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How Will We Manage $2,000 Gold?

Posted on May 3, 2006
Filed Under Uncategorized |

Will the earnings from $2,000 gold slosh around, creating monetary chaos? How will the gold dollars be invested and will it balance the capital drain caused by golds rise?

Should royalties for gold mining on BLM land be raised? We could establish a permanent fund similar to the Alaskan oil fund that could pay citizens a yearly dividend. This would keep the economy on an even keel. Alternatively we could use the revenues to reduce wage taxtion on a revenue neutral basis.

As a sub-question what are the limitations that we will put on refining low quality ore as gold becomes more valuable?


Comments are closed. Thank you.


73 Comments so far
  1. barter this May 6, 2006 5:20 pm

    I looked over the net and all I could find about royalties go the investors. Not to the states or towns. Something like 3% was all that I could find in places like South Africa. Talk about going up to 5% was frowned upon by all involved with the gold(Company).
    Since gold dust is all that is being found and arsonic is used to leach the gold out of the rock and the land(BLM) which is sold at $5.00 an acre, is left raped by the owners of the gold companys… I think something needs to be done by way of royalties especially since gold is steadly going up.
    Monthly dividends are a very good idea….Why let them use the money for a whole year?

    The price of gold has tripled since bush has been president and he is pushing to sale BLM at pennies on the dollar only to the gold companies not to regular people(fair market value)like you and me.

    This site is really interesting as to gold creating monetary chaos. http://www.lewrockwell.com/paul/paul319.html
    Barter This

  2. Turk May 6, 2006 8:00 pm

    Yes the feds should increase royalties for all gold extracted from federal land. As a matter of fact, all of the extractive industries should be paying higher royalties to the federal and state governments for any profits they make from the materials they take. State governments should be included where appropriate because they are often left with local environmental messes when the extractors pull out. The feds do not always respond for the cleanup. These royalties could go toward paying off the debt and helping to alleviate environmental problems that are left behind. The republican government has been spending money like a drunken sailor with a bogus rich uncle. Its high time for the government to wake up and pay the bills.

  3. ronandreas May 7, 2006 6:41 pm

    Barter, that was a great article by Ron Paul. Thanks.
    There’s over 2.5 trillion in existing gold at current prices. If those prices triple, thats a 5 trillion dollar monetary expansion. I wonder if the inflation that we see already isn’t fueled by gold’s rise.
    In Venezuela 5% of net production from mining goes to fund local clinics and schools. Foriegn miners must partner with a local company. Environmental restrictions are more strict than ours. Canadian miners are getting quite a deal here.

  4. cornhusker May 9, 2006 7:10 am

    Everything is cyclical…gold will be back under $320/ounce by 2012…life is good.

    There is no oil shortage…a barrel of sweet crude will be under $30/barrel by 2010.

    The bird flu will go the way of West Nile…a non-event. Stop worrying.

    Be happy!

  5. gold guy May 9, 2006 7:34 am

    I doesn’t really matter to me what happens to the the gold I intend to sell once the price is such that my mortgage is paid off. At the rate it is rising, I shouldn’t have to wait to many more years. Come on $1500 gold!
    –gold guy

  6. Rich May 9, 2006 11:24 am

    Hey Michael.

    Thanks for the new blogs, very precient.

    Gold mining is pretty onerous on the environment because of the arsenic being used. In South Africa the people in the not too distant past were more or less slaves to the mining outfits. Some mining companies have been serial abusers of their local communities and the environment.

    So, I think it is fair and just to extract from mining companies a healthy spiff for community and bio-remediation. I’d be in favor of raising royalties significantly, probably indexed to the POG?

    At $2,000 for an ounce of gold we are all going to be in shock! $2,000 means the dollar is in the can, the world economy is in deep trouble, war and rumors of war are everywhere and no one has confidence in the government or our financial system.

    I expect that to happen, but not until several years from now.

    I must admit that the hedge fund activity seems to be really driving the POG higher right now. I don’t see huge market activity on the part of the consumer yet, and I don’t think the explosion in the POG will occur until then, when globally the guy on the street starts to speculate, etc.

    But once the price hits $2,000 I believe it’ll be time to get out, dump everything and move to foriegn currencies or other foriegn holdings.

    Cheers Rich

  7. rolf rogde May 9, 2006 8:35 pm

    unfortunately any mining royalties giving to governments will just be more money pissed away by said governments.

  8. the stranger May 9, 2006 9:08 pm

    Barter, thanks – always good to read Ron Paul; and you’re not long winded – fresh air more like it.

    I don’t see us going to $320 gold unless a lot of dollars are destroyed; but a lot of dollars are digital, so I guess it’s possible. The dollar isn’t cyclical, is it? It doesn’t return to its original value periodically. Personally, I see oil as tight but still supplying demand. I think the hike to $60 was an inflation adjustment; the supply disruptions are still ahead of us. And personally, I think they are deadly.

    I tend to agree with what Rich put down; $2k gold will be accompanied by major problems. My only exception perhaps is time. It seems any number of predicaments could put us there much quicker. Not least of which is the Gold Anti-trust Action Committee’s contention (and formidable evidence) of a derivative chain reaction waiting in the wings.

    I guess I consider $2000 gold catch up to where it should be, then everybody piles on.

  9. Rich May 10, 2006 6:05 am

    Hey rolf and the stranger.

    I totally agree with all you’ve said, giving the government more revenue means more to piss away, and the single, biggest threat to the global economy is a derivatives meltdown.

    GATA, Richard Russell, Bill Gross, Warren Buffet, Stephen Roach, etc. have all stated that another LMTC (but on a much larger scale) is somewhere in the future, and would trigger a financial market meltdown - or should!

    The reason I say “or should” is because by all rights 9/11 should’ve caused a massive meltdown but somehow didn’t! The PTB have an unholy ability to suspend market action, rewire the broken connections, and keep it all running. This is what happens when you have monopoly control of the creation of credit, the flow of funds in the various markets, control over the major central banks of the world, etc.

    Any derivative position, and the majority of them are traded through JP Morgan Chase, with Citi being in 2nd place, that go unstable could (in theory) be erased with the stroke of a key - - averting meltdown.

    At the end of the day this subject belongs under the heading of “who owns the world,” or “who runs the world,” or “what the banks do to control government.” Something like that!

    If JPMC has, for instance (and I’ve checked for a while at the FDIC but this is verifiable) $150 TRILLION in derivatives contracts, which is 10X the entire US GDP in Notional Value, then they can (theoretically) hold humanity to ransom in very subtle ways. Imagine Kissinger advising the bank board of directors to threaten the US government with a derivatives meltdown that the government could simply not stop! Now that is a Financial Weapon of Mass Destruction!

