What I heard on CNBC regarding GOLD

[JIM F.]

A German banker (I think) made a statement that if all the gold backed securities paper were redeemed it would amount to more gold than has ever been mined, and his opinion was that the European central banks will start redeeming such paper causing a run on the precious metals. It was early this morning when this was broadcast.

 

I have never heard of such a thing, and don't see how gold backed securities can exceed all the physical gold, unless they are perhaps backed by futures derivatives. But if this is so, then mass redemptions could really have a serious market impact.

 

Comments?

[MBA101]

I read about something like this recently. There supposedly is more "paper" gold out there than what is available, perhaps as much as a 45-1 ratio. If people were to react to this at some point, it was explained that the buying power of physical gold would be 45X more than what it currently is in dollars.

 

If there is only a 1% chance that this comes to pass, isn't it worth having a few gold coins just in case one ounce of gold can buy what $50,000 can buy today? That is the way I am thinking. Doesn't hurt to have a gold coin collection of some sort.

[RWB]

A very common government strategy both before and after the Great Depression was the gold exchange standard. A country that had no gold of its own, bought the gold-backed currency of another, then used that as collateral for its own currency and for international loans. The effect was to further dilute physical gold by having the same quantity of gold pretend to be backing for many layers of fiat money and credits.

 

This also meant that any disruption in the original gold-backed currency, was amplified as the wave moved down the chain of claims.

 

[SkyMan]

...Comments?

 

This has been known for a LONG time. I doubt that it'll make much difference at all.

[Mark T]

Bubble - POP !!!

 

Just like the housing bubble and the dot.com bubble they all burst .

 

This ballon is very full .

 

 

[Walkerfan]

Gold WILL crash and when, not if, it does, it will not only happen but it will happen precipitously. I would NEVER buy gold under the current market conditions, although others would definitely disagree. The market cannot sustain this high price and it MUST correct itself and it will be in the very near future; I am guessing. There are far too many speculators of both high and low confidence for it to reach astronomical proportions. Just my 2 cents.

[mtnstyne]

Not really sure what is being referred to as gold backed securities but if you are talking about the various gold ETF's and such then I think the opposite is more likely to happen...meaning that the value of the ETF's would lose their value rather than actual gold going through the roof.

 

What exactly are we referring to as "gold backed securities"? Do any governments issue these anymore? Forgive me for being naive.

[History Student]

In the recent HEARINGS at the COMEX the EXPERT for the GOVY testified that all gold is LIKE fractional BANKING that they have LESS than one OUNCE of gold for every 100 claims on it.

 

You can read all about it do a search for the HEARINGS.

 

Hope that helps to be right on POINT.

 

I'm sure that G.A.T.A. has a lot of information on it also. See Bill Murphy therein.

They are controversial of course: but they have been right for TEN year in a ROW from $250.00 GOLD then to $1316.00 TODAY - a HELL of a BULL market: some say it will

hit 10 to 20 times the ORIGINAL price of $250.00.

 

[World Colonial]

At least in my lifetime, there has always been more paper claims to gold than the physical metal but absent a psychological trigger to cause a "run on the bank", there is no more reason to give it significance now than before.

 

Even though I am negative on the metals now, I'm not expecting a crash in gold, though that is a matter of perception. My current opinion is that in the deflation that I see, it will fall below $800 and possibly below the $680 low of October 2008, but not much more and much less than any other asset that comes to mind, possibly excepting high quality short term debt. I do expect silver to crash.

 

But even though I believe the metals will fall, it is not because I consider them overpriced because they are not versus many things. I believe they deserve to sell at some premium at the current time versus what they might have sold in the past because of the instability in the financial system. I just do not expect the price expectations of the metal bugs to happen in the near future.

