I know Jansen is the expert, but I still do not buy the explanation. I do not pretend to know the answer, but I cannot accept "the desire of banks to hold good stuff on their balance sheets". Cash is good stuff compared to a T-bill above par...
It's a custodial thing. T-securities are not deposits. From the FDIC: Customers who purchase T-bills at banks that later fail become concerned because they think their actual Treasury securities were kept at the failed bank. In fact, in most cases banks purchase T-bills via book entry, meaning that there is an accounting entry maintained electronically on the records of the Treasury Department; no engraved certificates are issued. Treasury securities belong to the customer; the bank is merely acting as custodian.
i'm not up to speed on the finer workings of cash management at the big banks, but I don't think these banks have the kind of cash to just sit on.
were talking billions, of course.
the majors are'nt going to be sending around Brink's trucks just to square their accounts. So, maybe i is cheaper to buy neg yield, than hire the NY national guard to move 10billion from midtown to downtown?
I know Jansen is the expert, but I still do not buy the explanation. I do not pretend to know the answer, but I cannot accept "the desire of banks to hold good stuff on their balance sheets". Cash is good stuff compared to a T-bill above par...
buy futures on margin with non-USD margin collateral to short the USD by another name ?
don't know why people holding USD cash aren't stepping in to collect that arbitrage quicker
On anti-Earth, anti-Pavel logs into his anti-retirement account. Positrons flow out of his laptop and in a brilliant flash the anti-retirement is toast.
On anti-Earth, anti-Pavel logs into his anti-retirement account. Positrons flow out of his laptop and in a brilliant flash the anti-retirement is toast. "
That banks are willing to adsorb losses to prettify their portfolio just tells you how bad their portfolio is normally. This is exactly like slipping the meat inspector a few bucks to look the other way.
I can deal with negative interest rates, it just shows some parts of the market web are slower/faster than others, we're probably just more sensitive to this lag now because NEGATIVE
it's the inverted yield curve that makes me run for the hills
The system is totally out of whack if you have so much fiat that you are willing to get less fiat back just to ensure your haircut can't be any longer.
Nov. 20 (Bloomberg) -- China is passive on the value of the U.S. dollar as the level doesn’t affect the nation’s economy, central bank Governor Zhou Xiaochuan said, rebuffing criticism that the government is devaluing the yuan.
“It’s like watching a tournament,” Zhou said at the BusinessWeek CEO Forum in Beijing today. “We just watch the game. Regardless who wins or loses, the issue of whether the winner or loser benefits the spectator doesn’t arise.”
That's right Schumer you moron. The Administration should stop embarrassing itself with this yuan appreciation nonsense. No, retards, the IMF's going along with your scam doesn't prove squat to anyone with a brain.
Wall Street's looting of Main Street continues unchecked. At least it wasn't Goldman...
Carlyle to run roadside service stops in Connecticut - washingtonpost.com The District-based private-equity giant and its partners will invest $178 million in the state's roadside service centers as part of the agreement, which will include putting Subway restaurants as well as Dunkin' Donuts locations in the centers, according to a Carlyle spokesman. Dunkin' Donuts is owned by Carlyle....
The venture is part of Carlyle's growing interest in developing partnerships with cash-strapped state and municipal governments to invest in, build and manage projects in exchange for a long-term revenue stream.
I don't like this market, if it craters I will buy back more metal for the same price.
Meaning you would be willing to buy your PM back for the price you sold it if things get more wonky?
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Edit: Ignore this message. Your point finally sunk in.
I mean is it so crazy given how $s are divied up by manager/desk?
they haven't circumvented that organizational limitation by adding a few lines in their automated trading system to automatically buy any negative yielding zero weighted risk asset because it was a rare/unexpected event, and for another reason that comes next
I would be pissed off if they lost me $25 in 3 month t-bills up front, but the buyers were probably not people. probably a thing. some central bank that cares more about when and how much is bought instead of at what rate of return
which is probably the other reason that it hasn't been eliminated. free money is free money, which is the best kind of money. better see how much they are willing to give away before you give an answer
No, given the hedge funds crowding the trade, I will be able to buy back just north of $10 for silber, and $850 for glod.
Of course, that will be due to wall street taking a pasting again.
This ridiculous liquidity trade illustrates the problem- too much money just sloshing around looking for alpha and safety- which are now mutually and totally exclusive.
Where is the consumer? Down in the bankerdome, cowering in fear as the credit lines are being closed.
But they have not yet begun to really liquidate- that is going to be the next lesson, brutal selling of stuff for cash to pay the bills.
No... As Citizen AllenM put it: We have too much money looking for alpha and safety. No problem with the arrangement that they are currently mutually exclusive.
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Barbrady: Nothing to see here. Move along.
"Whatever the case, I am certain that the present circumstance is not an indicator of financial stress as plunging bill rates have been in the past..........No worries ... "
........why did this strike me with "dread" the first time read?..........Despues
I was initially joking about opening The Mattress Fund, where we would hold lots of actual paper cash in vaults in the US. The Fund would make no loans, and would be enormously liquid.
But they have not yet begun to really liquidate- that is going to be the next lesson, brutal selling of stuff for cash to pay the bills.
Does the consumer have enough bullion-grade PM to liquidate? Does the confidence game between USDs and PMs affect the movement of those items? What kind of order do you think will play out in the liquidation? e.g. Electronics -> Jewelry -> Big Ticket Items -> PM? I agree that the capitulation isn't here yet because people aren't selling to make ends meet. They are just selectively choosing where to default for now.
correct. a lot of analysts have been calling for Credit Crunch 2.0
Meredith Whitney on Bloomberg today agreed. She noted that credit card lines have been cut by $1.5 trillion since the market peak, and she expects this to go to $2.7 trillion. She also expects losses of credit access will reaccelerate in 2010
It will be just like how the consumer sold out to make ends meet sending all of Asia into a currency crisis in 1997
I'm curious. Got a link for me or can you give me a brief 1-3 line synopsis? What did they sell out of in 1997 or Argentina earlier this decade? I really don't know.
I really doubt China, India, or the Maltives (yes they are buyng too) will let gold see 3-figs again.
You may be right about silver though. Kinda shocked mining stocks took it on the chin with the rest of the market too. I really thought it would've decoupled by now.
Rich,
made a response to you after the pig...
My comments about holding physical gold...basically I was talking about Americans holding physical gold (IF there was a currency reset) and maybe having to sell to raise cash and take what the gold bullion oz. value in dollars at the time such as Cash For Gold for junk gold or coin shops buying bullion coins...what the Chinese are doing, yes, is their way to cope with uncertainty...but most Americans are stuck in the Dollar and sell stuff for Dollars if they need to raise cash to pay bills or buy necessities and if there's a drop in gold and they have to sell for dollars...they will have to take what they can get in dollars...
unemployment goes up, so do credit card losses
which is why I laughed at Dimon proposing that his #1 reason goal after acquiring WaMu was to issue more CCs right here in these comments
no one prepared for these unemployment rates, so of course we were going to have these retrenchments
the CARD act is just taking it a little further, or grouping all the cuts together
I just posted this because some people are pointing to the negative rates and heading for the bunker. There are plenty of reasons for concern - but this probably isn't one.
BTW, Goldman has a note out tonight to clients: "Our current working assumption is a 5%-10% drop in home prices through the middle of 2010. ... Our conclusion: while the bottom in housing starts has very likely been seen, homebuilding is likely to provide a much smaller boost to real GDP growth in 2010 than in the recovery from prior deep recessions. Meanwhile, house prices and credit quality look set continue to weigh on the US financial system, the availability of bank credit, and ultimately the pace of the economic recovery."
just reading naked capitalism and post by Harrison re Faber and Au never going below $1k ever again(!).
The move now is by central banks pushing the price up higher. Faber also obliquely refers to sloshing since folks aren't going to be willing much longer to tolerate 10 t-bill yields at 3.5% or 30 year yields at 4.4%; so their going to go to commodities, esp gold/silver. So the gist is that he sees start of move out of USG notes further into commodities, esp PM (earlier interview other day also mentioned farmland).
So, time to go long PM and buy TBT?
And yeah, I'm playing with selling some of the PM and repurchasing after a correction.
the CARD act is just taking it a little further, or grouping all the cuts together
Dodd ended up getting a bunch of grief from Democrats in the hearings on his financial reform legislation today. Given the republicans were all opposed, he basically has to start over.
it has never been the man on the street who decides the end of a bubble
No, I was curious to know what did the average person during the Asian currency crisis of '97 sell to make ends meet? Was there some sort of pattern between what retained a good value vs. what was instantly trashed upon resell (Think cars or Madden NFL video games)? Would tobacco hold more value in a selling market, or is it pretty much all assets plummet to the floor?