    Enough on derivatives, I’m sure most of you read Rude Awakening, did you see the quote on gold today? “As long-time Rude readers will be well aware, your editors have been long-time fans of commodities and resource stocks…and so we remain. But we’d be lying if we did notadmit to viewing the chart above with some consternation.
    Trading volumes in metals futures contracts are
    skyrocketing on the Chicago Board of Trade. Specifically,during the month of April, more than 40,000 metals futures
    contracts were changing hands every day, on average. That’s double the volumes of the prior month and TEN times the volumes of the prior year.”

    I tend to read Rude when something big has happened in the market, most days I just read the headline. But with gold at $700 it was time to see what they had to say.

    If the hedge fund action stays at this level the POG could get very crazy (or crazier). Hold on for a wild ride. Buying dips of $50 to $100 may be good policy!? But I am no financial advisor!

    Cheers Rich

  10. Turk May 10, 2006 10:04 am

    I sure am glad I bought silver in 2003. $2000.00 gold, well I for one haven’t jumped totally on the gold will keep going up, up ,up bandwagon yet. Yes we are in a commodity bull market for some years to come but it doesn’t mean gold will follow it to the end. There may be other currencies in the world that are serious contenders to be the new world champion. I’m not so sure the fed is ready to let the dollar die and bring back a gold , or other, standard. If they are, they will do nothing for the rest of the year, not even after the fall elections. Personally I think they will raise rates at a minimum of 3 more times. They don’t care about the market falling or driving in the nails of the housing market coffin, then throwing on the dirt. They will just say , “well America, cheap money was no reason for the irrational exuberance of the housing developers, was it?” Keeping the dollar in shape is paramount for their ability to maintain control. Everything else is secondary. Now in this global market of rapid transactions, it is still possible for gold and silver to keep rising substantially even in the face of a strong dollar. Just because interst rates tighten the dollar supply, this administrations policies have made many world investors want to invest in precious metals and other currencies. The world does not like GW for the most part and we all will pay the price. Since 9-11 the terror factor has been the unspoken thing that influences the markets and investments of many. If 9-11 never happened, the dow would be substantially higher than its level today. In the back of peoples minds is a place that says another major attack on the US is just around the corner, best to stay cashed out until the dust settles, or invest in gold. Lets face it, although we haven’t been attacked since then, are you really confident that our current government can prevent another major attack? On oil, the increase in the price of crude is by far the best thing that has happened to the world market in recent times, for many more positive reasons than negative. I just got an email from a buddy of mine in Korea who was telling me that Camp Hialeah in Pusan is closing and so the post gas pump (priced to the American market) will be going away. He will be buying gas there on the Korean market after the closure. The current price for 1 gallon of gas on the Korean market is around 6 dollars per gallon right now. I would like to see American gas price averages settle in at around 4 dollars per gallon, but not without some kind of subsidy for deisel fuel that allows delivery of all of our goods to our neighborhoods. Yes, I said subsidies.

  11. the stranger May 10, 2006 5:54 pm

    I recently read (in the Daily Reckoning, I think) an article referring to our economy as a flywheel. That metaphor really hits a nerve. The PTB are throwing everything they’ve got at it behind the scenes, and we look like lunatics for reporting it. Rich, you seem to be an ace on this subject – I want to run this thought past you (and everyone else).

    When Nixon closed the gold window in the early seventies, many an old school economist proclaimed disaster. They were wrong, or so it seemed. Perhaps the twentieth century is just one hell of a flywheel.

    There are a number of great thinkers weighing in on this; Richebacher, Pretcher, Farber, Lips, Russell, etc. Opinions vary and it’s the application of patterns, Elliot Waves, Kondratieff Cycles, Long Wave Theory and such that keep me drawing new sketches. I’m referring to the macro applications, not trading as such.

    One thing we read frequently is that we are in a commodities bull; a commodities bull with many years to go. I won’t go into the explanations; you all know them and I very much except the reasoning. But I also figure that massive demand destruction could alter the premise. And that’s where Pretcher’s eventual forecast seems to be. We got pandemics and war as empirical evidence to support this “saddle in the rain” perspective. Here’s another angle…

    One of several resident geniuses at Le Metropole Café, Adrian Douglas, has an interesting theory regarding the fundamentals of the gold bull. Adrian’s contention (forgive the distilled paraphrase) is that the gold bull started when the gold window closed. The fact that gold when down for years, due to a rigged market, didn’t change the fundamentals; it just created an “extra trend anomaly.”

    To me this is as logical as it is simple. But if it’s in fact accurate, then the wave structure must be altered. What is the possibility of slipping directly into phase three of the bull move? And would the resulting chaos be the catalyst to fulfill Pretcher’s ultimate Grand Super Cycle vision?

  12. KTM May 10, 2006 6:48 pm

    There are so many economic cross-currents now, I don’t see how any prediction can make sense past six months. The Chinese have a proverb that says it is better to live as a dog in a peaceful era than to be a man in chaotic times. I think our “peaceful era” is drawing to a close.

  13. the stranger May 10, 2006 7:45 pm

    KTM – I think your summery is as good as any; all our musings may well be exercises in futility.

  14. Robert Sczech May 13, 2006 7:21 pm

    What is so disturbing about gold is not the rising price (up to $2,000 we are told). It is the realization that gold is the least useful one among all the commodities. Base metals are absolutely necessary for industrial production. Similarly, oil and other fossil fuels are indispensible for our present civilization. In comparison to oil, gold is almost completely useless (except for jewelery and some specialized applications in dentistry and electronics). The rush into gold is irrational. Gold has no intrinsic value. Like fiat money, gold derives its value from the trust people place into this commodity. Every gold buyer trusts that he will be able to exchange his gold into food and fuel on demand. But if everybody is starving, who is going to give away his own food for a couple of gold coins?

  15. Sex May 14, 2006 10:34 am

    cool site
    Looking forward for updates


  16. Chris May 15, 2006 11:19 am

    Americans need to start understanding that gold is money, and why that is so. Start looking for an answer. To say that gold is the least useful commodity is to so that money is useless. Yes, in a famine, when food is scarce, food is more valuable than gold. No one who is starving will give up food to get gold. But then, a starving person will not give up food to get a credit card, or cash, or a cadillac or a big screen TV. Are those things worthless? Rising gold prices reflect declining value in American money. Hating gold, or saying that rising gold prices are destroying the economy, is like saying a barometer causes hurricanes, or hating the fuel gauge on your dashboard when you need to fill up with gas. Gold has been subject to a century of disinformation, because people who want power - politicians and bankers - know that gold is an impediment to their desires. (Lenin wanted to line urinals with gold to make people (guys only?) believe it was worthless - that can work, if you also have secret police to kill people who try taking the gold.) The people given the special privilege of controlling the money printing press can create dollars to spend for virtually no cost or work. Who else in America gets that privilege? Listen to Ron Paul, Aaron Russo, Richard Russell. Be skeptical of the people on CNN or CNBC, or just the mainstream press in general, because guess what? Mainstream press are owned by the financial people - the same people who know that gold is an impediment to their desire for power.

