# Gold



## PalmettoTree (Jun 8, 2013)

The following are highlights from a WSJ article by Mark Hubert published in the Weekend Investor newspaper dated 5-6 July.

Gold bugs are up beat in hopes the three-year bear market might finely be over.

Duke Univ. Prof. Campbell Harvey, a leading expert on gold prices says the odds are low that gold will return to its high of $1,929.20. Thursday’s price of $1,320.40. He puts golds fair value at a little higher than $800.

About a year and a half ago he correctly predicted that at $1,700 gold was over priced in a paper to National Bureau of Economic Research. This prediction was based on a model that says gold prices will decline when the ratio of gold price to the consumer-price index rises well above its average level of 3.4.

The current ratio is 5.6. Professor Harvey acknowledges that gold can take a long time, never follows a straight line and can be interrupted by a small rally before returning to its fair-value. However because gold is quick to respond to changes in bond yields a rally is unlikely with increasing treasury yields.

Therefore both short and long term gold prices are forecasted to decline. The immediate question is what about inflation? Gold has a long-standing reputation as a hedge on inflation. Professor Harvey points out such a hedge depends on your time horizon. Over the short term gold is a very poor hedge against inflation. Gold as a hedge against inflation must be measured in decades or longer.

Both Professor Harvey and his co-author Claude Erb predict that even if inflation and Treasury yields increase gold prices will continue to decline in the short term. (Remember short term is less than decades.)

The immediate question that comes to my mind is what about silver?


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## Ripon (Dec 22, 2012)

Gold and Silver are needed prepper items for me. I won't ever invest in them because I can't imagine the market place for them as free -- meaning free of manipulation. Governments (China, Russia, US and even smaller) can manipulate it. Individuals (hunt brothers did to Soro's) have manipulated the silver markets. I want just enough to meet my needs in SHTF and not an ounce more. To that end I keep roughly 200 oz of silver, $200 in face value dimes, quarters, and halves and a few ounces of gold. That took two lifetimes to accumulate....mine and my dads. 

As to this theory what of deflation? With so many libertarian types hating the FED, the "banksters," and the .GOV what if they are just holding off the inevitable deflationary state predicted by our 2008/9 housing market? What if their inflationary attempts were nothing but efforts to stem off the real predator deflation. Remember with inflation our trillions in debt gets easy to pay, but with deflation our way of life by this gov....is over.


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## PalmettoTree (Jun 8, 2013)

Ripon said:


> Gold and Silver are needed prepper items for me. I won't ever invest in them because I can't imagine the market place for them as free -- meaning free of manipulation. Governments (China, Russia, US and even smaller) can manipulate it. Individuals (hunt brothers did to Soro's) have manipulated the silver markets. I want just enough to meet my needs in SHTF and not an ounce more. To that end I keep roughly 200 oz of silver, $200 in face value dimes, quarters, and halves and a few ounces of gold. That took two lifetimes to accumulate....mine and my dads.
> 
> As to this theory what of deflation? With so many libertarian types hating the FED, the "banksters," and the .GOV what if they are just holding off the inevitable deflationary state predicted by our 2008/9 housing market? What if their inflationary attempts were nothing but efforts to stem off the real predator deflation. Remember with inflation our trillions in debt gets easy to pay, but with deflation our way of life by this gov....is over.


Obfuscation


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## PalmettoTree (Jun 8, 2013)

I made an error in my original post. It has been edited as follows: Duke Univ. Prof. Campbell Harvey, a leading expert on gold prices says the odds are low that gold will return to its high of $1,929.20. Thursday’s price of $1,320.40. He puts golds fair value at a little higher than $800.


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## PalmettoTree (Jun 8, 2013)

The Golden Dilemma by Claude B. Erb, Campbell R. Harvey :: SSRN

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2148691

Read for yourself. Is gold really what you think it is at these prices?


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## Casie (Feb 26, 2014)

*yawn*

The spot prices of GLD and SLV are irrelevant. I feel a bit like a broken record saying the same stuff over and over. (Just ignore me if you have no interest in the mechanics behind spot prices.)

All through 2013 the Morgue monkey hammered gold and silver prices down using HFT trades. But the best part is what they did after!

(These numbers are from Butler Research LLC.)

At the start of 2013, JPMorgan's short market corners amounted to a *21*% net share of the entire COMEX gold futures market (minus spreads) and an astounding *35*% of the entire COMEX silver market. JPM was short 75,000 gold contracts (7.5 million oz) and 35,000 silver contracts (175 million oz). No single entity had ever held such outsized and anti-competitive shares of any important regulated futures market.

The price plunge through the end of June resulted in JPMorgan making more than $3 billion on their short market corners in COMEX gold and silver.

Must be nice, right!? So what did they do with the self-created $3 billion windfall?

JPM *bought*. They bought so aggressively on the price plunge thru June, that they almost eliminated their short market corner in COMEX silver and actually reversed their short market corner in COMEX gold to a long market corner. JPMorgan was the single most aggressive trader in 2013.