"Meanwhile, house prices and credit quality look set continue to weigh on the US financial system, the availability of bank credit, and ultimately the pace of the economic recovery.""
So TImmy G testifies that things are great, and hangs him out to dry? That does not bode well for Timmy's future.
Outside of jewelry J6P generally doesn't own any gold, and probably not too much in jewelry either. Oh, and it's not like the guy's gonna part with his Rolex or the gal's gonna give up her wedding ring without circumstances being dire.
Most people have trash/stuff that's easily replaced later on. Think of what went for sale to raise more cash in college after you toked the account away by February. Electronics, etc.
That's when I'd start to push them on the more interesting stuff, that will really have some value after things shake out.
Martin Mull once wrote a song with first stanza:
Saddle up the buckboard, crack the whip
Tell the horse that the course is the mighty Mississipp'
Keep your strongest son, shoot the rest,
Sell your daughter with the biggest breasts
'cause we'll need that money when we get out west
Headin' for the Cumberland Gap
No crap
We're headin' for the Cumberland Gap!
Outside of jewelry J6P generally doesn't own any gold, and probably not too much in jewelry either.
I guess that was my point. The argument that people will dump their physical bullion as the first wave of Making-Ends-Meet '10 begins just strikes me as odd. Maybe *bugs just think about it differently, but the fear is also that of a collapsing currencies more than just having a cash flow problem. I would easily sell excess furniture, computer equipment, glass/flatware, and other things before thinking about the PM, and I would imagine those things I listed would fall in values long before the Canadian Silver Maples because it is easier to buy plates and forks than it is to buy Silver Maples.
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I would also think that the use of services for pay (legal and illegal) would make a raise and killing the amount of cash you could raise as everyone does it more, but I just don't seem to comprehend the thought of selling PMs first as a logical first or second step...
Average Americans are trying to feed and clothe the kids, keep the car half full with gas, and pay the rent. Sometimes they get a chuckle out of 'planning' for college, but upgrade the cell phone plan instead.
So average Americans aren't really buying tenth oz., quarter oz. or half oz. gold bullion coins from their local coin dealer and/or eBay?
My parents never owned any coins sans some silver pre-1964 dollars until this year. That means 50+ years of never even thinking about it much less acting on it until I finally convinced them to drop some cash into PMs to supplement their emergency cash supply. As for me personally, I'm stocking up on silver, but it is a personal choice of risk v. reward. In sum, my family is the only people I know who have, and everyone else I've asked look at me like I'm babbling.
TJ,
Plus all the gold coin sellers advertising bullion coins in tenth, quarter, half oz., etc. advertising on Alex Jones and other Patriot sites or Hannity or Glen Beck? 'Buy gold where I buy mine'. You or Joe6pak can buy in small quantities from these TV or internet gold bullion dealers.
If you thought real estate had some vicious spreads on a round-trip, you've never tried to sell physical PM. Look at the buy /sell spreads on Kitco for an idea. And then add another 1-2% vig in either shipping or dealing local.
And remember, you owe the IRS 28% of you capital gains on a sale.
And any cash transaction (or series of transactions) totaling $10k are reported to your Uncle Sam. If not by the dealer, then by the bank when you cash the check. Unless you feel comfortable dealing with all that cash. And trust the dealer (who is already skirting the law) as legit.
You're certainly welcome. The transaction costs, combined with risk of being out should a major event transpire (e.g., nuking Iran), is just too high to be trading physical.
i might personify the j6p image... i drink beer (obviously), i work in the maintenance / construction field, no 4-year degree, and i own gold and silver.
i'll let you all know when my fellow meatheads advocate gold ownership. most can't afford to grab a few beers at the bar anymore...
it ain't about "us" anymore. that's what i tell myself when i buy maples.
Yeah, and what fraction of the population actually sees those? You're projecting based upon personal experiences which are wildly divergent from middle america, otherwise you wouldn't even be here.
You have to think in terms of dot-bomb or the RE bubble; IOW, when your friends and family start every conversation with talk of their favorite gold investments THEN it's time to get out.
If a million people bought an oz. coin gold bullion...that's a lot of sales for the TV and internet gold coin sellers...plus the coin shop sales and they are busy...and not everyone is rich in those coin shops...
i'll let you all know when my fellow meatheads advocate gold ownership.
Ha! Rest assured I haven't been offered to buy some Gold Kangaroos from my shoe shine boy yet so I don't the top is here. Also as sneering alluded, you can't just decide one day to buy gold coins. You have to decide to buy silver bullion coins. While showing up on the TV or radio, these kinds of things are not turning up around the watering hole along with Monday morning football talk--at least in my world.
yagij.
Just look at what is worth anything, and you will see what the order is.
Big ticket items? Just saw a hot rodded 63 biscayne on craigslist here for 2k- divorce sale. Electronics is already not going into the pawn shop unless it is big ticket stuff. Jewelry is going now, and I imagine PMs are next to last for most folks, given how few own any beyond this commentariat. Houses are going into the abattoir. Commercial property is next. Tools have fallen quite a bit, but there is still a market out there when they get cheap enough. Default is first, then whatever, but here in Phoenix I am seeing a lot of total liquidation next stop is the relative's couch.
Tired and a bit depressed today, personal reasons.
If a million people bought an oz. coin gold bullion...
Those million people would need to be able to part with 1150-1200 USD in cash up front to get a single coin. That is a chunk of change to many people at the moment--me included. Go with TJ's comment. When family members want to talk about their PM strategies--like they did with .com stocks or flipping houses--then it is time to either hold for a currency risk play or get out.
TJ, screw the data, anything going up with momentum has hedgie money pushing it today.
Otherwise, how could dead men walking like SPG keep going up?
I was looking at how tight the options are on slv and gld with amazement, how little money can be made selling those options.
Is that not the very definition of liquidity and interest? I took me a dog's age today to get out of 30 calls on ERY that were in the frickin money, and yet the bid/ask in gld and slv is tight, and the near money on ERY was running 15 to 25 cents.
ATLANTIC CITY, N.J. (AP) -- America's first casino to open outside Nevada got permission Thursday to hand itself over to its lenders because it can't pay the mortgage.
WTF are you going to do with a $1000 coin? You can't cash a $50 at a lot of gas stations, but gold coins are going to be our saviors? People want to believe.
yeah, but I wonder what happens when the paper market dislocates from the physical market.
bingo! PM should denote physical, and PPM should denote paper (GLD & SLV). While GLD reportedly has enough gold bullion in its safe to be its own central bank, I'm weary of it beside short-term trading purposes. I also think that I will be able to buy certificates of it much easier than a coin if things go south.
WTF are you going to do with a $1000 coin? You can't cash a $50 at a lot of gas stations, but gold coins are going to be our saviors? People want to believe.
What is it about Gold and "Mad Max" scenarios? It can be as simple as trying to preserve the purchasing power of your money.
I know this coin bullion is selling because the commercials are increasing and the pitch is buy gold bullion in various weights and then a salesman or gold representative will try and switch the customer to numismatic gold coins where the real profits are...
You cannot buy groceries at Wall^Mart with SPOOs either. It is a simple supply/demand play with some currency risk thrown in for good measures. USD is moving down. Even if AU wasn't appreciating via demand, it would be moving up by doing nothing.
I've gotsme a vertigo voodoo headache.
From Yahoo: To lower interest rates, Citi customers must spend
NEW YORK – For Citibank credit card holders, there is one way to escape the bank's rate hikes currently under way: Meet a monthly spending requirement.
Those who meet the spending minimum — in some cases $750 a month — will be able to get a rebate on their total interest charges for that month. The rebate could cover some or all of the interest rate hike. Customers also need to make payments on time to qualify for the rebate...........
Prepare ship for ludicrous speed! Fasten all seatbelts, seal all entrances and exits
WTF are you going to do with a $1000 coin? You can't cash a $50 at a lot of gas stations, but gold coins are going to be our saviors? People want to believe.
I am no gold bug, but there is little chance of physical gold going to zero, outside of theft. Paper money, T-Bills and stock though, have a higher risk. Gold is a convenient, portable, historic, hedge. Diversification is king. What is a Confederate dollar worth? What if the South had won? Gold is a store of wealth against the Black Swan.
badger,
Got $1200 for it today, cash.
So, that is 24 fillups.
Now, is that what you are talking about?
