All the drama with Ukraine, inflation, uncertainty...... is GOOD. Here is why

tanstaafl72555

tanstaafl72555

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It is a last flashing "roadblock up ahead" flashing yellow lights.

It is like an engineering report that says there is a fatal structural flaw in the building.

It will either have to be torn down or radically reconstructed. I am referring, of course, to the gigantic ponzi scheme that is currency, debt, and banking. It is more ghastly than other earlier collapses, threatened or actualized. Prior events have been localized to one nation or a group. This one is worldwide.

People who trusted..... and continue to trust (rely on, put their hopes in, act in accordance with) the reliability of the USD have been fools. Some will continue to cling to foolishness as their entire fiscal environment swirls down the toilet. What almost everyone except the maniacal Mises camp of gold bugs and other lunatics has assumed is reliable wealth is going to vaporize. I don't know if this is "it" but I know it is coming. I also know how the majority will respond. It will be with an increasing bitterness and cynicism of "there is no place else to go." One of the things I have learned over the years in trading is the foolish tendency of people to just stare stupidly at a screen as an investment tanks, holding to a forlorn hope that "it will come back.... it can't go down much more..... it has to bounce somewhere....." and it does bounce.... down around zero. When it is dumping DUMP IT! Get out now. I shorted citibank stock in 2008 at 25 (it had already sold off over 35 per cent). Covered at 12. IT WENT DOWN TO UNDER A DOLLAR. "When in doubt, get out." However, this may be instead like a worldwide Enron. When it goes bust, the markets will simply close (the governments will do that to "protect you" ... because 8000 elephants cant all fit thru that door at once. You can stare at that screen and watch the "price" go to less than 3% of what it was..... then you will be able to sell, as "order has been restored." Don't be that guy, is my advice.

I have been convinced that the entire US/Western/ and in fact WORLD financial architecture is rotten, tottering, and due for correction since 2002. What has happened instead is that the guys at the top have in fact guaranteed that when the "correction" comes, it will be with a devastating crash. I do not know if Ukraine will push this over the edge. I think so, but I thought so in 2008 and I was wrong then. I do know it will come. You cannot obviate basic economic laws, and the world banking structure is very much like Wile E Coyote, who has run out past a cliff and is just now realizing there is nothing under him but air. The bottom of that canyon is deep.

It is NOT too late to begin hedging with gold/silver/various commodities (no, you are NOT going to save yourself with "lead", though you should have some!). Those who have placed their trust in the head bobbing minions of central bankers (CNBC and the financial "industry") are going to be ruined. I am not saying this with glee. It is rather an invitation to liquidate and reposition assets out of the vapor we have assumed is "wealth."

Get independent. DOWNSIZE. Diversify your portfolio (if you stay in equities) to oil and gas, farmland, basic commodities (fertilizer, metals and mining) and GET OUT of tech, FANG type stuff, anything related to finance/interest or debt/housing etc. DO NOT look to the professional IB crowd to give you advice on how to hedge. They are going to recommend what they know, which are LEVERAGED INSTRUMENTS THAT DEPEND ON THE FISCAL STABILITY OF THE SYSTEM TO PAY OUT. You have no idea how close the large insurance companies (AIG in particular) came to simply defaulting on the darling of the last 2008 mess (credit default swaps). SOMETIME (and it may just well be this time around) the fed is going to step in and say "we will pick up the bill" and the world is going to say "with what?"

I don't say this with any glee or "I told you so".... even if I am (finally) right. I might not be right on timing when the foundation will finally crack. I am telling you that it is groaning, and Ukraine/Putin etc may well be the bulldozer that shoves it over. Be smart.
 
tanstaafl72555 said:
It is NOT too late to begin hedging with gold/silver/various commodities
Click to expand...
What good is a precious metal if the SHTF? It doesnt serve any value other than being pretty and to be put into electronic circuit boards right?

I don't disagree every trade you need to have a set sell price before you get in. Im very novice at trading but I did alittle options day trading on the side for a year or so, every trade I would setup an auto sell every day so I couldn't loose my ass without knowing. I agree a lot of people hold too long because they think it'll bounce and go back up or it'll keep going up. Take your profits and wait for the next move. Especially if you're a single trader you are a shrimp running around in a sea of sharks, tuna ,and mackerel.

Another positive note for some people including the millennial generation that were brainwashed and told degrees are necessary and racked up all this debt in ignorance, if wages can even remotely keep up with inflation now your overall ridiculous debt amount is 7% less. Same with houses and cars purchased before this covid spike.
 
I don’t think so, and since PMs are down I think relatively few others think so. You may be right, but most are betting against you.

I have a bunch of PMs, wish it’d been in equities the past few years.
 
tanstaafl72555 said:
SOMETIME (and it may just well be this time around) the fed is going to step in and say "we will pick up the bill" and the world is going to say "with what?"
Click to expand...
The bankers will keep the house of cards up as long as it serves them better than cleaning up the mess will serve them.

Your point is a good one, and it is independent of timing. It is never too late to become independent of the system, to the extent that you are able.
 
JimB said:
I don’t think so, and since PMs are down I think relatively few others think so. You may be right, but most are betting against you.

I have a bunch of PMs, wish it’d been in equities the past few years.
Click to expand...
PMs are down because they are heavily manipulated. That's part of how they keep the house of cards standing.
 
tanstaafl72555 said:
It is a last flashing "roadblock up ahead" flashing yellow lights.

It is like an engineering report that says there is a fatal structural flaw in the building.

It will either have to be torn down or radically reconstructed. I am referring, of course, to the gigantic ponzi scheme that is currency, debt, and banking. It is more ghastly than other earlier collapses, threatened or actualized. Prior events have been localized to one nation or a group. This one is worldwide.

