January 09, 2008

Gold is at $884. It's telling us something. Something big is coming.


I think gold is shouting "systemic meltdown", or maybe "Countrywide bankruptcy".

Or even worse.

"Fannie Mae failure"?

"Dollar crash"?

"FHLB meltdown"?

"Iran bombing"?

"Fed 2 point cut"?

Serious question - what do you think gold's trying to tell us today?

67 comments:

Anonymous said...

I think it is speaking loud and clear. I think it is saying:

"Help! I am overbought and I can't go up any more erection, until I have a major correction!"

keith said...

I agree - waiting for that major correction

But just missed 800 to 884 as my dollars sat there losing value

Perhaps gold is just buy and hold and look away

Meanwhile, I think gold is saying something really really loud today.

What is it?

Frank@Scottsdale-Sucks.com said...

Hell, the dollar crash is already here.

Gold always has been "buy and hold." It's not something to be traded.

Besides, trading is just glorified flipping.

Andrew from Russia said...

All uncertainties combined: this is no longer a mortgage crisis, this is no longer a solvency crisis, this is a sanity crisis!

Princess Mononoke said...

I keep asking myself the million dollar question... Who is driving up the price?

Individuals? Institutions?

I think it's institutions running for safety. This says a WHOLE lot if this is the case.

Anonymous said...

Hillary presidency?

Anonymous said...

Isn't gold simply saying what this very blog has been saying for quite some time: That the US dollar and economy are about to take a nosedive? During the Great Depression and the 70's, gold prices increased severalfold in response to the economic troubles. With an inflation-adjusted high well over $1,500 per ounce, gold could have quite a bit further to run in the long term, since the economic fallout of the housing bust is just beginning. The price of oil and agricultural commodities may also increase in the coming years as the Fed prints dollars. Moral of the story - avoid dollars! And don't expect any major (>15%) corrections in gold prices any time soon.

Anonymous said...

"A gold bubble that will crash any day now?"

Anonymous said...

http://en.wikipedia.org/wiki/
Gold_as_an_investment

Gold has not been a very good investment over the past 100 years.

In 2006 dollars gold was $400 in 1900. In 1980 it was at $1500

So in the pas 108 years gold has doubled in value. In the past 28 years gold has lost 1/2 its value.

Piss poor long term investment if you ask me.

Anonymous said...

Yeah, and here I thought it was overbought at 550.

Anonymous said...

Deflation is coming boyz. Housing is tanking, we are in a recession, stock market is in free fall. Actually I take that back, deflation is here. Gold is so due for massive correction.

borkafatty said...

My silver is doing unreal...like yo said keith I just hold it an look aways...I bought at $3.00 an ounce...look at it now almost $16...nice!..bring on the correction the faster it happens the better off we will all be in the end.

borkafatty said...

But please remember folks...yes the dollar crash is happening...but you can not pay your bills with metal..keep cash reserves..even in the 1930's cash was and will always be king.

Cornholio Mangus said...

Shanghai Gold Exchange opened a futures market on 1/9/08 for contracts of 1kg or more.

Anonymous said...

Gold has historically been an inflation hedge. What this is telling us is that The Fed has been full of shit the past few years regarding inflation. It's also telling us that Mr Market expects Uncle Ben to cut rates and destroy the U$. When the rates hit 1%, sell you gold since there isn't won't be much more room to the downside. For now, watch as gold hits $2K by 2009

Anonymous said...

.



Gold has always been a 'buy and hold'
commodity!

If your going to twitch at every blip......then stay out!


.

Happy Homedebtor said...

A great depression/deflation is most likely coming, but you're thinking the 1930s, when we had a production-based economy, the word "computer" was akin to some forgotten dialect of Hindi (IE noone knew what it meant), etc etc. If you want to see what a "great depression" looks like in modern times, look at Japan...where it's been going on for over a decade. They still work, they still have homes, they still have kickass cellphones and electronics, still create amazing animation, etc etc etc.