I am sure that coin will be turned within 24 hours for $1300 to the public.
The yellow stuff always has a market, but you do have to know it not to get trimmed a bit.
Then buy the ETF. Don't put up with the transaction costs of coins. In the actual TEOTWAWKI scenario, people think gold coins are going to act as a currency, but they lack some of the fundamental values necessary to be one.
Gold is OK...not knocking the hedge or possible safe haven aspect until someone in a pickle has to sell for less than they paid or when it dips badly but that's the nature of risk in investments...gold has risk like other investments...maybe less risk than many...
The Mashantucket Pequot Tribal Nation, which owns Foxwoods, said it has paid $14.2 million of the $21.25 million semi-annual interest payment that was due Monday on $500 million in debt notes. The tribe said it does not anticipate paying the balance within a 30-day period, resulting in a default.
See TJ above. All of the above ground gold == 40B.
Not quite -- I was stating the market value of the GLD ETF. The total for above ground gold is much higher, but still does not rival equities, bonds, or derivatives.
that's why you want to keep a quantity of silver available. The silver will be the daily stuff as well as small items made of Au, think rings and the like.
In the actual TEOTWAWKI scenario, people think gold coins are going to act as a currency
What makes currency a "currency" is the acceptance of it by a government for taxes. Gold can never behave as a "currency" for that reason but it is a currency in the sense that people will accept gold in exchange for currency.
Was bored this evening and decided to click on the CR problem bank list and checked on the larger banks that are reporting companies to see what their Q3 SEC reports, which were filed ths week, said. It will be interesting to see if any of the whales on the list go tomorrow - I am thinking TierOne has a decent chance
Not quite -- I was stating the market value of the GLD ETF. The total for above ground gold is much higher, but still does not rival equities, bonds, or derivatives.
Gonna have to go back to my research because I thought someone posted those numbers and the above ground market cap for bullion was that small. Maybe it was ZH.
.
Edit: Here Rich write this
If we added up all the gold ever mined on the planet, its total value would equal no more than $5 trillion at today’s prices.
.
If the gold industry is tiny, then silver’s $9 billion market cap makes it a nano industry. The entire silver industry is over 21 times smaller than gold’s! If gold explodes, silver will go supernova.
Homedad,
If you pulled up to a gas station say in outback Moose Country somewhere in Hard Times and pulled out a Kennedy 50 cent silver coin, would the attendant know how much it's worth and give you gas? No maybe not. Gold & silver are for holding like the shotgun...
It was at least 20 years ago when I was researching this issue for a client that was interested in building a retail center in AZ on tribal land - my recollection was that their soverign status made it next to impossible to foreclose. Plus they never waive soverign immunity, so you can't even sue them on the note except in tribal courts.
TJ
No maybe the merchants of fear are selling gold as a hedge to the political/economic campaigns to devalue the dollar...don't make it too simplistic or black-and-white...there's many sellers and players trying to cash in on the expectations of dollar devaluation created by our fearless leaders and administrators...
A bubble requires the active encouragement by a government to inflate itself.
Do you see the government provide tax incentives to own gold? (It is taxed as a collectible)
Do you see the government encourage ownership by touting a "Gold Ownership society"?
Gold does not generate fees for any of the interests of the FIRE sector.
How can it be in a bubble? Do I think it will keep rising? I don't know. What I do know is that I would like to hold insurance against a collapse in the value of the dollar. I hope my gold bet does not pay off because all of my earnings are in dollars.
This article is starting to get annoying. Headline should be "Typist at Telegraph helps Soc Gen locate scared bankers and hedge fund managers so that it can charge them fees for setting up strategies to hedge against unlikely event. - Increase in public fear an afterthought" "The worst case scenario is usually scary and in this case meant to scare people," said the typist, "but I'll take his word that bankers and hedge fund managers are scared. I'll scare the readers of the Telegraph as that will help sell papers." Note the actual absence of scared bankers who are willing to be quoted in support of the worst case scenario. Just a guess - Soc Gen is moving a product. Nothing more. This isn't "reporting" in the traditional sense - it's typing up a Soc Gen press release.
Last thougt on gold because it is the thing now IMO...but if gold is the last hope of investing or preserving wealth, the system has failed already as in systemic failure...
I have no idea about Beanie Babies. But, from the Wikipedia article about the Tulip bubble.
*During the rest of the year, traders signed contracts before a notary to purchase tulips at the end of the season (effectively futures contracts).[19] Thus the Dutch, who developed many of the techniques of modern finance, created a market for durable tulip bulbs.[10] Short selling was banned by an edict of 1610, which was reiterated or strengthened in 1621 and 1630, and again in 1636. Short sellers were not prosecuted under these edicts, but their contracts were deemed unenforceable.[20]
*
badger (profile) wrote on Thu, 11/19/2009 - 8:51 pm
WTF are you going to do with a $1000 coin? You can't cash a $50 at a lot of gas stations, but gold coins are going to be our saviors? People want to believe.
thats why they invented silver...to make change for gold
"The bank [Citibank] also noted that "customers who do more business with us will have the most opportunity to reduce their rates." Of course, consumers could need to spend more than they otherwise would to qualify."
There was only one catch and that was Catch-22', Citbank the new and improved Temple of Doom.
Maybe not a problem but, something don't add up. Ben, Bullard and the boys giving the two thumbs up to the free money reflation trade for an "extended period' even into 2012 and big money going into negative yield 3 month t bills?
I think gold is a good investment. If I were in "wealth preservation" mode instead of "waiting to short the hell out of the market" mode, I'd put some money into gold. But I'm very wary of people who think gold can never crash because fundamentals say so. "Buy now or be priced out forever" talk always makes me suspicious.
Allen, there is a lot of physical buying happening as a result of significant curtailment of tax havens. Several stories along these lines out of Switzerland.
Pension funds are also entering the trade. The baton is being passed to a different class of buyers. With the CB change of heart we are facing a very different market. Also, the Reserve Bank of India purchase legitimizes the above $1,000 price for Indian buyers IMO.
I don't mean to imply that gold is not facing a potentially severe correction but I would be quite surprised if it were to fall below $1,000. I think we are moving into the second phase of the bull market and the old patterns will increasingly be obsolete.
Human fat in cosmetics
Four people have been arrested in Peru on suspicion of killing some 60 people to sell their fat and other human tissue to Italian co-conspirators for cosmetic use in Europe, authorities say.
Four people have been arrested in Peru on suspicion of killing some 60 people to sell their fat and other human tissue to Italian co-conspirators for cosmetic use in Europe, authorities say.
ee, you want doom? Whyintheheck is the Dec 2011 nat gas trading at $6.26? But that raises the question. Is there a long dated commodity strategy for shorting the dollar?
EHP, I posted about this a few days ago. Don't buy GLD, SLV but get CEF. By filling out form 8621 you will qualify for the 15% capital gains treatment.
hey RE -- are you going to the 2010 namm show? it's right around the corner you know? i remember talking to you about it last year, that's why i ask.
Thanks for remembering. Not this year. I'm stuck here in the great Northwest. I miss Southern Nevada a bit but thinking of summer I really don't want to trade.
One for Rich...
Gold holdings by country...the U.S. vs. China...couldn't set the ZH link but U.S.( had 8,134 tonnes of gold and China had just 1,054 tonnes of .
I just responded to POIC who posted a link about the 28% tax treatment of GLD/SLV. I use GLD/SLV solely for trades but keep longer term money in CEF. It acts as the equivalent of my savings account. Not enough people are aware of the tax advantages of CEF.
bah, Europe is full of hypocritical savages
imposing a ban on Canadian seal imports while approving of seal hunts in Scotland and Norway, importing human fat from murdered corpses, dumping toxic and nuclear waste in the ocean, bottom trawling fish stocks into extinction, ... it stands for nothing but show
Not enough people are aware of the tax advantages of CEF.
GTU has the same advantage although it holds only gold bullion. Both of these funds trade at a premium to their NAV because of the tax treatment. Lately, the premiums have been a bit on the lower side than their historic premiums. Sign of an imminent correction?
dang! 2010 is supposed to be even drunker than 2009!
My drinking binges have abated quite a bit since my hair got shorter and shorter and acquired that grayish tint. I now pay a much bigger price. However, for an old musician and software guy, NAMM is still THE place to go.
The linked article refers to this as sovereign default. Apparently the tribes are in fact sovereign states.
Why, oh why, would a tribe leverage up their casino? All you have to do is be patient and let the cash roll in until you've got enough for the next upgrade. You are getting literal payback bigtime from the descendants of the folks that stole your territory in the first place.