Normally, one would think the net purchase of 150,000 COMEX gold contracts (15 million oz) and 23,000 COMEX silver contracts (115 million oz) by the US's largest bank would cause prices to soar. That would usually be the case, except for one other fact - As I mentioned before, JPMorgan and other collusive traders have come to control the price mechanism on the COMEX, thru high frequency trading (HFT), spoofing and other illegal computer trading means.

They are so brazen now, they hardly even bother covering their tracks any more. After all, laws are for the little people, not Jamie Dimon.

In addition to holding a long market corner in COMEX gold futures, JPM has been extraordinarily active in taking *actual delivery* of metal recently. For the month of December, JPMorgan has taken delivery of more than *96*% of the 6493 gold deliveries issued this month. The 6254 contracts taken by JPMorgan in its house (proprietary) account is equal to *625,400 oz of gold*. In addition, JPMorgan also took delivery of *10 million oz* silver last December and another *5 million oz *silver in January 2014.

http://www.cmegroup.com/delivery_reports/MetalsIssuesAndStopsYTDReport.pdf

Also interesting is the COMEX has a spot month position limit and monthly limit on actual deliveries of 7.5 million silver oz and 300,000 gold ounces by any one trader. Yet the CME is reporting that JPMorgan in it's house account took delivery of more than double the amount of gold allowed in any one month. Proving yet again JPM/Jamie Dimon are above the law.

..........................................

So, let's recap. FED investor, JPM buys shorts. JPM hammer's down the price of PMs using HFTs. JPM collects $3 billion plus. JPM purchases 625,400 oz of (physical) gold and 15 million oz of (physical) silver, and has it delivered. JPM buys so much at one time it violates COMEX law. No one says a word. (Shhhh, nothing to see here my friends.)

..........................................

Anyway, feel free to never buy a single gram of gold or silver ever, because Mark Hubert said gold was going to $800 and silver was going to be used as ship ballast. Or maybe stop listening to what Hubert writes for the Sunday New York Times, and start _watching what the big dogs are really doing_.

If the prices continue to get hammered, maybe consider it a buying opportunity. I bet big bankers will. Keep in mind, one day you may wake up and see a sweet ass spot price, but when you cruise down to your local coin store (or load up APMEX on your computer), you may find people selling for 200% premium over spot... or maybe just not selling physical at all.

Soldiers deployed behind enemy lines to gather intel are often issued gold coins, and many Jews were able to buy their safe passage out of Germany and Poland using them. *But holding gold or silver most likely isn't going to save your life. It could however protect your wealth. Just put it somewhere after water, food, protection, health/hygiene, and maybe comfort. *

........................................

*When Kyle Bass asked a senior Obama official, "How are we going to grow exports if we won't allow nominal wage deflation?", the Obama official answered, "We're just going to kill the dollar.".*

Do you think he was kidding?


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## PalmettoTree (Jun 8, 2013)

Casie did you read the two papers?


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## Casie (Feb 26, 2014)

No, sorry. I read the abstracts, looked at the dates of publication, and glanced at the author's credentials.

I know it's annoying to post a link to a paper that you find interesting, only to have people not willing to spend the time on it. In many of my posts I'll just excerpt the main points I want to share, and provide the link for anyone who did find it compelling.

My wordy reply was just to say, if anyone out there is still attempting to make a decision on gold or silver, my advice is *not* to rely too heavily on a Duke University - Fuqua School of Business professor or a New York Times analyst. There is simply too much noise and too little substance out there. In my opinion the practical thing to do, is to *look* with your own eyes at what Jamie Dimon's JPMorgan Chase, Bank of America, Citigroup, and Warren Buffett's Wells Fargo, entities are actually *doing*. They are telegraphing their intentions, you just have to look for it.









I'm sorry if I missed your original point, my friend.

Honestly, I'm juuuust about done talking finances. I'm feeling like at this stage in the game, anyone who was exploring their options on how protect a little wealth, have already made their decisions. Again, my suggestion would be just look at what the very rich are doing to protect themselves.

But like I mentioned above, for many people in this forum the finer points of spot price or market manipulation are moot points. After all it's just not as important as water, food, protection, health/hygiene, and even comfort.

Again, my apologies for nudging the direction of your post. No offense intended. See you in a thread on solar panels, firearms, or canning, or something!


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## Slippy (Nov 14, 2013)

Casie
I KNOW you read ALL of my posts, right?


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## Casie (Feb 26, 2014)

Affirmative Slippy!

All 5 by 5.
Acknowledged!
Copy that.
Roger on that copy!


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## Slippy (Nov 14, 2013)

Casie said:


> Affirmative Slippy!
> 
> All 5 by 5.
> Acknowledged!
> ...


::clapping::::clapping::::clapping::::clapping::

(Slippy blushes and and says awshucks!)


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## PalmettoTree (Jun 8, 2013)

PalmettoTree said:


> Casie did you read the two papers?


I see the answer is no. Too bad so many have such an emotional attachment that they miss the point. Oh well, I tried. Back to the counting house.


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