Paper gold market defaults loom ?

[Andreuccio]

Re: Paper gold market defaults loom ?

Looking at the recent events, I am starting to seriously fear that governments will make gold holding illegal.

What is the plan for that?

One thing that occurs to me is wouldn't it be a tough case to make for the government? After all, they're still in the business of selling gold coins, albeit less now. (http://apmexdealer.blogspot.com/2008...-platinum.html).

How do you go from selling gold coins one day and the next day taking them all back while yelling "HOARDERS" at the people who bought them? A bit like Captain Renault being "shocked" to find out gambling was taking place at Rick's Casino in Casablanca.

It seems an easier, and thus more likely, route than outright confiscation would be to increase the taxes on the profits from the sale of gold, as has been discussed by others here. That's something for which I'd like to know what the plan is.

[Guest]

Re: Paper gold market defaults loom ?

Rarer type colored diamonds are not bad as an alternative. Very compact form of wealth. They've apparently gone up pretty much every year by 10% - 15% for decades. Only thing to check out there is whether there is any threat to that segment from synthetic diamonds, but I think the rare colored diamonds segment is sheltered from that. Very compact form of wealth, too. :cool:

[c1ue]

Re: Paper gold market defaults loom ?

It seems an easier, and thus more likely, route than outright confiscation would be to increase the taxes on the profits from the sale of gold, as has been discussed by others here. That's something for which I'd like to know what the plan is.

Except - thanks for Fred - there is now a possible motive for confiscation: to form a base for recapitalization of the banking system.

While the South Koreans voluntarily donated billions, I think the US will need many more tens, if not hundreds, of billions. Given that, and of course the unlikely scenario of a Sudden Stop like S. Korea happening in the US, a confiscation might be necessary.

[tombat1913]

Re: Paper gold market defaults loom ?

when push comes to shove, you may discover that the gold that was supposedly backing the paper representation does not in fact exist, and that your paper certificate is worth fuck all.

Well said ASH, Perhaps you should become iTulips door greeter for all the "nebys". ;)

[skidder]

Re: Paper gold market defaults loom ?

I don't have the chart but the US mint has a production chart going back several years. The chart shows a production capacity WELL above today's production levels. Now, the Mint is claiming that they are restricting sales because of the level of orders being received but the chart shows that they are not at previous years production capacity. It appears to be a voluntary reduction in minting gold coins.
I'm reading a lot of anecdotal reports from European folks that the banks are restricting direct sales and that inventory is very low in the dealer system.
Canadian Banks are apparently in the same mode of restricting sales, again anecdotal by just a couple of folks reporting in from the field to GATA.
We are seeing a spike in Gold lease rates. I am hearing reports of folks being dissuaded from taking delivery from the COMEX.
Ebay sale premiums are spiking up.

Basically there are lots of little smoke puffs coming up from around the system but no clear fire to point to. It is possible that the banking system in conjunction with the mints is retricting sales by gov't order.
I think we'll know the plan shortly if we stay on the same rate of unwind.

[tombat1913]

Re: Paper gold market defaults loom ?

I don't mean to be argumentative, but you do know the 1933 act was declared constitutional by the Supreme Court, right?

I'd like to remind you that constitution was written primarily to protect the people from the government. It is our responibility to keep the constitution in tact despite what the president, congress, or supreme court says.

Our own president has said that the constitution is just a "goddamned piece of paper".

The FBI has been distributing pamphlets to major police stations across the country citing that potential terrorists include "people who keep copies of or make numerous references to the constitution".

The constitution is being attacked from every branch of government. The time is soon approaching when people who believe in the constitution are going to have to defend it from the idiots who swear an oath to it.

[Supercilious]

Re: Paper gold market defaults loom ?

Quote:

Originally Posted by ASH when push comes to shove, you may discover that the gold that was supposedly backing the paper representation does not in fact exist, and that your paper certificate is worth fuck all.

Well said ASH, Perhaps you should become iTulips door greeter for all the "nebys". ;)

People, just to make things clear about my post. What I was trying to say is that one should not invest even in his own thumb without due diligence and understanding precisely what are the risks of each trade. What I saw a problem with this ETN-ETF paper is that many investors didn't understand exactly what they actually are.

Many people believed that ETN is just a funny name for a trust . That is not good.

But don't forget there is no such thing as bad securities The so called bad securities are securities one doesn't understand and doesn't know how to trade.