  17. Robert Sczech May 15, 2006 9:06 pm

    Chris: I agree with you that gold is a perfect form of money - no argument here. What I tried to say in my previous post (but did not succeed) is that for the survival of our civilization we need real economic goods and not just money. It could be argued that almost every problem today has its origin in too much money. People try to address that problem by rushing into gold. However, a much better choice would be solar panels on the roof of our houses. It provides something precious: electricity without polluting the envirorement. Or solar thermal panels which produce hot water for domestic consumption without burning irreplaceable hydrocarbons. These things represent real wealth in the sense that they support our life on this planet without degrading it. In my opinion, this is a much better value than gold which in comparison is merely perfect money. The fallacy of gold as wealth becomes obvious by imagining everybody having plenty of gold, but no food and no solar electricity. That would be a very poor society indeed. A society with lots of agriculture and plenty of solar electricity has a much better future than a society with plenty of gold. Gold is the ultimate fantasy that we need only lots of (”honest”) money in order to survive in the future.

  18. ron May 16, 2006 7:21 am

    It should also be sobering that average cost per ounce of production is in the $300 range. Eventually, with the right level of investment in exploration and development, miners will catch up with demand. This is accentuated by the fact that as the price goes up, one ounce satisfies more investment dollars. I agree with Robert, gold as wealth is a fallacy. In the 1500’s, so much stolen gold and silver were brought to Europe that hyper-inflation set in. Commodities became true stores of wealth. Ultimately, educational and industrial infrastructure provides a real return, but these require governmental support or protection.

  19. Chris May 16, 2006 9:50 am

    Robert: Your “fallacy of gold as wealth” can exist in the imagination, but not reality. There are at most 180,000 tons of gold above ground, which is enough to cover a football field in 3 feet of gold, or about 1 ounce for every person on the planet, or about 20 ounces for every American. Plenty of gold for everybody is impossible. That is one of the reasons it is money - scarcity. Another is that it is difficult to increase the supply of gold ( the amount increases about 2000 tons annually, a growth rate of about 1%). Now, your imaginary scenario DOES apply to fiat money. It can be created endlessly, and you could give every single American a bank account of $1,000,000, or whatever. How much would American currency be worth then? It would be good for starting fires, and using as toilet paper, so it would have value, but who would work for such “pay”? Another benefit of money (gold) is it permits division of labour, which permits specialilzation, and a society. You work at a job, get money, which can be exchanged for things you want. What if that money is practically turned into toilet paper? Who would give you useful stuff in exchange for slips of toilet paper? Who would bother working? Who would grow food for sale?
    Ben Bernanke believes the Great Depression was caused by re-instituting the gold standard, which constricted money supply and caused a depression. He believes the antidote to depression is printing of currency. That necessarily means American currency will lose value, and to me its looking more and more likely American will experience something like what Germany did in the 20’s. Anyway, fiat currency has integrated itself into every American’s life, and if/when it is destoyed, that will be very painful for all Americans, to say the very least.
    Gold is not an antidote, but it has its uses. Even if the optimistic version of the future will become reality, at least if you invest in gold and mining stocks now, you will be able to get out of debt, and hold on to your house.
    If the pessimistic scenario takes place, gold won’t save society, and gold won’t save individuals, but it would provide a person more options than American currency would.
    Having plenty of agriculture and energy is important, but I’m more worried about the financial and political situation. In case of trouble, the banks are saved first, and the masses (which includes me, and possibly you), are expendable.
    I think we are not on the same page, but this is an interesting discussion.

  20. ron May 16, 2006 12:12 pm

    Criss, the price of precious metals is based on supply and demand. We are already seeing detereoration in jewellry demand in Thailand and Saudi Arabia (which may prove temporary). There is no guarantee that the U.S. won’t sell bulion at some level. Supply was restricted by decades of non-investment. Gold is good as a short term speculation. In 3 years new supplies will come on market.

  21. Chris May 16, 2006 12:24 pm

    ron: The U.S. government, if it has any gold to sell, would be idiotic to sell gold, so they probably will do that in an attempt to suppress the price. Regardless, more educated people - Chinese, Arabs, Germans, Russians - will be more than glad to buy that gold at those low prices, and much much more. Supply and Demand? Sure, OK, and when people realize U.S. currency is becoming worthless, there will be a torrent of demand for other things instead of U.S. currency, one of those things will be gold. They said in the depression that there was no reason for a depression because nothing had disappeared from the 20’s to the 30’s. Same people, same land, same industry, so depression was simply illogical! What disappeared were promises - financial promises - and that impacts trust, trust in the currency, among other things. Gold is not a financial promise and it’s value doesn’t depend on trust or confidence. It depends, as you say, on supply and demand.

  22. ron May 16, 2006 5:31 pm

    Cris, No doubt the $ will continue to decline. I also agree that foriegners would buy all the gold our treasury has. I’m not so sure though that gold or silver can be counted on as a stable currency. The depression in the 30’s is associated with the classic cycles of wealth concentration. Capital is put to speculative purposes once the wealthy have so much of the economy tied up that consumption fails to provide profitable, productive investment opportunities.The consequent asset bubbles eventually burst.In that stage Keynesian intervention can re-start the economy.
    You may decide at some point that crashed real estate or some other asset becomes a better investment than gold.

