Of dramatic drop in gold price

[Mikej]

Anybody know what's going in the good market? Down 30%- are we heading for a dollar bull market?

[CunegoFan]

Anybody know what's going in the good market? Down 30%- are we heading for a dollar bull market?

The nutjobs switched to stockpiling ammo instead of soft, shiny metal.

[Ralph]

I see no reason why it has any value at all beyond it's industrial use, or whatever demand is from jewelry manufacturing.

[mtechnica]

The nutjobs switched to stockpiling ammo instead of soft, shiny metal.

As someone that has recently shopped for 22lr I think this is sadly accurate

[christian]

FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN. FRN.

There, just wanted to get that out there.

[texbike]

Hmmmm. Perhaps Faux News Corp decided to short gold futures?

Texbike

[Vinci]

As someone that has recently shopped for 22lr I think this is sadly accurate
I'm convinced that that is an artificial shortage.

As long as it is scarce, they can charge double the price and it will fly off the shelves.

[SPOKE]

If you google a little bit you'll find a bit of info pointing a finger at some manuplitatuon by the Fed Reserve.

[sales guy]

It's Obamas fault. It always is. Just like he cause WW2! Great Depression, world war 1, civil war, war of 1812, faked the moon landing and of course, blew up the wtc on 9/11.

[MadRocketSci]

Fed tapering

[christian]

As someone that has recently shopped for 22lr I think this is sadly accurateThis would be for when the paper targets attack? :)

[gdw]

30%.... yawn.
Blue fin tuna went for over $6600 per lb last year at the first auction at Tokyo's Tsukiji market last but this year only averaged a little over $600. As to how that relates to the dollar's strength, 22lr sales, FOX News, or cycling.....

[54ny77]

Scotch tapering?

Christian I almost choked from laughing at that post of yours.

Fed tapering

[crownjewelwl]

bitcoin's where itz at

[GuyGadois]

Greater Fool Theory (http://en.wikipedia.org/wiki/Greater_fool_theory)

The value of gold is based solely on what someone will pay for it. There is little true 'value'.

GG

[MattTuck]

bitcoin's where itz at

Yep. Got this email earlier.

https://lh4.googleusercontent.com/-YM0ysvzq_A8/UsslbmXvTdI/AAAAAAAAGNY/oQeFODcZrlA/w815-h770-no/Picture1.png

[MattTuck]

Anybody know what's going in the good market? Down 30%- are we heading for a dollar bull market?

A dollar bull market? Maybe. But given the nation's debt, lack of political will to reign in spending, lack of political leadership, etc... I wouldn't bet on it.

Productive assets are probably a better investment than gold. But it is hard to flee the country with a chain of dry cleaners.

[54ny77]

Damn I feel old. I remember when Glocap first started, it was a dude with a great email listserv. And here we are, years later, on a bike forum seeing a headhunter ad for a make-believe currency trader. Wow. Yep. Got this email earlier.

https://lh4.googleusercontent.com/-YM0ysvzq_A8/UsslbmXvTdI/AAAAAAAAGNY/oQeFODcZrlA/w815-h770-no/Picture1.png

[MadRocketSci]

gold isn't really an investment, it's a store of value when you're worried about the value of currencies....

[jds108]

30%.... yawn.
Blue fin tuna went for over $6600 per lb last year at the first auction at Tokyo's Tsukiji market last but this year only averaged a little over $600. As to how that relates to the dollar's strength, 22lr sales, FOX News, or cycling.....

Fukushima - nothing more or less IMO.

[AgilisMerlin]

http://vimeo.com/26473172

[verticaldoug]

Fukushima - nothing more or less IMO.

in 2008, the price was 55,400 for first blue fin. 2009 107,000. The last couple of years was a just Sushi-Zenmai pushing up the price to make a splash in the news. You can think of it as the owner buying prime advertising across Japan as the newspapers, and other media all report on his Sushi Chain purchase. Sushi Zenmai just decided the advertising isn't paying off.

If you think the price decline is Fukushima related, you'd see the price of blue fin decline over the year. It isn't happening. Most of the blue fin is not caught locally anyway.

The fact is the Fukushima area is better known for Sanma (Mackeral). Because of lower catches, the price of Mackeral has shot up.

[tiretrax]

http://vimeo.com/26473172

Cool.

