PCR: Gold & the Dollar - A Fight to the Death?

[Forrest]

Re: PCR: Gold & the Dollar - A Fight to the Death?

That's pretty good doomer porn; thanks for bringing us the good stuff, Don.

If China offers to buy my physical gold at $10,000 an ounce I will sell it all to them.

Since all our holdings would be diminished to about 1/8 of current value US$ at a US$10K value per ounce of gold, we would probably need to.

Of course...that would also make any organic veggie I raise worth about $10.00 each instead of $1.50 each, with consequent trauma in all our markets, and food riots on the streets.

I would infinitely prefer to just muddle through, and keep my gold for a more serious emergency until all the debt is written off everywhere on the the long slow crash scenario...painful for all, but not ugly and brutal.

Bye the bye, if Russia, China and Iran become more exclusively trading with each other on Energy, wouldn't all the oil prices drop with China no longer needing so much from anywhere else?

And if they also sell their goods to each other, and just buy from the West what we do well, wouldn't we all benefit from that, as we would need to start product manufacturing back in the West...and particularly in America?

[thriftyandboringinohio]

Re: PCR: Gold & the Dollar - A Fight to the Death?

Since all our holdings would be diminished to about 1/8 of current value US$ at a US$10K value per ounce of gold, we would probably need to.

Of course...that would also make any organic veggie I raise worth about $10.00 each instead of $1.50 each, with consequent trauma in all our markets, and food riots on the streets.

I would infinitely prefer to just muddle through, and keep my gold for a more serious emergency until all the debt is written off everywhere on the the long slow crash scenario...painful for all, but not ugly and brutal.

Bye the bye, if Russia, China and Iran become more exclusively trading with each other on Energy, wouldn't all the oil prices drop with China no longer needing so much from anywhere else?

And if they also sell their goods to each other, and just buy from the West what we do well, wouldn't we all benefit from that, as we would need to start product manufacturing back in the West...and particularly in America?

I agree, Forrest.
The basis of my comment was that Bill Holter's argument is nonsense in many ways.

China can't "set the price" of gold, umbrellas, sardines, or anything else, especially the price in US dollars.
The most they can do is offer to buy or sell that thing.

If they offer to sell gold for $10,000 an ounce, no one will buy.
If they offer to buy gold for $10,000/oz, they will go broke trying to buy all the available gold in the world.
If China and Russia form a tightly coordinated union, it will just be a team of two corrupt, totalitarian nations arguing and cheating.

I did not follow the link. With so much bad thinking in the first three paragraphs, it seems pointless to read more.

Jesse's Cafe Americain web site has a lot of great info and commentary, but this one ain't.
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[jk]

Re: PCR: Gold & the Dollar - A Fight to the Death?

I agree, Forrest.
The basis of my comment was that Bill Holter's argument is nonsense in many ways.

China can't "set the price" of gold, umbrellas, sardines, or anything else, especially the price in US dollars.
The most they can do is offer to buy or sell that thing.

If they offer to sell gold for $10,000 an ounce, no one will buy.
If they offer to buy gold for $10,000/oz, they will go broke trying to buy all the available gold in the world.
If China and Russia form a tightly coordinated union, it will just be a team of two corrupt, totalitarian nations arguing and cheating.

I did not follow the link. With so much bad thinking in the first three paragraphs, it seems pointless to read more.

Jesse's Cafe Americain web site has a lot of great info and commentary, but this one ain't.
.
.
.

iirc china holds about $1.8trillion in dollar based assets. if they chose to offer $10k for an oz of gold, that would buy.... let's see... the 1k factor drops it to 1.8 billion, the 10 factor to 180,000,000 oz of gold.

a quick google search pulls up this paragraph from wikipedia: It has been estimated that all the gold mined by the end of 2011 totalled 171,300tonnes.^[1] At a price of US$1500 per troy ounce, reached on 12 April 2013, one tonne of gold has a value of approximately US$48.2 million. The total value of all gold ever mined would exceed US$8.2 trillion at that valuation.<sup>[note 1]

so all the gold ever mined, if valued at $10k would be worth 6.7 times as much, or $54trillion. so you're right, at $10k/oz one tonne would cost $322million, and china's $1.8trillion would only buy about 6 years of total global production. would hardly make a ripple in global markets, i guess.</sup>

[Southernguy]

Re: PCR: Gold & the Dollar - A Fight to the Death?

