The plummet in gold prices has all gold holders perplexed and less wealthy so what’s the little guy to do, assuming he hasn’t already disappeared and is cowering in a corner somewhere? Below are some answers.
So writes Monty Pelerin (www.economicnoise.com) in edited excerpts from his original post* entitled What To Do with Your Gold.
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In times like these, the weak panic and get out and the strong get in. If this is a manipulated event (and it certainly appears to be so), then the big money will be accumulating gold at these prices. That’s fine if you have oodles of money but what’s the little guy to do, assuming he hasn’t already disappeared and is cowering in a corner somewhere?
Peter Souleles would not “even consider selling gold until…until….
- Until someone can explain to you where all the big green boxes of silver eagles you could find on ebay have gone.
- Until someone can explain why you are confronted by overpriced and limited stock offerings when you type in gold bullion (newly listed).
- Until the FED allows Ron Paul to head and appoint an audit team that will verify exactly what physical gold the US holds on behalf of its people as well as foreign nations.
- Until the FED actually sells its gold to prove that it is a barbarous relic without any intrinsic value.
- Until China actually announces what its gold holdings are.
- Until China, Russia and other central banks stop buying gold.
- Until someone can tell us all where Libya’s gold is following the overthrow of Gaddafi.
- Until someone can explain why literally every coin shop and bullion dealer has been confronted by far more buyers than sellers.
- Until the USA stops raising its debt limit.
- Until the FED raises interest rates to a level that equals the REAL inflation rate plus 2%.
- Until the governments of the world can unanimously guarantee that there will be no further culling of bank accounts as happened in Cyprus and that such behaviour is not part of a new template for “saving” our economies.
- Until governments such as Canada withdraw proposed legislation authorising bank deposit haircuts in future.
- Until the FDIC and its equivalent in other nations no longer find it necessary to guarantee deposits (even in limited fashion). After all, Cypriot bank accounts up to 100,000 euros are guaranteed but still remain inaccessible for total withdrawal so what kind of a guarantee is that?
- Until new gold production outpaces population increases which is in stark contrast to worldwide behaviour by Central Banks printing money.
- Until gold ore grades rise dramatically or production costs fall dramatically.
- Until food [stamp] recipients (currently at 47,791,966) fall to pre GFC levels of just over 26 million in 2007.
- Until they can explain how the stock market continues to climb in the face of so many deteriorating indicators.
- Until they jail Corzine, the bankers who launder drug money, and the bankers who manipulated LIBOR amongst others.
- Until they put an end to fractional reserve banking and…[prevent] banks from leveraging to obscene levels.
- Until women stop wanting gold jewellery.
- Until you believe that governments will not eventually in some manner nationalise your 401k’s and IRA’s.
- Until sales of paper gold and silver cease to take place.
- Until the people of India start selling their gold in bulk. (In Sydney Australia I was told by one bullion dealer that Indian people were lining up as if his office was a soup kitchen.)
- Until the German Government actually gets all of its gold back – or are they powerful only when it comes to little countries like Cyprus?
- Until someone can explain what will happen to South African gold mine economics and production in view of the higher wages negotiated last year and the plummeting prices of precious metals.
Other commentators who are far more knowledgeable than I will no doubt add their own comments both quantitatively and qualitatively to what I have written [above]. The point is. however, that the fat lady who has appeared on stage to sing the funeral requiem for gold is none other than a certain banker in disguise…
The gold canary may have been temporarily silenced but silencing the canary does not avoid the explosion in the mine taking place at some stage.”
“What crash?” Gold is still up almost 500% since 2001. How does the S&P and Dow compare over that timeframe? Better yet, how about Apple stock? There is no other investment sector/space as they like to say these days, which can come close. So again I ask “What crash?”
The paper gold market is being used to shake the bullish tree harder this time than any time before because of what is to come. Fear is the most powerful emotion in markets and it is being used perfectly to enrich the grand names of finance at your expense. We are right in front of that time when the market performs a classic bottom both in shares and physical. From this point gold is going to and through $3500 [so] if you are unable to buy at this time there is one thing you can do – to get into the fight and out of the stands. That act is do nothing, and do not capitulate. Let them play the price game, but give them nothing whatsoever of yours. Words: 758
There will come a time, and based on current charts no one knows when, that prices for gold and silver will become prohibitive and/or governments will do what they can to inhibit (steal) ownership, maybe even making it criminal to own or use in transactions. [That being the case we advocate that you go “get”] physical gold and silver [while the getting is good], consistently and at any price. The point here is not to “make money,” but to preserve and/or create wealth. [Let me explain.]
If central banks are preparing for a major change in the value of the dollar, shouldn’t we? The US dollar cannot and will not survive the ongoing abuse heaped upon it by government planners and federal officials. That not only means the gold price will rise, but that many, if not most currencies, will lose a significant amount of purchasing power. This has direct implications for all of us.