This morning, someone told me there's a shortage of .22 bullets, but I could swear I saw 500 round boxes for $10 just before Christmas.

[oldpotatoe]

It's Obamas fault. It always is. Just like he cause WW2! Great Depression, world war 1, civil war, war of 1812, faked the moon landing and of course, blew up the wtc on 9/11.

Thought that was Dubya.

[CunegoFan]

Thought that was Dubya.

Obama is just carryong on Dubya's work.

http://i.imgur.com/zzbuCSC.jpg

John Jackson and Jack Johnson

The joke is on those who thought there was a difference.

[sg8357]

Bretton Woods II will adopt Helium3 as the new worlds reserve currency.

[witcombusa]

It's Obamas fault. It always is. Just like he cause WW2! Great Depression, world war 1, civil war, war of 1812, faked the moon landing and of course, blew up the wtc on 9/11.

You're on the right track here, but Barry can only get "credit" for some of the more recent "social engineering" events.

[witcombusa]

The Fed bubble is just about ready to go boom. When it does, you just watch what the gold/silver metals do....

[cash05458]

http://www.tate.org.uk/art/artworks/manzoni-artists-····-t07667

[handsomerob]

Cool.

This morning, someone told me there's a shortage of .22 bullets, but I could swear I saw 500 round boxes for $10 just before Christmas.

$10 bricks may have been a Black Friday only special, but good luck if you weren't waiting in line when the doors opened. Around here (Memphis)... We have scalping bastards that wait for Walmart/Sports stores shipments to come in and buy it up (even with 3 box maximums)

[BumbleBeeDave]

. . . that Ahneida is Mike Sinyard in real life and boy, are YOU in trouble! ;)

BBD

FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN FRN. FRN.

There, just wanted to get that out there.

[1centaur]

Given the inherent supply and demand for industrial and jewelry gold supports a lower price, the "excess" is a function of the marginal buyer/seller and the momentum traders who exacerbate the moves. The stories that support buying gold for investment purposes remain the same, but the marginal buyer/seller goes through cycles of belief. When Europe was blowing up and the Fed was ballooning its balance sheet, two of the rationales for buying gold were in play, the hedgies were trying not to get caught believing in real recovery and we were off to the races. With European blowup a distant scenario and the Fed balance sheet not creating any inflation other than in financial products, the scare is off the table just as capacity is coming on line and the stock market is delivering great returns. Momentum goes the other way.

Gold is a trade, not an investment, until some really bad thing happens.

[sworcester]

30%.... yawn.
Blue fin tuna went for over $6600 per lb last year at the first auction at Tokyo's Tsukiji market last but this year only averaged a little over $600. As to how that relates to the dollar's strength, 22lr sales, FOX News, or cycling.....

That's a fukishima issue, or it should be

[sworcester]

....If you think the price decline is Fukushima related, you'd see the price of blue fin decline over the year. It isn't happening. Most of the blue fin is not caught locally anyway.

The fact is the Fukushima area is better known for Sanma (Mackeral). Because of lower catches, the price of Mackeral has shot up.

It is a world migratory species. The Bluefin caught off of California this year showed alarmingly high levels of radioactive contaminants. And Japan is in their migratory path.

[mtechnica]

I'm convinced that that is an artificial shortage.

As long as it is scarce, they can charge double the price and it will fly off the shelves.

I don't believe that there is a scarcity, as far as I know the ammo companies are making more or less the same amount, it's just that there's a run on ammo right now and the reasons are interesting. I think it was somewhat tongue in cheek saying that nut jobs are buying ammo instead of gold and that's causing the price of gold drop, but it's there's also some truth to this as some of you may recall the price of gold and silver increasing steadily after ~2008. The nutters were indeed buying up physical metals because they feared economic collapse and it raised the prices. But (and I could be off base) I'd assume the recent drop is because of increased confidence in the economy and lowering demand for physical stores on large scales. I believe the price of gold is very reactionary and mostly based on perception as well as short term economic factors.

[SlackMan]

RE the comments referring to those buying up ammo as "nuts" or "nutters:". There are frequent suggestions by gun control advocates to tax ammo heavily or attempt otherwise to increase its cost by requiring that it contain serial numbers. Given the likelihood that ammo will be very expensive in the future, it seems quite rational to buy now while it is lower cost. What am I missing?

