Many of you gold bears are now panicking!

[pianodoctor]

Re: Many of you gold bears are now panicking!

Um...could you elaborate on that?

Not to 'interrupt' sunskyfan, but I heard an interview with a shop owner in SoCal who buys gold. He says he's getting a lot of poor people coming in and selling things like gold dental work out of their heads.

My interpretation is that Americans are clearly getting poorer quickly. Those already at the lowest rungs or the newly unemployed working poor (e.g. SoCal construction workers) are increasingly desperate for cash to meet survival expenses, thus the rush to sell gold for cash.

[FRED]

Re: Many of you gold bears are now panicking!

Not to 'interrupt' sunskyfan, but I heard an interview with a shop owner in SoCal who buys gold. He says he's getting a lot of poor people coming in and selling things like gold dental work out of their heads.

My interpretation is that Americans are clearly getting poorer quickly. Those already at the lowest rungs or the newly unemployed working poor (e.g. SoCal construction workers) are increasingly desperate for cash to meet survival expenses, thus the rush to sell gold for cash.

See: Catching a gold basher:

In one of the most confused paragraphs in the history of financial journalism, the second sentence starts off with a statement about tight gold supply due to a dearth of new gold mines but ends by asserting that retail gold buying rip-off schemes like Cash4Gold appeared to fill the demand that gold mines can’t meet. What?

Don’t warn readers that these horror show services on average pay gold sellers 15 cents on the dollar for their heirlooms. Don’t explain that a desperate and indebted middle class is selling gold to pay property taxes and mortgage bills while wealthy investors like physician Scott Van Steyn buy gold to hedge inflation risk. Talk about a wealth transfer.

We don’t see as many Cash4Gold ads these days as we did last year. Has the middle class sold all of its gold? Sure looks that way.

Now what happens to them if the inflation appears that well-healed gold investors like Scott expect? The wealth class dichotomy of gold investing is the final irony of the collapsing FIRE Economy that deposited 90% of all personal debt in the laps of the bottom 40% net worth group. Imagine what happens when prices start to rise even more than they already have, while unemployment continues to rise with it? That's been our forecast since last year.

[rjwjr]

Re: Many of you gold bears are now panicking!

Exactly right! There is no price correlation what so ever. Gold and U.S. stocks are each separately correlated to a third factor: confidence in the management of the United States of America. The bubble in confidence peaked in 2000 with gold at $270.

Great, so confidence in the management of the US started it's downward spiral with the election of George W. Bush. That doesn't reflect well on those of us that voted for him. In our defense, we had no idea he'd spend like a drunken Democrat.

Flintlock, do you mind if I change my location? I want to be from the Republik of Redneckistan also?

[rjwjr]

Re: Many of you gold bears are now panicking!

Not to 'interrupt' sunskyfan, but I heard an interview with a shop owner in SoCal who buys gold. He says he's getting a lot of poor people coming in and selling things like gold dental work out of their heads.

My interpretation is that Americans are clearly getting poorer quickly. Those already at the lowest rungs or the newly unemployed working poor (e.g. SoCal construction workers) are increasingly desperate for cash to meet survival expenses, thus the rush to sell gold for cash.

Next they'll be selling gold out of other people's heads.

[sunskyfan]

Re: Many of you gold bears are now panicking!

These places, it looks to me, are the gold equivalent to pawn shops.

Ever see someone not desperate for cash using a pawn shop?

[Charles Mackay]

Re: Many of you gold bears are now panicking!

FRED,

If S&P is 500 to 600 by year end and gold stays around $1000, that puts Dow/Gold at about 5, right at the lower limit band. Are we still looking for overshoot to Dow/Gold=2 or will Dow/Gold=5 be the time to reallocate back into stocks? Thanks.

Jimmy

Jimmy I personally am in the camp of it being an expanding triangle. It's not often in history that you lose the world's reserve currency at a time when every currency on the planet is fiat! This is a first and that is why I prefer the expanding triangle conclusion.

[wayiwalk]

Re: Many of you gold bears are now panicking!

Interesting - was looking at "spot" prices on the bullionvault main page - the buy/sell spreads were more than $30 at one point, now back to normal.

Logged in - for all the "jump" in price - my portfolio ain't going to make me a rich man, might as well keep on buying at the usual measured pace.

[zoog]

Re: Many of you gold bears are now panicking!

These places, it looks to me, are the gold equivalent to pawn shops.

Ever see someone not desperate for cash using a pawn shop?

This is all speculation on my part, but I think the cash for gold places are primarily targeted towards middle class people who have never set foot in a payday loan or a pawn shop (at least to sell). The stigma associated with those places is a little too much to bear for someone who has never considered themselves poor or desperate. I think they are not quite as embarrassed to go the gold place to get some cash for their jewelry, coins, or other gold items.

[Marek]

Re: Many of you gold bears are now panicking!

All this talk of buying on dips assumes supply is good. In the past year we've more than once seen prices drop but supply stay tight. $12 silver and $800 gold isn't a buying opportunity if no one has any.

Should we expect the supply of silver/gold coins to dry up this fall?

[hayekvindicated]

Re: Many of you gold bears are now panicking!

Gold is rocketing upwards as we speak - in all currencies.

$1000 an ounce may become the next $700 "buying window". ;)

[jpatter666]

Re: Many of you gold bears are now panicking!

Gold is rocketing upwards as we speak - in all currencies.

$1000 an ounce may become the next $700 "buying window". ;)

PMs in general rocketing -- silver too.

Something is going on....

[WildspitzE]

Re: Many of you gold bears are now panicking!

PMs in general rocketing -- silver too.

Something is going on....

...and oil is limp.

[Slimprofits]

Re: Many of you gold bears are now panicking!

This is all speculation on my part, but I think the cash for gold places are primarily targeted towards middle class people who have never set foot in a payday loan or a pawn shop (at least to sell). The stigma associated with those places is a little too much to bear for someone who has never considered themselves poor or desperate. I think they are not quite as embarrassed to go the gold place to get some cash for their jewelry, coins, or other gold items.

Absolutely right. Cash4gold has kiosks in some of the "high-end" Simon shopping malls around here. I'm talking about the malls with a Nordstrom, a Williams-Sonoma, etc.

[vinoveri]

Re: Many of you gold bears are now panicking!

dollar up, 10yr UST up (in price), PM up .... does this correlation reflect some underlying fear?

[kartius919]

Re: Many of you gold bears are now panicking!

Dollar index down.