Al's Insights – Tue 3 Apr, 2012

Big Al discusses precious metals, interest rates, deflation and the conventional markets on The Wall Street Network’s “What’s Working Now”

I had a great time discussing economics and investing on The Wall Street Network today.

Click download link to listen on this device: Download Show


Featuring:
Al Korelin

Comments:
  1. On April 3, 2012 at 5:07 pm,
    benb says:

    I could be wrong but my guess about diamond prices has to do with moving large amounts of cash. Tuff to carry 10,000 once of silver, much easier to move 200 onces of gold, 1 diamond easier to carry than gold. Maybe that has sumtin to do wit it, as well people with large amounts of money are buying big items just to get out of currency. If you bin watching auctions the expected selling points of big ticket items are being blown away. Just a guess.

    • On May 8, 2012 at 6:46 pm,
      Armando says:

      Ugh one thing I definitely do not miss about sheuotrn Oregon. Of course we get fires in Ontario too, but not with the same frequency as I remember in the Rogue Valley.

  2. On April 3, 2012 at 5:25 pm,
    Marc says:

    Big Al,
    With all due respect to your host, it really amazes me that he didn’t understand or lacked awareness of the macro-fundamentals that are driving the gold and silver markets. The simple premise that the market is ending because of a vague realization that “shops’ have signs up BUYING gold. He should know that things will START to get interesting when everybody wants to SELL to the general public..which would signify the lack of desire of a DEPRECIATING asset…no way, are we even close to that. Among, all the other points we discuss here – what else is there? Sorry, but that is THE question is ask myself every morning the Lord allows me to live.(Besides RE). Now, I gotta let my “FOUR HEADED DOG” in the house now-They are barking ferociously. What’s his name – you ask? His name is- gold, silver, oil and food (water). Gotta feed them again – they are hungry!
    All the best,
    Marc

    • On April 4, 2012 at 1:03 am,
      har says:

      Making 4 reality tv shows about gold?

      Just like all those tv shows about flipping houses in 2006.

  3. On April 3, 2012 at 6:12 pm,
    Vortex says:

    Al,

    Very solid interview, keep up the good work.

    Respectfully

    V

    *******************************
    The mind is a prism into the irrationality of the human delusion dichotomy. Mans ability to rationalize and deny his own enslavement pales in comparison to his cultivation and facilitation of the means in which to keep him enslaved.

    – Vortex (2012)

    • On April 3, 2012 at 6:34 pm,
      Marc says:

      OK, OK,
      I now have a “five-headed dog”….diamond(s) :)
      Vortex – WOW, excellent!!

      • On April 3, 2012 at 6:43 pm,
        Vortex says:

        Marc, you’re far too kind my friend.

        Respectfully

        V

  4. On April 3, 2012 at 6:28 pm,
    Jed Davis says:

    Don’t ever downplay the importance of diamonds in the preservation and transportation of wealth. Demand is heavy and they are easy to conceal.

  5. On April 3, 2012 at 7:46 pm,
    Dennis M. O'Neil says:

    I cannot understand why people think WE BUY GOLD prolification is a sign of a top.
    It is when the lines are outside the coin shop lined up to BUY GOLD that we may be nearing a top. There is no froth yet. Still AG and AU represent less than 2% of investment assets. What top….too much paper. Lets talk about bonds being toppy!

    • On April 3, 2012 at 7:55 pm,
      Marc says:

      Yep, you are exactly right. Only, 1 to 2% of the population – unbelievable! This has hardly budged in this decade long market. What in the world are people thinking! It is absolutely mind-boggling….I REALLY don’t understand – at all! Could it be, Dennis, et al, that these people are just clueless – C’MON, really?
      Marc

      • On April 3, 2012 at 8:56 pm,
        Dennis M. O'Neil says:

        “to 2% of the population”
        I meant as a sector PM’s only represent 1 to 2%.

        Think about it in 1980 PM were at 26%…that figure was from a round table at the 2011 Chevoit Sound Money Coference…I think Davies referenced that.
        PM’s are still under owned….how many pensions own physical gold.
        Do you remember last year when the Univerity of Texas took delivery off just under $1 billion in gold….it made big news…..it is a $20 billion endowment…do the math relative to other colleges ….pensions…Trusts….Charities they are over invested.
        What if all of them move to 5%…they could not do it at at current price levels. If they were smart they they would move even higher. Gold historically backed the USD with 40% vaulted per USD. Up until 2000 to 2001 the Suisse Franc was backed with 40% gold.
        Think if all fiat currencies were backed by 5% gold….what price would it take.

        http://www.bloomberg.com/news/2011-04-15/texas-university-endowment-holds-almost-1-billion-in-gold-bars.html

        • On April 3, 2012 at 9:10 pm,
          Marc says:

          Yes, Dennis…of course, 1 to 2% of the financial sector. I stand corrected. I had population in my head for some reason. But either way, PM’s are a tiny portion of the macro financial environment – my above comment still holds – hence, a mad rush to the coin shops when the SHTF!
          All the best,
          Marc

          • On April 4, 2012 at 6:36 am,
            Dennis M. O'Neil says:

            Marc I think 1 to 2% is a circa the write % of people who have a significant portion of their assets in PMs.
            The rub that is hard to take is in forced liquidation scenarios the originating culprit of it all the USD benefits. So if those you understand this paradox you are smart to own it…at least contemplating redeployment to add ounces.

      • On May 6, 2012 at 9:34 pm,
        katheriin says:

        I see all time GM ot der yok item pi neak coy soss. doj jear salary jear derm.& now all item buy tam sralary in jp GM ber jear sell Exp. teat.