[michael]

if i happen to buy gold this is how i likes it

[michael]

and my advices is if you buy gold

 

take physical possession of it

 

 

 

be it a numismatic gold coin or a bullion gold coin

 

 

[MBA101]

I do not understand why anyone would think gold would crash. There are more people on the planet than ever, and that number is increasing faster than we can mine the stuff. All governments of the world are printing money faster than Carl Lewis could run. Gold has been artificially priced forever ($20 an ounce from 1795 til 1933? please!). A bubble in gold will be when in the course of days, the price will skyrocket by unimaginable amounts (like back in '80) and then will not be able to sustain those levels. This run to $1300 has taken years, and gone little by little. We ain't seen nuthin yet folks. whether it gets to 2500 or 45000, there are no indications yet as to what this bull will actually hit.

 

Only time will tell, but we cannot keep printing money like this without consequence. And its not just us, its the whole world.

[physics-fan3.14]

I'm not going to prognosticate, but I really hope gold does come down considerably. Then I can add all those pretty PL gold coins to my collection that I can't afford right now.

[JIM F.]

Like these?

[physics-fan3.14]

Yeah, like those

[michael]

for the past 43+ years i have heard of many predicting gold falling and rising and soon to be the barbearic (sp.) relic

 

and maybe one day it might be true

 

but not today

 

[GoYankees]

Gold has been trending upwards for a decade.

.

[Mark T]

I do not understand why anyone would think gold would crash. There are more people on the planet than ever, and that number is increasing faster than we can mine the stuff. All governments of the world are printing money faster than Carl Lewis could run. Gold has been artificially priced forever ($20 an ounce from 1795 til 1933? please!). A bubble in gold will be when in the course of days, the price will skyrocket by unimaginable amounts (like back in '80) and then will not be able to sustain those levels. This run to $1300 has taken years, and gone little by little. We ain't seen nuthin yet folks. whether it gets to 2500 or 45000, there are no indications yet as to what this bull will actually hit.

 

Only time will tell, but we cannot keep printing money like this without consequence. And its not just us, its the whole world.

 

When the average Joe is out there buying up gold because everyone else is you have the same makings of a bubble like we saw in the stock and housing markets. I cannot predict how much higher gold will go but when it does sell off, and it eventually will, it will fall hard and fast.

Here is an interesting factoid. I sold my 1986 $50 proof Eagle in November of 2009 for $1750. Within a month after my sale they were going for a bit over $2000. At that time gold was under $1200 an ounce. Now with gold over $1300 an ounce the same coin is selling for around $ 1600.

 

[Mark T]

I'm not going to prognosticate, but I really hope gold does come down considerably. Then I can add all those pretty PL gold coins to my collection that I can't afford right now.

 

The price of gold has not affected the price of smaller denomination coins. It has barely moved the price of the $20 gold as well.

[MJ]

It's hard to think gold is in a bubble when SO many folks AND the media still does not understand it........... and thinks it's in a bubble! I'm also guessing that 95- 98% of Americans or so own ANY physical gold.

 

QE2 is fuel for sustained gold prices. The dollar will nearing a presipice soon.

 

Gold may come down if and when confidence ever comes back in equities and currencies. I firmly believe we are in a 20 to 25 year old gold cycle. Yes, gold will have very bad days in the future but nothing goes straight up.

 

I have had people tell me gold was over priced at $400

I have had people tell me gold was over priced at $500

I have had people tell me gold was over priced at $600

I have had people tell me gold was over priced at $700

I have had people tell me gold was over priced at $800

I have had people tell me gold was over priced at $900

I have had people tell me gold was over priced at $1000

I have had people tell me gold was over priced at $1100

I have had people tell me gold was over priced at $1200

I have had people tell me gold was over priced at $1300

 

I've bought gold at every level just like clockwork and I will continue to do so. I will continue to hear it's in a bubble each and every day. Most will be from people that don't own gold. I'm quite certain I will be hearing gold is in a bubble for quite some time. I will choose to ignore the noise and listen will my eyes and ears.

 

I do not own gold for appreciation. I own gold as financial insurance just like home, car and life insurance. Cheaper gold means cheaper insurance premiums to me. Please go down. I will not sell gold at any level. FYI- I'm not a gold bug and I've been actively trading most of my adult life. One day someone who thinks gold is in a bublle will be right, So far they have been all wet.