[OtayBW]

There's no real 'scarcity' per se; only differences in cost of production. Years ago, they wouldn't even think about mining the 'invisible gold' on the Carlin Trend of Nevada, for example, but better extraction technology has changed that and it's now the richest gold source in North America. Cost effective gold is now being produced in increasingly more remote places all the time and that will continue.

[BCS]

This would be for when the paper targets attack? :)

Don't forget about the squirrels! (Picked up a case of 5250 rds for 399 today)

[Ken Robb]

Don't forget about the squirrels! (Picked up a case of 5250 rds for 399 today)

That ought to last you a week or so. :)

[CunegoFan]

RE the comments referring to those buying up ammo as "nuts" or "nutters:". There are frequent suggestions by gun control advocates to tax ammo heavily or attempt otherwise to increase its cost by requiring that it contain serial numbers. Given the likelihood that ammo will be very expensive in the future, it seems quite rational to buy now while it is lower cost. What am I missing?

When everyone does this then price skyrockets and all of a sudden a brother gotta pay a dollar a round for his AR-15. So he, like everyone else, decides he'll just shoot with 22LR instead and all of a sudden there are no 22 bricks to be found at the Walmart. Soon everyone is paying as much for ammo now as they fear the gubmit will force them to pay in the future.

[Steve in SLO]

Good thing I'm investing in titanium.

[Ahneida Ride]

The value of gold is that is can't be counterfeited.
which is one of the definitions of money.
It takes massive work to make gold ....
it take mere keystrokes to make frns.
Most frns are not printed, they are just typed into a computer.
Over 95% are just computer entries.

Our nation private central private banking system counterfeits
85 Billion frns per month. When these frns hit the commercial
banking system, "fractional" reserve will be practiced and an
additional 9 Trillion frns can be counterfeited. Interest can be collected
on 10 trillion frns all created by typing then into a silicon chip.
This process is called frnacation.

The frn has lost about 98% of it's purchasing power since 1913,
the inception of the frn.

Compare that to gold. In 1913 gold was 20 dollars per oz.
frns could be converted into dollars in 1913.

So 20 1913 frns are now worth 0.02 x 20 = 4/10 of a frn

while one 1913 oz of gold is worth 1 x 1235 frn = 1235 frns

So there you have it (in 100 years) 4/10 of a frn vs. 1235 frns

in 1913 20 frn = 20 dollars = 1 oz gold

Just Google the fed reserve system publication ... Money Market Mechanics
The private federal reserve system was started in 1913.

[sitzmark]

RE the comments referring to those buying up ammo as "nuts" or "nutters:". There are frequent suggestions by gun control advocates to tax ammo heavily or attempt otherwise to increase its cost by requiring that it contain serial numbers. Given the likelihood that ammo will be very expensive in the future, it seems quite rational to buy now while it is lower cost. What am I missing?

All hyperbole to engineer fear and manipulate the heard. "Heavy tax" is a euphemism for a few $0.01s per bullet (maybe). Time to ignore the goofballs on the left and right and think rationally.*

*Short term there will be a run on ammo and shortages because of the stupidity, but it will "equilibrate" as the profiteers move on to the next party.

[Vinci]

I don't believe that there is a scarcity, as far as I know the ammo companies are making more or less the same amount, it's just that there's a run on ammo right now and the reasons are interesting. I think it was somewhat tongue in cheek saying that nut jobs are buying ammo instead of gold and that's causing the price of gold drop, but it's there's also some truth to this as some of you may recall the price of gold and silver increasing steadily after ~2008. The nutters were indeed buying up physical metals because they feared economic collapse and it raised the prices. But (and I could be off base) I'd assume the recent drop is because of increased confidence in the economy and lowering demand for physical stores on large scales. I believe the price of gold is very reactionary and mostly based on perception as well as short term economic factors.
What I meant by "scarcity" is just that it's difficult to find, not that it doesn't exist. I am certain that it exists somewhere, but it just seems less likely to me that a minority of people are buying up THAT much of the total production (assuming it hasn't gone down) of 22lr consistently. I mean, how long could people keep up that kind of buying before they either ran out of money or space? Even if it was all resellers buying it up to jack up the price and flip it, we should still see a lot of availability, just at a higher price.