This is no disclaimer BS and a$$covering: I'm firmly convinced there are investors out there, which, even in current market conditions, can make a lot of money out of ETN's and do that with a minimal risk.

Well ...you know there are people for which climbing like a spider a few hundred feet of smooth, vertical rock face is a very rewarding and safe endeavor. Watching fit and experienced rock climbers is fascinating, but for myself, I believe bridge and pool are much more rewarding and appropriate, plus I'm pretty good at winning in these two "extreme" sports ...;)

[ltullos]

Re: Paper gold market defaults loom ?

...

$#* got me started down this road, and here's what I've been able to discover. (Standard disclaimer: this does not constitute legal or financial advice, and I am in no way qualified to give either type of advice, because I design semiconductor devices for a living!) .....

Ash, thanks for taking the time to research and provide a great answer! This is precisely (and even more) what I was hoping to learn.

BTW, ironically enough, I qualify and failure analyze semiconductor devices for a living and who knows, maybe some of your designs! I'll message you to compare notes.

[Tulpen]

Re: Paper gold market defaults loom ?

Priceless information!

[ThePythonicCow]

Re: Paper gold market defaults loom ?

I'm holding a position of GLD within my IRA

One can move your IRA to entrust, and invest in gold via GoldMoney.com, I believe.

However one might instead consider removing some of one's IRA money,
paying the taxes and penalties, and thereby gaining more investing flexibility.

WIth all the newly printed Treasury debt, and all the promises I hear from our
presidential candidates, and the near certainty of a smorgasboard of new fangled
ways for the federal government to spend money trying to bail us out, I figure
taxes can only go up from here. Might as well pay them now.

Of course, since I'm over 60 (no 10 per-cent early withdrawal penalty) and living
in a state with no income tax, it's less painful for me to withdraw IRA money now.

Now ... if I could just find a way to invest LONG in american tax rates ;)

[lotep]

Re: Paper gold market defaults loom ?

Hi I'm a real newbie! I've got some cash from selling a property. I'm in australia and land prices haven't started to fall enough here (yet) - when they come down enough so I can afford it I plan to buy some productive farming land - where it still rains occassionally (most of Oz is in drought).

What I'm concerned about is possibly hyper inflation so am looking at buying bullion through Perth Mint leaving it with them. What I'm wondering is, at what price is it too expensive to buy?

I realise this might be a naive question but until recently I didn't have any money to buy any gold and now there is a long waiting list to process my paperwork before I can buy the gold. So I'm starting to think it might not be worth it. any thoughts?

[Guest]

Re: Paper gold market defaults loom ?

Hi Lotep -


With regard to buying precious metals and having the Perth Mint store them for you. "Storage" is akin to burial for a term duration. You have a lot of land out there, so why not "bury" it yourself, rather than have the Perth Mint "bury" it for you custodially? Last I heard, their "burial" practices were under scrutiny for being a little "squirrely".

Hi I'm a real newbie! I've got some cash from selling a property. I'm in australia and land prices haven't started to fall enough here (yet) - when they come down enough so I can afford it I plan to buy some productive farming land - where it still rains occassionally (most of Oz is in drought).

What I'm concerned about is possibly hyper inflation so am looking at buying bullion through Perth Mint leaving it with them. What I'm wondering is, at what price is it too expensive to buy?

I realise this might be a naive question but until recently I didn't have any money to buy any gold and now there is a long waiting list to process my paperwork before I can buy the gold. So I'm starting to think it might not be worth it. any thoughts?

[lotep]

Re: Paper gold market defaults loom ?

I love your idea but I'm renting now in a small flat on the fourth floor so there's not much dirt around for me to bury it in.
That said, if I was going to buy some gold what do people recommend? bullion or coins?

[ThePythonicCow]

Re: Paper gold market defaults loom ?

My small flat is only on the second floor, and while I might have a little more dirt about me (not being very meticulous in my cleaning) it's not enough in which to bury gold.

I prefer GoldMoney or BullionVault myself. They seem to more directly match my funds to real gold (the few particles of gold dust I can afford) than do the other means of remote gold owning.

[Guest]

Re: Paper gold market defaults loom ?

lotep - if you are in OZ then I guess Perth is the automatic choice. But as Pythonic points out, Goldmoney and BullionVault are better. Government of WA is not guarantee enough for me given the reports I've heard of those chaps foot-dragging when it came to delivery of actual silver. Gold is a little better. Likely it's a non-issue. ... Likely, but not "certain".