GTU has the same advantage although it holds only gold bullion. Both of these funds trade at a premium to their NAV because of the tax treatment. Lately, the premiums have been a bit on the lower side than their historic premiums. Sign of an imminent correction?
Sorry for not mentioning GTU. You are right, of course.
As to the correction, I think it will come with the initial clear downturn of the stock market. I believe that gold will then diverge again. As I mentioned above, the rules are in the process of changing and predictions are therefore much harder to make. I'll still have a Feb. 15 trigger finger but I'm not at all confident that we'll the see the usual seasonals next year.
As to CEF NAV, the premium just about always goes down following a share offering. I'm not certain that it is meaningful at this time.
I didn't see the discussion about the inability to foreclose. So in this case the tribe snookered the debt buyers. The tribe should just offer ten cents on the dollar, take it or leave it. Good for them.
how about this for an explanation - thanks to the Fed, the financial system has so much money sloshing around that they ran out of places to put it? equities - nope, those are bid up to the limit. commodities - nope, already got oil tankers full of those.
lend it out? hahahahahahahahahahahaha
hell, let's just put it into t-bills, so what if we get negative interest, plenty more where that came from.
I do not care what anyone says; borrowing at a negative rate of interest is not rational, period.
Efficient Market my a**.
(Correction: Yeah, yeah. I meant "lending". As in buying T-Bills. Brain's been farting a lot lately.)
former IBs, too, need to show cash in something other than a mattress
Cash in a mattress earns 0 percent. Which is more than negative 0.3 percent. Q.E.D.
"I am certain that the present circumstance is not an indicator of financial stress as plunging bill rates have been in the past."
Your definition of "certain" is not the same as my definition of "certain".
U.S. Treasury Quotes - Markets Data Center - WSJ.com
t-bill rates offered above par!
booooyaaaaaahhhahahahhahhha
didn't we have negative rates last fall?
Nemo wrote:
Care to rethink that? I borrow from you and you pay me interest to to it? Who is not rational?
created new piles of cash and that money needs a place to park
Second Nemo's sentiment...
I'm not a zillionaire banker nor a Nobel-prize winning economist, but WTH is wrong with just leaving it in cash?!?
so, that's got to break some kind of fiduciary respoonsibility rule, right?
you buy something you KNOW is a money loser? they should be fired!
Japan 1991 here we come
Maybe people are hiding in cash because they expect asset price declines
WAIT, I GET IT! This is like investing in Real Estate nowadays...
See, CR has mastered understated irony. He can play that line either way.
Graveyard, meet whistler ... Jansen used to work for the Fed so his credibility is suspect, IMO.
I know Jansen is the expert, but I still do not buy the explanation. I do not pretend to know the answer, but I cannot accept "the desire of banks to hold good stuff on their balance sheets". Cash is good stuff compared to a T-bill above par...
WTH is wrong with just leaving it in cash
It's a custodial thing. T-securities are not deposits. From the FDIC:
Customers who purchase T-bills at banks that later fail become concerned because they think their actual Treasury securities were kept at the failed bank. In fact, in most cases banks purchase T-bills via book entry, meaning that there is an accounting entry maintained electronically on the records of the Treasury Department; no engraved certificates are issued. Treasury securities belong to the customer; the bank is merely acting as custodian.
i'm not up to speed on the finer workings of cash management at the big banks, but I don't think these banks have the kind of cash to just sit on.
were talking billions, of course.
the majors are'nt going to be sending around Brink's trucks just to square their accounts. So, maybe i is cheaper to buy neg yield, than hire the NY national guard to move 10billion from midtown to downtown?
If I were a small bank I would leverage my cash to buy 20x more treasuries to make it appear it has more cash holdings.
Doesn't this mean that demand is higher than supply?
So the Treasury needs to issue more debt to fix it, right?
Basel Too --
It's a custodial thing. T-securities are not deposits.
But that explanation could only make sense during a panic, correct?
what's the yield on the longer term stuff?
i thought that the real
indicator was the inverted yield curve.
Nemo wrote:
buy futures on margin with non-USD margin collateral to short the USD by another name ?
don't know why people holding USD cash aren't stepping in to collect that arbitrage quicker
Remember how we were talking about a WPA to build hundreds of nuke plants? Well, maybe not...
Technology Review: Blogs: arXiv blog: The Coming Nuclear Crisis
correct. a lot of analysts have been calling for Credit Crunch 2.0
On anti-Earth, anti-Pavel plugs his toaster into a power socket. Positrons flow out of the toaster and in a brilliant flash the wall is toast.
Comrade Rally Monkey wrote:
It's all zeros and ones anyway recorded in a ledger somewhere, so what's the diff? None of this deals with real currency.
Bizzaro Bonds.
On anti-Earth, anti-Pavel logs into his anti-retirement account. Positrons flow out of his laptop and in a brilliant flash the anti-retirement is toast.
which is precisely why we end up talking about neg yield!
" Doesn't this mean that demand is higher than supply?
So the Treasury needs to issue more debt to fix it, right? "
Toilet paper is softer.
Rob Dawg: http://sfist.com/attachments/sfistLeanne/raccoons.jpg
SF Bus
Basel Et al
So banks are putting deposits into T-bills to safeguard the money?????
pavel.chichikov wrote:
Talk about intrinsic value!
"pavel.chichikov wrote:
On anti-Earth, anti-Pavel logs into his anti-retirement account. Positrons flow out of his laptop and in a brilliant flash the anti-retirement is toast. "
Broward wrote that.
more like bank customers, and we're not talking about Joe6Pack.
That banks are willing to adsorb losses to prettify their portfolio just tells you how bad their portfolio is normally. This is exactly like slipping the meat inspector a few bucks to look the other way.
Basel
Yes Basel the big money.
Thanks
"Talk about intrinsic value!"
In medieval times the king would use the neck of a goose.
I'm beginning to appreciate that what I thought were meager returns in our credit union accounts are actually quite generous.
I can deal with negative interest rates, it just shows some parts of the market web are slower/faster than others, we're probably just more sensitive to this lag now because NEGATIVE
it's the inverted yield curve that makes me run for the hills
pavel.chichikov wrote:
Yes, they're almost keeping up with inflation.
Quite generous indeed to let you keep most of your money.
EvilHenryPaulson wrote:
Thanks that's going on my blog for my next transit rant.
Liquidated some glod and silber today at the local store of ill repute that does coins.
The place smelled of new paint, and they had a beautiful new counter of granite, they doubled the size of storefront (been there for 35 years)
Walk in with my bag, the junior squad was closing in when the proprietor waved them off and asked buying or selling?
Selling, the junior bunch went off to practice the investment patter on a couple of ladies who were total newbies.
Experience pays, he did give me a better price than almost everyone else in the city, but I sold some quality metal.
Ten minutes to a check. Who say metal isn't liquid?
I don't like this market, if it craters I will buy back more metal for the same price.
Someday this war's gonna end...
Tim waiting for 2012 wrote:
The system is totally out of whack if you have so much fiat that you are willing to get less fiat back just to ensure your haircut can't be any longer.
That's right Schumer you moron. The Administration should stop embarrassing itself with this yuan appreciation nonsense. No, retards, the IMF's going along with your scam doesn't prove squat to anyone with a brain.
the 20 and 30 look like...
not really sure what any of this means but it's still fun to look at.
here
Wall Street's looting of Main Street continues unchecked. At least it wasn't Goldman...
Carlyle to run roadside service stops in Connecticut - washingtonpost.com
The District-based private-equity giant and its partners will invest $178 million in the state's roadside service centers as part of the agreement, which will include putting Subway restaurants as well as Dunkin' Donuts locations in the centers, according to a Carlyle spokesman. Dunkin' Donuts is owned by Carlyle....
The venture is part of Carlyle's growing interest in developing partnerships with cash-strapped state and municipal governments to invest in, build and manage projects in exchange for a long-term revenue stream.
yagij
Yes well put. Again they are expecting big asset declines.
Citizen AllenM wrote:
Meaning you would be willing to buy your PM back for the price you sold it if things get more wonky?
.
Edit: Ignore this message. Your point finally sunk in.
so the bill maturing jan 2010, you can pick up 17 /32 ($532) shorting it into maturity(per $100,000) !
Just Do It
"Yes, they're almost keeping up with inflation. "
I think it's slightly better than even, and certainly safer than houses - literally.