People who trusted..... and continue to trust (rely on, put their hopes in, act in accordance with) the reliability of the USD have been fools. Some will continue to cling to foolishness as their entire fiscal environment swirls down the toilet. What almost everyone except the maniacal Mises camp of gold bugs and other lunatics has assumed is reliable wealth is going to vaporize. I don't know if this is "it" but I know it is coming. I also know how the majority will respond. It will be with an increasing bitterness and cynicism of "there is no place else to go." One of the things I have learned over the years in trading is the foolish tendency of people to just stare stupidly at a screen as an investment tanks, holding to a forlorn hope that "it will come back.... it can't go down much more..... it has to bounce somewhere....." and it does bounce.... down around zero. When it is dumping DUMP IT! Get out now. I shorted citibank stock in 2008 at 25 (it had already sold off over 35 per cent). Covered at 12. IT WENT DOWN TO UNDER A DOLLAR. "When in doubt, get out." However, this may be instead like a worldwide Enron. When it goes bust, the markets will simply close (the governments will do that to "protect you" ... because 8000 elephants cant all fit thru that door at once. You can stare at that screen and watch the "price" go to less than 3% of what it was..... then you will be able to sell, as "order has been restored." Don't be that guy, is my advice.

I have been convinced that the entire US/Western/ and in fact WORLD financial architecture is rotten, tottering, and due for correction since 2002. What has happened instead is that the guys at the top have in fact guaranteed that when the "correction" comes, it will be with a devastating crash. I do not know if Ukraine will push this over the edge. I think so, but I thought so in 2008 and I was wrong then. I do know it will come. You cannot obviate basic economic laws, and the world banking structure is very much like Wile E Coyote, who has run out past a cliff and is just now realizing there is nothing under him but air. The bottom of that canyon is deep.

It is NOT too late to begin hedging with gold/silver/various commodities (no, you are NOT going to save yourself with "lead", though you should have some!). Those who have placed their trust in the head bobbing minions of central bankers (CNBC and the financial "industry") are going to be ruined. I am not saying this with glee. It is rather an invitation to liquidate and reposition assets out of the vapor we have assumed is "wealth."

Get independent. DOWNSIZE. Diversify your portfolio (if you stay in equities) to oil and gas, farmland, basic commodities (fertilizer, metals and mining) and GET OUT of tech, FANG type stuff, anything related to finance/interest or debt/housing etc. DO NOT look to the professional IB crowd to give you advice on how to hedge. They are going to recommend what they know, which are LEVERAGED INSTRUMENTS THAT DEPEND ON THE FISCAL STABILITY OF THE SYSTEM TO PAY OUT. You have no idea how close the large insurance companies (AIG in particular) came to simply defaulting on the darling of the last 2008 mess (credit default swaps). SOMETIME (and it may just well be this time around) the fed is going to step in and say "we will pick up the bill" and the world is going to say "with what?"

I don't say this with any glee or "I told you so".... even if I am (finally) right. I might not be right on timing when the foundation will finally crack. I am telling you that it is groaning, and Ukraine/Putin etc may well be the bulldozer that shoves it over. Be smart.
Click to expand...

Well we could look to WWI and WWII and see if your idea stands up to historical shift in the economy.
 
In my view precious metals have three functions in a portfolio:

1) Long-term hedge against inflation or destruction of fiat money

2) Preservation of wealth through times of extreme uncertainty or social chaos, that doesn't depend on any bank, broker, or government keeping its promises

3) In the case of gold, it's a high density, portable store of wealth that can be taken with you for emergency relocation. Think people fleeing pre-WWII Germany; not much time to prepare and couldn't bring much with them

If society has broken down to the point of bartering for supplies amidst the smoldering, radioactive remains of civilization, then of course things like food/water/ammo will have the most immediate value rather than coins and bars. But I don't think that scenario is likely or worth seriously planning for.
 
MacEntyre said:
PMs are down because they are heavily manipulated. That's part of how they keep the house of cards standing.
Click to expand...
By manipulated you mean that there is an active market for contracts, or something else? Who is “they”?
 
JimB said:
By manipulated you mean that there is an active market for contracts, or something else? Who is “they”?
Click to expand...
In my sentence, "they" clearly refers to the subject, being PMs.

All markets are manipulated, meaning price discovery is not just from buying and selling.

Oops... you meant the next sentence. "They" in that sentence means the Evil Central Bankers and Other Puppeteers!
 
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if scifi teaches us anything...
vices like bottles of liquor, cocaine and other drugs that aren't simple to produce, and cigarettes in places where it doesn't grow easily
nonperishable food, of course.
aside from that, salt, spices, soft toilet paper, and other such "luxury" items that people may want to splurge for once in a while.
 
Chuckman said:
I am not so sure most people care enough to get into the microeconomics of their savings and retirement plans. But I DO think one thing that will happen is growing inflation will make people assess what's important and start to separate the "must haves" and "nice to haves."
Click to expand...
you know, i missed seeing one "s" in "assess" and came away with a COMPLETELY different impression of what you meant.
Not a wrong one, mind you, just different.
 
DrScaryGuy said:
salt, spices, soft toilet paper, and other such "luxury" items
Click to expand...
Yeah, I was thinking propane because it's so versatile and stores so well. Cook, heat, and fuel generators and vehicles if you're handy. Of course I'm speaking out of my ass because I don't have a horde of propane lol

My wife has this dream of a house on enough land to feed us independent of the grocery store and solar power to feed an electric vehicle for daily errands or short trips. I thought she was crazy for wanting to go solar but looking at gas and the way the country is going. I'm the crazy one thinking she's wrong.

