Thread: US Stocks Plunge, Dow Falls Over 300 Points As Fears Grip Market

All these assett classes are worthless if nobody has the cash to sell to.

They can hold whatever value in your mind you want to put on them, but no cash no sale.

The next wave is for the countries with default looming is to cash in their assets while they can to repay their loans.

You can't eat stocks and shares or gold, squeaky bum time, twist or hold.

I agree. I also tend to think no matter what you are holding eventually there's a good chance you will sell at a loss to get to the real assets. Many people and financial insititutions that think they are sitting on something 'safe' like gold may well lose quite a lot by the time this is over. When it comes down to it if you can't convert it to anything you want, there are always risks. When the show ends and people switch their holdings from one type of asset to another, the very first to sell will do well, the rest have a good chance of getting screwed. People holding houses in the states know this. The first out walked away with the inflated bubble imaginary wealth but soon after everyone else got screwed. Many people are holding homes who mortgages are based on that bubble price and they must pay them or lose all. They got in late and got screwed when the market collapsed. It's kind of like being sentenced to 15-30 years in jail. If you are a hopefull person you can dream of parole (housing markets going way way up and you being able to sell at a profit and get out of your prison cell)

With markets down and growth threatened the housing situation shouldn't improve and those who were struggling pay for their over-priced homes may just give up and let their homes go. Good for them but more loss for the banks and economy.

Originally Posted by LooseBowels

All these assett classes are worthless if nobody has the cash to sell to.

They can hold whatever value in your mind you want to put on them, but no cash no sale.

The next wave is for the countries with default looming is to cash in their assets while they can to repay their loans.

You can't eat stocks and shares or gold, squeaky bum time, twist or hold.

Most rich people. countries or corporations don't have an issue feeding themselves. They want to store capital. Gold has already gone high enough to prove ^ stuff like that wrong. If it isn't worth $1800 then it isn't worth $1000.

Originally Posted by Hampsha

I agree. I also tend to think no matter what you are holding eventually there's a good chance you will sell at a loss to get to the real assets.

Gold is a real asset. You can hold it in your hand.

Most people, like you, don't understand gold. Even lots of the people in the financial world.

Originally Posted by socal

Gold is a real asset. You can hold it in your hand

.....you sure it's Gold...your holding....that's gotta be a Troll...
keep a firm grip on that five oz'er.....

Originally Posted by baby maker

Originally Posted by socal

Gold is a real asset. You can hold it in your hand

.....you sure it's Gold...your holding....that's gotta be a Troll...
keep a firm grip on that five oz'er.....

....you do know there are three ozs of paper gold...read derivitaves...
to every ozs of real gold....in the gold market....

there is a great difference in allocated physical gold and unallocated derivitate gold.....

should make for a great short squeeze....sending the price into the comos...

you can then be payed with those worthless Dollar paper notes....
or maybe the Governments will just seize the bullion to underwrite
their worthless curriencies.....

even if you think you are smart and have it hidden in the back of a cave and are siting on it 24/7 with your AK 47 .....

good luck with that...

Originally Posted by baby maker

Originally Posted by baby maker

Originally Posted by socal

Gold is a real asset. You can hold it in your hand

.....you sure it's Gold...your holding....that's gotta be a Troll...
keep a firm grip on that five oz'er.....

....you do know there are three ozs of paper gold...read derivitaves...
to every ozs of real gold....in the gold market....

there is a great difference in allocated physical gold and unallocated derivitate gold.....

should make for a great short squeeze....sending the price into the comos...

you can then be payed with those worthless Dollar paper notes....
or maybe the Governments will just seize the bullion to underwrite
their worthless curriencies.....

even if you think you are smart and have it hidden in the back of a cave and are siting on it 24/7 with your AK 47 .....

good luck with that...

Do I know about this ? UU.. yes. 100-1. And I know allot more then that. I know how gold is being worked into the financial system as we speak. Thats a deep subject though. The Euro is involved...

There won't be any western governments seizing gold or underwriting fiat currencies with it. I know that too.