I mean is it so crazy given how $s are divied up by manager/desk?
they haven't circumvented that organizational limitation by adding a few lines in their automated trading system to automatically buy any negative yielding zero weighted risk asset because it was a rare/unexpected event, and for another reason that comes next
I would be pissed off if they lost me $25 in 3 month t-bills up front, but the buyers were probably not people. probably a thing. some central bank that cares more about when and how much is bought instead of at what rate of return
which is probably the other reason that it hasn't been eliminated. free money is free money, which is the best kind of money. better see how much they are willing to give away before you give an answer
Those CT road stops are fine. I'm not paying
a premium for a donut.
Citizen AllenM wrote:
Does that signal a top?
good call CAM -- the precious does feel toppy here. i'm not selling but i'm not buying either. i'll add if we break 1k on the downside.
That is from John Jansen. But I don't think there is a problem either....
best wishes
No, given the hedge funds crowding the trade, I will be able to buy back just north of $10 for silber, and $850 for glod.
Of course, that will be due to wall street taking a pasting again.
This ridiculous liquidity trade illustrates the problem- too much money just sloshing around looking for alpha and safety- which are now mutually and totally exclusive.
Where is the consumer? Down in the bankerdome, cowering in fear as the credit lines are being closed.
But they have not yet begun to really liquidate- that is going to be the next lesson, brutal selling of stuff for cash to pay the bills.
And retail inflation in food, and drugs.
Someday this war's gonna end...
CalculatedRisk wrote:
No... As Citizen AllenM put it: We have too much money looking for alpha and safety. No problem with the arrangement that they are currently mutually exclusive.
.
Barbrady: Nothing to see here. Move along.
........why did this strike me with "dread" the first time read?..........Despues
All is well in the garden. The Emperor has clothes. You don't need to see my identification. Move along, move along.
I was initially joking about opening The Mattress Fund, where we would hold lots of actual paper cash in vaults in the US. The Fund would make no loans, and would be enormously liquid.
It's a shame that Carlyle is literally stealing from the blind, who by law have first dibs on the operation of vending facilities on federal property.
Citizen AllenM wrote:
Does the consumer have enough bullion-grade PM to liquidate? Does the confidence game between USDs and PMs affect the movement of those items? What kind of order do you think will play out in the liquidation? e.g. Electronics -> Jewelry -> Big Ticket Items -> PM? I agree that the capitulation isn't here yet because people aren't selling to make ends meet. They are just selectively choosing where to default for now.
Basel Too wrote:
Meredith Whitney on Bloomberg today agreed. She noted that credit card lines have been cut by $1.5 trillion since the market peak, and she expects this to go to $2.7 trillion. She also expects losses of credit access will reaccelerate in 2010
Citizen AllenM wrote:
Do you have data to back that statement up? Not arguing, just haven't seen anything to support or refute that assertion.
Insight from a comment on Across the Curve:
We need creative, productive use of capital, not spread trades of .000000006 bps on 5 billion in money.
yagij
It will be just like how the consumer sold out to make ends meet sending all of Asia into a currency crisis in 1997
TJ and The Bear wrote:
I was at a meeting this week where various short term rates were making their way to zero. Still those might be positive real rates.
And here I was worried about having too much sitting in cash. At 0% interest, I'm getting a better rate than the big boys. Booya!
EvilHenryPaulson wrote:
I'm curious. Got a link for me or can you give me a brief 1-3 line synopsis? What did they sell out of in 1997 or Argentina earlier this decade? I really don't know.
Nemo wrote:
But if rates go lower -0.3% T-Bills would be worth more?
I really doubt China, India, or the Maltives (yes they are buyng too) will let gold see 3-figs again.
You may be right about silver though. Kinda shocked mining stocks took it on the chin with the rest of the market too. I really thought it would've decoupled by now.
Another buying oppertunity. Woo hoo.
Rich,
made a response to you after the pig...
My comments about holding physical gold...basically I was talking about Americans holding physical gold (IF there was a currency reset) and maybe having to sell to raise cash and take what the gold bullion oz. value in dollars at the time such as Cash For Gold for junk gold or coin shops buying bullion coins...what the Chinese are doing, yes, is their way to cope with uncertainty...but most Americans are stuck in the Dollar and sell stuff for Dollars if they need to raise cash to pay bills or buy necessities and if there's a drop in gold and they have to sell for dollars...they will have to take what they can get in dollars...
And just when I thought kcoops menagerie was complete, I have a sudden need for a levitating knife.
Nevertheless, you have to admit that these are interesting times.
*the Maltives "
Maldives? They're nearly under water.
unemployment goes up, so do credit card losses
which is why I laughed at Dimon proposing that his #1 reason goal after acquiring WaMu was to issue more CCs right here in these comments
no one prepared for these unemployment rates, so of course we were going to have these retrenchments
the CARD act is just taking it a little further, or grouping all the cuts together
I just posted this because some people are pointing to the negative rates and heading for the bunker. There are plenty of reasons for concern - but this probably isn't one.
BTW, Goldman has a note out tonight to clients: "Our current working assumption is a 5%-10% drop in home prices through the middle of 2010. ... Our conclusion: while the bottom in housing starts has very likely been seen, homebuilding is likely to provide a much smaller boost to real GDP growth in 2010 than in the recovery from prior deep recessions. Meanwhile, house prices and credit quality look set continue to weigh on the US financial system, the availability of bank credit, and ultimately the pace of the economic recovery."
best to all
yagij
it has never been the man on the street who decides the end of a bubble
Great photo EHP.
just reading naked capitalism and post by Harrison re Faber and Au never going below $1k ever again(!).
The move now is by central banks pushing the price up higher. Faber also obliquely refers to sloshing since folks aren't going to be willing much longer to tolerate 10 t-bill yields at 3.5% or 30 year yields at 4.4%; so their going to go to commodities, esp gold/silver. So the gist is that he sees start of move out of USG notes further into commodities, esp PM (earlier interview other day also mentioned farmland).
So, time to go long PM and buy TBT?
And yeah, I'm playing with selling some of the PM and repurchasing after a correction.
EvilHenryPaulson wrote:
the story behind that racoon + bus photo is that this one driver apparently feeds them at the same time and place on his night shift
EvilHenryPaulson wrote:
No, I was curious to know what did the average person during the Asian currency crisis of '97 sell to make ends meet? Was there some sort of pattern between what retained a good value vs. what was instantly trashed upon resell (Think cars or Madden NFL video games)? Would tobacco hold more value in a selling market, or is it pretty much all assets plummet to the floor?
"Meanwhile, house prices and credit quality look set continue to weigh on the US financial system, the availability of bank credit, and ultimately the pace of the economic recovery.""
So TImmy G testifies that things are great, and
hangs him out to dry? That does not bode well for Timmy's future.
Terry
I wasn't following it closely, but I got indications that no one but Dodd was behind that bill. Frank, Obama, Pelosi, etc distinctly displeased
Outside of jewelry J6P generally doesn't own any gold, and probably not too much in jewelry either. Oh, and it's not like the guy's gonna part with his Rolex or the gal's gonna give up her wedding ring without circumstances being dire.
EvilHenryPaulson wrote:
Yep.
homedad43 wrote:
Never sell your physical. If you're worried about a drop, short GLD as a hedge.
Goldman- 5-10% drop on home prices through the middle of 2010.
Is that with the release of the reserve shadow inventory?
yagij
oh in Asia, I guess I have no methodical answer to how they made ends meet during the currency crisis. heard a lot of bad stories though
What to sell?
Most people have trash/stuff that's easily replaced later on. Think of what went for sale to raise more cash in college after you toked the account away by February. Electronics, etc.
That's when I'd start to push them on the more interesting stuff, that will really have some value after things shake out.
Martin Mull once wrote a song with first stanza:
Saddle up the buckboard, crack the whip
Tell the horse that the course is the mighty Mississipp'
Keep your strongest son, shoot the rest,
Sell your daughter with the biggest breasts
'cause we'll need that money when we get out west
Headin' for the Cumberland Gap
No crap
We're headin' for the Cumberland Gap!
They also just bought 2 tons of the barbarous relic.
Not quite the 200 tons India bought, but it's a start...
TJ,
So average Americans aren't really buying tenth oz., quarter oz. or half oz. gold bullion coins from their local coin dealer and/or eBay?
TJ:
So noted. Thanks for the comment since hadn't considered.
TJ and The Bear wrote:
I guess that was my point. The argument that people will dump their physical bullion as the first wave of Making-Ends-Meet '10 begins just strikes me as odd. Maybe *bugs just think about it differently, but the fear is also that of a collapsing currencies more than just having a cash flow problem. I would easily sell excess furniture, computer equipment, glass/flatware, and other things before thinking about the PM, and I would imagine those things I listed would fall in values long before the Canadian Silver Maples because it is easier to buy plates and forks than it is to buy Silver Maples.