I'm curious to see if the media will spin Ukraine to be a massive issue to try and scare citizens now that covid is "over" or if they will sweep it under the rug to try and save face for Biden and midterm elections.
 
Squanchy said:
Yeah, I was thinking propane because it's so versatile and stores so well. Cook, heat, and fuel generators and vehicles if you're handy. Of course I'm speaking out of my ass because I don't have a horde of propane lol

My wife has this dream of a house on enough land to feed us independent of the grocery store and solar power to feed an electric vehicle for daily errands or short trips. I thought she was crazy for wanting to go solar but looking at gas and the way the country is going. I'm the crazy one thinking she's wrong.

I'm curious to see if the media will spin Ukraine to be a massive issue to try and scare citizens now that covid is "over" or if they will sweep it under the rug to try and save face for Biden and midterm elections.
Click to expand...
I think they’ve written off the midterms, question is will war spending (yeah, an excuse for more debt) drive economic prosperity in advance of the next general election?
 
JimB said:
I think they’ve written off the midterms, question is will war spending (yeah, an excuse for more debt) drive economic prosperity in advance of the next general election?
Click to expand...
That's a good point. Historically if it's a war the American citizens supported has the economy typically boomed?

I'm fairly young and I'm not that well versed on economics but it's my understanding normally it does right?
 
JimB said:
I think they’ve written off the midterms, question is will war spending (yeah, an excuse for more debt) drive economic prosperity in advance of the next general election?
Click to expand...
And if the comservatives take back comgress the 2024 democrats will blame it all on Republicans.
 
Squanchy said:
That's a good point. Historically if it's a war the American citizens supported has the economy typically boomed?

I'm fairly young and I'm not that well versed on economics but it's my understanding normally it does right?
Click to expand...
Popular support doesn’t really have much to do with it, it’s the cash infusion in the economy. Say the government wants to give Ukraine $100B in military aid. A significant portion of that aid will be targeted to American companies as part of the terms, so say $75B of it gets spent on hardware, contractors, training, etc from American companies. That’s $75B in new economic activity, people like that. Same happens when we send troops, the government spends an enormous amount to deploy soldiers.

I do so hate when we provide military aid and they use to buy Chinese small arms and missles.
 
shackleford said:
In my view precious metals have three functions in a portfolio:

1) Long-term hedge against inflation or destruction of fiat money

2) Preservation of wealth through times of extreme uncertainty or social chaos, that doesn't depend on any bank, broker, or government keeping its promises

3) In the case of gold, it's a high density, portable store of wealth that can be taken with you for emergency relocation. Think people fleeing pre-WWII Germany; not much time to prepare and couldn't bring much with them

If society has broken down to the point of bartering for supplies amidst the smoldering, radioactive remains of civilization, then of course things like food/water/ammo will have the most immediate value rather than coins and bars. But I don't think that scenario is likely or worth seriously planning for.
Click to expand...
What you say makes sense, but it doesn't take nuclear bombs to wind-up bartering for supplies. A solar CME powerful enough to wipe out our electrical grid happened in 2012. Luckily it was not pointed toward Earth, otherwise we would be in a much different situation today. IIRC we are overdue for a Carrington level event.
 
tanstaafl72555 said:
It is a last flashing "roadblock up ahead" flashing yellow lights.

It is like an engineering report that says there is a fatal structural flaw in the building.

It will either have to be torn down or radically reconstructed. I am referring, of course, to the gigantic ponzi scheme that is currency, debt, and banking. It is more ghastly than other earlier collapses, threatened or actualized. Prior events have been localized to one nation or a group. This one is worldwide.

People who trusted..... and continue to trust (rely on, put their hopes in, act in accordance with) the reliability of the USD have been fools. Some will continue to cling to foolishness as their entire fiscal environment swirls down the toilet. What almost everyone except the maniacal Mises camp of gold bugs and other lunatics has assumed is reliable wealth is going to vaporize. I don't know if this is "it" but I know it is coming. I also know how the majority will respond. It will be with an increasing bitterness and cynicism of "there is no place else to go." One of the things I have learned over the years in trading is the foolish tendency of people to just stare stupidly at a screen as an investment tanks, holding to a forlorn hope that "it will come back.... it can't go down much more..... it has to bounce somewhere....." and it does bounce.... down around zero. When it is dumping DUMP IT! Get out now. I shorted citibank stock in 2008 at 25 (it had already sold off over 35 per cent). Covered at 12. IT WENT DOWN TO UNDER A DOLLAR. "When in doubt, get out." However, this may be instead like a worldwide Enron. When it goes bust, the markets will simply close (the governments will do that to "protect you" ... because 8000 elephants cant all fit thru that door at once. You can stare at that screen and watch the "price" go to less than 3% of what it was..... then you will be able to sell, as "order has been restored." Don't be that guy, is my advice.

I have been convinced that the entire US/Western/ and in fact WORLD financial architecture is rotten, tottering, and due for correction since 2002. What has happened instead is that the guys at the top have in fact guaranteed that when the "correction" comes, it will be with a devastating crash. I do not know if Ukraine will push this over the edge. I think so, but I thought so in 2008 and I was wrong then. I do know it will come. You cannot obviate basic economic laws, and the world banking structure is very much like Wile E Coyote, who has run out past a cliff and is just now realizing there is nothing under him but air. The bottom of that canyon is deep.

It is NOT too late to begin hedging with gold/silver/various commodities (no, you are NOT going to save yourself with "lead", though you should have some!). Those who have placed their trust in the head bobbing minions of central bankers (CNBC and the financial "industry") are going to be ruined. I am not saying this with glee. It is rather an invitation to liquidate and reposition assets out of the vapor we have assumed is "wealth."