    • On April 3, 2012 at 10:25 pm,
      castanheiro says:

      Hi Dennis,
      You’re absolutely correct in my view!
      Thanks much.

  6. On April 3, 2012 at 7:55 pm,
    Vortex says:

    Dennis, when I heard that guy say gold was at a top because of the companies that say “We Buy Gold”, all I thought of was the below statement.

    —- I guess it’s like “they” say: “If you can’t blind ‘em with brilliance, or baffle’em with bullshit.”

    Respectfully

    V

  7. On April 3, 2012 at 8:51 pm,
    Matthew says:

    When all the signs say “WE SELL GOLD”, THEN we’ll be approaching the top.

    • On April 3, 2012 at 9:11 pm,
      Marc says:

      Exactly….Matthew…exactly….see my above post!
      All the best,
      Marc

    • On April 3, 2012 at 10:31 pm,
      castanheiro says:

      Matthew,
      So true! Right now, we have maybe what 4 – 5% of the public who are buyers of au/ag? When 98 – 99% of the public are all trying to buy it then, as you say, we will be nearing the top.

  8. On April 3, 2012 at 9:08 pm,
    Clay says:

    Al, As one of your listeners you can trust me when I say that the Earths crust has more platinum than gold. Earths crust contains on average about 0.01 grams Platinum per ton, whereas it contains about 0.004 grams Gold per ton. Platinum is about 2.5 times as abundant as gold.

    But, Gold exists more abundantly in ore deposits than Platinum because gold reacts with other elements much more than platinum. Platinum is a noble metal and does not like to make compounds with other elements. Platinum will form compounds with Sulfur along with nickle and will occur with Chromite, but platinum does not normally form deposits in hydrothermal systems like gold and silver do.

    Therefore the economically available platinum in the Earths Crust is many times less than Gold, because most of the platinum is dispersed evenly and not concentrated like gold and silver are.

    Diamonds have value but are not money. For something to be money it needs several aspects.

    1) It must be rare but not extremely so.
    2) It must be divisible with equal value and weight and fractionally with each division.
    3) It must not corrupt, be easily destroyed, rust, oxidize or go bad at any time.
    4) It must be easily recognizable to most anyone, although a few humans like in the Bernanke species might not recognize any kind of money.
    5) It should be available in deposit form in most every country of the world and no single or minority of countries contain the worlds lion share.
    6) It should have other intrinsic values such as beauty, appeal and so on.
    7) It should not be dangerous or toxic.

    Gold fits all the above. Silver does with some exceptions such as it oxidizes. Oil, Food, Water, diamonds, Uranium or anything else does not fit as money. Gold is the perfect fit which because of the above, it naturally gravitated to money for all people and nations on Earth.

    • On April 3, 2012 at 10:34 pm,
      castanheiro says:

      Clay,
      Very well put. Agree completely!

  9. On April 3, 2012 at 9:16 pm,
    Clay says:

    Any time anyone says the Fed is or has not done any QE after QE2, ask them a simple question. If the Fed say that they will keep interest rates at near 0 out until at least 2014, how is the Fed going to do that if they are not buying bonds???? Jim Rogers asks his interviewers that question every time they say the Fed is not doing QE.

    Why are people so incredibly stupid about these things???

    • On April 3, 2012 at 10:29 pm,
      Vortex says:

      In a land populated with delusional naive fools, the greatest political and monetary liar inherits the throne with the full approval of the populas.

      • On April 4, 2012 at 8:31 am,
        Marc says:

        Beauuutiful….V….. Beauuuuutiful

  10. On April 3, 2012 at 9:24 pm,
    Dennis M. O'Neil says:

    Clay,
    You are starting to sound like Murray Rothbard.
    That is a compliment coming from me!
    I was skimming Man, Economy and State:
    a brief paasage Chapter;
    The Pattern of Indirect Exchange
    4. The Monetary Unit

    “We have seen that every good is “in supply” if it can be divided into units, each of which is homgeneous with every other. Goods can be bought and sold only in terms of such units, and those goods which are indivisible and uniques may be described as being in a supply of one unit only.”

    • On April 3, 2012 at 11:17 pm,
      Clay says:

      Dennis O’Neil: Murray was a giant and his work is cream of the crop. He knew that for a society to be stable, it needed a stable form of money and something that can not be corrupted by anyone. Fiat currency is not homogeneous as politics can corrupt it through quantitative creation resulting in disruption of supply and demand of things necessary such as energy and food. Fiat money systems by their political nature cause miss-allocation of capital and necessary limited resources

      We are only beginning to see the pain and suffering caused by this 100 year Frankenstein creation of the fiat money calamity. It was really difficult for people like Murray to convince others what he knew true about economics, but people like Ron Paul can stand on the shoulders of giants and get this message out more easily now because of the continual increase in misery for the majority of people.

      The politicians and bankers in power today like Bernanke don’t know it, but they will have to live out their remaining decades of life being ridiculed, scorned, blamed and despised for the catastrophe they helped cause.

  11. On April 3, 2012 at 11:03 pm,
    Dennis M. O'Neil says:

    We need more money the Derivatives and Credit Default Swaps are unwining.
    More money quick the rope is getting frayed!

    http://timesofindia.indiatimes.com/business/international-business/IMF-chief-calls-on-US-for-more-cash/articleshow/12522131.cms

  12. On April 4, 2012 at 1:02 am,
    har says:

    Feels like 2008 all over again.

    Remember folks the stocks all ways follow underline commodity.