Skip to comments.Inside the Global Gold Frenzy
Posted on 11/09/2009 8:14:29 AM PST by TigerLikesRooster
November 8, 2009
Inside the Global Gold Frenzy
By NELSON D. SCHWARTZ
HERE, in a corner of Switzerland where Italian is spoken and roughly one-third of the worlds gold is refined into bars and ingots, business is booming. Every day, bangles, bracelets and necklaces arrive in plastic bags from souks in the Middle East, from pawn shops in Asia and from corner jewelers in Europe and North America.
It could be your grandmothers gold or the gift of an ex-boyfriend, said Erhard Oberli, the chief executive of Argor-Heraeus, a major refiner here that processes roughly 400 tons of gold a year. Gold doesnt disappear.
Amid a global frenzy fed by multibillion-dollar hedge funds, wealthy speculators and governments all rushing to stock up on the precious yellow metal, the price of gold briefly surpassed $1,100 an ounce on Friday, a record high.
Long considered the ultimate refuge for nervous investors, gold has climbed as the dollar has steadily weakened, budget deficits have expanded in the United States and Europe, and central banks have continued to pump trillions of dollars into weak economies, creating fears of another asset bubble that will ultimately pop.
Its not that gold has changed, but gold buyers have changed, said Suki Cooper, a precious-metals strategist for Barclays Capital. Its a structural shift were seeing on the investing side, from Asian central banks right down to individual investors buying ingots and coins.
Golds appeal has broadened, added Ms. Cooper, who predicts that it will hit $1,140 an ounce by the second quarter of next year.
(Excerpt) Read more at nytimes.com ...
The shoe shine boy at the corner there gave me some good tips for buying gold..
Adventures in bubbleland
I’m sorry - educate me as to what good Gold will do for me if the world economy goes to heck? I think food, smokes, booze, and ammo will be a better bet.
at the corner of Harrods Department Store in London?
We will use gold as a medium of exchange. Just as people have done for the last 4000 years - during periods of history considerably more fracked up than today.
If it’s useless to you because ‘you can’t eat it’ someone will be glad to buy it off you.
Years and years ago, I had a professor that asked the class a question. “What is purpose for democracy?” After the class tried to answer his question, he said “You are all wrong.” This guy was before the days of liberal professors. I didn’t answer because I knew this guy. There was more to the question than what we knew. His answer....”Democracy is a way for the government to keep you broke. If you are broke, they have total control over you. Remember, we are a republic, not a democratic society.”
Now, if the general public is into gold and they become very independent, the government won’t like it and will do what they can to recall the gold.....as was done in the past. You may be able to hide your gold from them, but what are you going to do with it when they make it illegal to spend or own it? I live in gold country. There are over 50 gold mines within 25 miles of where I live. The Federal government won’t allow them to open up. England owns most of the mineral rights but they can’t mine it because the Feds won’t allow it. Think they won’t control gold eventually? Think again.
What in blazes will an ingot of gold be worth if things really crash? And we’re past the idea of a “crash” being a mere deterioraion of net wealth. We’re talking a bout a real crash.
You gonna eat that gold? Oh, you’re gonna by things with gold, huh? Like what? Food, ammo, fuel? Fom whom? Someone who can eat your gold?
What will have more intrinsic value gold, or food and ammo?
Regardless of all the other arguments that favor gold, $20,000 dollars worth of the stuff is a lot easier to store and transport than $20K of .45cal or $20K of Snickers Bars.
$1,140 by second quarter?
$1,140 by quarter after three on Tuesday!
While I am in basic agreement with your point, we are still going to have to pay property taxes and whatever other fees, taxes and bribes the remnant of government will continue to extort from us. IF gold is still legal for exchange, that will be its use. I include silver as a possible means of exchange.
As for food, ammo, fuel, et al, take a look at your stash. It is going to eventually run out or, in some instances, particular items are going to disappear from commerce because no one can obtain the raw materials, the energy or the means of transport essential to their production. It is good to have a balanced cache of goods, money and metals and to keep it replenished. It is still essential to have something to exchange for it. It is also essential to have skills that can be bartered, friends in the medical field and some plans for illness or old age that will allow us to survive the present regime, even before they bring us totally down.
If gold and silver are illegal for exchange and if goods in excess of short term needs are labeled hoarding, life is going to be nasty, brutal and short for most of us.
In spite of this, I have recently begun to notice just how much our own PMs have increased in value. We purchased them wholesale (spot+) over 15 years ago for use in a jewelry business. Most of us cannot afford coins or bars in today’s economy. The premium alone is nearly the price we originally paid for what we have now.
