GOLD: A buy signal from the horse’s mouth

The Slog has always maintained that, left to its own devices – and without QE to pump up the Stock Market – gold would be up around $4000 an oz right now. Yesterday, I posted to show how the unsubtle daily price movements were part of the price-suppression applied by Central Banks and the Fed, over many years, to dissuade escapees from overpriced stocks.

Just as in 2010-11 they were forced to focus on other equally expensive ruses (and thus let the gold price move up) so too, from here on, the imminent sovereign and banking disasters in Europe will force the fiddlers to give gold-capping a lower priority.

The World Gold Council confirmed that yesterday (and yes, they would say this): ‘gold will act as hedge against possible coming dollar weakness, and gold will act as a “currency hedge in the international monetary system.”‘

So as that young scamp Delingpole says (and he is always right about everything, which he must be, because he says so, QED) gold Bears are talking bollocks.

This is not financial advice, because you need to be a regulated crook to give advice, but should you decide to be sensible as opposed to a cloth-eared twit about this, buy bullion only: bank trackers are worth as much, ultimately, as all the rest of the toilet tissue they peddle.

52 thoughts on “GOLD: A buy signal from the horse’s mouth

  1. Hi JW,

    I’m not a registered crook either, so this is not advise.

    I have been watching this and will likely invest in Britanias/Sovereigns (as they are legal tender and thus free from CGT) but I’m holding on for now. My thinking is this.

    The stock market will likely be slower over the summer and the next big hurdle (event) will likely be in sept, at the end of the third quarter.

    So, I’m holding on until late August/early September.

    Eventually, people are going to work out that any increases in Stock due to QE is just a reflection of a devalued currency that the stock is marked to.

  2. With HSBC and JPM being the major “players” in gold and silver is anyone surprised the whole precious metal market is rigged and has been since forever? The CFTC have been “investigating” the silver bollocks for what seems like a similarly lengthy period and if you are waiting for a decisive outcome dont hold your breath. Central bankers know that gold is the only real “money” hence significant stockpiling of late notably by the Chinese and Russians. Gordon’s sale of half the UK’s reserves at the nadir which is still known in the market as the “Brown bottom” was allegedly a ruse to bail out the bullion banks who were getting short squeezed.

    If you have money in a bank account far better in my opinion to salt away some sovs/ kruggers/brits with a possible small downside as opposed to waking up one morning and finding your bank is shut and the govs guarantees worth as much as a piece of fiat toilet paper.

    The Spanish bail out has been “agreed” yet Spanish 10 years went back over 7% on Friday – mind your eye out there…

    • Dont be hasty about judging the CFTC my friend as they were the ones who “outed” Barclays over the Libor rigging. They had been lulling the banksters into believing they were “onside” then unexpectedly knifed the NUMBER 1 most powerful “super entity”(Yes thats Barclays) on the face of the planet.
      Watch JP Morgan as their rigging of the Silver market is firmly in the Justice departments crosshairs now.

  3. To imagine that the powers controlling the world’s ponzi, fiat, economic systems will let them collapse is naive. Some sort of transaction tax or holding penalty would be introduced to ensure the little guy cannot profit. The best he can do is to be nimble and take advantage of any temporary conditions for arbitrage.

    • Yes, I think you are correct, they won’t let the system collapse. Only problem is that they might not get a choice, the system is spinning wildly out of control, eventually it will fall over.

  4. Unfortunately, too many people (little people like us) are going to be left behind in this. We got into gold three years ago maybe, and even then I knew we were late, but who cares, this is about ‘preserving’ the value of your money, not trying to make an extra buck necessarily.
    We scrapped this ridiculous with profits plans that held onto any growth to maturity, to stop you cashing in, and let them syphon of all the money in under the counter fees and charges.

    Just about everyone in your town is going to lose almost everything; their savings by inflation, their pension by government & banker theft, their jobs by a coalition of the clueless.

    Can you think of a way to explain to people, they just look at you blank (… it can’t be that serious …) ? Maybe people don’t care.

    Absolutely, 100%, don’t even question it, buy gold bullion coin, and stick it under your mattress readers.
    I mean it.
    We are in another world now.
    ALL of the rules have been tampered with.

    • “Maybe people don’t care.”

      au contraire, mon frère…we sharpen our scythes each day in alacritous anticipation, total systemic collapse – make my day.

    • “Maybe people don’t care.”

      au contraire, mon frère…each morning we sharpen our scythes in alacritous anticipation. total systemic collapse? make my day.

    • “everyone in your town is going to lose almost everything: their savings by inflation”

      That might be a bit difficult if debt deflation continues. Got NSI index-linked savings?

  5. Most gold, ever mined, in history, remains intact, having few commercial uses. Silver, on the other hand, has thousands of commercial uses and most is consumed. In Roman times, silver was legally pegged against gold at 14/13 to 1. Silver, imho, is your best bet. And remember the golden rule: if you do not hold the PM in your hand, you do NOT own it

  6. Interesting comment…..BUT….
    the official new thinking has decided that money printing and inflation is the way forward out of debt – regardless.

