all in the charts….

I posted this (somewhere-maybe it was here and maybe not here) last summer. Can’t recall at the moment, and don’t want to go wading through a prolonged ’search’ of various previous posts.

So, as remembered, …….
Mr Bruce Gordon of “so and so Gold firm” calls me to offer some ‘numbalistic’ somethings graded ohh……….63-65-72 or whatever.

Don’t recall that detail. Droning on and on about what a ‘wonnerful’ opportunity this fortunate call to me was, as I would be allocated 10 or them.

However, Gold was around $800, and his ‘numbalistics’ were around $1300.

I let him go on and on, and asked if the ‘numbalistics’ cost me $1300, and Gold rose $500, would they buy them back. He readily agreed.

So, you’d give me $1800?

Oh no, couldn’t go that high.,……….maybe $1650. Remember….we must also make a profit.

Did some quick Casio calcs and posed them back..

$1300/$800 for regular bullion…… Could sell them around that price, if desired, for around a 62% profit.

But you would buy the ‘numbalistics’ back for $1650?

He countered, thereabouts……depends.
————————————–
$1650/$1300 = 27%

Sucha Deal.

Thanks, click.

///////////////
at this astonishing premium rate the early vickies will become some ‘nuemismatic’ type holdings. i see for the most part various dealers have no sovs and i understand in europe they are far and few between. [would really like an update from one of our europe friends] the bid/ask premium i quoted earilier was from cni who i presume have some since they show up on thier quote board but i doubt there vickies probably kings or lizzies. wj
www.golddealer.com/index.asp

What you have not done, you may well not be able to do after December 31st 2008. Act immediately.

Dear Valued Client,
On December 1, 2008, the Securities and Exchange Commission (SEC) approved a rule change that will eliminate the ability of Depository Trust Company (DTC) participants - including **COMPANY NAME** - to request physical certificates for securities positions participating in the Direct Registration System (DRS). This change will take effect on January 1, 2009.

Currently your account is set up to automatically generate a physical certificate each time a trade is settled. This functionality will be disabled on December 31, 2008. All security purchases in your account that settle after the December 31, 2008, will be held in your **COMPANY NAME** account, and a physical certificate will not be automatically generated. Details about the new regulations are listed below.

What you need to know:

-The DTC, the institution in which **COMPANY NAME** holds shares in electronic form, proposed the rule change in an effort to reduce the industry’s dependency on physical certificates and reduce the cost and risks associated with processing physical certificates.

-DRS is a way to electronically transfer shares into book entry form. Shares held in book entry form represent shares held on the books of the company rather than in physical certificate form or in street name with a brokerage firm. This change will only affect securities that are eligible to be transferred via DRS.

-Starting on January 1, 2009, **COMPANY NAME** will be unable to obtain physical stock certificates for securities that are participating in DRS.

-There are a small number of companies that are DRS-eligible but do not allow their shares to be transferred via the DRS system. These companies are considered DRS-eligible but not participating. The initial change effective January 1, 2009, will exclude these securities. However, effective July 1, 2009, **COMPANY NAME** will be unable to obtain physical

Hi FGC, realizing that I still think that there is considerable downside in gold shares but also taking into full account that we are really at an inflection point. While I favour more downside, the HUI may go down further but will it go as far down as 36. I am not sure but with the calculations it definitely bodes well for a chance of it happening. So yes, you can put me on the record of it going down to 36 to complete the second wave down. Hopefully, I am wrong.

RLS

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Thanks, gang -

Silverboom!

..Here is a different opinion …Hamilton

www.zealllc.com/2008/huipanic.htm