  23. Chris May 16, 2006 6:27 pm

    Wron, read Howard Buffett’s speech “Human Freedom Rests on Gold Redeemable Money” (1948). One very interesting bit of info in that speech is that when currency was gold-redeemable, average people could enforce discipline on government spending by turning in paper currency for gold. I was astounded to read that. Politicians would no longer only serve special interests (like the biggest military on the planet - what the fuck is that for? why not spend THAT money on food, or projects to better society?). Gold-redeemable money was a real check and balance. And it was eliminated, in favour of power for politicians and bankers.
    I do not believe that re-introducing the gold standard now or anytime in the near future ( 5 years ) will solve America’s problems. First, America has to go through the correction. That said, politicians and media ( bankers, financial people) will blame gold for all the ills to come, and indoctrinate a new generation of Americans into the lie that gold is evil or destructive or a deception or worthless or harmful to finance or whatever other new shit they will squeeze out of the cow’s ass (expect to hear these ones soon - gold mining is killing the planet, if you have gold you are destroying your children’s future and the planet; OR gold is used to finance terrrorism - if you have gold or gold investments, you are a terrorist, or you are helping the terrorists destroy America; or even better - UNCLE SAM SAYS: IF YOUR NEIGHBOUR HAS GOLD, HE IS HELPING THE TERRORISTS, REPORT HIM TO THE PROPER AUTHORITIES FOR PUNISHMENT, AND YOU WILL RECEIVE A REWARD FOR PROTECTING THE LAND OF THE FREE AND FOR BEING A BRAVE, RED BLOODED, PATRIOTIC AMERICAN!).
    Also, listen to Larry Parks’ interview by Jim Puplava, which appears on Parks’ website fame.org “Our dishonest and corrupt monetary system radio interview”.

  24. Rich May 17, 2006 5:54 am

    Hey Chris,

    Great stuff, you certainly understand the gold issue. I know that it must seem that sometimes you are beating your head against a brick wall, but don’t give up on trying to get folks to understand!

    Gold is the ultimate store of value for the population of the world, it is as simple as that. Most of the major cultures of the world, the west, China, India, Middle East, South America, have valued gold for the entirety of recorded history.

    In the west, with our relatively recent domination of the world, we’ve tried to educate everyone to believing that fiat currency creation in the hands of central bankers and politicians is really the ultimate store of value for them. But simple people around the world (including me, and of course Chris) are not taken in by this argument.

    Right now on the streets of the world you are better off holding US dollars if you want to trade, no doubt about it, dollars are better than most local currencies still. It’s been that way since I was a kid, and the change went from British Pounds to US $. But the times they are a changing and the power of the dollar is diminishing, in line it would seem, with respect for the US government and current foreign policy.

    The dollar isn’t finished yet, but it’s on the way down and at some point will plummet and disintegrate. At that point the world will collectively face its next existential crisis (if something of natural causes doesn’t come along before then!).

    Fiat currency is based on confidence in the issuing authority. If humanity rejects that authority wholesale then we could be in for an extended period of chaos as new forms of exchange and barter are established. Or the PTB could trick everyone in to believing they’ve cleaned house, shot the charlatans, and created a NEW system, better than the old system, etc.

    Meanwhile, gold will remain the ultimate store of value for those seeking a safehaven from politicians and central bankers. Those smart enough to see through the charades, and determined enough to attempt to be independent.

    Of course, we will all need food, water and protection as a priority, but if you are to store your excess value - then gold will be one of the safest ways to do to it.

    In the past few weeks we’ve seen gold bounce off $740, and then down to $670ish - its been hard to follow as I was in Long Island for 4 days in the suburban wilderness - with barely an Internet connection in site!! As I mentioned before the gyrations now will be in the $50 to $100 range, so expect more volatility in the price and if you have funds to spare, buy the dips!

    Gold, for all the reasons Chris has given you, will continue to rise. At some point it will reach the point where it won’t go higher, that point is a problem for all of us, because it is the point where the US dollar no longer has any value!

    Keep watching, and expect the unexpected.

    Cheers Rich

  25. ron May 17, 2006 6:30 am

    Actually the Incas didn’t use gold as a currency. They used coca. Meso-Americans had other currencies as well.

  26. Chris May 17, 2006 7:04 am

    Here’s another reason to despise fiat currency. Since the value of gold is linked to supply, changing its value is difficult. Since the supply of fiat currency can be changed signficantly and rapidly, changing its value is simple, and changing its value wildly is simple. The fiat currency you work for and save and rely on to buy essentials and plan for your future, can be changed in value at the whim of someone you don’t know and believes you are irrelevant (and very possibly would prefer that you die in order to reduce the earth’s population and save our precious earth and its environment). Greenspan himself said that with fiat dollars the savings of a lifetime can be wiped out in an eyeblink. That is an excellent reason to want gold redeemable currency.

    Think of how bad a global fiat currency would be. When the monetary authorities inevitably screw up (or rather, carry out their plans effectively), and a depression happens, everyone on the planet would be in that depression at the same time. You wouldn’t be able move to another state or country to find a job. You wouldn’t be able to contact any friends or family in another place for help, because they would be just as badly off as you. Even worse, everyone on earth would be looking to blame someone, and would be angry, and could easily be led into a war. Global fiat currency will synchronize everyone’s financial lives, and make it easy to have the biggest wars possible. (If you think that also means times of greatest prosperity possible, do you know many people who got rich during the 90’s? All I saw when America’s stock market was topping was an endless stream of fraud and other crime. Average people don’t participate in the peaks, but they do get to feel the troughs)
    One other effect of fiat currency is the highs and lows can be stretched out to decades, which means good times for one or two generations, and terrible times for the following one or two; as well, it means people have a hard time linking and understanding that those extreme and widespread highs and lows just might be entirely due to fiat currency. And its easy to fool people into thinking it is due to something else, and thereby continue the fiat currency fraud.

  27. ron May 17, 2006 12:09 pm

    Economic cycles occur due to the monopolization of wealth that happens when debt traps for the masses succeed. Fiat, gold backed, either way without inheritance and capital gains taxation, wealth will concentrate due to compounding.

  28. Chris May 17, 2006 12:29 pm

    So people should be trying to get out of debt instead of spending money in order to defeat the terrorists.

  29. ronandreas May 17, 2006 6:20 pm

    The minimum wage, freedom of association, and social security have done an excellent job of smoothing over capitalism’s cyclicality. However we have been abandoning successful policy to benefit the elite few.

  30. Rich May 19, 2006 5:53 am

    One of those huge dips is occuring with the price of gold, if you were lamenting the lost opportunity before then this could be a good dip!? Of course, I’m no financial advisor and we could be witnessing the end of the bull market for commodities!!??

    What do you think?

    Cheers Rich

  31. Chris May 19, 2006 6:45 am

    Gold is getting a pounding this week, but I don’t believe the bull is over. The US still has large and growing debt and deficits, annual supply of gold hasn’t ramped up, M3 is still hidden. Central banks and whoever else are just continuing their campaign to attack gold (Greenspan said in 1998 that in the event gold prices rise, central banks stand ready to sell gold). This week the central banks are having some success, but it won’t last.