I calculate as follows: at today's price: 1300 an t. ounce; 1 ton of gold is worth 32.154 MMD.
All the central banks holdings aprox. 20% of total gold ever mined is aprox. 34,000 ton.
At current price this is around 1 t. dollars.
I think that in the crazy but not completely impossible situation that China begins buying gold in earnest, the price shall begin to go up. Someone with enough knowledge of microeconomics can, probably make approximate calculations.
My hunch is that if China employs 1 t. dollars of it's reserves to buy gold price is likely to go to 10.000 an ounce or more. Simply put, at current prices (which of course would not hold) 1 t. dollars buys all the gold being held by all CB's.
All privately held gold (bullion vault, GLD, etc) is only (aprox.) 2200 ton. That is the "pittance" of mere 70 billion dollars. The fortune (more or less) of one of the super rich. Should China announce (or just allow to "filter") the information that it is buying gold in big quantities all the bets are out as to how the "gold fever" could evolve. There would be no limits. Well, of course, western CB's could begin selling as fast as China buys. So they could keep the price at nowadays levels...until China had changed 1 t (or less, say Russia and others would not follow suit) in toilet paper for solid, heavy, shinning, yellow matter.
Western CB's would not have gold to fix a tooth...

[GRG55]

Re: PCR: Gold & the Dollar - A Fight to the Death?

I calculate as follows: at today's price: 1300 an t. ounce; 1 ton of gold is worth 32.154 MMD.
All the central banks holdings aprox. 20% of total gold ever mined is aprox. 34,000 ton.
At current price this is around 1 t. dollars.
I think that in the crazy but not completely impossible situation that China begins buying gold in earnest, the price shall begin to go up. Someone with enough knowledge of microeconomics can, probably make approximate calculations.
My hunch is that if China employs 1 t. dollars of it's reserves to buy gold price is likely to go to 10.000 an ounce or more. Simply put, at current prices (which of course would not hold) 1 t. dollars buys all the gold being held by all CB's.
All privately held gold (bullion vault, GLD, etc) is only (aprox.) 2200 ton. That is the "pittance" of mere 70 billion dollars. The fortune (more or less) of one of the super rich. Should China announce (or just allow to "filter") the information that it is buying gold in big quantities all the bets are out as to how the "gold fever" could evolve. There would be no limits. Well, of course, western CB's could begin selling as fast as China buys. So they could keep the price at nowadays levels...until China had changed 1 t (or less, say Russia and others would not follow suit) in toilet paper for solid, heavy, shinning, yellow matter.
Western CB's would not have gold to fix a tooth...

China will be buying more US$. It needs to depreciate the yuan against the global reserve currency to rescue it's export economy model.

(and as that happens the only functioning economy in Europe, Germany, is toast).

[Southernguy]

Re: PCR: Gold & the Dollar - A Fight to the Death?

China will be buying more US$. It needs to depreciate the yuan against the global reserve currency to rescue it's export economy model.

(and as that happens the only functioning economy in Europe, Germany, is toast).

That's the way it has been so far. And it is going on for quite a while yet. Agressive US moves like "Asia pivot" could accelerate the change towards something different. Time will tell. But what the article states; the possibility that China takes gold prices to USD 10.000 is real, however harmful or even suicidal for themselves.

[FrankL]

Re: PCR: Gold & the Dollar - A Fight to the Death?

That's the way it has been so far. And it is going on for quite a while yet. Agressive US moves like "Asia pivot" could accelerate the change towards something different. Time will tell. But what the article states; the possibility that China takes gold prices to USD 10.000 is real, however harmful or even suicidal for themselves.

If you wish to acquire gold to the point where you are happy to pay 10K per oz, why why would you pre-announce it?

You could also just buy everything available on the market until it hits 10K; you end up with the same end situation, but get a lot more gold for your dollars to get there...

[GRG55]

Re: PCR: Gold & the Dollar - A Fight to the Death?

That's the way it has been so far. And it is going on for quite a while yet. Agressive US moves like "Asia pivot" could accelerate the change towards something different. Time will tell. But what the article states; the possibility that China takes gold prices to USD 10.000 is real, however harmful or even suicidal for themselves.