As for the nutters buying up physical metals, I think there might be something to it when those nutters include all the world's central banks. It seems like everyone (or at least the big guys) are snapping up all they can get their hands on. Countries are repatriating (or at least trying) national reserves that were held abroad as well.

As for the price, that is so heavily manipulated that it seems silly to try to assign a logical reasoning to it. My guess is that whenever the price takes a dump, someone with a lot of pull wanted to make a big purchase and preferred a discount price.

Obviously, this is a lot of conjecture on my part, but I have to assume that things at this level don't happen accidentally.

[93legendti]

Thought that was Dubya.


Nice.

Too early..the next election isn't till Nov 2016...

[echelon_john]

Didn't realize Divine Cycling Group was in the gold and tuna businesses as well. Man, they're EVERYWHERE.

[93legendti]

This would be for when the paper targets attack? :)

Varmints, small game, smaller hogs, coyote, deer if placed well, even personal defense, if necessary.

[slidey]

Didn't realize Divine Cycling Group was in the gold and tuna businesses as well. Man, they're EVERYWHERE.

Divine intervention indeed!

[avalonracing]

I would like to compliment all of the people that posted to the first page of this thread. Some funny stuff there! :hello:

[Rueda Tropical]

The Fed bubble is just about ready to go boom. When it does, you just watch what the gold/silver metals do....

Thats what they said when the last gold bubble popped. Turns out investing in the collapse of civilization has been a bad bet.

[Ralph]

Thats what they said when the last gold bubble popped. Turns out investing in the collapse of civilization has been a bad bet.

True...Also investing in other right wing propaganda hasn't worked too well either.

http://www.factcheck.org/2009/06/500-percent-ammo-tax/

Can't think of any reason why gold should trade above it's industrial or jewelry use value. Inflation is almost non existent in US 1-2 %, our deficit spending is coming down....currently about 1/2 what it was in depth of recession, interest rates are still historically very low, and even Europe is coming out of recession. On the whole....things are improving rapidly around the globe...economically speaking. Politically things are a mess in other places....but what's new or different about that?

[MadRocketSci]

you've watched them bike in circles around socialist countries....now, read their crazy-ass? predictions for 2014!!!

http://storage.saxobank.com/TradingFloor/TF_OutrageousPredictions_2014.pdf

[goonster]

http://storage.saxobank.com/TradingFloor/TF_OutrageousPredictions_2014.pdf

This is satire, right?

Otherwise, I'd short their positions.

[MadRocketSci]

This is satire, right?

Otherwise, I'd short their positions.

no, qualitatively speaking, i think this reflects their views. The satire part might be in the quantitative part, as i have a hard time believing that gold will go to 1800, amzn, nflx, pandora, twitter, and yelp will all be cut by 50% on average, dollar/yen goes to 80, french index falls 40%, 10 year treasuries go to 1.5%. Maybe things head that direction but a bit "outrageous" to predict to those levels in one year....

take what the markets give you, stay hedged, and short away if you're feeling confident....

[MadRocketSci]

a custom spectrum in gold terms, starting about the 2005-6 timeframe, has gotten (much) cheaper most of the way since. In $ terms, not so much. just sayin....

[verticaldoug]

India which is the largest consumer of gold imposed a tariff on imports starting in 2013. (They were concerned about the strain on their balance of payments). To some extent this choked off real demand. Add in speculators trying to exit (ETF) and you get the sell-off.

The Saxobank outrageous predictions aren't all that outrageous. When you look at the currencies (BRL, TRY, ZAR, INR, IDR) have all depreciated by 10-20% against the dollar. TRY 1.8 to 2.15, ZAR 8.5 to 10.5, INR 54-62 (although trough at 70) etc.

The worry about deflation isn't outlandish when you look at the decline in gold or even the Japanese situation. They have been fighting deflation/disinflation for 20 years and even with the yen going from 80 to 105 against the dollar, inflation is barely approaching 2%. The FED is rightly worried about deflation in the system. The Taper is probably a response to the money not creating the right inflation and only benefiting real estate/ equity class.


The real reason for some of these outrageous predictions is just drum up some business but also to highlight our ability to be stupid. The last 20 years or so of bubbles and busts should prove that point out.

If you want to read a funny book on Wall Street, read 'The Money Game' by Adam Smith. It is from the 60's and 70's but still hilarious as human greed and hubris never changes. The best line in the book is about trying to corner the Cocoa market. When Elephants dance, mice become pate'.