....was heavy into Gold....allocated Gold through the Perth Mint myself....
at the time the cost of production was around USD380 per oz from memory..

daunting prospect to pay four to five times more than cost....in some markets....like houseing, grain, copper, iron ore, pussy....that would be considered a bubble.....

there seems a natural arbritrage....an oppertunity, never before seen...in its present form...

Gold going through the roof and stock valuations on a downward trend....

when we see a reverse in the trade....it will be violent....but by all accounts it is a way off yet....if the Fed's low interest policy is to be believed....

not that there is an option in policy.....and therein lies the danger...
stagflation...........

for my part i took the trade in '08/'09 in the last washout....one never knows timeing on these things....

no doubt some would say, it would be better to still be in the Gold trade...
afterall they were allocated ozs....900 ozs...

but we move on....views change...and the existing portfolo...is adquate to the needs.......

as for the EU imposeing a gold standard or even a fiat currency backed by Gold, on the World....they would need to get their house in order....

and maybe even mention it to the Yanks......

[quote=baby maker;1841818]

....was heavy into Gold....allocated Gold through the Perth Mint myself....
at the time the cost of production was around USD380 per oz from memory..

daunting prospect to pay four to five times more than cost....in some markets....like houseing, grain, copper, iron ore, pussy....that would be considered a bubble.....

There is some mines with cost of production under $380 now. Cost of production has less then nothing to do with how well gold consolidates wealth. It is rare, you have to find it first. That is what gives it its value.

there seems a natural arbritrage....an oppertunity, never before seen...in its present form...

Gold going through the roof and stock valuations on a downward trend....

Yeah, you would think the big mining stocks would be going through the roof. Lets look at that. Newmont mining is one of the biggest gold miners in the world. It has a price to earnings ratio of 11, today. The biggest, Barrick gold has a PE of 12.


Apple, who sells toys to bankrupt consumers has a market cap of 341.392 Billion.

The market cap of the entire sector of gold stocks (producers only) is about $234 billion.

when we see a reverse in the trade....it will be violent....but by all accounts it is a way off yet....if the Fed's low interest policy is to be believed....

Gold went up more when interest rates where rising from 2003 to 2006, then it did after they fell in 2008. Rates have to be well above the rate of inflation for a long time to put a dent in gold.

for my part i took the trade in '08/'09 in the last washout....one never knows timeing on these things....

I guess it depends where you get your information.

no doubt some would say, it would be better to still be in the Gold trade...
afterall they were allocated ozs....900 ozs...

but we move on....views change...and the existing portfolo...is adquate to the needs.......

I don't know what you where looking at in 2009, but I came up with a different conclusion.

Global pension assets are estimated to be – $31.1 trillion. It is more than twice the size of last year’s GDP in the U.S. ($14.7 trillion). According to estimates by Shayne McGuire in his new book, Hard Money; Taking Gold to a Higher Investment Level, the typical pension fund holds about 0.15% of its assets in gold. He estimates another 0.15% is devoted to gold mining stocks, giving us a total of 0.30% – that is, less than one third of one percent of assets committed to the gold sector.

Let’s say fund managers as a group decide to increase their allocation to the gold market. If they doubled their exposure to gold and gold stocks – which would still represent only 0.6% of their total assets – it would amount to $93.3 billion in new purchases.How much is that? The assets of GLD total $55.2 billion, so this amount of money is 1.7 times bigger than the largest gold ETF. SLV, the largest silver ETF, has net assets of $9.3 billion, a mere one-tenth of that extra allocation. The market cap of the entire sector of gold stocks (producers only) is about $234 billion. The gold industry would see a 40% increase in new money to the sector. Its market cap would double if pension institutions allocated just 1.2% of their assets to it. If these funds allocate just 5% of their assets to gold?

as for the EU imposeing a gold standard or even a fiat currency backed by Gold, on the World....they would need to get their house in order....

and maybe even mention it to the Yanks......

There will be no backing of anything. Gold will be floated.

Back to stocks. Here is the gold stock to bullion ratio chart. Its almost at 2008 levels. Doesn't look like a bubble to me. Looks almost like a bear market.

I don't know what you where looking at in 2009, but I came up with a different conclusion.