    The losers are the guys who PRODUCE for paper reward.

    Farmers are the classic example of not HIKING THE PRICE AND STICKING TO IT

  7. Nadeem Walayat is always worth a read.

    http://www.marketoracle.co.uk/Article35687.html

    Makes the point that Wall St/ Washington are targeting the City and our institutions since they don’t make campaign contributions to anything like the extent that GS,, JPM etc do. Reckons we are on the verge of QQE which will lead to the sea change in inflation.

    • Agreed. If the BoE start QQE and feed huge sums directly to the Treasury, they will of course be breaking the rules.

      I like this straight honesty from Walayat: “…the global banking system is fraudulent and possibly even start to see that the central banks are party to this fraud by evidence of their actions as illustrated by money printing, the whole of which has been effectively funneled into the back pockets of the Bankster elite where in the UK this stands to the tune of £375 billion over 3 years, all aided by pure propaganda that central banks are pumping money into the economy which I have repeatedly illustrated as being a PURE LIE because it has NOT been pumped into the the economy as politicians continually state but into the banks.

  8. Old King Glod is a tricky old sod
    And his value hard to measure
    But if your mirth depends on worth
    You’ll need a little treasure
    (Anon)

  9. Couldn’t agree more with the above comments. With negative real interest rates and the UK governments laughable inflation figures fiat money in any sort of account is being stolen from you by the hour…

    Yes, Gold is manipulated just like everything else in the present day financial system, but there will come a day when its manipulation will no longer be possible. Watch it go then…

    • and leaving at 50 with an indexed linked pension in the order of $180K a year. tax free if he is not American and lives in the right place.

    • @kfc: kinda vindicates JW’s criticisms of Madame going back a while. The IMF: yet another</i. agency corrupted by the elites and now 'unfit for purpose'. It would get on well with the UN and all the British agencies similarly described.

  10. You already have treasure in heaven when you help those who can’t help themselves. The Lord said not to throw pearls before swine, a lot of the charities are not what they seem to be, but sometimes you might see a person all beat up and decide not to cross over the street to avoid them but try to help them instead. You already did that John, thank you and God bless and keep you xx

  11. waiting for a sign? well here it comes…

    this weekend the giant gold olympic spliff begins to make its inexorable journey over the paving-stones of london, today passing through the happy hub of hackney where it will slowly spread the buzz along the streets, sparking-up spirits in sub-social smoke-easies as it goes, until it finally hits its historic destination high above the spanking-new stadium of sporting sponsorship, where it will set the puffed-up psyche of the games…ablaze.

  12. The CB’s holding down of the gold price through their proxies
    in the paper market is akin to holding a basketball underwater.
    You can do it for quite a while ,but finally it will get out of control
    and broach out of the water.
    Gold is money,everything else is credit.
    Do not be left as the bagholder by trying to trade in this ‘market’.
    Short term you will make money ,but when the music stops,
    the sudden stop at the end of the fall will kill you.

  13. Forget gold. When the EU finally unite their currencies, as they eventually will, the euro will rise again. Now is the time to buy.

  14. JW said that Brussels was all out of fantasies. Nope. Sorry they are not.
    ‘Mr Draghi claimed that the currency was “absolutely not” in danger when asked by France’s Le Monde newspaper in an interview.’
    “We see analysts imagining the scenario of a euro zone blow-up,” he said. “They don’t recognise the political capital that our leaders have invested in this union and Europeans’ support. The euro is irreversible.”
    He was also optimistic for the economic outlook of the region and said he did not think there was a risk that the entire currency bloc would slip into recession.
    http://www.telegraph.co.uk/finance/9417209/The-euro-is-irreversible-and-not-in-danger-says-Draghi.html

      • Yeah, right. Lets have a competition to see if ANYONE can take a photo of D.Cameron on the tube, or even just spot him on the tube (in anything other than a PR excercise)

      • Dave’s alright, he’s got his trusty pushbike. He will only need the Rolls for his valet and intermission goodies.
        I think Eric Pickles ought to take the opportunity to get on his bike as well, if he can find one strong enough, it would do him some good.

    • Yeah – remember after the election when there were going to be a ‘pool’ of ministerial cars to save money ? The idea lasted about 5 minutes longer than it took someone to look up the words ‘security & risk’ in the dictionary.
      It’s just more piss and wind for theBBC to spout about before it just doesn’t happen !

      • Nothing to do with security and risk; they simply rolled out a couple of episodes of ‘Yes, Minister’.

    • It is’nt – but it’s a logical “reason” for those that don’t understand how markets work. People would also be wise if they searched and understood exectutive order 6102 – http://en.wikipedia.org/wiki/Executive_Order_6102

      This can happen in any country, but it;s less likely to occur in Switzerland – so yes Gold bars/coins are suitable but held in a safe in a swiss bank – make sure it won’t go bust either. If world currencies go (as some are expecting) then some other form of currency will be required, governments require greater amounts than individuals to pay the bills, governments think of their citizens 2nd and the good of the nation 1st – If they need the gold under your bed they’ll cease it.

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