 

Do not trust advisors who do not own physical gold.

 

MJ

 

 

 

[Mark T]

I will used my 25 years of stock market trading to conclude this this has every indication of a bubble. I am and always will be my own advisor.

With that said no one can predict with any real accuracy when it will burst. I have no issues guessing that gold will most likely surpass $1400 an ounce over the next 6 months. I sold a lot of gold when it was $1200 an ounce, I won’t touch it here.

 

[RGT]

Here is an interesting factoid. I sold my 1986 $50 proof Eagle in November of 2009 for $1750. Within a month after my sale they were going for a bit over $2000. At that time gold was under $1200 an ounce. Now with gold over $1300 an ounce the same coin is selling for around $ 1600.

 

That makes me feel better. I sold mine (that I bought from the mint in 1986) a couple of months earlier than you for around $1500. Gold was around $1000 per ounce at the time and I saw no reason for the huge markup. Then I kicked myself as I watched the premium keep rising. You can't always sell at the top so I have no regrets. It would have been better if I had waited just a bit longer though...

[Mark T]

Here is an interesting factoid. I sold my 1986 $50 proof Eagle in November of 2009 for $1750. Within a month after my sale they were going for a bit over $2000. At that time gold was under $1200 an ounce. Now with gold over $1300 an ounce the same coin is selling for around $ 1600.

 

That makes me feel better. I sold mine (that I bought from the mint in 1986) a couple of months earlier than you for around $1500. Gold was around $1000 per ounce at the time and I saw no reason for the huge markup. Then I kicked myself as I watched the premium keep rising. You can't always sell at the top so I have no regrets. It would have been better if I had waited just a bit longer though...

 

 

They peaked around $2200 in late 2009, then they started to drop back to reasonable levels. I also purchased that coin in 1986 direct from the mint. I was a bit torn about letting it go but I don’t collect moderns so with gold moving up I thought it was time to sell. A few weeks prior to me listing the coin they were selling for $1650.

 

[jackson64]

Back to the original post and not prognosticating...

 

I don't believe either that a run on selling of securities will shoot gold's value through the roof. More likely is that organizations like the IMF, world bank and yada yada yada would step in and create a fiat global currency of some sort--I only say fiat because I don't believe that it will be backed by anything ( obviously not gold because there isn't enough). Just like the slight climb in the current DOW numbers ( which is really due to the Fed monetizing the debt and trying to draw the private sector back into the market so they can withdraw some of the billions they've printed)..it is all unpredictable and headed for a global solution..by 2025 things will be almost completely different than they are now with world and national economics..

[World Colonial]

I do not believe that gold is in a bubble, but I still think it will fall anyway.

 

I definitely agree that for those who are paying attention to it, which I still consider a minority of the population or even potential "investors", that there is excessive optimism. (Metal bugs are always bullish no matter what, even after a complete rout such as the 93% decline in silver prices from 1980 to 2001.)

 

Anecdotally, I do not believe the current metals environment even approaches the 1980 experience and price wise, absolutely does not even remotely resemble the recent stock market or real estate manias. The latter two were part of the larger credit mania which was the GREATEST EVER in the HISTORY OF CIVILIZATION and that is no understatement. They were global and involved a substantial proportion of the population, essentially a majority with any economic capacity to speak of.

 

As for "printing" of which there has been little since most recent government actions have involved debt swapping, guarantees of private debt and reserves sitting on deposit at central banks with zero velocity, that poses no obstacle to a metals price decline either. There was "printing" and price inflation every single year from 1980 to 2001 and that did not prevent gold from losing 70% of its value and silver 93%. This is merely a rationalization for why prices cannot fall.

 

I do not have the price performance for all asset classes at this time, but since financial markets bottomed in March 2009, the price increases for gold and silver are not greater or substantially greater than most or even all others. Certainly, a two year Treasury note yield of less than 50 basis points cannot be explained under conventional theories. The most logical explanation is that this is a partial reflation of the credit bubble.