Panic Is Near if "The Gold Is Gone"

Insight ^ | 3 March 2003 | Kelly Patricia O'Meara

[WatchNKorea]

"An individual investor is a bug in that environment; you could get squashed like a bug at any moment."

Yes, but with folks like Merrill Lynch suggesting 5% go into gold and silver bullion, that must be considered also.

"I do hope they are playing with risk capital and not their life savings"

Why absolutely. That's a given.

[WatchNKorea]

"...you could get squashed like a bug at any moment."

Well, actually not. Let's say you purchase ten one ounce American Gold Eagles at today's price of $349 per oz and the standard 2-21/2% commission; then the price goes down for a few months. You do not get squashed . You have not lost your coins. They are still in your safety deposit box and you simply have to wait till gold goes back up to the $349 level. You'll lose interest on your $4000 cash while waiting but, what if gold does skyrocket upwards like this article suggests?
Yes, I like gold at this $349 level...very much.

Again, one is using risk capital and not next months house note.

[WatchNKorea]

"...this is like swimming with sharks."

I wish I had extra risk funds now so I could swim with some of those sharks ....lol.

[Nick Danger]

with folks like Merrill Lynch suggesting 5% go into gold and silver bullion, that must be considered also.

I assume that the intent of that advice is to protect against the really, really, worst case where literally everything goes to Hell. If it comes to that, I'd rather have one of those new Smith & Wesson 50 caliber pistols than any amount of gold.

My ex mother-in-law used to keep 10 cartons of cigarettes in her extra freezer. That was her "gold" in the event that the social order broke down and she needed something that would have purchasing power no matter what.

[tortoise]

There has been a lot of quiet activity in Nevada lately. Over the 90s when gold prices were soft, the Nevada gold fields basically ran skeleton operations on existing mines just to stay afloat but prospecting for new ore bodies continued.

I own scads of land in the mountains of the primary gold-bearing regions of Nevada. What I know from first-hand information is that during the long period of soft gold prices, some of the prospecting companies have identified a number of what they believe to be extremely fat ore bodies, some of the richest since the initial gold rush in the 19th century, using some new models for how and where those mineral formations occur that caused them to look in places no one had seriously looked before. With gold prices being what they are, these new mining sites are being built at a rapid pace and without so much as an announcement of the fact. I run into geologists all the time while cruising around my property and the surrounding wilderness, and I've recently run into a bunch who are turning up new mining sites around my area. They are basically saying that they've been sitting on these new ore bodies for a few years now and have been waiting for prices to go up. Their prognosis is that output from Nevada (one of the major gold exporting regions of the world) will climb rapidly as these new sites are brought online over the coming months. In other words, there are several new resources that will be coming online shortly in addition to all the existing mines going back to full production.

I'm stoked because I own hundreds of acres of land that included presumed-to-be-worthless mineral rights that are literally a stones throw from what is expected to be one of the richest ore body discoveries since the 19th century, or at least according to the geologists who are putting the site together as we speak.

[BlackJack]

I went to 2 dealers in my area and they were out of bullion bars.
There was some web chatter about Tulving being out of bars?
In any case, the feds are out of silver, they need to start buying
again for eagle coins. Also Barrick was unwinding their hedges
in silver. We shall see if it means anything.

[Publius]

Concur. Gold is finally in a primary bull market, and this is only the beginning.

If the story is true -- that the central banks have swapped out most of their gold to the bullion banks who have used it to keep the price down to support the Strong Dollar Policy -- then there is going one hell of a short squeeze soon. The central banks will no longer be able to play this game, and they'll have to get that gold back. The bullion banks will have to buy it back at many multiples of the current price.

Then look at collateral damage.

• What will a short squeeze in gold will do to financial markets based on paper -- stocks and bonds?
• What will a huge price jump in gold do to the dollar and other fiat currencies?
• When the central banks defend their currencies by raising interest rates through the roof, what other collateral damage does that unleash?
• What about those financial institutions who have huge amounts of money at risk in interest rate swaps (derivitives) that were once safe but now are dangerous in a world of volatile interest rates?
• What kind of collateral damage do we see in the world of the FDIC and Fannie Mae and Freddy Mac?

I feel like the guy who stands on the beach and sees what looks like a cloud bank moving quickly toward him. Only too late does he realize that the cloud bank is really a tsunami.

[Publius]

See #27.

That pistol may help you defend yourself, but you'll need a medium of exchange if the dollar gets crushed.

[WatchNKorea]

"My ex mother-in-law used to keep 10 cartons of cigarettes in her extra freezer. That was her "gold" in the event that the social order broke down and she needed something that would have purchasing power no matter what."

Exactly what I've been suggesting. - In post #3, Capitalism2003 says he's been purchasing American silver eagles and so in the back of his mind, I'll bet he's considered that if ....'social order broke down' he knows that he could use his silver eagles to barter with -just the way your ex-mother-in-law could have resorted to using her cig. cartons if she had needed to.

[Poohbah]

If social order broke down that messily, gold is a REALLY expensive source for metal to cast into bullets.

[WatchNKorea]

"I'm stoked because I own hundreds of acres of land that included presumed-to-be-worthless mineral rights that are literally a stones throw from what is expected to be one of the richest ore body discoveries since the 19th century..."

Sounds like your in good shape now. Best to you. :)

[dennisw]

btttttttttttttttt

[WatchNKorea]

"Concur. Gold is finally in a primary bull market, and this is only the beginning."

Absolutely! No doubt in my mind.

[WatchNKorea]

"If social order broke down that messily, gold is a REALLY expensive source for metal to cast into bullets."

Ahhh, no, post #29 is a discussion of silver...about $4.70 per oz. [very cheap...those vampires ya know :)

[Salvation]

I was thinking that panic had hit when I saw that gasoline had increased 30 cents in one week.

Now $1.91 for super in Oregon.

Liquid gold.

[WatchNKorea]

"If the story is true -- that the central banks have swapped out most of their gold to the bullion banks who have used it to keep the price down..."

Key: "...to keep the price down."
Bttt

[WatchNKorea]

"Then look at collateral damage.
What will a short squeeze in gold will do to financial markets based on paper -- stocks and bonds?"

All the more reason to get your minimum 5% without delay.

[Publius]

Gasoline has topped $2 in the Seattle area.

[WatchNKorea]

"What will a huge price jump in gold do to the dollar and other fiat currencies?"

Key word: fiat

[arete]

I went to 2 dealers in my area and they were out of bullion bars. There was some web chatter about Tulving being out of bars? In any case, the feds are out of silver, they need to start buying again for eagle coins. Also Barrick was unwinding their hedges in silver. We shall see if it means anything.

When I placed my last silver order with Northwest Territorial Mint, they told me there would be a couple day delay because they were having trouble keeping up with demand.

Richard W.