Get independent. DOWNSIZE. Diversify your portfolio (if you stay in equities) to oil and gas, farmland, basic commodities (fertilizer, metals and mining) and GET OUT of tech, FANG type stuff, anything related to finance/interest or debt/housing etc. DO NOT look to the professional IB crowd to give you advice on how to hedge. They are going to recommend what they know, which are LEVERAGED INSTRUMENTS THAT DEPEND ON THE FISCAL STABILITY OF THE SYSTEM TO PAY OUT. You have no idea how close the large insurance companies (AIG in particular) came to simply defaulting on the darling of the last 2008 mess (credit default swaps). SOMETIME (and it may just well be this time around) the fed is going to step in and say "we will pick up the bill" and the world is going to say "with what?"

I don't say this with any glee or "I told you so".... even if I am (finally) right. I might not be right on timing when the foundation will finally crack. I am telling you that it is groaning, and Ukraine/Putin etc may well be the bulldozer that shoves it over. Be smart.
Click to expand...
I will buy your ounce of gold for a box of bullets.
 
JimB said:
By manipulated you mean that there is an active market for contracts, or something else? Who is “they”?
Click to expand...
Something else. There is almost an 800 to 1 ratio of derivatives to physicals. The big boys use the forwards/swaps and futures markets to cap the physicals markets. I am a bit surprised you don't know about this. The last time someone tried to buy the physicals and force delivery (the Hunt brothers in 1980), they were buying futures whenever the bankers would sell, and then 3 mos later TOOK DELIVERY (which NO ONE does!). Not only that,, they had a company picnic with their various oil/drilling/service companies, and had "shooting contests." They selected the ones that were pretty good and had military background, got them all 870s, got them permits, drove them up to the MERC (New York Mercantile Exchange) warehouse, DEMANDED like 30 tons of silver. They about crapped themselves and tried to deny it or delay it but the Hunts were ready with a bunch of legal briefs and judicial opinions and slapped them on the table. After about a six hour delay, they released the silver, which the Hunts loaded on to trucks, drove them to Idlewild Airport, and flew it to Switzerland. It functionally pushed the reserves to zero, and everyone knew it and they had MILLIONS AND MILLIONS of contracts out there... and the Hunts just kept on taking delivery. Price went crazy into contango (physicals are higher than futures) which is the mark of a tight market. The board of the COMEX finally got the courts to rule that any future contracts initiated could be to sell , but not buy. That is right. The banks ran to the fed, who leaned on the market and finally broke the Hunts. Since then, they have initiated all sorts of rules, including position limits, to keep this from ever happening again. Everyone in these markets knows that there is nowhere NEAR the amount of physicals out there to satisfy the contracts of the derivatives. Any other market, you would call that "counterfeiting" where you can print a promise to deliver when no underlying exists.

This is just one of HUNDREDS of examples. I will give you two more: Germany had about 1000 tons of gold stored in NY and other sites. They had about 500 tons stored in NY. In 2013 they told the USA they wanted it back. WE REFUSED TO GIVE IT TO THEM. Of course it was in terms of language of "you have to wait till we can do a complete accounting (??????), which fed the accusation long posited by Ron Paul and others that the USA did what a local banking schmuck would go to prison for embezzlement if he tried it. We spent the money. (Ron says publicly we need to audit the gold reserves at Fort Knox. Privately he hints that he knows we have "hypothecated" (pledged that gold as reserves for loans... that is, bonds) and rehypothecated and actually sold off not only the vast majority of OUR reserves, but actually those of other countries. The Treasury looked in 2013 for all the world like that sleazy car dealer in FARGO, scrambling to cover what they did not have and folks were asking for. In fact they marched out some guy onto one of the financial news channels with a brick of gold and said "see, we have the gold" and waved it around for the camera....., and in a stroke of genius, some kid took an image of the brick, enhanced it, got the serial number from it, and......, guess what? IT WASN'T A GERMAN BRICK. It was some block of gold that belonged to ANOTHER country, and it had actually been hypothecated out!
So, after 5 years, Germany got half the gold back it had asked for. Took them five years to finish that "exhaustive audit" you know...... and they were still asking for the rest of it, but rumors are the fed leaned on them to shut up about it. At any rate, someone found a list of the serial numbers of the gold bars...... and guess what? About half the serial numbers don't match. Now someone who is suspicious might surmise that it took them five years to scrounge up enough gold bars to satisfy 1/2 what they owed and were demanded. The Bundesbank said "oh, that does not matter," illustrating that old saw "if I owe you 100 dollars and cannot pay you, I am in trouble. If I owe you 100 BILLION dollars and cannot pay you, YOU are in trouble." The Krauts just shut up in the hopes of getting the rest of their stash back.

Final story. Whenever gold / pms go on a tear, the most unusual pattern emerges: THere are HUGE dumps of futures onto the markets. Not physicals, futures. The timing is most odd. In a legit trade, you wait for the opening of the NY, Asia, Europe, UK markets and sell into those. Lots of activity, and they can handle the liquidity. Not these savvy metals merchants. They sell at like 1 am on Monday morning, or on holidays, or some other time when there is no liquidity and it is sure to hammer the markets. That is not exactly smart sell strategy....., to dump TENS OF THOUSANDS of contracts (literally millions of ounces of gold at some weird time when there are no buyers......, unless your strategy is itself mere price manipulation.


Again for someone who has been as vocal as yourself in criticism and general questioning of why pms are to be preferred, I find it odd that you don't know this background. There are scores more examples out there. Andrew MacGuire presented these and hundreds more examples of overt price manipulation to congress.... who thanked him and promptly ignored him. I can link you to dozens of other examples.
 