.
I would also think that the use of services for pay (legal and illegal) would make a raise and killing the amount of cash you could raise as everyone does it more, but I just don't seem to comprehend the thought of selling PMs first as a logical first or second step...
Average Americans are trying to feed and clothe the kids, keep the car half full with gas, and pay the rent. Sometimes they get a chuckle out of 'planning' for college, but upgrade the cell phone plan instead.
merchants of fear wrote:
Sure, but the numbers are still inconsequential, and those that are buying now aren't likely to be hurting either.
merchants of fear wrote:
My parents never owned any coins sans some silver pre-1964 dollars until this year. That means 50+ years of never even thinking about it much less acting on it until I finally convinced them to drop some cash into PMs to supplement their emergency cash supply. As for me personally, I'm stocking up on silver, but it is a personal choice of risk v. reward. In sum, my family is the only people I know who have, and everyone else I've asked look at me like I'm babbling.
TJ,
Plus all the gold coin sellers advertising bullion coins in tenth, quarter, half oz., etc. advertising on Alex Jones and other Patriot sites or Hannity or Glen Beck? 'Buy gold where I buy mine'. You or Joe6pak can buy in small quantities from these TV or internet gold bullion dealers.
Dude,
If you thought real estate had some vicious spreads on a round-trip, you've never tried to sell physical PM. Look at the buy /sell spreads on Kitco for an idea. And then add another 1-2% vig in either shipping or dealing local.
And remember, you owe the IRS 28% of you capital gains on a sale.
And any cash transaction (or series of transactions) totaling $10k are reported to your Uncle Sam. If not by the dealer, then by the bank when you cash the check. Unless you feel comfortable dealing with all that cash. And trust the dealer (who is already skirting the law) as legit.
homedad43 wrote:
You're certainly welcome. The transaction costs, combined with risk of being out should a major event transpire (e.g., nuking Iran), is just too high to be trading physical.
i might personify the j6p image... i drink beer (obviously), i work in the maintenance / construction field, no 4-year degree, and i own gold and silver.
i'll let you all know when my fellow meatheads advocate gold ownership. most can't afford to grab a few beers at the bar anymore...
it ain't about "us" anymore. that's what i tell myself when i buy maples.
Ambrose in yesterday's Telegraph reports Soc Gen calling for a return of the Armageddon trade: http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-clients-how-to-prepare-for-global-collapse.html
A question: Did mp deliver the new document he was promising last weekend?
merchants of fear wrote:
Yeah, and what fraction of the population actually sees those? You're projecting based upon personal experiences which are wildly divergent from middle america, otherwise you wouldn't even be here.
You have to think in terms of dot-bomb or the RE bubble; IOW, when your friends and family start every conversation with talk of their favorite gold investments THEN it's time to get out.
If a million people bought an oz. coin gold bullion...that's a lot of sales for the TV and internet gold coin sellers...plus the coin shop sales and they are busy...and not everyone is rich in those coin shops...
sneering nihilist wrote:
Ha! Rest assured I haven't been offered to buy some Gold Kangaroos from my shoe shine boy yet so I don't the top is here. Also as sneering alluded, you can't just decide one day to buy gold coins. You have to decide to buy silver bullion coins. While showing up on the TV or radio, these kinds of things are not turning up around the watering hole along with Monday morning football talk--at least in my world.
honestly; Is Gold any different than tulips....? Really?
I think Glen Beck and O'Reilly have a big Joe6pak audience and there's tons of gold coin ads...
yagij.
Just look at what is worth anything, and you will see what the order is.
Big ticket items? Just saw a hot rodded 63 biscayne on craigslist here for 2k- divorce sale. Electronics is already not going into the pawn shop unless it is big ticket stuff. Jewelry is going now, and I imagine PMs are next to last for most folks, given how few own any beyond this commentariat. Houses are going into the abattoir. Commercial property is next. Tools have fallen quite a bit, but there is still a market out there when they get cheap enough. Default is first, then whatever, but here in Phoenix I am seeing a lot of total liquidation next stop is the relative's couch.
Tired and a bit depressed today, personal reasons.
Someday this war's gonna end...
Comrade Rally Monkey wrote:
Find me a Central Bank buying tulips and we'll talk.
merchants of fear wrote:
Those million people would need to be able to part with 1150-1200 USD in cash up front to get a single coin. That is a chunk of change to many people at the moment--me included. Go with TJ's comment. When family members want to talk about their PM strategies--like they did with .com stocks or flipping houses--then it is time to either hold for a currency risk play or get out.
Citizen AllenM wrote:
Sorry to hear that. Take care!
Anyone got a link to the report?
Oxtail,
There are plenty of banks that have > 1% interest. I know it is pittance but don't you move your cash to one that gives the best interest.
TJ, screw the data, anything going up with momentum has hedgie money pushing it today.
Otherwise, how could dead men walking like SPG keep going up?
I was looking at how tight the options are on slv and gld with amazement, how little money can be made selling those options.
Is that not the very definition of liquidity and interest? I took me a dog's age today to get out of 30 calls on ERY that were in the frickin money, and yet the bid/ask in gld and slv is tight, and the near money on ERY was running 15 to 25 cents.
Someday this war's gonna end...
Citizen AllenM wrote:
Good point. I should trek into a local pawn shop and see what is sitting and see if anything is moving. I may do that this weekend.
I believe tenths and quarter oz. gold bullion coins are the best sellers for coin dealers...
yeah, but I wonder what happens when the paper market dislocates from the physical market.
GLD is priced at $1500 /oz, while you add a zero to get the physical price. If you can find it.
So for a $150 or whatever Joe6pak can get a tenth oz of security...
Good news! Another casino goes belly up. This really is good news for America:
NJ Resorts casino gets OK to give keys to lenders - Yahoo! Finance
ATLANTIC CITY, N.J. (AP) -- America's first casino to open outside Nevada got permission Thursday to hand itself over to its lenders because it can't pay the mortgage.
JP wrote:
SocGen - Worst Case Debt Scenario
Any of you oldsters recall baht chains? Portable gold just in case things went seriously negative. I wonder if maybe they are making a comeback?
WTF are you going to do with a $1000 coin? You can't cash a $50 at a lot of gas stations, but gold coins are going to be our saviors? People want to believe.
Some perspective...
Market Cap of S&P 500: $9.6T
Market Cap of GLD: $40.7B
That's not even considering bonds & derivatives.
Badger boy wrote:
bingo! PM should denote physical, and PPM should denote paper (GLD & SLV). While GLD reportedly has enough gold bullion in its safe to be its own central bank, I'm weary of it beside short-term trading purposes. I also think that I will be able to buy certificates of it much easier than a coin if things go south.
merchants of fear wrote:
Same thing with Rush.
did you read CAM's comment above? he sold his stash for cash. in 10 minutes.
Foxwoods in trouble this week too.
badger wrote:
What is it about Gold and "Mad Max" scenarios? It can be as simple as trying to preserve the purchasing power of your money.
I know this coin bullion is selling because the commercials are increasing and the pitch is buy gold bullion in various weights and then a salesman or gold representative will try and switch the customer to numismatic gold coins where the real profits are...
Thanks Vic.
badger wrote:
How much paper gold is there versus physical gold?
1 currency now -yogi wrote:
Where are you seeing that?
I've gotsme a vertigo voodoo headache.
From Yahoo: To lower interest rates, Citi customers must spend
NEW YORK – For Citibank credit card holders, there is one way to escape the bank's rate hikes currently under way: Meet a monthly spending requirement.
Those who meet the spending minimum — in some cases $750 a month — will be able to get a rebate on their total interest charges for that month. The rebate could cover some or all of the interest rate hike. Customers also need to make payments on time to qualify for the rebate...........
Prepare ship for ludicrous speed! Fasten all seatbelts, seal all entrances and exits
badger wrote:
I am no gold bug, but there is little chance of physical gold going to zero, outside of theft. Paper money, T-Bills and stock though, have a higher risk. Gold is a convenient, portable, historic, hedge. Diversification is king. What is a Confederate dollar worth? What if the South had won? Gold is a store of wealth against the Black Swan.
badger,
Got $1200 for it today, cash.
So, that is 24 fillups.
Now, is that what you are talking about?
I am sure that coin will be turned within 24 hours for $1300 to the public.
The yellow stuff always has a market, but you do have to know it not to get trimmed a bit.
