Home Forums Hunting & Shooting Hunter's Campfire What is the deal with gold and silver?

Rest assured that the economy and its data will be altered and adjusted so as to ensure a second term for Team "O".

I have had this same thought.

Last week I seen a interview with one the oil traders and the guy said "remember oil can go down as fast as it goes up". In all the years I have watched oil I have never seen a trader say anything like that. I am wondering what will happen to oil/gas prices come August and September.

Dink

But if I remember correctly private ownership of gold was illegal in 1971, from 1933-1974, and also back in 1917 when .gov confiscated it for "patriotic" reasons and issued gold certificates in lieu. What's to stop .gov from doing that again in an economic emergency? Gold hoarders would be up a creek then.

If that's a concern of yours, go with silver instead.

If TSHTF gold and silver will have very little value. Guns, Ammo, food and fuel will be the most valuable.

There's a whole pile of contrary history your theory slams up against. Even those Jews who managed to sneak their gold and silver coins into the Polish ghettos lived well while the Germans were attempting to starve them. Somehow there were always canned goods, wine, and fresh produce to be had for someone with gold and silver coins with which to buy them, while those without gold and silver ate rats when they could find them. In the months before the fall of South Vietnam, merchants stopped accepting paper money, but would still accept gold and silver for their goods and produce. That pattern has repeated itself countless times throughout history.

Yes it was, and yes they did. The compliance rate in 1933 was around 20-25%. On 31Dec75 President Ford rescinded the PEO that the great thief Roosevelt had imposed upon the people, allowing them to own physical bullion once again.

Numismatic gold, and jewelry had been allowed under the PEO. Gold was traded worldwide, and other Western countries allowed their citizens to hold gold, and many Americans did as well, especially if they had overseas connexions.

The London Gold Pool, which was the the Bank of England acting in concert with the Federal Reserve, fought for ten years to keep the price of bullion at $35/oz, as agreed under the Bretton Woods Agreement of 1944. They were unsuccessful. Nixon defaulted on US debt obligations required under treaty in August of 1971. This kicked off the first bull market in gold.

When Ford rescinded the PEO in 1975/76, he added American participation in what was a bull market in which only Westerner's-meaning primarily America and Western Europe-participated. That bull ended in 1980. It ended because Paul Volcker, Chairman of the Federal Reserve, raised interest rates 200 basis points above the current REAL rate of inflation. This made interest rates positive once again, killed inflation over the next few years, caused a major recession, and removed the reason to hold gold. He was able to do that because America was a creditor nation, and had a manufacturing economy that led the world.

That is no longer the case, and since 1971 we have lost both of those attributes. We are now the world's largest debtor nation, and have switched from manufacturing to services, and "financial engineering" and inflation are our major exports. The move that Volcker made is no longer possible because of the size of the debt.

In the government's search for revenue because of this excessive debt and the overwhelming level of "entitlements" that they have taken on, they will search for all sources of revenue that they can find, and they will print money and create as many Treasury obligations as they can to keep the Ponzi rolling.

What that means is that they will be more likely to confiscate 401k's and IRA's, or force both of those entities to have a large percentage of government paper. Since these are all .gov sponsored "retirement" funds, they are subject to rule changes and policy reversals. If I were you, I would be much more concerned with my so called "private" retirement fund being confiscated by revenue hungry .gov than I would my gold.

Gold and silver are outside the system, meaning that if you hold the physical metal, it is untraceable by .gov, easily hidden and transported, and can be used as money anywhere in the world. This is in addition to holding its purchasing power over paper money, and having no counterparty risk of default.

Having seen the government violate property rights and contract law at will over the last 10 years, I think that if given the choice, I would choose something that was physically in my hand over something that some politician or central banker promised would be worth something in 5, 10, or 30 years. History is on my side on this, and against politicians and bankers.

The choice is yours. Choose wisely.

Yes, and after the SHTF ends, as it always does, real means of facilitating trade will be required, and I can guarantee that paper won't be accepted as such. See Continental Dollars or Confederate Dollars as two examples. Gold and silver are MONEY, always have been and always will be. Paper is a scam dreamed up by bankers and politicians to steal from the people.

A great post, Mike.

DINK,

Here's the real reason that gold and silver were taken down today.

Trader Dan's Market Views

Market Insights and News
Wednesday, February 29, 2012
Bernanke tries talking down Commodities


Today was Fed Chairman Bernanke's chance to testisfy before the Congress' Financial Services Committee. Here is a quick synopsis of his comments as I see them.

"The economy is getting better based on what we can see of the employment numbers but it is not growing at a fast enough clip to justify any immediate change in our accomodative monetary policy. The uptick in hiring has been helped by this policy and any change to it at the present time is not warranted. Real Estate is still a concern. Us fiscal condition is dire and faces a serious challenge at the end of this year. Inflation is not a concern although temporary rises in energy prices bear monitoring".

There you basically have it.

Based on this testimony, gold and silver were murdered. The supposed reason? - We are told that traders were expecting QE3 to be imminent and were disappointed because the usually dovish Bernanke did not sound quite as dovish as before. Thus the metals were hammered mercilessly lower.

Excuse me - but as a trader who watches these markets each and every day for more hours than I would prefer anymore, I have not seen any analyst explain the reason for the heretofore rally in the metals as traders EXPECTING AN IMMINENT QE3 program to launch.