JimB said:
Popular support doesn’t really have much to do with it, it’s the cash infusion in the economy. Say the government wants to give Ukraine $100B in military aid. A significant portion of that aid will be targeted to American companies as part of the terms, so say $75B of it gets spent on hardware, contractors, training, etc from American companies. That’s $75B in new economic activity, people like that. Same happens when we send troops, the government spends an enormous amount to deploy soldiers.

I do so hate when we provide military aid and they use to buy Chinese small arms and missles.
Click to expand...
You should read the broken window fallacy by Bastiat.
 
JimB said:
Popular support doesn’t really have much to do with it, it’s the cash infusion in the economy. Say the government wants to give Ukraine $100B in military aid. A significant portion of that aid will be targeted to American companies as part of the terms, so say $75B of it gets spent on hardware, contractors, training, etc from American companies. That’s $75B in new economic activity, people like that. Same happens when we send troops, the government spends an enormous amount to deploy soldiers.
Click to expand...

That $100B had to come from somewhere though. It was directly taxed from US citizens, or borrowed from citizens and foreigners who buy Treasuries, or created from nothing by the Fed (i.e. inflation).

It's true that some of that money may eventually be used to buy goods from US companies. But that represents not an "infusion", but a redirection from the economic activity that would otherwise have taken place, from one sector to another. It means Walmart shelf stockers and fast food workers being forced in one form or another to subsidize Raytheon and Lockheed Martin's profits, because their taxes go up or their money is worth less.

If somebody steals my car and I have to buy a new one, I'm not inclined to view that as a $30k infusion into the economy, but rather a $30k loss of money that I'd rather have spent on something else. It's certainly a positive for Ford or Chevrolet though.
 
tanstaafl72555 said:
Something else. There is almost an 800 to 1 ratio of derivatives to physicals. The big boys use the forwards/swaps and futures markets to cap the physicals markets. I am a bit surprised you don't know about this. The last time someone tried to buy the physicals and force delivery (the Hunt brothers in 1980), they were buying futures whenever the bankers would sell, and then 3 mos later TOOK DELIVERY (which NO ONE does!). Not only that,, they had a company picnic with their various oil/drilling/service companies, and had "shooting contests." They selected the ones that were pretty good and had military background, got them all 870s, got them permits, drove them up to the MERC (New York Mercantile Exchange) warehouse, DEMANDED like 30 tons of silver. They about crapped themselves and tried to deny it or delay it but the Hunts were ready with a bunch of legal briefs and judicial opinions and slapped them on the table. After about a six hour delay, they released the silver, which the Hunts loaded on to trucks, drove them to Idlewild Airport, and flew it to Switzerland. It functionally pushed the reserves to zero, and everyone knew it and they had MILLIONS AND MILLIONS of contracts out there... and the Hunts just kept on taking delivery. Price went crazy into contango (physicals are higher than futures) which is the mark of a tight market. The board of the COMEX finally got the courts to rule that any future contracts initiated could be to sell , but not buy. That is right. The banks ran to the fed, who leaned on the market and finally broke the Hunts. Since then, they have initiated all sorts of rules, including position limits, to keep this from ever happening again. Everyone in these markets knows that there is nowhere NEAR the amount of physicals out there to satisfy the contracts of the derivatives. Any other market, you would call that "counterfeiting" where you can print a promise to deliver when no underlying exists.

This is just one of HUNDREDS of examples. I will give you two more: Germany had about 1000 tons of gold stored in NY and other sites. They had about 500 tons stored in NY. In 2013 they told the USA they wanted it back. WE REFUSED TO GIVE IT TO THEM. Of course it was in terms of language of "you have to wait till we can do a complete accounting (??????), which fed the accusation long posited by Ron Paul and others that the USA did what a local banking schmuck would go to prison for embezzlement if he tried it. We spent the money. (Ron says publicly we need to audit the gold reserves at Fort Knox. Privately he hints that he knows we have "hypothecated" (pledged that gold as reserves for loans... that is, bonds) and rehypothecated and actually sold off not only the vast majority of OUR reserves, but actually those of other countries. The Treasury looked in 2013 for all the world like that sleazy car dealer in FARGO, scrambling to cover what they did not have and folks were asking for. In fact they marched out some guy onto one of the financial news channels with a brick of gold and said "see, we have the gold" and waved it around for the camera....., and in a stroke of genius, some kid took an image of the brick, enhanced it, got the serial number from it, and......, guess what? IT WASN'T A GERMAN BRICK. It was some block of gold that belonged to ANOTHER country, and it had actually been hypothecated out!
So, after 5 years, Germany got half the gold back it had asked for. Took them five years to finish that "exhaustive audit" you know...... and they were still asking for the rest of it, but rumors are the fed leaned on them to shut up about it. At any rate, someone found a list of the serial numbers of the gold bars...... and guess what? About half the serial numbers don't match. Now someone who is suspicious might surmise that it took them five years to scrounge up enough gold bars to satisfy 1/2 what they owed and were demanded. The Bundesbank said "oh, that does not matter," illustrating that old saw "if I owe you 100 dollars and cannot pay you, I am in trouble. If I owe you 100 BILLION dollars and cannot pay you, YOU are in trouble." The Krauts just shut up in the hopes of getting the rest of their stash back.

Final story. Whenever gold / pms go on a tear, the most unusual pattern emerges: THere are HUGE dumps of futures onto the markets. Not physicals, futures. The timing is most odd. In a legit trade, you wait for the opening of the NY, Asia, Europe, UK markets and sell into those. Lots of activity, and they can handle the liquidity. Not these savvy metals merchants. They sell at like 1 am on Monday morning, or on holidays, or some other time when there is no liquidity and it is sure to hammer the markets. That is not exactly smart sell strategy....., to dump TENS OF THOUSANDS of contracts (literally millions of ounces of gold at some weird time when there are no buyers......, unless your strategy is itself mere price manipulation.