Relax, smile, nod, and prepare yourself so that you're not one of the 6-9% unemployed.

devestment said...

Our coin shops are full of sellers not buyers. The price run up has to be coming from government or wall street funds. The public is not in the mix like it was in 1980.

Veronica Lodge said...

RE: Something big is coming...

Perhaps another staged terrorist attack will occur before the election... one of 9/11 magnitude.

This would pave the way for the "election" of yet another Republican president.

V.L.

Idiots... said...

Borkfatty 2:15 - silver hasn't been at $3 since the 70's

Borkfatty 2:17 - in the 30's, metal was cash

Anon 1:40 - past 8 years: gold/silver up 200% - stocks up 10% (Dow) down 40% (nasdaq).

Anonymous said...

Gold is telling us that iPods are selling.

Anonymous said...

I am a Realtor in Conway, Arkansas and am getting rather tired of everyone talking about how bad the market is EVERYWHERE. In our market last year, the average home price rose by just over 5% from the previous year. However, I am seeing more and more people reluctant to buy and sell not because of financial condition but instead because of constantly hearing from the national media and others how bad the housing markets are. The misleading information is so overwhelming that buyers and sellers are starting to believe it.

Also, I think it is news worthy that nationally 1 in 775 homes is in foreclosure; however, only 1 in 2,323 Arkansas homes are in foreclosure. According to, http://realestate.msn.com/buying/article2.aspx?cp-documentid=4734608 .

As we start the new year, I am already seeing an increase in activity and fully expect in our market to be back on track as far as number of transactions in 2008.

Greg Moss - Crye-Lieke Realtors
1065 Skyline Drive
Conway, Arkansas 72032
(501) 733-9493

www.GregMossRealtor.com
www.MovingToConway.com

Anonymous said...

I think it's saying "Gotta luv those gold ETFs! Now the masses listening to a daily diet of fearmongering can pile in and help me form yet another historic top before everyone discovers my poor fundamentals."

Mammoth said...

"Waiting for that major correction"
----------------------
Nope. Not until Time Magazine has a cover page showing the idiot hugging a gold bar instead of a house.

Besides, with the recent angst over the stock market, combined with the housing woes, where else can all those investors put their money?

Yes, there will be some minor corrections between now and then, so it is not yet be too late to jump in grab some gold, and endure the roller coaster ride for a while.
-Mammoth

Malcolm said...

I’m not a real gold owner, but I do own a 4-coin Gold Eagle set.

Right now, the value of the gold alone is about $325 more than I paid for the set. Considering that the collector value was already priced into it when I bought it, it’s probably worth about $800 more than I paid for it.

Overall, I avoid buying gold because I still remember the time an old boss bought gold at it’s 80’s peak. It took a decade for him to make up his losses.

@ borkafatty….

>But please remember folks...yes the dollar crash
>is happening...but you can not pay your bills
>with metal..keep cash reserves..even in the
>1930's cash was and will always be king.

I totally agree. For those of us who live in the US and don’t travel, the loss of value internationally will be more than made up for by the increase in buying power that comes from no one having cash.

Think of the famous photo of the man trying to sell his new car for $100 after the crash. Cash-on-hand will always be a strength.

http://bp0.blogger.com/_Mq5qyAsSNIQ/RqYlhDXAGXI/AAAAAAAABxE/_yhI9oapf4Y/s1600-h/great+depression+selling+car.jpg

Anonymous said...

newbie here: where do you even get gold prices or solid info about how to purchase/trade?

Anonymous said...

Life is a piss poor long-term investment. At the end you're put in a box and rot or get thrown in an incerator and turned to dust. But there are good times still, right?

Houses are a real piss poor long-term investment. What is a house? A wood and stucco box that sits out in the rain, that people crap in, that slowly rots into the ground.

The dollar is an absolutely horrible long-term investment. The US dollar has lost 96% of its purchasing power since 1913. Gold has held its value.