Presumably this was in your 6th form Economics class, between Art History and English Lit?

Originally Posted by baby maker

the Fed [a private company] issues paper called T Notes to the market, the community, the world....

actually the Federal Reserve doesn't issue T Notes or T Bonds, only the US Treasury does. Only the US Treasury is an arm from the government, the Fed is an independent organization and I don't think its private status is relevant at the end, yet it's still an organization with great political influence.

The role of the Fed is to manage the flow of money, and they use among other things T notes and T bonds for that. They will hold them, buy them, sell them etc... they are a super bank that "regulate" the money held in all the other banks to control macro-economics functions like GDP growth and inflation.

The US Treasury has a different role.

Monetary Reform: The Beginning of the Beginning



"08/10/11 Fundamental reform of the world’s monetary system has begun. It is way too early and too amorphous to be front-page news. We are only at the beginning of the beginning of a popular effort to restore gold backed money to the center of economic activity.

The power of this incipient reform movement is its grounding in human nature and our propensity – in Adam Smith’s famous words – “to truck, barter and exchange one thing for another.” We forget money is a human invention, emerging from what Hayek calls the spontaneous order of the market, to make possible mutually beneficial exchanges over an ever-widening number of goods, across an expanding set of communities and through the keeping of promises of exchange, even over long periods of time.

The invention of money made possible an extraordinary increase in commercial activity by liberating us from a direct barter system where I have to have something you need in order to trade. By ancient times, gold and silver coins had become the money of choice because they were better than any other medium at maintaining their rate of exchange into goods and services, thereby favoring neither buyer nor seller.

Defining a dollar, or a British pound, as a fixed weight of gold was an innovation that further increased the usefulness of money. You could take currency and trade it for something you needed, or you could trade that money for a fixed weight of gold. As a general proposition, paying with paper money was no different than paying with gold, except paper money was more convenient to carry.

Forty years ago, that order was up-ended by President Richard Nixon’s decision to sever the final link between the dollar and gold. For the first time since Sir Isaac Newton established the British gold standard in 1717, all of the world’s major currencies during a time of peace were free to float against one another and to fall in value against precious metals. The consequence has been a debasement of the dollar and all other currencies, an ever more cyclical economy, a 40-year hiatus in real wage increases for American workers and a growing fear of yet more financial crises created by monetary instability.

As a consequence, support is growing to repeal tax and other legal barriers that effectively prevent people from using precious metals as money.

In March, Utah repealed its capital gains tax on gold and silver coins it will recognize as legal tender. Twelve other states are considering similar legislation.

Then, in June, Senators Jim DeMint (R-S.C.), Mike Lee (R-Utah) and Rand Paul (R-Ky.) introduced the Sound Money Promotion Act that would remove the 28% federal tax on gains realized in the use of gold or silver coins recognized as legal tender for use within a state.

Now, in Switzerland, efforts are underway to create an official Gold Swiss franc (GSF) with a set of coins, each with a fixed content of gold. The proposed constitutional change would permit private institutions to issue an unlimited number of coins whose appearance, content and weight of gold, and definition would be under the supervision of the Swiss government.

For example, the smallest coin would have a face value of 1 GSF and have 0.1 grams of gold in its center, similar to today’s bi-metallic euro coins, and be worth—at today’s price of gold, about $4.00.

Five, 10, 20 and 50 GSF coins would have 0.5, 1.0, 2.0 and 5.0 grams of gold and today would be worth approximately $20, $40, $80 and $200 respectively. Gold Swiss franc bank notes are conceivable, as are GSF bank deposits, but they would have to be 100% backed by gold held by the issuing institution. Credit transactions would be legal, but fractional reserve credit would be forbidden under Swiss law.

“The primary purpose is to make it easy for the Swiss people to use or hold gold as an alternative to the Swiss franc and all other currencies,” explains Thomas Jacob, the man behind the gold initiative who now heads the newly founded Goldfranc Association.

In addition, Jacob believes the free coinage of Gold Swiss francs may alleviate the upward pressure on the Swiss franc. In the past year, it has shot up 15% against the euro and about double that against the dollar as people all over the world sought refuge in the Swiss currency.

