Week ending market comments from Peter Grandich
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Already had three of them.
Thanks for your input Lore
much has been written lately about the explosion in prices in tangible assets.
works of are are flying off the shelves for astronomical prices, diamonds are being auctioned off for millions.
I dont know how true this is, but one things is for sure.
I find it higlhy unreasonable and incredible to think that while all this is going on gold is going down.
are we to believe people are reaching for anything tangible in an effort to preserve their wealth and they all have the samemind regarding gold, that being to ignore it, or worse sell it?
you say gold has held up reasonable well?
i guess that depends on your perspective.
ask that to someone who bought gold at $1800 or $1900 how gold is doing
or better ask someone who bought silver at $30 or $40 or $45
those people have been destroyed.
will the new year bring anything different? no one has a clue
if you look back at the start of this year, I know it seems so long ago,
but gold actually had like its best january ever
many people expected record highs this year
instead in the face of overwelmingly absolutely bullish, couldnt ask for better factors for gold we are struggling now to get past $1300 and silver has ben crushed.
I find this astonishing.
something is definitely rotten in denmark
if Andy Warhols are commanding $100 millions I find it absolutely preposterous that gold cant even command its inflation adjusted high.
if this were a casino those dice are loaded
if this were a racetrack that race is crooked as all getup
I can’t disagree with you The Greater.
When I said gold/silver have held up reasonably well, I meant in the current context of the market. There seems to be a floor of sorts in.
Would I personally buy gold/silver right now? Nope
You bring up the prices of art work, diamonds, etc. I simply at this moment in time do not understand that phenomenon.
James:
No, it makes sense. The money printing and financial stress is causing pressure to secure quality collateral. When the GOFO rate rises and the repo market is under stress, gold get hit. Like clockwork. Same thing in April 15th, same thing in 2008, etc. Why Cory and Al haven’t picked up on this is beyond me. Ask any person working at a bullion bank. When gold leasing increases, gold paper supply increases and gold prices get slammed. Who knows when it reverses?
On November 15, 2013 at 6:48 pm,
John Chew says:
It doesn’t matter in the near-term what the premium is for gold. The physical gold market is divorced from the paper market.
More currency debasement and QE will cause problem for interbank lending and obtaining quality collateral so there will be more gold leasing for collateral. Gold has no liability risk. Gold can be lent out 50 to 1 or 50,000 to one ounce of physical gold. Supply limitless until the tide reverses.
So welcome to Alice in Wonderland. The more printing, the lower the price of gold in the near-term.
Google: Alhambra Investment and Gold Collateral.
“While it is acknowledged that bailing in interbank liabilities may carry certain risks,” officials write in the document, seen by Reuters, “on balance, it is preferable … that these liabilities are not excluded from bail-in”.
If this overall interpretation of angst in European funding markets is correct, then the cumulative effect of everything from SNS to Anglo Irish to Cyprus to the EU memo is potentially a large shuffling of funding, particularly for banks that are perceived to be the weakest. Not wishing to be a liability holder in the crosshairs of bail-ins and deposit haircuts, counterparties to these weak institutions may have removed themselves in full or in part (to get below the €100,000 insured limitation for individuals). In turn, that may have forced these firms to find funding substitutions at short notice, eventually appealing to whatever collateral relationships they could find including gold-based.
I have little doubt that this kind of pressure on gold was cascaded into other selling pressures, including running preset stops. However, I do think the impetus for selling, particularly in the wake of continued and unprecedented central bank debasement activities, is a window into interbank liquidity problems. If we add in the collateral actions of various QE’s, the pieces connect here all too well for this to be ignored.
Nobody wants to play in the gold futures market – very small volume. They know its a rigged game. When the LBMA and CRIMEX inventories are gone as well as GLD inventories, the jig is up.
Ohhhhhh, you’re such a tease. haha
It is remarkable how distorted the game is become. The economy is so distorted and debt so extreme that manipulation and suppression is literally a matter of national security. Of course, the question that should come to everyone’s mind is: “WHAT KIND OF NATION ARE THESE PEOPLE TRYING TO SECURE?”
Lore,
I have to agree.
Remember; however, there is an outside chance that the “plan” could possibly work. That, of course, is what “they” are hoping for!
Of course its crooked James. The discussion about it is only ment to confuse.
Assets are commanding higher prices. When we see 85 billion a month printing, the cash has to go somewhere, and its all going to wal street and the top 1%. 5% gold, 95% where? Lots of choices.
J Rickards firgures 5% in gold is enough, at that rate it will be awhile till gold gets going.
And we still dont know for sure if the gold Karen Hudes told us about is there or not. People are ignoring that, I have emailed anyone I could think of to confirm it or tell me its not there. Totally ignored. That (believe it or not) is strange.
Gold holding up well? Your right, its perspective. You would think somthing that really is holding up well would not require perspective.
There might be more than 1 reason J Rickards says 5% is enough.
At a mear 5% it really doesnt matter what it does.
For me, I intend to continue @ 5-10% and if nothing happens with it and I dont start making gold and silver “stuff” I give it to my kids. No big deal.
I can’t remember who was talking, but someone stated with emphasis that the Dragon hoard will NEVER, EVER come to mainstream market. For our purposes as market participants, it is not a variable.
Yabbut b.,
With gold at $50k – 5% is plenty for me!
[/sarc]
COLOSSUS fall crazy IRWIN What you think ?
Down 50% ? buy buy buy
-just kidding
-I don’t know anything about it
Was a $9.50 stock once; price objective now ZERO!
http://stockcharts.com/freecharts/gallery.html?CSI.TO
ha ha ye tanks ! crazy ! world ! tank u irwin
Regarding CSI, production delay and water problems
“No big deal” My thought exactly!