Again for someone who has been as vocal as yourself in criticism and general questioning of why pms are to be preferred, I find it odd that you don't know this background. There are scores more examples out there. Andrew MacGuire presented these and hundreds more examples of overt price manipulation to congress.... who thanked him and promptly ignored him. I can link you to dozens of other examples.
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Obviously know about the contracts and the Hunts, honestly didn’t know about the German gold.

But it all boils down to there being an active market in paper, and that you’ve found a pattern that you can exploit. Have you, cause you should be filthy stinkin rich buying when there are tons being sold into no demand.
 
tanstaafl72555 said:
Something else. There is almost an 800 to 1 ratio of derivatives to physicals. The big boys use the forwards/swaps and futures markets to cap the physicals markets. I am a bit surprised you don't know about this. The last time someone tried to buy the physicals and force delivery (the Hunt brothers in 1980), they were buying futures whenever the bankers would sell, and then 3 mos later TOOK DELIVERY (which NO ONE does!). Not only that,, they had a company picnic with their various oil/drilling/service companies, and had "shooting contests." They selected the ones that were pretty good and had military background, got them all 870s, got them permits, drove them up to the MERC (New York Mercantile Exchange) warehouse, DEMANDED like 30 tons of silver. They about crapped themselves and tried to deny it or delay it but the Hunts were ready with a bunch of legal briefs and judicial opinions and slapped them on the table. After about a six hour delay, they released the silver, which the Hunts loaded on to trucks, drove them to Idlewild Airport, and flew it to Switzerland. It functionally pushed the reserves to zero, and everyone knew it and they had MILLIONS AND MILLIONS of contracts out there... and the Hunts just kept on taking delivery. Price went crazy into contango (physicals are higher than futures) which is the mark of a tight market. The board of the COMEX finally got the courts to rule that any future contracts initiated could be to sell , but not buy. That is right. The banks ran to the fed, who leaned on the market and finally broke the Hunts. Since then, they have initiated all sorts of rules, including position limits, to keep this from ever happening again. Everyone in these markets knows that there is nowhere NEAR the amount of physicals out there to satisfy the contracts of the derivatives. Any other market, you would call that "counterfeiting" where you can print a promise to deliver when no underlying exists.

This is just one of HUNDREDS of examples. I will give you two more: Germany had about 1000 tons of gold stored in NY and other sites. They had about 500 tons stored in NY. In 2013 they told the USA they wanted it back. WE REFUSED TO GIVE IT TO THEM. Of course it was in terms of language of "you have to wait till we can do a complete accounting (??????), which fed the accusation long posited by Ron Paul and others that the USA did what a local banking schmuck would go to prison for embezzlement if he tried it. We spent the money. (Ron says publicly we need to audit the gold reserves at Fort Knox. Privately he hints that he knows we have "hypothecated" (pledged that gold as reserves for loans... that is, bonds) and rehypothecated and actually sold off not only the vast majority of OUR reserves, but actually those of other countries. The Treasury looked in 2013 for all the world like that sleazy car dealer in FARGO, scrambling to cover what they did not have and folks were asking for. In fact they marched out some guy onto one of the financial news channels with a brick of gold and said "see, we have the gold" and waved it around for the camera....., and in a stroke of genius, some kid took an image of the brick, enhanced it, got the serial number from it, and......, guess what? IT WASN'T A GERMAN BRICK. It was some block of gold that belonged to ANOTHER country, and it had actually been hypothecated out!
So, after 5 years, Germany got half the gold back it had asked for. Took them five years to finish that "exhaustive audit" you know...... and they were still asking for the rest of it, but rumors are the fed leaned on them to shut up about it. At any rate, someone found a list of the serial numbers of the gold bars...... and guess what? About half the serial numbers don't match. Now someone who is suspicious might surmise that it took them five years to scrounge up enough gold bars to satisfy 1/2 what they owed and were demanded. The Bundesbank said "oh, that does not matter," illustrating that old saw "if I owe you 100 dollars and cannot pay you, I am in trouble. If I owe you 100 BILLION dollars and cannot pay you, YOU are in trouble." The Krauts just shut up in the hopes of getting the rest of their stash back.

Final story. Whenever gold / pms go on a tear, the most unusual pattern emerges: THere are HUGE dumps of futures onto the markets. Not physicals, futures. The timing is most odd. In a legit trade, you wait for the opening of the NY, Asia, Europe, UK markets and sell into those. Lots of activity, and they can handle the liquidity. Not these savvy metals merchants. They sell at like 1 am on Monday morning, or on holidays, or some other time when there is no liquidity and it is sure to hammer the markets. That is not exactly smart sell strategy....., to dump TENS OF THOUSANDS of contracts (literally millions of ounces of gold at some weird time when there are no buyers......, unless your strategy is itself mere price manipulation.


Again for someone who has been as vocal as yourself in criticism and general questioning of why pms are to be preferred, I find it odd that you don't know this background. There are scores more examples out there. Andrew MacGuire presented these and hundreds more examples of overt price manipulation to congress.... who thanked him and promptly ignored him. I can link you to dozens of other examples.
Click to expand...
Great point, and another is the 2008 collapse as I understand it. They were selling credit default swaps on the subprime pools. Those sales were used to create more derivatives of the same subprime pools to satisfy the demand for mortgage backed securities. Given that they were subprime to begin with it took little to push it all over the edge, at which point the multiplier of derivatives brought down the whole house.
 