  32. Robert Sczech May 20, 2006 10:00 am

    Any serious discussion of money (including gold) has to start with a careful definition of wealth. After thinking about these matters for some time, I arrived at the conclusion that money (regardless whether fiat or gold based) is not wealth. To give an extreme example, if you are on a sinking ship, you are going to die regardless how much gold you carry with you. In such a situation the only way to escape death is not the possession of gold, but the access to a rescue boat. A rescue boat represents real wealth (wealth = means of survival) while gold is only a perfect form of money. Gold can only store wealth if and only if it is relatively scarce in comparison to the wide avaiability of real wealth (which I define as means of survival including food, energy etc). The value of gold sinks down to zero if the real wealth bocomes more scarce than gold itself. A case in point: The total amount of gold in storage all over the world is growing every year at a rate of over 1% per year. In comparison, the total amount of fossil fuels reserves above and below ground is declining day by day at a frightening speed. Since fossil fuels represent real wealth, it is pretty clear that the value of gold (or any other form of money) in terms of oil must decline in the years ahead. To sum up: gold is perfect money, but gold is not wealth.

  33. the stranger May 20, 2006 11:34 am

    If I knew nothing of gold already, I could get by pretty well with what’s been laid out above. And how about this - gold is close to perfect money, and may or may not represent actual wealth (disclaimer: may not be redeemable in totalitarian societies).

    I know the commodities bull could end in a New York minute, but I don’t think we’ll see it until we get major demand destruction. Of course it seems equally likely an interruption in civilizations just-in-time inventory systems could drive prices up. But I reckon misallocation/underinvestment caused part of the commodities bull plus population growth, but some of it is dollar decline and a large part is the dollar debasement.

    When I think of the dollar declining, I think of the dollar index; the comparison to a basket of six other currencies. So as these other CBs debase their currencies (by whatever ratio) complete value loss isn’t measured here; it’s relative. But monetary expansion, contraction and feedback loops could get absolutely insane. Over my head… “Some things are too hot to touch, the human mind can only stand so much…

    Further deciphering empirical hieroglyphics, I was just checking out the US Dollar Forecast over at Jessie’s charts. If you can augment your conviction factoring the GATA-Put, you have an interesting graph; flip it over and use it to anticipate major gusts in gold & silvers’ sails. Just take profits and buy something useful with it – like a room on the space station where you can watch this unfold with impunity.

  34. Chris May 20, 2006 11:49 am

    That sounds very sensible to me. Gold is not always the most important thing you need in any given situation. And in desperate times, lots of other things are more important than money. To me, that kind of clear thinking helps to remove the mystification that the fiat currency people try to build around money. Those people want you to believe there is an irrational mythology around money (gold) that only they are able to understand and dispel, and that average people should rely on their wisdom and accept that gold is truly a useless thing and fiat money is far better, for everyone. Money is not a topic beyond the average person’s understanding. I think it starts to get mysterious when someone is trying to rip you off.

    Here’s an example of the mystification I mean. Someone on another board said a great introduction to money is “the Money Myth Exploded” by Louis Even. It is not. This essay is the kind of disinformation people would immediately recognize as a deception if they had clarity about money. (There are some good bits. But here is what I don’t like: It first implies that average people are irrationaly mystified by gold, that gold is only valuable because average people have been fooled into believing that by bankers, and in the end, when the banker is seen for what he is, they get rid of the banker and eliminate gold from their system of exchange. Lots of things wrong in the story. I’m okay with not trusting bankers. But it gives a wrong conclusion - it says that to believe gold is valuable is a fraud and wrong. That message is total rubish. But the story is so simple and appealing, it has probably taken in a lot of people.)

  35. ronandreas May 20, 2006 12:16 pm

    Robert brings up an interesting subject. Oil backed currencies such as the Norwegian Krona now exist. I wonder, if commodity backed currencies are such a good idea, why don’t central banks hold more Kronas? I’m not suggesting that the Norwegians don’t have it good.

  36. Chris May 20, 2006 12:32 pm

    Central banks hate commodity backed currencies.

  37. the stranger May 20, 2006 1:48 pm

    Money shouldn’t be a topic beyond the understanding average person. But it is - because of years of disinformation. That’s why a basic understanding of money, include gold, seems mystical. The bull shit is turned around and aimed at the head level at the level headed.

    Sure gold is of no use dying of thirst in the desert, and solar panels are a store-in-value, but the gold-is-useless argument boggles my mind. That a red hearing. At the beginning of this topic I made a Google search on the uses of gold (beyond monetary). I was going to link to them, but the uses go on and on and on. I decided screw it. If a person needs to believe that precious metals have no valve, I’ll leave it alone; please pass the colloidal silver.

    I like Fuller’s definition of wealth as “stored forward life.” Land is a good example of capital. I hear people erroneously refer to it as money. And money, that’s your poker chips. Gold and Federal Reserve Notes are money (actually money and money-substitutes, respectively) because they are compact, liquid and represent a store in value. Of course, FRNs should have a picture of an hour-glass instead of a president to represent they’re infamous store-in-value; and maybe some slaves building a golden information pyramid to represent devolved sheeple.

    I think you can have a commodity back currency, but I also believe you can just use a legal note pad to keep track; if your community is small enough. Once people are bartering again, by necessity, this may well be a moot point. The obvious may be re-learned and re-instated.

  38. Chris May 20, 2006 3:02 pm

    That’s what I think. I think money is necessary to have a complex society where there is large population so that people can specialize and get paid something that can be traded for things they need. (That way, there is no need to find a person who has what you want to obtain and wants what you have give in return - multiple times, every day). Gold is the best thing for this purpose.

    To me, a very important difference between fiat and commodity currency is that fiat is based on promises and commodidities have value in themselves. Financial promises can be made endlessly in any amounts, and can be broken without any recourse for the person who loses out (sometimes you can sue, but in reality this is not practical for average people). One great thing about commodity currency is when you realize you’re in a time when the financial promises are getting shaky, you trade in currency for the commodity, and don’t have to worry about losing the value you have saved up. Gold is the best commodity for this purpose, in a complex society. Oil backed currency is much less convenient. (Imagine you want to convert your fiat-promises-bank account to something tangible, and you had $10,000 in the bank - that would convert to about 14 ounces of gold, or about 150 barrels of oil - so the gold would be far more preferable most of the time, again assuming complex society continues on. I’ve heard suggestion of a water based currency on the Jim Puplava show. That would be so inconvenient - for example, Would you ever convert all your fiat money in for water? How much would you get, and what would you do with it? What about people just collecting rain water and bringing it to the bank for currency? Because of the inconvenience, if the currency was water “backed”, average people would not be able to reject the fiat-promises and take possession of the commodity water. The banks would know this and would feel no need to limit printing or the reserve ratio of fractional banking, and people would end up with the same fiat currency problems.)