This isn't about holding gold for the next 100 years. Everything has its season. This is about holding gold through the current cycle of dollar/debt destruction.

vegas crash watcher said...

Crack-up boom in gold. When anything goes hyperbolic, it's time to sell.

Anonymous said...

Gold holds up well in both inflationary and deflationary scenarios.

The reason it holds up well in deflation is that money (cash) is king. Gold is an alternative source of money.

I'm not worried about what deflation might do to gold.

Jymkata

Anonymous said...

Anonymous said...
Yeah, and here I thought it was overbought at 550.

January 09, 2008 1:55 PM
--

I thought i over bought at 700.

Gold is up bec everythign else stinks to high heaven. DOW neg for the year, S&P neg for the year. Even CNBC's preceious NASDAQ is down for the year. Ya ya I know it's 09 Jan. But gold keeps going, yet who even knows about it?

I was watching CNBC yesterday at the close when the Dow lost 250 in 5 min's. Gold was at a high at ~880. The damn ticker bar at the top was highlighting the gold figure like they did when the Dow was hitting 14000. Yet NOBODY talked about it!

Gold is tricky. It shows how the economy and stock market is doing. In the 90's it was under 300, the dollar was strong, bull markets charging ahead and nobody wanted gold. Now the markets are shot, the dollar is shot, gold has trippled, and nobody still wants it.

Sell you gold when TIME magazine cover shows a baby boomer hugging a gold bar!

Anonymous said...

borkafatty said...

But please remember folks...yes the dollar crash is happening...but you can not pay your bills with metal..keep cash reserves..even in the 1930's cash was and will always be king.

January 09, 2008 2:17 PM
------------------------

Thats near the dumbest thing ever posted here. Keep those US dollars ie. worthless scraps of paper and see how happy you are one year from now. Get all of your assets out of US dollars and use only your US dollar income (if any) for living expenses. Keeping a cash reserve is just thowing money away. Heck, worse case borrow for an emergency and pay back the loan with depreciated dollars.

DaveO said...

Let's look at Yun's latest comment about housing (from http://tinyurl.com/ytwa6l):

"Consumers continue to wait for additional signs of market stabilization," Lawrence Yun, chief economist for the Realtors, said in a statement. "There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain."

Is he saying that if it weren't for the uncertainity in the market right now, a lot of people would be buying, with even more buying power than in 2005? Have house price/income ratios decreased enough in bubble areas to make houses affordable with a 30-year fixed-rate loan for people making median incomes? If no, then shut up Larry!

Ed said...

I can't see metals holding up during a recession. I know the dollar is getting whacked, but I also think that has more or less run its course.

When people stop spending money on useless Chinese shit, the dollar will bounce back. When unemployment goes up and fewer people are driving the monster SUV 60 miles to work, demand for oil will fall as well.

It will take some time of course and gold could easily go up another $50 or $100 short term. I'm saying 6-12 months from now gold and silver and oil will be significantly cheaper than today.

debtisslavery.blogspot.com

Anonymous said...

Gold is saying "foreign countries are reducing their dollar reserves and diversifying into other currencies, as well as gold, in anticipation of major economies eventually decoupling their currencies from the dollar and crashing it to the ground."

Anonymous said...

Gold is trying to tell us:

"Well Ron Paul ain't gonna be president so this fiat currency shite is toast. Buy me now!"

Halifax said...

It's a combination of a Triffin dilemma and a Minsky moment.

Anticipated in Gold and the Dollar Crisis by Robert Triffin (1960), de facto devaluation of USD culminated in DeGalle draining US gold, forcing Nixon to close the gold window.

It's been credit booms and bust since the, first by the Fed and now by "shadow banks".

From Motel-6 (1962) to Motel-120 (200?). It's currently Motel-60 where I live.

Anonymous said...

Lots of cash looking for safety may continue to find gold or stay in cash.