Someday this war's gonna end...
That's just insidious.
merchants of fear wrote:
See TJ above. All of the above ground gold == 40B. The options market on the NYMEX is waaaaaaaaay larger in regards to paper contracts.
Then buy the ETF. Don't put up with the transaction costs of coins. In the actual TEOTWAWKI scenario, people think gold coins are going to act as a currency, but they lack some of the fundamental values necessary to be one.
JP wrote:
ZH has the report in full text
Gold is OK...not knocking the hedge or possible safe haven aspect until someone in a pickle has to sell for less than they paid or when it dips badly but that's the nature of risk in investments...gold has risk like other investments...maybe less risk than many...
Foxwoods faces more fiscal trouble | SouthCoastToday.com
JP,
Foxwoods missed a bond payment this week:
Mashantuckets Will Miss Debt Deadline | Connecticut Public Broadcasting Network
A Confederate dollar is worth something as a collectible...
right!
adjacent to my gold coins (which makes me sick to look at), is a pile of cash (which makes me sick to look at).
inflation? deflation? noitalfed? noitalfni?
who knows?
yagij wrote:
Not quite -- I was stating the market value of the GLD ETF. The total for above ground gold is much higher, but still does not rival equities, bonds, or derivatives.
Re utility of physical Au for everyday stuff...
that's why you want to keep a quantity of silver available. The silver will be the daily stuff as well as small items made of Au, think rings and the like.
Keep the Au for the bigger stuff.
Not sure what creditors can do on the reservation.
yogi. you beat me to it. from what i understand, indian tribes have limited sovereignty rights.
Gold just has the appearance of a possible manufactured bubble to me with the relentless U.S. & global campaign to tank the dollar...
badger wrote:
What makes currency a "currency" is the acceptance of it by a government for taxes. Gold can never behave as a "currency" for that reason but it is a currency in the sense that people will accept gold in exchange for currency.
Was bored this evening and decided to click on the CR problem bank list and checked on the larger banks that are reporting companies to see what their Q3 SEC reports, which were filed ths week, said. It will be interesting to see if any of the whales on the list go tomorrow - I am thinking TierOne has a decent chance
Thanks Nuke & yogi, I didn't know they were so far gone.
Good thing they have sovereignty.
Basel Too wrote:
How so? ie, how does this limit foreclosure?
When Ag is $5 an oz again, I'll consider that.
Gold ETF, taxes » Beware The Tax Traps Of Commodity ETFs | Daily Markets
still better than the average mutual fund, but is there even anything worse than the average mutual fund?
TJ and The Bear wrote:
Gonna have to go back to my research because I thought someone posted those numbers and the above ground market cap for bullion was that small. Maybe it was ZH.
.
Edit: Here Rich write this
MoF,
So, the countries of the world are manufacturing crises in their own fiat to create a bubble in gold? Yeah, that makes sense.
JP wrote:
You are welcome. Glad to be of service to one of my favorite commenters over here
what happens to gold if a lot of the soverign/state/corporate debt is repudiated, but the currency retains it's value
Homedad,
If you pulled up to a gas station say in outback Moose Country somewhere in Hard Times and pulled out a Kennedy 50 cent silver coin, would the attendant know how much it's worth and give you gas? No maybe not. Gold & silver are for holding like the shotgun...
NJ Resorts casino gets OK to give keys to lenders - Yahoo! Finance
Jingle all the way...
TJ, very interesting article, thanks!
then i'll drive you to mars in my honda civic on the following weekend and we'll do lunch.
Would someone please wake me up 5 minutes after the last "Glod" (or equivalent) mention in this thread?
TIA
JP wrote:
It was at least 20 years ago when I was researching this issue for a client that was interested in building a retail center in AZ on tribal land - my recollection was that their soverign status made it next to impossible to foreclose. Plus they never waive soverign immunity, so you can't even sue them on the note except in tribal courts.
TJ
No maybe the merchants of fear are selling gold as a hedge to the political/economic campaigns to devalue the dollar...don't make it too simplistic or black-and-white...there's many sellers and players trying to cash in on the expectations of dollar devaluation created by our fearless leaders and administrators...
RE: Gold Bubble
A bubble requires the active encouragement by a government to inflate itself.
Do you see the government provide tax incentives to own gold? (It is taxed as a collectible)
Do you see the government encourage ownership by touting a "Gold Ownership society"?
Gold does not generate fees for any of the interests of the FIRE sector.
How can it be in a bubble? Do I think it will keep rising? I don't know. What I do know is that I would like to hold insurance against a collapse in the value of the dollar. I hope my gold bet does not pay off because all of my earnings are in dollars.
It's technically their nation, so their laws govern. Some US laws prohibit purchase of Indian land because there used to be abuse.
Yeah poic,
Gold is a boring topic that's not too relevant now...you think?
1 currency now -yogi wrote:
Its Native land until its not plenty of instances
Vic wrote:
Tulips? Beanie Babies?
hey RE -- are you going to the 2010 namm show? it's right around the corner you know? i remember talking to you about it last year, that's why i ask.
Vic,
That's the paradox...either way lies possible madness...
Vic wrote:
Well they seem to be doing their damnedest to tank the Dollar which could be seen as blowing a bubble in gold.
Skip gold then...silver is interesting too, especially junk silver...
Badger Boy
two suggestions when dealing in gold coins
the first is...mmmmmmmm
the second is, gold is money is cash...so when ya sell gold at a minimum insist on seeing the long green
ps 10k plus transactions are for guys trying to compensate...be cool
ahh...
from the Treasury, the very politically correct "Guide to Mortgage Lending in Indian Country"
http://www.occ.treas.gov/events/country.pdf
merchants of fear wrote:
Occam's Razor. There's certainly a momo trade on the dollar, but you can't deny the underlying fundamentals.
I too think gold's run is a bit extended and a pullback is entire warranted. Doesn't change my positioning a whit.
vikas wrote:
This article is starting to get annoying. Headline should be "Typist at Telegraph helps Soc Gen locate scared bankers and hedge fund managers so that it can charge them fees for setting up strategies to hedge against unlikely event. - Increase in public fear an afterthought" "The worst case scenario is usually scary and in this case meant to scare people," said the typist, "but I'll take his word that bankers and hedge fund managers are scared. I'll scare the readers of the Telegraph as that will help sell papers." Note the actual absence of scared bankers who are willing to be quoted in support of the worst case scenario. Just a guess - Soc Gen is moving a product. Nothing more. This isn't "reporting" in the traditional sense - it's typing up a Soc Gen press release.
MoF,
Would it interest you to know that I've invested more in silver than gold?
Comrade Rally Monkey (homepage, profile) wrote on Thu, 11/19/2009 - 8:45 pm
honestly; Is Gold any different than tulips....? Really?
no not really, i prune my gold, water it and never leave it out in the cold on a freezing night...other than that uhhh not really
oh yeah except one thing, there are 2000 years old glod coins floating around
have ya ever seen a 2000 yr old tulip, ? no?
Last thougt on gold because it is the thing now IMO...but if gold is the last hope of investing or preserving wealth, the system has failed already as in systemic failure...
OKAY, OKAY... let's all give picosec (and others I'm sure) a break.
If the naysayers would agree to stop trotting out the tired old anti-PM arguments, then the rest of us won't have to stomp on'em. Deal?
Oxtail wrote:
I have no idea about Beanie Babies. But, from the Wikipedia article about the Tulip bubble.
*During the rest of the year, traders signed contracts before a notary to purchase tulips at the end of the season (effectively futures contracts).[19] Thus the Dutch, who developed many of the techniques of modern finance, created a market for durable tulip bulbs.[10] Short selling was banned by an edict of 1610, which was reiterated or strengthened in 1621 and 1630, and again in 1636. Short sellers were not prosecuted under these edicts, but their contracts were deemed unenforceable.[20]
*
Tulip mania - Wikipedia, the free encyclopedia
badger (profile) wrote on Thu, 11/19/2009 - 8:51 pm
WTF are you going to do with a $1000 coin? You can't cash a $50 at a lot of gas stations, but gold coins are going to be our saviors? People want to believe.
thats why they invented silver...to make change for gold
TJ,
...
Yes that's interesting because I had heard silver has more potential to go up than
Blackhalo wrote:
The U.S economy is structurally incapable of supporting the present value of the dollar. Gold rising is probably an unintended consequence.
Nuff said.
merchants of fear wrote:
You have no idea... don't get me started!
"The bank [Citibank] also noted that "customers who do more business with us will have the most opportunity to reduce their rates." Of course, consumers could need to spend more than they otherwise would to qualify."