I write this as a sourcce of info to all of Al’s followers. In speaking to a friend of mine who is Cambodian he says that the South East Asian countries such as Vietnam, Cambodia and Thialand require visitors to use their currency in place of the dollar when they land in their country. Als, a friend of his just went from Cambodia to India and was required to exchange any dollars they have for Rupees. That closing of the free exchange of dollars in these countries tells me the day the dollar dies is not that far off.
That is interesting. Tks LGC
Not exactly, LGC. We are seeing similar tactics in many places now. There are growing shortages of USD. Governments need them for both strategic and mundane domestic purposes (like energy, oil, gas, propane etc) and so make laws limiting how much foreign currency a citizen can possess or even for how long. They also make an effort to get tourists and visitors to give them up at official locations to avoid losses of physical paper that will leak into black markets where prices are higher than those offered by banks. So the idea is to make you exchange dollars and euros before you get to your hotel or next restaurant. In some countries you cannot buy them back again either when you want to leave. You are therefore stuck with local paper that maybe can’t be exchanged in any country except the one you just visited. Currencies are a real racket now. We will need a new reserve currency eventually just to break down some of the problems that are seriously inhibiting trade and economic activity. Near where I live there are factories that have been closed for many months due to a serious shortage of USD and Euros. They cannot import necessary commodities and supplies. Their business has closed and the workers are laid off now.
My point above was that what you are seeing is the result of increased demand for dollars, not a revulsion to them. Governments are desperate to get their hands on them in some cases. This is not about the dollar dying at all. It is about a bottleneck in the global system of trade and exchange and flow of goods. The result is that countries that don’t export enough are hamstrung to maintain past import levels if the trade imbalances cannot be closed. Foreign exchange reserves are a lot more important than most realize.
Interesting information. Thanks Larry!
Agree Al. It is interesting. We don’t hear too many stories offering real world examples of what the repercussions are for emerging markets where QE and QE withdrawal are concerned. What we often hear instead are vague terms like “global liquidity is drying up” or there is “capital flight” or “asset outflows” or the interesting sounding “defence of currency” and other similar expressions that don’t really mean much at all to most readers. What really happens mechanically on the ground in the background is more interesting to me.
LGC,
THAT IS VERY INTERESTING. AS FAR AS GOLD HOLDING UP, IT FEELS LIKE ITS ON A BANNANA PEEL. AFTER A BIG MEAL MY PANTS WILL HOLD UP BETTER THEN GOLD.
BUT I HAVE TO AGREE WITH PETER G. NEXT YEAR GOLD WILL START TO MOVE UP, BUT THEN AGAIN NOBODY REALY KNOWS.
BIRDMAN,
HOW CAN YOU BE SO SMART. MAYBE BIG AL SHOULD INTERVIEW YOU.
WHATS YOUR CALL FOR GOLD AND SILVER NEXT YEAR?
Gold and silver are heading back up next year, Silverman. Regarding an interview…..that won’t ever happen. Just not my cup of tea. Also I swear far too much for normal public consumption. The whole F%&+#@* show would be deleted.
Here is an article discussing some of the problems with FX in Thailand, Silverman. It is from back in the summer when problems were first developing with outflows related to policy changes at the Fed (tapering talk). The vulnerability of the Thai economy is pretty stark when you see how much property, equities market share and other assets are held by foreigners. Selling of assets naturally means redeeming in your own currrency or the reserve (usually dollars or euros) before transferring back to your home bank. This can drain what cash was on hand at the foreign Central Bank and create havoc with the local currency. Obviously they are taking small steps to stem the flows but honestly there is not much they can do outside of more austere capital controls. If things get worse expect exactly that to happen. Any government can, at the stroke of a pen, refuse to permit sales or redemptions of assets by foreigners and the repatriation of capital, dividends, interest and other income arising from the sale of assets held on their own soil. Most don’t of course but these are not normal times and once one does it more will follow. It is a survival instinct kicking in. Recent restrictions placed on wire transfers abroad by Americans are just one example of how capital is being kept at home and thereby being prevented from fleeing in advance of trouble. The question we should be asking is this…if capital controls have arrived in the form of restrictive practices being imposed on US investors moving financial assets abroad then what is it exactly that the authorities are bracing against? They don’t do this shit for nothing.
Thai Economy May Be Vulnerable To Another Shock ~~ International Business Times
http://www.ibtimes.com/thai-economy-may-be-vulnerable-another-shock-due-high-foreign-holdings-country-1331541
gold could be in a sideways range for many months to even many years now
Agreed, but mining P/Es will improve and weed out the chaff from the wheat; at least that is where my investing ideal is for the moment.
Funny Bird!
Ok I agree with bird. We had a 13y run and a major top. I had $250K of bullion in my briefcase ready to unload @ $1900 but expected a correction to $1500 but we may see a $1000. S#it! I should have dumped…but figured Id hang for the full bull. Oh well I did off 3000oz (doesn’t fit in a briefcase!) of silver @ $49 at J&M Coin and a guy bought the whole shebang @ $50oz bet hes crying more than me!? I knew silver would take a bigger beating and it has but one never gets it exactly. Next time EVERYTHING MUST GO! After everyone gives up we should resume da bull….hopefully.
Every quiet morning is a morning not slammed. I’m still shuffling my portfolio, wishing for better exit points in some things and even better entry points in others. Guess others are doing the same. Need another coffee. Thank you sirs! Rgds