Anonymous said...

If you look at a chart of the price of housing between 2000 and 2007 and compare that to a chart of gold prices during the same time period, why are you not creating a blog called "goldpanic". It's an inevitable stampede to yet another bubble. It always happens and always will for people to move in a herd mentality. Hell the only thing I know is that at the end of the day even if my home value is 0.00 I can live in the damn thing. Try that with gold.

Bush's 9 day briefing said...

Gold is saying: "The oil futures speculation bubble is on the verge of deflating to the low $80s and crashing to the mid $50s within 45 days unless an attack on Iran can be arranged..."

Anonymous said...

So buy up some gold/silver, but keep some cash around to pay off bills?

What about my 401K, my mutual funds, etc. (in US dollar values)?
Do I sell those off and stick the proceeds into metals, or just leave them as they are, look away and pray the money managers aren't sniffing coke?

Lovingthatbush said...

I think gold is shouting "systemic meltdown", or maybe "Countrywide bankruptcy
-------------------------------
Put my vote ons "systemic meltdown".

Anonymous said...

So...

The fateful day arrives: we're attacked, martial law, constitution suspended, no food, no gas, neighbor killing neighbor, millions heading to the detention centers - you know, just like some Hollywood movie where the world has gone mad (Max)...

Tell me again - just what exactly are you going to be buying with your gold?

You: "Can I give you a few gold coins for a loaf of bread to feed my starving family?"

Me: "No - I can eat the bread, but I can't eat the gold."

You: "Please, my family is starving! And it's GOLD!"

Me: with gun in your face "Fuck off!"

Anonymous said...

Greg Moss,

Dude you did not just put your name out there. Expect to be inundated with spam and all sorts of nasty stuff.

Anonymous said...

Veronica Lodge said...

RE: Something big is coming...

Perhaps another staged terrorist attack will occur before the election... one of 9/11 magnitude.

This would pave the way for the "election" of yet another Republican president.

V.L.

January 09, 2008 3:38 PM<<<

yeh either that, or we will keep the same son of a bitch we have now for a while longer, (for national security purposes) of course. to help protect us from the evil boogie man out there whoever that is at the present moment...we build up enemies and then we fight them....a never ending process of war. damn , don't any of you ever get tired of being used to fuel the military industrial complex? isn't it about time for a real change?

Anonymous said...

Yo, anon strawman 7:58 PM, did I miss something? Did someone say to sell all your food and buy gold?

Anonymous said...

"Gold is saying "foreign countries are reducing their dollar reserves and diversifying into other currencies, as well as gold, in anticipation of major economies eventually decoupling their currencies from the dollar and crashing it to the ground."

January 09, 2008 6:00 PM


DING-DING-DING! We have a winner.
Foreign holders of US dollars are going to get whatever hard assets they can before the collapse.

Veronica Lodge,
You and the other truthers really need mental help...you guys would make great basis for a follow-up to "A Beautiful Mind"...minus the intelligence, that is.

hlowe said...

Historical charts for gold http://www.gold-eagle.com/editorials_05/hommelberg071906.html
Note gold vs inflation. I think the fed will continue to inflate.

Location to buy gold at fair price. No I am not affiliated with them, just did some research on the web.

hlowe said...

hlowe 9:57
Sorry, I forgot the link, here it is.
http://www.golddealer.com/

Very good outfit that has been in business for years. They can send your insured order certified mail.

Anonymous said...

The dollar is an absolutely horrible long-term investment. The US dollar has lost 96% of its purchasing power since 1913. Gold has held its value.

Not if you invested your dollars in US gov bonds over the same period - your returns would have been better than holding gold.

Foreign countries are reducing their dollar reserves and diversifying into other currencies, as well as gold, in anticipation of major economies eventually decoupling their currencies from the dollar and crashing it to the ground.

Maybe some are - some others with large reserves have their fingers poised over giant red SELL buttons. Central bankers like to do that to keep gold bugs in line.