[cfox]

Verticaldoug is correct. Deflation is near impossible to fight. Inflation can be dealt with. It can be costly, but it can be dealt with. The vast majority of the money printed by the Fed has wound up...back at the Fed as excess reserves. Excess reserves have basically zero inflationary/multiplier effect. When QE does finally end, the Fed has several ways to mop up the reserves before they blow out into the money supply. Those ways have a price and political problem, but they will keep inflation in check. Fears of crazy inflation are misguided.

[R2D2]

I was amazed watching a science program the other day when it stated that the entire supply of gold would fill 3 Olympic sized pools.

I also like to watch the Gold Rush reality shows and have concluded there's not much money wild catting for gold.

[SlackMan]

True...Also investing in other right wing propaganda hasn't worked too well either.

http://www.factcheck.org/2009/06/500-percent-ammo-tax/



That's stale information from 2009. From 2013:

"Called the “Gun Violence Prevention and Safe Communities Act," the bill sponsored by William Pascrell, D-N.J., and Danny Davis, D-Ill., would nearly double the current 11 percent tax on handguns, while raising the levy on bullets and cartridges from 11 percent to 50 percent." http://www.foxnews.com/politics/2013/08/26/house-dems-seek-to-tax-gun-owners-with-new-bill/

True, it's not 500 percent, but 50 percent seems pretty high.

[unterhausen]

I don't care too much about gold prices, but it was annoying when the geniuses that were buying gold decided that silver was a good speculative bet. There was a 50 cent haircut the other day, still has a ways to fall. Soon after I first started building frames, the Hunt brothers decided they could corner the silver market. That was annoying. And I lived in a place where the silver suppliers kept their prices high long after that bubble had burst because they paid so much for the stuff, they were going to sit on it until somone really, really needed it. That was a major inconvenience.

I don't know how you could look at a long-term chart of precious metals and decide it's a good investment, there are numerous bubbles. The stuff is gradually worth less over time, it almost goes without saying. In any event, the price will revert to the mean, exponential increase in price almost always results in an exponential decrease in price.

[zap]

I don't know how you could look at a long-term chart of precious metals and decide it's a good investment, there are numerous bubbles.

Declines equals investment opportunities. Gold and Silver will always have value.

[Mr. Pink]

Warren Buffet on the subject of gold:

1. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

2. “The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.”

3. “Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

4. “I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils (XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.”

5. “The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.”

6. “What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As 'bandwagon' investors join any party, they create their own truth — for a while."

7. “I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that."

[goonster]

The worry about deflation isn't outlandish when you look at the decline in gold or even the Japanese situation. They have been fighting deflation/disinflation for 20 years and even with the yen going from 80 to 105 against the dollar, inflation is barely approaching 2%. The FED is rightly worried about deflation in the system. The Taper is probably a response to the money not creating the right inflation and only benefiting real estate/ equity class.
Agreed on all this, but I disagree with their predicted political armageddon. After the last election, Germany is less likely than ever to change course (e.g. toward wealth tax or Euro-scepticism), and I don't see the Ukip consolidating gains.

[Ralph]

As usual, Buffet has it right. Buy his advice thru his stock. BRK-B is cheapest way.

[Llewellyn]

Warren Buffet on the subject of gold:

1. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

2. “The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.”

3. “Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

4. “I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils (XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.”

5. “The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.”

6. “What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As 'bandwagon' investors join any party, they create their own truth — for a while."

7. “I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that."

These are the wisest words I've read on the subject

[jasonscott77]

Wise words, yes. But he's dancing around the question.
How would Buffet rate the ride gold as compared to steel or ti?

[54ny77]

have golden 2x4, will travel...

http://cdn.media.cyclingnews.com/photos/2003/apr03/athens/verdelle/mi_Roberto_Gaggioli_Monex_has_ridden_many_Twilight s_600.jpg

[Mr. Pink]

Heh, just had to bump after seeing this:

"Foul cankering rust the hidden treasure frets, But gold that's put to use more gold begets." ~William Shakespeare, Venus and Adonis

[witcombusa]

Say what you will but I find it a great time to invest in Gold/Silver. Buy in is low now and I'll put it up against the madness that is the Fed for the long run any day.