  39. the stranger May 20, 2006 4:15 pm

    Yeah, good points. I’ve given some thought to various commodity backed currencies and it seems you might end up in the commodities market. The insidious factor embedded in fiat is two sided. First is the theft, second is the misallocation of resources (perhaps misanthropists reallocation). It’s pretty ingenious too be able to steal from someone without having to touch them; without their awareness of the crime. But to be able to finance the insanity of war is just salt in the wound.

    Hey, I have a commodity baked currency. I bought a hundred Liberty Dollar (10s) before they went to the 20 base. The Liberty Dollar is spreading like wild fire – you’re supposed to spend em’ not save em’ – but I like the idea of putting a hundred ounces of silver in my pocket in an emergency; so I grabbed em’ up. I like reminding people to open a Goldmoney account too; digital commodity money. Very handy…

    I’ve really been trying wrap my head around barter and self sufficient life style. Next step up would be a self sufficient community and real money circulating within it. What are the basic businesses? If you had limited energy, where would you use it? Would the community center around basic food production and cottage manufacturing? …or a basic governing and hospital complex?

  40. the stranger May 20, 2006 4:18 pm

    -typo day; make that “backed currency” - our present currency is “baked”

  41. Chris May 20, 2006 4:58 pm

    Anyone understand the exotic derivatives, and how we will know when that disaster is about to hit us?
    My guess is these things are partly about that the financial guys have figured out how to stake a claim to anything on the planet that has value. I’ve heard they were about non-existent a few years ago and now there’s about 300 Trillion dollars of these things. Say in 5 years they have created 300 trillion dollars of “value”. That equals:
    -4.2 trillion barrels of oil, or 146 years supply for the world (80 Million barrels a day).
    - 12.5 Million tonnes of gold (at $750 an ounce)(total above ground gold is estimated at 180,000 tonnes, so that is 69 times more gold than has been mined in history, or 6250 years of annual production at 2000 tonnes per year)
    - 600,000,000 homes costing $500,000- every group of 10 people on earth gets a half million dollar home.
    - 300 Ronald Reagan aircraft carriers. (I think it did cost 1 Trillion).
    - $50,000 per person on the planet (including babies, etc)

    Suppose 50,000 people work in the banks and brokerages that produce these derivatives, and this value is distributed evenly among them over a period of five years, working an 80 hour week without holidays. That means their hourly wage is:
    Man hours worked - 50,000 people x 5 years x 80 hours a week x 52 weeks = 1 billion man hours
    Value created 300 Trillion
    Hourly value - $300,000 per hour, or 1.2 billion dollars per year salary for every one of those 50,000 people. Say a doctor earns $500,000 per year, then each wallstreet guy has been outputing the value of about 2000 doctors every year for the past five years.

    If this stuff has any bearing on the reality of derivatives, and total fiscal irresponsibility is proportional to the size of the conflict that ensues when the promises are not met, what does that mean for the future? That’s a lot of debt to liquidate.

    This to me looks like a pretty good piece of evidence that going off the gold standard maybe was not that good an idea.

    But, I have to admit I don’t understand exotic derivatives.

  42. ronandreas May 20, 2006 6:03 pm

    Couldn’t derivitives exist in conjunction with a gold(commodity) based currency? I think the real question is how to create a stable store of value that deserves trust. Commodities (gold included) haven’t been so stable of late, and not just in relation to fiat currencies but in relation to each other also.

  43. the stranger May 20, 2006 6:14 pm

    Derivatives - Buffet calls em’ financial weapons of mass destruction. I can’t say I understand them, unless I lie. But from what I can comprehend, they are exponential echoes of a fractional reserve monetary process that has become terminal. And to me, they are at the heart of the collapse. Inflation & Deflation, by monetary definition seem two sides of the same coin.

    Hyperinflation is set to occur as long as things keep running. One example of increased money supply - there are virtual silos of dollar denominated assets all over the world – off line so to speak. I think of it as stored energy like in a capacitor; our civilization like a circuit board. Not to mention continuous new supply

    Deflation (decrease in money) can occur if lending stops, for one example. And the Fed is trying to create more “liquidity” directly. But all those derivatives …seems to me nothing could evaporate quicker. Short circuit, Collapse.

    That’s my question from an earlier post (11). I see inflation from every direction, and like a pig in a python, some of it is already in the system. Inflation, turning into hyperinflation; and nothing on earth can stop it. Nothing except for a derivative triggered destruction of monetary blips, continuing into a derivative exacerbated implosion.

    This is the single scenario that brings the commodities bull, and civilization itself, to a halt. And I think a case can be made for this outcome even through technical analysis. By including the now irrefutable evidence that gold (and now all markets) have been manipulated and reevaluating the charts. Of course, I could be wrong.

  44. Chris May 21, 2006 10:01 am

    So the most obvious indicators will be rising prices, and we should expect it to turn into a Germany sort of situation, or much worse?
    How many years before, for example, food prices are ten times what they are now?
    I guess everyone agrees that people should be buying some store of food and necessities, and expect that at some point, for some period of time, nobody will not be able to purchase anything they need, likely because the currency will virtually disappear (hyperinflate into worthlessness), and trade will have stopped as a result?

  45. Rich May 21, 2006 10:13 am

    Derivatives are securities “derived” from other securities. By this point in time pretty much every bank/institutional loan on planet earth has been repackaged in to a derivative contract, say something like $10 billion of 8% interest 30 year mortgages could be a simple contract, and traded - several times over. The banks hedge these contracts, so they keep a “balanced” portfolio, which in effect halves the amount of liability inherent in a portfolio (which is then called the “notional value”). So JP Morgan Chase may have $150 TRILLION in total derivative liability, but the notional value would be $75 Trillion, the amount they could theoretical lose if they experienced a 100% derivative meltdown.

    These contracts are traded between major banks that are completely unregulated, the only way of getting any info on this is through the FDIC or the Comptroller of the Currency, banks like JP Morgan Chase have to report their trading activity because it represents a liability (apparently a “virtual liability” because there are no limits to these liabilities assumed by a bank backed by the FDIC).

    What is crazy is that the tax payer is backing this unregulated activity, that is where the crime is. How is it that these FDIC insured banks are allowed by our legislature and Treasury (government, etc.) to trade liabilities that are 10 times the annual GDP of the USA when the banks assets may be as little as $50 billion? JPMC is leveraging its assets (deposits) something like 750X - - which is insane.

    If you follow this so far then you realize that “fractional reserve banking” went the way of the DoDo some time ago. If you stripped JPMC down to its true value I would guess that they have been allowed to lend/trade on their asset base at something like 2000 times their real value!! This is an educated guess. To look at it another way, for every dollar they have on deposit they are creating an additional 2000, from which they derive standard banking fees that represent profits.