It's an inevitable stampede to yet another bubble. It always happens and always will for people to move in a herd mentality. Hell the only thing I know is that at the end of the day even if my home value is 0.00 I can live in the damn thing. Try that with gold.

Bingo.

Anonymous said...

newbie here: where do you even get gold prices or solid info about how to purchase/trade?

You can see spot prices quoted at www.apmex.com. You can buy metal from them but their sell prices are above spot. If you have the ability to check stock quotes, check ticker GLD, it tracks the price of gold very closely (it's 1/10 oz per share, so multiply the price by 10 and you know what gold's trading at, more or less). If you believe civilisation is going to avoid collapse, and can buy stocks for low commissions, GLD is a very cheap way to buy gold. (But perhaps not to own it - if you are going to own it for years, physical bullion is likely to be cheaper in the long run, because GLD charges an annual expense ratio that over time will eat into your profits.)

Anonymous said...

"http://en.wikipedia.org/wiki/
Gold_as_an_investment

Gold has not been a very good investment over the past 100 years.

In 2006 dollars gold was $400 in 1900. In 1980 it was at $1500

So in the pas 108 years gold has doubled in value. In the past 28 years gold has lost 1/2 its value.

Piss poor long term investment if you ask me."

Nobody's asking you. If you're stupid enough to buy anything whether it's houses, gold or beanie babies, at the top, then you deserve a financial disaster. Buy low, sell high. Get it?

Anonymous said...

"Gold has historically been an inflation hedge. What this is telling us is that The Fed has been full of shit the past few years regarding inflation. It's also telling us that Mr Market expects Uncle Ben to cut rates and destroy the U$. When the rates hit 1%, sell you gold since there isn't won't be much more room to the downside. For now, watch as gold hits $2K by 2009"

Really? How much did gold go for the last time rates were at 1% during Greenspan's chairmanship? I don't recall it breaking $850 back then, do you?

Anonymous said...

The fateful day arrives: we're attacked, martial law, constitution suspended, no food, no gas, neighbor killing neighbor, millions heading to the detention centers - you know, just like some Hollywood movie where the world has gone mad (Max)...


Somehow your stocks or McMansion will be worth more than gold in this scenario?

Anonymous said...


>But please remember folks...yes the dollar crash
>is happening...but you can not pay your bills
>with metal..keep cash reserves..even in the
>1930's cash was and will always be king.


The Fed chose the deflationary route in 1929. Heli-Ben is choosing the inflationary route this time. Read his works. He thought that The Fed's mistake was that they cut off liquidity to the banks. You want to hold liquid investments, but not cash.

Anonymous said...


Heck, worse case borrow for an emergency and pay back the loan with depreciated dollars.


You're assuming that you will be able to borrow

Anonymous said...

Gold bugs 2008 = NAR 2005 = .com mania 1999

See a pattern?

Bubble

Bubble

Bubble

Smart money is already out of gold. Sure they lost out on the $800 to $875 run. But that's like getting out of yahoo at $100 and missing the run to $120, but also missing the crash to $20. Or getting out of your house for $700K in 2005 and missing the run to $750K but also missing the crash to $450K.

Never fails to amaze me how you supposed financial geniuses - the same one who talk about blind, greedy FBs and sheeple - are acting just like blind greedy sheeple when it comes to gold.

Don't say I didn't warn you.

3deep said...

Gold is not in a bubble. It's just moving well versus the dollar. There will be a big correction soon, perhaps (there usually is in the spring), but it'll turn around and keep going up - probably to a record high. And while gold could increase 100 percent this year, the junior mining stocks could go up 50 times that much. This is a rare opportunity. Staying in dollars is a huge mistake - and your real estate investment is going nowhere for many, many years. I predict steady devaluation of the dollar over the next 18 months followed by a 10 year climb back up to current market real estate values. IMO, wait for big spring correction and buy some gold stock.