There was only one catch and that was Catch-22', Citbank the new and improved Temple of Doom.
Maybe not a problem but, something don't add up. Ben, Bullard and the boys giving the two thumbs up to the free money reflation trade for an "extended period' even into 2012 and big money going into negative yield 3 month t bills?
Hey, sorry to interrupt but do any of you here on this glod blog know the url for that blog voted biggest game changer?
i agree, it don't make no sense. so what's your take?
@ Vic: Thank you, but I'm sure you're confusing me with somebody else.
@ Basel Too: Looks like they punt it over to the tribal courts, who I'm sure are VERY sympathetic to the US style of foreclosure. Thanks for thelink.
You have probably blocked the site on your computer but it is the Huffington post.
I think gold is a good investment. If I were in "wealth preservation" mode instead of "waiting to short the hell out of the market" mode, I'd put some money into gold. But I'm very wary of people who think gold can never crash because fundamentals say so. "Buy now or be priced out forever" talk always makes me suspicious.
Rob Dawg wrote:
You mean catsforgold.com
insufficient
too much shiny 
for the love of pete
if ya dont have no Au nor Ag
i hope ya at least have a little Pb
Allen, there is a lot of physical buying happening as a result of significant curtailment of tax havens. Several stories along these lines out of Switzerland.
Pension funds are also entering the trade. The baton is being passed to a different class of buyers. With the CB change of heart we are facing a very different market. Also, the Reserve Bank of India purchase legitimizes the above $1,000 price for Indian buyers IMO.
I don't mean to imply that gold is not facing a potentially severe correction but I would be quite surprised if it were to fall below $1,000. I think we are moving into the second phase of the bull market and the old patterns will increasingly be obsolete.
Human fat in cosmetics
Four people have been arrested in Peru on suspicion of killing some 60 people to sell their fat and other human tissue to Italian co-conspirators for cosmetic use in Europe, authorities say.
OT: I interrupt this
chat for this lovely Cracked article: How Not to Deal With The Red Ring of Death | Cracked.com
I LOL'd and had to share it somewhere. (Rated PG-13 for mild language)
Time for a Soylent Green comment yet ?
~splat
ee, you want doom? Whyintheheck is the Dec 2011 nat gas trading at $6.26? But that raises the question. Is there a long dated commodity strategy for shorting the dollar?
EHP, I posted about this a few days ago. Don't buy GLD, SLV but get CEF. By filling out form 8621 you will qualify for the 15% capital gains treatment.
They should find some hungry Russian partners so they can fully maximize their resource utilization.
sneering nihilist wrote:
Thanks for remembering. Not this year. I'm stuck here in the great Northwest. I miss Southern Nevada a bit but thinking of summer I really don't want to trade.
Rob Dawg wrote:
Dunno, but let me know if you find one.
RE
I wasn't sure what/when I had read, but I guess it was you with that link I re-found, so h/t to you then
yagij wrote:
PCRDX ? Pays dividends too.
One for Rich...
had 8,134 tonnes of gold and China had just 1,054 tonnes of 
.
Gold holdings by country...the U.S. vs. China...couldn't set the ZH link but U.S.(
RE -- dang! 2010 is supposed to be even drunker than 2009!
I just responded to POIC who posted a link about the 28% tax treatment of GLD/SLV. I use GLD/SLV solely for trades but keep longer term money in CEF. It acts as the equivalent of my savings account. Not enough people are aware of the tax advantages of CEF.
bah, Europe is full of hypocritical savages
imposing a ban on Canadian seal imports while approving of seal hunts in Scotland and Norway, importing human fat from murdered corpses, dumping toxic and nuclear waste in the ocean, bottom trawling fish stocks into extinction, ... it stands for nothing but show
So 2 years agao I said "negative i rates" and was laughed off the program....now what?
John Jansen is a Fed shill. No credibility in my books.
Basel Too wrote:
There's a Dunkin Donuts on every second block in the UAE. Bush Sr. is using his in with the Sheiks to sell double chocolate dips with bad coffee.
ghostfaceinvestah wrote:
MS would agree.
If it's just PM's why does it get the tax break?
RE wrote:
GTU has the same advantage although it holds only gold bullion. Both of these funds trade at a premium to their NAV because of the tax treatment. Lately, the premiums have been a bit on the lower side than their historic premiums. Sign of an imminent correction?
Keep pounding the table. You've been right. Some people still think DD inflation is coming around the corner
Barley wrote:
Join Rob Dawg in the "Ha ha! I was right!" section of the lounge. The Timmah body-double will let you behind the velvet rope.
Planning a 10-20% sell off between now and Feb., maybe? They'll wait and see what the markets feel like then.
sneering nihilist wrote:
My drinking binges have abated quite a bit since my hair got shorter and shorter and acquired that grayish tint. I now pay a much bigger price. However, for an old musician and software guy, NAMM is still THE place to go.
At some point, sovereign nations will need to sell hard assets to cover debts - they won't print forever - sorry.
And when they do, many DItto Heads will shed a tear for their three gold coins.
"There are plenty of reasons for concern - but this probably isn't one."
It is quite unusual for certain. Look at the leverage ratios. At what point is the banking system insolvent? We have to be close...
Speed wrote:
AZ wants to sell their state legislative house. Seems like my silver is safe still!
many DItto Heads will shed a tear for their three gold coins
but nt their etfs found on paper, right?
Allen C wrote:
Two years ago?
The linked article refers to this as sovereign default. Apparently the tribes are in fact sovereign states.
Why, oh why, would a tribe leverage up their casino? All you have to do is be patient and let the cash roll in until you've got enough for the next upgrade. You are getting literal payback bigtime from the descendants of the folks that stole your territory in the first place.
Stupid, stupid,stupid..bangs head in frustration.
mark zandi said today that the banks are overcapitalized.
Moody’s Economist: Banks ‘Overcapitalized’ after TARP : HousingWire || financial news for the mortgage market
'Central Banks Increasing Gold Reserves'
Safe Haven | Central Banks Increasing Gold Reserves
rosethorn wrote:
The red man never learns? /ducks
is this a trick question?
every commodity you buy effectively makes you short $
Safe Have has some good articles. But it is also Gold Bug Central.
Vic wrote:
Sorry for not mentioning GTU. You are right, of course.
As to the correction, I think it will come with the initial clear downturn of the stock market. I believe that gold will then diverge again. As I mentioned above, the rules are in the process of changing and predictions are therefore much harder to make. I'll still have a Feb. 15 trigger finger but I'm not at all confident that we'll the see the usual seasonals next year.
As to CEF NAV, the premium just about always goes down following a share offering. I'm not certain that it is meaningful at this time.
Uh, Rose, why wouldn't they, given that it's going to be hard to get a dime out of them.
Comrade Rally Monkey wrote:
Even more if you use a credit card! You are using weaker USDs tomorrow for stronger commodities today!
Peak Oil?
BP CEO Says U.S. Gasoline Demand Peaked In 2007 - WSJ.com
"We will never sell more gasoline in the U.S. than we sold in 2007"
I still don't get the CEF tax "treatment". What's the case or rule?
Tim waiting for 2012 wrote:
No, peak Dollar...
I don't think peak demand is the same as peak production
For some reason while reading the financial news I have the song by The The "Sweet Bird of Truth" running through my head...
~splat
1 currency now -yogi wrote:
This link explains it nicely:
I bought CEF from broker. If I sell do I get 15%... - JustAnswer
I didn't see the discussion about the inability to foreclose. So in this case the tribe snookered the debt buyers. The tribe should just offer ten cents on the dollar, take it or leave it. Good for them.
splat
It was a play on words
from upthread
mark zandi said today that the banks are overcapitalized.
kind of like saying "prostitutes are too virtuous"
how about this for an explanation - thanks to the Fed, the financial system has so much money sloshing around that they ran out of places to put it? equities - nope, those are bid up to the limit. commodities - nope, already got oil tankers full of those.
lend it out? hahahahahahahahahahahaha
hell, let's just put it into t-bills, so what if we get negative interest, plenty more where that came from.
Allen C wrote:
When foreign countries stop trading goods for dollars.
Vic wrote:
Actually, CR threads do not devolve to survivalist strategies at the mention of gold nearly so severely as they did about a year ago.
'...Financial Crises and Economic Growth' (August 2009)
'Remaining issues' -
'...sudden stops and contagion still lurk in the shadows.'
'...there are prospects for further turbulence in the developing world.'
http://www.econ.ucdavis.edu/faculty/cmm/os_growth.pdf