The reason for the rally has been expectations by the market that Central Banks would keep the liquidity spighots open for the foreseeable future (near zero interest rate policy coupled with QE out of Europe and the UK) and thus create an environment in which there was little opportunity cost for buying the metals. This has been generating RISK TRADES in which traders/investors buy both stocks and commodities and generally sell off the Dollar, which was particularly pronounced after a rush back into the Euro once traders were convinced that the immediate fallout from the Greece debacle was past.

Comments this morning trying to explain the sell off in gold mentioned the failure of the metal to make it through the $1800 level and downside stops as the culprit but ironically they are deathly quiet in regards to silver, which only yesterday had staged a MASSIVE UPSIDE BREAKOUT on strong volume out of a congestion zone. Yet today we saw a nearly 8% wipe out in silver which completey erased yesterday's breakout and then some.

My thinking AT THE MOMENT is that Bernanke and company were watching the commodity complex begin to accelerate higher once again as a result of their free money policy and began getting extremely nervous particularly as energy prices were rocketing higher. This is an election year and one thing that the boss cannot stand for is having to deal with that pesky issue of unhappy drivers bitching and complaining about the outrageous cost of filling their gas tanks especially since he and his crew are doing as much as they can to shut down drilling on public lands and offshore.

If one basically states that the economy is doing better - not out of the woods yet but better - and all the hedgies are leveraged to the gills because the FED GAVE THEM THE GREEN LIGHT TO DO EXACTLY THAT when it first announced that it would keep this near zero interest rate policy out to the end of 2014, then it is a simple matter of throwing a bit of uncertainty in that regards to generate a bout of selling. Toss in the same permabears as always capping at the highs of the day and the algorithms did the rest of the work as the stops were picked off.

In the meantime today's wild move in silver was a daytrader's/scalper's heaven. As said before, there are no worse traders on the planet than the hedge funds. Those guys could not trade their way out of a wet paper bag if their lives depended upon it.

In watching both of these metals, it does seem that we are now getting a bit of stabilizing in here around midday.

Gold and silver shares as usual are going nowhere. They made it just to the bottom of the critical resistance zone that I noted on the chart yesterday at the gap region 555-560 before going Kerplunk.

Interestingly enough, the long bond is down a full point right now as I write this. I am keeping an extremely close eye on this market. As stated yesterday, I refuse to believe ANY talk about an improving economy as long as the bond market does not start a solid downtrending move.
Posted by Trader Dan at 9:16 AM

Don't lose faith boys...the headline today was that the debt would be monetized further. This is good for gold, good for the markets, and bad for everyone and everything else.

The dollar is being further depreciated, it makes gold worth more and the markets a better buy for those with foreign dollars. You might note that the market, under a very damaged dollar, will be good for the HNIC.

I hope you're in cash, you'll take it in the arse.

I'm not saying this is a good thing, just providing current info.

Silver will prove to me more volatile than gold , erosion of the dollar will be good for silver prices. Industrial demand for silver is high. Comodities are always at risk. Im into my physical silver holdings for the long run and bought cheap years ago.

You stick with your theories I'll stick with what will keep me alive.

only down $100 today, in the near future it's probable that we'll see up and down days of multiples of $100


fasten your seat belts ladies and gents, the ride's about to get bumpy!


how'd you like to have had gold on margin this morning? yeeehaaaww! you'd feel like Dr. Strangelove character riding that bomb down in the sky!


you have to love this life we're given, place your bets, take your chances.

if you think gold is headed down....sell it

if you think the stock market indices are headed down....sell them


if you think the US$ is going down.......trade it for something that will hold value or short it if you have big balls and a big bank


if you think S is gonna HTF......best to have some food, guns and ammo, along with water, medicines, liquor, tobacco and candy!


if you think contestant # 8 is gonna win American Idol.....god help you

I have both.

Ah yes, Trader Dan had a good overview in the Harvey Organ blog site. Bernanke the "magician", not unlike "O" is manipulating the economic sentiment as best he can. Wallstreeters and the bankers love QE's as easy money can always cure the need for the next "fix". At some point the ponzi scheme will become unsustainable and we'll all act like Greeks! The only chance to end this is to remove the entire Team O from power. While it won't be a panacea, we will at least have a chance to move the economy forward with real growth.

Honestly, there is no realistic chance of averting disaster at this point. It's been in the works far too long, and we're far too deep into it, for any effective intervention at this point. As Mike says, the best outcome is to have someone in office who's not on board with the program to morph American into a police state hell hole when it finally happens. Most of the Republican candidates are as much on board with that programs as the Democrats.

BINGO! Glad to see there are a few here that understand why metals move the way they do.

The radical downward move is typical of a bull market, and constitutes a buying opportunity, i.e., a sale on metals. In a typical bull market, upward moves are gradual, while downward moves are sudden. A bear market is characterized by the opposite tendency. The explanation is that lots of folks are in the metals as a speculation, and on any bad news will dump it for profits, but these are like fleas on the elephant that is the bull market which is driven by deep fundamentals having to do with widespread reliance on Keynesian monetary and economic policy.

PS This wasn't directed at Stetson.

Hawk, you're teaching Granny how to suck eggs. I think Stetson is very familiar with the ins and outs (ups and downs?) of the metals market. Just sayin'.