JimB said:
Obviously know about the contracts and the Hunts, honestly didn’t know about the German gold.

But it all boils down to there being an active market in paper, and that you’ve found a pattern that you can exploit. Have you, cause you should be filthy stinkin rich buying when there are tons being sold into no demand.
Click to expand...
I have in fact faded moves like that in the past. You have to be VERY careful because size like that can swallow 500 of me down and never even burp. It is like when I traded in the pits. I sometimes saw BIG BIG BIG guys place odd orders when the markets looked toppy. Like selling 1000 cars at 1/2 cents under the market. I would try to scalp 1 or 2 contracts. You NEVER take the 1000 cars b/c they may be sitting there with 30,000 cars of sell orders.
 
Goofyfoot2001 said:
I will buy your ounce of gold for a box of bullets.
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Collapse is a spectrum, not a pass/fail event. MOST collapses in the past have not been utter demolition so that people are living in caves and there are no markets at all. In fact, only wars bring about that kind of devastation. So, if someone is trying to hedge against UTTER collapse with lead, they are frankly not real bright, as that comes after tons of bullets have already been expended. The thing that will keep you alive then is frankly mostly luck. I don't believe one can plan for a "Patriots" style collapse short of moving into the outback somewhere, and there you will be expending almost all your energy on food, energy, medicine, etc. Your hope for survival will NOT be predicated on being able to fight off bad guys...., because you will likely be so exhausted that they will just roll over you some night when you are sleeping.

My own philosophy about all this is to stay within the distribution bell curve of events. Fake money and fake wealth and the system that is built up on it vaporizes. There is large scale starvation and impoverishment, probably social unrest in the metro areas, and a "reset" in which the dishonest money gets swept away and the new wealth is more solidly based. THAT KIND of collapse is statistically far more likely. Bullets won't do crap for you in that kind of reset. Skills and sound money may, but the odds are that any gold and silver I have will not make me some kind of new baron/tycoon. That kind of wealth accumulation depends on a great deal of entrepreneurial savvy, force of character, and just plain luck of being at the right place first.

So, no, you won't in fact buy my gold for your bullets. I have a few of the latter, but I am not depending on them to save me from the consequences of ignoring the other parts of the picture here.
 
concepthomes2 said:
Precious metals will only retain any sense of value if the survivors place a value on them.

You try to trade a vial of gold flecks for a can of beans? If I have no need for your gold flecks then they have no value to me.
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This.

When the SHTF, the things considered valuable are the things essential to survival first and foremost. Food, water, and shelter tops the list. Heat in the winter, too.

Next will come the comfort things. Clothing beyond what's strictly necessary. Stocks in excess of what is strictly required. Entertainment.

For gold to have value in this kind of situation means that gold has to be either useful in a practical sort of way, or someone else has enough excess in essentials/comfort things to believe an exchange for gold will benefit them in the future.

And the future is a pretty long ways away when you have no food or shelter.
 
Squanchy said:
That's a good point. Historically if it's a war the American citizens supported has the economy typically boomed?

I'm fairly young and I'm not that well versed on economics but it's my understanding normally it does right?
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Actually no. War is the greatest wealth destroyer anytime, ever. Again this is a classical argument of statism and is addressed by the French economist "Bastiat" in his analogy about broken windows. It is called "what is seen and what is unseen" but the essence of it boils down to this... if wealth could be created that way, the best thing the government could possibly do would be to hire every individual at 3,000 dollars per hour and pay them do dig a giant hole one day, and fill it up the next. THERE WOULD BE SO MUCH ECONOMIC ACTIVITY!!! (Believe it or not, a Nobel Prize winning "economist" made exactly this argument about mere activity being key to economic growth. Paul Krugman argued that an space alien invasion would be great for the economy, as we would have to build back all the destruction!). Activity is not the key. PRODUCTIVITY is, and war is anything but productive.
 
tanstaafl72555 said:
Like, fitting all the definitons of a medium of exchange for goods and services ;)?
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Yes...but that only exists in an economy in which gold serves as some sort of valued commodity relative to the people involved.

Value is assigned by various means. If it's rare (and pretty), it's valuable. But who tends to own such items? The wealthy, who presumably aren't in a SHTF, bare-bones survival mode.

Trade is based on an exchange of goods or services that both sides place some sort of value on and those values may be greatly disparate between the parties. In one great example, "wampum" (essentially strings of beads and discs made from shells) which were extremely valued by coastal Native Americans were exchanged for pelts and even land in what later became Massachusetts. (And even then, the Dutch traders dealt out counterfeit wampum in the exchange. Go figure.)

Gold has to have a value to the people you're attempting to trade it to. That value can be immediate, future (investment), or intermediary (useful for trading with others who may value the gold).

What dictates this? Could be culture, religion, wealth/standing, available resources, etc.

It could even be faith that the economy as you knew it before will make some sort of recovery and the gold will once again be a valued commodity.


SO...here's a question for you:

What is an equitable exchange rate for gold, and say canned goods in a SHTF scenario? As I type, the spot price for gold is $1,887/ounce. That's a bit under $67/gram. A 14.5 ounce can of Del Monte green beans currently runs about $1.28.

How much gold are YOU willing to take from someone for some of your canned greenbeans? Current market rate would say a gram of gold is worth 52 cans of green beans. Four cases and four cans total. What value to you assign that much food when it comes to feeding you and your family? How much do you have stocked? How much practical good is that gold going to have for you in exchange? What can you turn around and use it for in a SHTF scenario?

On the flip side of the coin, you have the gold and are trying to buy someone else's green beans. How much are you willing to part with for a supply of green beans? What is your immediate need for food? How valuable is your gold as an exchange commodity for various other items?
 