Nations with aspirations of becoming global powers all behave more or less the same way...it is not just the USA that can appear "aggressive"

18 May 2014 Last updated at 02:15 ET

Vietnam riots: China ships to evacuate workers

China is sending five ships to evacuate Chinese nationals from Vietnam following a wave of anti-Chinese riots.

The Chinese government has already evacuated more than 3,000 people, Chinese state-run media report.

The first ship set sail on Sunday, while 16 critically injured Chinese nationals left Vietnam on a chartered flight, Xinhua news agency said.

Two Chinese workers have been killed and dozens more injured in unrest over a Chinese oil rig in disputed waters...

[Thailandnotes]

Re: PCR: Gold & the Dollar - A Fight to the Death?

As a side note...

Owning some gold as insurance against a SHTF scenario is taken for common sense on this website. I’m sure almost everyone reading itulip knows there’s a stalemate in Thailand that could break, probably will break quickly in one of several directions. There are gold shops everywhere here, in the malls, in the alleys, next to 7-11's. Today I went to buy some clamps and a level. I got to Home Pro at 9:57 and had to wait. There were dozens of people outside the gold shop next door negotiating through the gates with the owners. One woman was hoping to buy one million baht worth of gold (about 30 thousand US $) From the way she was talking I assumed she had the cash in her purse.

[BK]

Re: PCR: Gold & the Dollar - A Fight to the Death?

Interestingly, Bloomberg article from yesterday makes the case the demand for gold in Thailand is declining. ;-) Perhaps what you observed was isolated because the good people at Bloomberg wouldn't be trying to lead me astray.

Here is the Bloomberg article: http://www.bloomberg.com/news/2014-0...-deadlock.html

Curious to hear what you think about the timing,

[Master Shake]

Re: PCR: Gold & the Dollar - A Fight to the Death?

More and more, PCR sounds like some wild-eyed, wild-haired homeless guy with plastic bags on his feet proclaiming "The End is Near!"

[Thailandnotes]

Re: PCR: Gold & the Dollar - A Fight to the Death?

Interestingly, Bloomberg article from yesterday makes the case the demand for gold in Thailand is declining. ;-) Perhaps what you observed was isolated because the good people at Bloomberg wouldn't be trying to lead me astray.

Here is the Bloomberg article: http://www.bloomberg.com/news/2014-0...-deadlock.html

Curious to hear what you think about the timing,

Probably just some general's wife who was doing some insider trading knowing martial law would be declared today.

[BK]

Re: PCR: Gold & the Dollar - A Fight to the Death?

Wow! At first I thought you were joking about martial law and then I looked up Thailand news out of curiosity.

[ProdigyofZen]

Re: PCR: Gold & the Dollar - A Fight to the Death?

More and more, PCR sounds like some wild-eyed, wild-haired homeless guy with plastic bags on his feet proclaiming "The End is Near!

That's because a doomer already starts off on the negative side "the sky is falling" and can only get progressively more "doomer" or else risk losing the audience of fear he has built.

[Zorro]

Re: PCR: Gold & the Dollar - A Fight to the Death?

" The evidence of massive amounts of naked shorts being dumped into the paper gold futures market at times of day when trading is thin is unequivocal."

This statement alone proves PCR doesn't know anything about the futures market. There is no way he could determine whether or not the holder of any given short
contract has physical gold for sale or not, or whether they intend to deliver said commodity.
Of the 399,371 short positions currently held, 270,299 are bona fide hedges..... not offers to sell or deliver physical gold. Exclude these from this "naked short"
thing of his.
This leaves 129,071 short positions held for various reasons. Subtract 86,006 short positions held for spreading purposes and what you have is 43,065 short positions
needing further explanation to be excluded from his so called massive amount of naked shorts in existence. A mere 43,065 short positions that may or may not have physical gold for sale. Lets say not a single one of these shorts has gold for sale does this make them naked sellers? Hardly I say! We know for certain they are covered.
COMEX Clearing members currently hold 8,100,505.726 ounces of physical gold for delivery in COMEX warehouses. This is nearly twice the amount needed to cover the
possibility that these 43,065 short positions held their contracts beyond their delivery date. Oh, In case you didn't know if any of these shorts had to deliver gold it would have to be bought through the clearing members from registered stock stored in COMEX warehouses. "Naked shorts"? ,,,,,,,,There is no such thing in the commodities market.

Z!