    Hopefully someone who knows a lot more about derivatives can jump in and comment on this, I’ve just picked up knowledge on this in the past 6 years of researching.

    Of course one of the most intriguing thing about these trades is that in the week prior to 9/11 there was a huge spike in trading, which suggests that former spooks at a high level, now in the banking industry, had foreknowledge of what was about to happen. Of course no one has ever been made to answer for these extraordinary trades even though they are a part of the public record now - - a real smoking gun on 9/11.

    Anyway, enough already. Bottom line is derivatives are a ticking time bomb. They are also a symbol of just had privately controlled our system really is, and how steeped in secrecy and misinformation. When you peel back the final layers the entire system is set up to be backed by us serfs, we pay for its mistakes, but the upside is syphoned off by the banks through invisible channels. Its amazing how the deviant mind has evolved a perfect system of stealing from the masses without more than 1% working out what is going on!!!!

    Cheers Rich

  46. the stranger May 21, 2006 2:05 pm

    Well put guys. But I don’t know what can be obvious anymore; all information is suspect. Aside from blocking punches and dodging cars, I’ve tried to disable automatic responses. Knowledge of the Weimar hyperinflation is just one tool – how does it apply to our situation?” So many puzzle pieces.

    The trades prior to 9-11… now there’s a telegraph from past to present. Even the photos don’t fit the story. I figured crashing planes were partly to get people out, before computer sequenced charges activated.  …an inside job, by the well connected.

    Good derivative synopsis Chris and Rich; the explanations on derivatives here may be useful to the person dropping in for a quick read. In a few summaries, perhaps they can conclude what we did trying to demystify them; they’re real and they’re bad, an economic Sword of Damocles.

    2000 gold shouldn’t have had to be bad, and probably could have even been good. But it will probably signal yet another three-alarm derivative fire.

  47. ronandreas May 21, 2006 2:09 pm

    We have been told of the pension guarantee corporation scam by the mainstream media. Taxpayers will fund the pension liabilities of many corporations. This is the current version of the S.+L. scandal.
    Under what mechanism do taxpayers have liability for failed derivitives?

  48. RIch May 21, 2006 4:41 pm

    ronandreas, the FDIC insures your assets at FDIC participating banks. But derivatives are unregulated, just reported to the FDIC.

    So in reality if JPMC crashed due to irresponsible derivatives trading then the FDIC would bale out the banks depositors up to $100,000 a piece (or is it now $75,000?).

    Bottom line is banks like JPMC and Citi are now to big to bale and too big to fail, they are at the center of the globalization and the world economy. They are so tied to the wellbeing of the USA that if they catch a cold we all die of the flu. The elites that run these banks have their hands in all kinds of cookie jars, for instance just think about how many boards these banks sit on of the Fortune 1000. In the big business world you either bank with JPMC or Citi, those are the two big hitters. Between them they are at the center of anything important.

    They are original members of the Fed and have the only seat on the Fed Board from a member bank. They are dynasties, held publicly, but with large blocks held by the old establishment. If you want to understand where the decisions about the world emanate from you don’t need to look much further than these two banks.

    Effectively they can hold a gun to the head of the US government and force the government to do whatever is necessary to further their agendas - not that they need to use a weapon (like derivatives) - because the establishment is so co-opted in to the agenda that the unfolding new world order is more or less uncontested.

    But don’t get me started.

    Cheers Rich

  49. the stranger May 21, 2006 4:52 pm

    And it may not matter anyway, the taxpayers are broke. If the US downsizes, should the taxpayers apply for other countries? Or we could do a merger with Mexico, and layoff (eliminate) the less productive taxpayers.

  50. the stranger May 21, 2006 6:01 pm

    From the bullnotbull home page, good read…

  51. Rich May 22, 2006 6:18 am

    Yeah, Jim Willie is pretty good at summing it up. He doesn’t see a major jump in gold beyond $1,100 though, which could happen once the crazy trading really starts.

    I think the most pertinent comment though is his theory that the US Government seems to be creating chaos in order to leverage it’s core competency, the military. We are living through an evolved re-enactment of British Mercantilist Empire Building, with many strange twists (primarily Peak Humanity).

    Cheers Rich

  52. Chris May 22, 2006 8:36 am

    I think the bad financial situation was not about greed gone wild, but about intentionally causing chaos, and I don’t think the people at the center of that are Americans, but rather are the NWO people. I think the twits in the whitehouse in fact intend on destroying America because it is an impediment to building the NWO. Everything they do suggests they want to destroy America (destroy the military, destroy goodwill toward the US, bypass judicial system, install totalitarian systems of control including Total information awareness and the Verchip, take control of world oil in order to block other countries’ access to energy and thereby hold them down, much like what Britain did to Germany before the 14-18 war).

  53. ronandreas May 22, 2006 8:41 am

    Alot of interesting notions(peak humanity).
    Are we at peak liquidity?
    Is the U.S. empire past peak influence?
    Is the world economy past it’s peak growth for this cycle?

  54. the stranger May 22, 2006 5:09 pm

    Ron, Peak-influence is dead-on. And to adapt Kunstler, “Peak-influence isn’t the end of US influence (quite yet), it’s US influence everywhere. Past Peak-growth? All the real economists think so. But it’s the Wyle E. Coyote economy I guess, waiting to fall when everyone to look down.

    Peak-oil’s been a project for a while but I’ve been thinking about Peak-humanity since Rich mentioned it a while back. I’ve said here, “I have hope for humanity” but I didn’t mean all of us. Ripe for a culling, we are.

    And “government seems to be creating chaos in order to leverage its core competency” that though stuck with us all it seems (competency and strength may be interchangeable here). I think that theory applies; and yet… Here’s a flip-side thought from Brice I can’t get out of my head; “Thus, it seems to me, the Catch-22. In order to protect dollar hegemony, the US military must be used as enforcer. Yet, wars are expensive, and given the unwillingness of US politicians to pay as they go, inflationary- consequently destructive to dollar hegemony. The very act of protecting dollar hegemony reduces the value of the dollar.”

    Yeah, many strange twists indeed.

  55. Rich May 24, 2006 5:54 am

    Here’s one outcome from $650 gold already (this email just was sent to me from family in England, one of those email letters you add your name to and send on).