RetiredUSNChief said:
Yes...but that only exists in an economy in which gold serves as some sort of valued commodity relative to the people involved.

Value is assigned by various means. If it's rare (and pretty), it's valuable. But who tends to own such items? The wealthy, who presumably aren't in a SHTF, bare-bones survival mode.

Trade is based on an exchange of goods or services that both sides place some sort of value on and those values may be greatly disparate between the parties. In one great example, "wampum" (essentially strings of beads and discs made from shells) which were extremely valued by coastal Native Americans were exchanged for pelts and even land in what later became Massachusetts. (And even then, the Dutch traders dealt out counterfeit wampum in the exchange. Go figure.)

Gold has to have a value to the people you're attempting to trade it to. That value can be immediate, future (investment), or intermediary (useful for trading with others who may value the gold).

What dictates this? Could be culture, religion, wealth/standing, available resources, etc.

It could even be faith that the economy as you knew it before will make some sort of recovery and the gold will once again be a valued commodity.


SO...here's a question for you:

What is an equitable exchange rate for gold, and say canned goods in a SHTF scenario? As I type, the spot price for gold is $1,887/ounce. That's a bit under $67/gram. A 14.5 ounce can of Del Monte green beans currently runs about $1.28.

How much gold are YOU willing to take from someone for some of your canned greenbeans? Current market rate would say a gram of gold is worth 52 cans of green beans. Four cases and four cans total. What value to you assign that much food when it comes to feeding you and your family? How much do you have stocked? How much practical good is that gold going to have for you in exchange? What can you turn around and use it for in a SHTF scenario?

On the flip side of the coin, you have the gold and are trying to buy someone else's green beans. How much are you willing to part with for a supply of green beans? What is your immediate need for food? How valuable is your gold as an exchange commodity for various other items?
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Your point is a good one. There is no such thing as "intrinsic" value in the empirical realm. We ASSIGN values to stuff depending on its perceived UTILITY. That is, will this widget do something for me that otherwise I could not do. Air has phenomenal utility, as does water, but usually they are not rare enough to be valued. In a case where everyone is starving, or in fear for their lives against marauders, certainly food and ammo are going to take a (temporary) higher value. The best example I can think of to illustrate this is the account of the lepers during the seige of Jerusalem in 2 Kings 7. This is a perfect illustration of the rapidly shifting values people place on things when threats grow and retreat. One day, the court officials sneered at a spokesman who said that food would be very very cheap. The next day, something that was impossible to find (food was so scarce they cooked and ate their babies!), was discovered, and a frenzied stampede led to deaths in those trying to bring order, with the result that prices plummeted. Wild swings in prices. In fact, one of the marks of the awareness of the worthlessness of gold and silver "on that day" (of judgement in several other biblical passages) is men flinging away their gold and silver in terror at what is coming. Values shift. I get that.

I stated upstream that I am not really that interested in being the last man standing after a total apocalyptic wipeout, and am not planning for it. I will happily face death should society come that unraveled and frankly believe those who vocalize about THAT are mostly just whistling past the graveyard. Events FAR more unpredictable than how many rounds of .308 I have are going to determine if we live or die then, and odds are almost all of us are going to die. I AM rather interested in hedging against the sort of "collapse" that happens over and over and over and over in history, which is a sort of general awareness that the state runs a ponzi on its citizens, and there is a wide eyed awareness that you can't dump that fake "wealth" quick enough go beat the hordes trying to get out the door. I want to be able to buy the Dow with an ounce of gold, or at least an ounce and a half. https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart. Then, the market will be cheap, and gold will be high.

Gold has a pretty good track record as a historical unit of exchange.

Who knows? Maybe I am wrong.....

but I ain't :)
 
RetiredUSNChief said:
Gold has to have a value to the people you're attempting to trade it to. That value can be immediate, future (investment), or intermediary (useful for trading with others who may value the gold).
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Gold is a poor medium of exchange, when compared to things valued in dollars especially when the dollar value is low. That is a testament to how little the dollar is really worth.

When I first read your post, I read it as the item as a medium of exchange needing to have intrinsic value. I don’t believe this to be the case, but rather it’s the scarcity and inability to easily “mine“ or counterfeit it. Wood sticks for example would be a poor choice because anyone could create them easily (Inflation).

In the Fallout game series, Nuka Cola bottle caps were the currency of choice. They have no intrinsic value, but they are limited in supply, light weight and easy to carry, and hard to reproduce, fungible (one is like any other), making them an ideal currency.
 
noway2 said:
When I first read your post, I read it as the item as a medium of exchange needing to have intrinsic value. I don’t believe this to be the case, but rather it’s the scarcity and inability to easily “mine“ or counterfeit it. Wood sticks for example would be a poor choice because anyone could create them easily (Inflation).
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According to the Austrian school, only commodity money can truly be legitimate, because its relative worth is traceable to some original exchange value based on non-monetary uses. In other words, before gold was widely used as money, it was valued by many people for non-monetary uses (jewelry for example). Over time, that status evolved into a medium of exchange given gold's physical properties that make it very well suited for that function (divisibility, fungibility, durability, density, malleability, relative rarity). Money without any history as a valued commodity on its own doesn't have any comparable mechanism of price discovery and stability.

While that point is certainly debatable (bitcoin may be a counterexample), many fiat or makeshift moneys of all types have come and gone over millennia. But gold is still around, still serving its role. Maybe now is when that finally changes, but I wouldn't bet on it.

Edited to add -- funny enough, wood sticks were in fact used as money: https://en.wikipedia.org/wiki/Tally_stick
 
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