I doubt I would trade coffee, fuel, TP or tobacco for anything except antibiotics or food. Not that I ever want to find out, either.
“We will use gold as a medium of exchange. Just as people have done for the last 4000 years - during periods of history considerably more fracked up than today.”
Correct. Gold is a store of value.
I laugh at people who ignore history and think times are different today.
Who will buy it? You can’t eat it. Yada yada
It’s not an either/or issue
it truly is possible to buy gold, ammo and food
Say it isn’t so!
Okay I’ll do it.
There is a huge range of economic conditions between good times and TEOTWAWKI, Zombi Apocaplypse, Road Warrior total collapse. For 5,000 years of human history, gold has worked as a store of value for wealth in 99% of that continuum. Lots of people in the world were able to survive because they had a little gold or silver to use to trade or bribe with.
Does that mean you shouldn’t have food, ammunition, other trade goods put away? Of course not.
Ammo and food and, perhaps, gold to survive a complete crash. But for those with progeny, it might be nice to leave them with something for after the crash somewhat recovers besides a can of beans. Real estate will always belong to the government, either through taxation or expropriation.
Thanks for the info - I still will not be buying gold - as I have no job - I am stocking up on staples - I also manufacture my own ammo as I am into Civil War era weapons - All I really need is the powder - the stuff in front of the powder can be anything really - lol
Well in that case I suggest you stock up on a few sacks of charcoal, sulfur and potassium nitrate. Or read up on sources of same you can find around any farm....
Im sorry - educate me as to what good Gold will do for me if the world economy goes to heck? I think food, smokes, booze, and ammo will be a better bet.
One coin is $1000+. Try smuggling $10,000 in cigs (or booze, or ammo) across a border to flee whatever threatens you.
You gonna eat that gold? Oh, youre gonna by things with gold, huh? Like what? Food, ammo, fuel? From whom?
Of course, you’re making a big mistake here. Gold doesn’t primarily help YOU survive a crisis. Gold helps your surplus wealth survive a crisis. Get your beans and bullet squared away first.
at the corner of Harrods Department Store in London?
- Nothing can be in a bubble unless it is well past the previous inflation-adjusted all-time high
- Gold regularly drops up to ten percent in three days or less and once dropped more than twenty percent nearly without a break in 2008. Bubble price action goes one way.
- In every case, gold corrections have taken weeks and months to recover. Bubble price action is exponential not a grinding, grudging recovery.
- It is almost a commodity, yet supply is not readily available. Thats a supply shortage, not a bubble.
- Boiler-room companies (i.e. cash4gold) are begging the masses to sell to them, not to buy from them
- CNBC is still bashing goldbugs instead of worshipping them
- We havent seen a TIME or Business Week magazine cover with a cartoony John Q. Public engaging in borderline-sexual acts with Lady Liberty from the Saint Gaudens Double Eagle
- Nobody you know, knows what Lady Liberty from the Saint Gaudens Double Eagle looks like
- Hollywood hasnt yet made gold-related TV shows, movies, etc.
Also, this article specifically addresses the harrods issue:
....If the top were in, wed be in the midst of an all-out Mania. Are we? Do you get the impression theres a rush into gold by the greater public right now? Are headlines blazing the covers of major magazines pronouncing gold as the new investment king? Has Wall Street gone gaga over gold and silver? I ask because these are the true signs that a trend has entered its final blow-off top and would signal its time to get out.
I decided to put Berts prognostication to the test, and I invite you to play along.
First, I struck up casual conversations with my friends, neighbors, relatives, acquaintances, my wifes co-workers - heck, even my seatmates on airplanes - angling to learn how much gold they were hoarding, about the killing they were making in gold stocks, and how they were getting rich from all their precious metal investments. (In fairness, I had to exclude my dad, who is an award-winning gold panner, but hes the only one.)
I found no one - not one person - who is actively investing in anything gold or silver, let alone rushing to buy or hoard the stuff. I had two people who confided that they did own gold, but in both cases it was inherited. A few were curious how they would go about doing such a thing, and fewer asked if I thought they should. Most everyone looked at me blankly when I asked; they didnt seem to know what I was talking about. When I got a reaction like that, it was pointless to ask about gold stocks. Of the handful I did ask, most had never heard of Barrick Gold, the worlds largest gold producer....
It was a joke.
I was making the point that you can both accumulate gold and silver AND other things. Not just one of the other.
It was a joke.
When I see Lady Fortuna graffiti on subway cars/deserted buildings I will know it’s time to sell
It’s a bubble - but the shoeshine boy’s not buying in for another year or two...