The importance of this initiative occurring in Switzerland goes beyond that country’s reputation as a center of financial stability and sound banking practices through the millennia. Such a change in its constitution must be approved by the Swiss people through a referendum, and thus would demonstrate in a language politicians understand the popularity of making money again as good as gold.

Within the next few weeks, signatures will be collected to launch an initial referendum that would require the Swiss National Bank to repatriate all of its gold holdings to within the borders of Switzerland, prohibit it from selling any more of its gold, and require a minimum 20% of its assets be gold.

This initiative is likely to be very popular. The Swiss remember that during World War II, the United States refused to provide access to their gold reserves. More important, since 2000, the SNB has sold 1550 tons of gold – more than a half of its total holdings – mostly at prices below $500 an ounce, and bought European government bonds that have plummeted in value by SF40 billion, compared to a total federal budget of SF60 billion.

This referendum will put the issue of gold as money on the political agenda. The next step is to offer a follow-on initiative permitting the free-coinage of GSF.

The creation of a Gold Swiss franc and the free coinage thereof, along with the repeal of taxation by the U.S. of gold and silver coins used as legal tender, would liberate market participants to generate spontaneously a new monetary order. With government barriers removed, people all over the world will find ways to use gold-backed money to facilitate the exchange of goods and services with their counterparts anywhere in the world, and to engage in saving and investing, lending and borrowing using monies whose value would be anchored in the remarkably stable and trustworthy purchasing power of gold.

Initially, such efforts would have little economic consequence. However, in a world of voluntary exchange, good money chases out bad money, turning Gresham’s law upside down. That is why when the dollar’s value was stable, it was the currency of choice throughout the world.

No one can forecast how this process will evolve. However, we can anticipate that the creation of a Gold Swiss franc and the repeal of tax and legal barriers to the use of gold and silver coins as legal tender will be the antecedent to the reform of today’s paper money system – in the U.S and throughout the world."

If this move comes to fruition there will be created a "liquid" market, backed by one or more governments, similar to the the Libyan Government moves to produce the Libyan Gold Dinar.

Marc Faber August 9th.

" The technical pictutre is horrible... horrible."

I dont mind showing my ignorance, why would traders flee from high yield stocks into Govt bonds ?

Originally Posted by socal

Gold is a real asset. You can hold it in your hand.

But what can you do with it?

Originally Posted by sabang

Originally Posted by socal

Gold is a real asset. You can hold it in your hand.

But what can you do with it?

Store wealth. Gold is not a commodity, it is not consumed. All of the gold ever mined still exists above ground. It is rare.

So the Swiss are going to peg the Franc to the Euro..... Doesn't surprise me. The Euro is the future.

Swiss Franc Falls as SNB Sees Possible Euro Peg

Zerohedge.



There is some early discussion today that the SNB might implement a formal peg of the CHF against the EUR that is meant to prevent CHF's and CHF has responded by being the worst performing major so far today. The idea would be that the SNB would set the peg and undertake unlimited intervention to maintain it. Unlike the recent moves in money and swap markets this would involve direct buying of EUR, rather than intervention through swaps and money markets.

^ like any system based on trust, there will be assholes to abuse it, but the system itself is needed and bring a lot of advantages we take for granted

those who talk about the good old age of the gold standard and no debt have no clue, our economic system is far more complex and sophisticated to go back to some old archaic system. Do you think we could issue credit cards based simply on gold holdings ?

the real problem is that Banks are unregulated these days, and taking risk with THEIR money, but putting everyone money at risk in the process

they have too much money and don't know what to do with it, that's why governments have finally came to the conclusion that they need to be taxed heavily and that their utility purpose need to be seriously watched

a bank has an economic utility, and a lot of power, and that's why you can let banks run loose or do what they want, they will wreck themselves and the system in the process

Originally Posted by Butterfly

Do you think we could issue credit cards

and a lot of power,

Does the world really need credit cards?

A debit card or an ATM cash card would enable people to withdraw their money without the necessity of paying a bank clerk to sit and check the persons bank account.

The power has been given to it by the corrupt, lying politicians, did any ask the voters if they agreed?