    Dear friends who care about our earth. Judge for yourself if you want to take action. In the Valle De San Felix, the purest water in Chile runs from 2
    rivers, fed by 2 glaciers. Water is a most precious resource, and wars will be fought for it. Indigenous farmers use the water, there is no unemployment, and they provide the second largest source of income for the area. Under the glaciers has been found a huge deposit of gold, silver and other minerals. To get at these, it would be necessary to break, to destroy the glaciers - something never conceived of in the history of the world and to make 2 huge holes, each as big as a whole mountain, one for extraction and one for the mine’s rubbish tip.The project is called Pascua Lama. the company is called Barrick Gold. the operation is planned by a multi-national company, one of
    whose members is George Bush senior. the Chilean government has approved the project to start this year, 2006. The only reason it hasn’t started yet is because the farmers have got a temporary stay
    of execution. If they destroy the glaciers, they will not just destroy the source of specially pure water, but they will permanently contaminate the 2
    rivers so they will never again be fit for human or animal
    consumption because of the use of cyanide and sulphuric acid in the
    extraction process. every last gramme of gold will go abroad to the
    multinational company and not one will be left with the people whose
    land it is. they will only be left with the poisoned water and the
    resulting illnesses. the farmers have been fighting a long time for
    their land, but have been forbidden to make a tv appeal by a ban from
    the ministry of the interior. their only hope now of putting brakes
    on this project is to get help from international justice. the world
    must know what is happening in chile.
    the only place to start changing the world is from here. we ask you
    to circulate this message amongst your friends in the following way.
    please copy this text, paste it into a new email adding your
    signature and send it to everyone in your address book. please will
    every 100th person to receive and sign the petition send it to
    noapascualama@yahoo.ca to be forwarded to the chilean government.

  56. the stranger May 24, 2006 8:57 pm

    True. It’s easy to forget the environmental side of the story. Sad news; and no doubt just the beginning.

  57. Chris May 26, 2006 11:00 am

    Gold people consider Barrick a bad investment because of its hedging.

  58. Rich May 27, 2006 10:37 am

    Yeah, there’s a lot wrong with Barrick, they epitomize most of what is wrong in the world, including who owns them, who is involved with management and how closely they are tied to the elite, etc.

    They are part of the problem not the solution. Having said that, gold mining is a dirty business no matter where it takes place, Barrick just happens to be like a major oil company in the way it goes about its business, destroying indigenous areas, polluting with impunity, becoming involved in politics (corruption) in order to secure land rights, etc. This has been going on for decades - at least most of the juniors (exploration companies) are less offensive in how they go about extracting their gold.

    Like every industry and every manufacturing/extracting process, there are good companies and bad companies.

    About 3 or 4 years ago Barrick was actually making money by selling gold forward at lower and lower prices!! Absolutely corrupt and definitely should’ve been illegal! GATA was heavily involved in analyzing what was going on. Most of the hedging activity by the majors has stopped because the rise in the POG made selling gold short a very dangerous option.

    Cheers Rich

  59. Chris May 27, 2006 1:19 pm

    The Newmont website refers to an International Cyanide Management Code, whose website is http://www.cyanidecode.org. It sets standards for handling cyanide in all aspects of gold mining from beginning of the project and including closure/decommissioning of a project. Companies can voluntarily adhere to, become signatories to it, and must meet third party audits.

    According to the website, the Code was developed by groups including the United Nations Environmental Program.

    Barrick is a signatory to the code, and a list of which of their mines will adhere to the code is given, but no Chilean projects are mentioned. (and even if Pascua-Lama were on the list, that still doesn’t address all the reasons to stay away from Barrick).

    The site says “The objective of the Code is to improve the management of cyanide used in gold mining and assist in the protection of human health and the reduction of environmental impacts.”

  60. Rich June 1, 2006 5:42 am

    Sheesh, look at the sell off in gold, now down to $623! That is a big drop, bigger than expected. We could be in for one of those 6 month pullbacks where we just have to sit and wait, kind of like it was in 2003-4?

    Cheers Rich

  61. Chris June 2, 2006 9:07 am

    Goldman Sachs estimated gold would hit $800 this year, then with this price drop they put out a 2006 price of $635 and long term $425. Some say GS wanted to sucker in weak longs, short gold, stop out the longs and buy back that extra supply to cancel out their position, and thereby push gold lower. Looks like it was an effective strategy on their part.
    A GS guy is running the Treasury now, should make for interesting price activity and BS on gold.

  62. ronandreas June 3, 2006 8:25 am

    The best case made for a coordinated intervention explanation of the current market is at this link


  63. Ron June 6, 2006 6:27 am

    Demand for gold at 250 dollars an ounce is high. Demand for gold at 700 dollars an ounce is lower. More sellers than buyers. Supply and demand, a law of economics that works.

    Gold will end up at some 400 dollars per ounce and lower. The price of oil will also drop precipitously. Too few dollars chasing high priced goods. Too much tax on peoples income is a bad omen.

    Quit driving so much, quit buying so much. Save your money. buy at rummage sales.

    until gold and silver coin become US minted legal tender, chaos prevails.

    don’t buy goods made in china, buy goods made in the USA. don’t borrow money you can’t pay back. the banks stand to lose more than they can bear.

    “If only we had some potatoes, we’d be rich.” -the words of a woman who spent some time at Auschwitz in 1941.

    The old folks are still spooked by October 29, 1929. They don’t spend their money like it’s going out of style.

  64. Chris June 6, 2006 2:42 pm

    If gold ever hits 400, it will not be in US dollars, it’ll be in ameros or some global fiat rubbish (and the US dollar will be gone, as per the plan).

  65. No Eye See (+_+) June 8, 2006 3:05 am

    $2,000 is conservative estimation only!
    It will be hit right around the corner (~2 years)!

    This is my believe, and that’s why I fully loaded with physical bullion and Maple coins under the price of $300.

    Price below 500 is history, and won’t be seen again forever!

    Only one thing not sure…….how high will be the top of gold!! No one know, however the crowd around us will tell us the answer at that very moment!

  66. ron June 9, 2006 11:55 am

    An interesting story on Pascua Lama and Barrick.

  67. Danny June 13, 2006 9:08 pm

    Say what you want guys, gold just crashed.

    Believe me, I wish gold goes up to $2000, like some of you’ve suggested, but lets not be overly optimistic. Frankly, I doubt it’ll get to $1000 anytime soon.

  68. 4321bob June 25, 2006 10:23 am

    $5000 gold is coming, like it not.

    This minor correction has not changed to bull market in gold and other commodities, the overall trend is up.

    The only negatibe impact of gold prices rsing is that some politically unstable governments may get greedy and nationalize their country’s gold mines.

    Until then, buy gold and gold stocks.



  69. Chris June 28, 2006 3:33 pm

    Gold may have crashed, but drops are to be expected in a bull market.

    Not many gold people I’ve heard of actually want gold to go up really high, they just state that the financial conditions will force gold to go up, and you can either ignore it and lose, or preserve your financial health by investing in it (and other metals and commodities).

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