Anonymous said...

Gold is money, cash, a commodity all at the same time.

No one every says that oil, wheat, or any other commodity is an investment. An investment is something where you get a set or predictable return for your risk of default or devaluation.

Gold is also an insurance policy. You don't spend all of your discretionary money on an insurance policy and neither will you with gold.

The investors and central banks of the world are tired of the Fed's empty promises and want to hold something that is both liquid and simultaneously not some else's liability. Gold is such a commodity. Infinitely divisable and indestructable, it is a perfect store of value. It is a store of value, not an investment.

Whenever I hear someone complain that gold is poor investment over time, I just assume the complainer is economically illiterate.

Anonymous said...

Why do people consistently believe that you cannot take your gold to a dealer and exchange it for dollars. Not only can I get spot price anytime, but I can go around the world and exchange it for whatever currency.

Gold is the safehaven. Silver is the safehaven. The gold bull market is barely in its first phase. Have you noticed that the gold stocks have only recently broken free from the pack. This gold market has just begun. Silver should be $45 an ounce right now.

Oil may get taken down, but gold will keep rising if the presses keep printing, banks keep failing,
dollar continues its fall, and people keep looking for a safety net.

Joe 6 pack knows nothing about gold yet, and when he does then its time to sell.

When your cabbie tells you how many coins he has, then its time to sell.

When your realtor all of sudden starts pawning all of their gold, then its time to sell.

When the tweeker invasion hits the gold scene then its time to sell.


Iceman

Anonymous said...

The only thing $884 gold is telling us is that the dollar is down.

Anonymous said...

>> Why do people consistently believe that you cannot take your gold to a dealer and exchange it for dollars. Not only can I get spot price anytime, but I can go around the world and exchange it for whatever currency.

Today, right now, yeah, you can take your gold to a dealer and exchange it for cash. But that's not the point. When the shit hits the fan:

1. What makes you think the dealer is going to be around, particularly after the banks (and gold dealers) have closed and anyone found possessing gold is executed on the spot?

2. Your grocer won't accept gold coins now - why would they when everything is falling apart?

You're living in a dream world if you think some polished metal is going to save your ass. As the original anon implied, have fun eating it!

Anonymous said...

Smart money is already out of gold.

I'm glad to see you have the inside scoop on the smart money. What else are they doing?

LauraVella said...

"I think it's institutions running for safety. This says a WHOLE lot if this is the case."



Your point is well taken Princess Mononoke.

Anonymous said...

- it's different this time

- they're not making any more land

- housing never goes down

- buy now or be priced out forever

- renting is throwing your money out the window

take any of these arguments and they are the same statements you are making about gold

hlowe said...

Once again look at the gold charts. Also go to Peter Schiffs web site and note how correct he has been over time. Conclusion is that this housing mess is basically still in it's early stages of deterioration, and Gold is not nearly done with huge increases. Those who say gold is a terrible long term investment are correct, but they fail to capitalize when the time is write to take the ride upwards. Listen to Peter Schiff videos and radio addresses on his site, and understand what is going on in the world.
Keith, sory these are not in tiny url's
http://www.kitco.com/charts/historicalgold.html

http://www.gold-eagle.com/editorials_05/hommelberg071906.html

http://www.europac.net/ This site may be difficult to access as the sheeple are becoming aware of his accuracy.

hlowe said...

Perfect timing. Listen to Peter Schiffs radio adress January 9 2008

Anonymous said...

Gold only goes up like housing prices. Please. Deflation is coming. I also think the dollar will rebound. The decoupling thesis is flawed. The US economy is and will tank and it is still a large part of the global economy. Add the European recession and the rest of the world will be hurting and probably worse than us.

Frank in scottsdale.. buy that gld - gold now over 900 and tell me how you are doing 3-6 months from now. Hell I would short gold if there were not better risk/reward bets in the market. I don't like the geo-political spikes up/down in gold.