 |
COMEX Crash To Send Gold To $3,000
Wednesday, February 11, 2009
As horrible as the financial news for currencies and paper assets has been since mid-2007, it looks like the worst is yet to come – perhaps as early as next month.
Over the weekend the Managing Director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, told a gathering of Southeast Asian central bankers that the world’s advanced economies are already in a depression and that the financial crisis may deepen unless the banking system is fixed.
On Febr. 4, Paul Wolfowitz, the former president of the World Bank, said the IMF and similar institutions are incapable of coping with the global financial crisis because they do not have enough resources.
The market appears to have turned on U.S. Treasury debt. Analyst Adrian Douglas issued a report on Sunday titled “Bond Market Collapse Unfolding.” He used his proprietary Market Force Analysis on the price of the 10-year U.S. Treasury Note. Last September and October, as the value of Treasury debt was falling, it looked almost certain that the U.S. Treasury entered the market to purchase its own debt! This had the effect of boosting the price of Treasury bonds.
However, the futures market for 10-year Treasury debt shows that there have been far more sellers than buyers for more than the past six months, a strong sign that bond prices are destined to decline in the near term. For the past eight weeks, Treasury bond prices have indeed been generally declining (i.e. interest rates have been rising). The U.S. government is almost certain to intervene again, as the Treasury debt is the most important in the world, and whose collapse could wreak havoc across the global financial system.
(ARTICLE CONTINUES BELOW)
The problem is that the U.S. government is going to have to float massive additional amounts of new Treasury debt in order to immediately finance the second $350 billion of the bank bailouts and the nearly trillion dollars for the new so-called “economic stimulus” program. If almost everyone else is selling and the U.S. Treasury is the primary buyer of its own outstanding bonds, who is going to buy the newly issued debt?
Non-precious metals prices may have also passed their bottom. The price of copper recently jumped as much as 10 percent in a single day, for example.
Treasury Secretary Timothy Geithner is so busy with the crisis over President Obama’s “economic stimulus” program that he announced Monday he would have to delay dealing with the U.S. banking crisis.
In an interview on www.commodityonline.com released Monday, Marc Gugeri, the Fund Manager and Advisor to both Gold 2000 Ltd and the Julius Baer Gold Equity Fund, was asked about the price of gold. He stated, “The majority of investors purchase Paper-(Gold)-Futures at the COMEX. The sellers or counterparties of those Gold-Futures are just a few dominant players. Some of them have an in-official close link to the U.S. government. So far most of the investors didn’t exercise the gold futures and have accepted cash instead of physical settlement. This is about to change. I believe that the COMEX will default and the entire paper gold market will ‘crash’ and gold could rise very quickly to 2,000 [or] 3,000 U.S. dollars. When this happens it will be too late to exercise or to try purchasing physical gold.”
It normally is rare to find such doom-and-gloom commentary appearing in general financial circles. It is even more uncommon for commentators to reveal that some of the dominant players in the gold market have a close link to the U.S. government or that the price of gold could soon double or triple. Lately, mainstream financial analysts have been much more willing to talk about gold, to recommend owning gold for having better appreciation prospects than other assets, and to specifically recommend purchasing physical gold rather than shares in gold exchange traded funds or gold “certificates.”
The tide has been turning toward gold for the past eight years, partly because it has been one of the top performing of all asset classes. Still, the proportion of Americans who own gold is minuscule – estimates I have seen range from only 3-9 percent of all U.S. investors. There is much more room for future appreciation despite how far prices have already climbed this decade.
The money supply of all of the world’s major currencies is now increasing by 10-30 percent annually. With the gold supply increasing by less than 2 percent annually, it is a virtual certainty that all currencies will fall in value against gold.
In the past several weeks, several investment advisors have become more positive about gold because of the relative strength in the price of silver! In the past, silver has led the way for higher precious metals prices, which is just what has been happening so far this year. Late last year, the gold/silver ratio was over 80. Now it is under 70 and falling. I like the prospects for both silver and gold (though I continue to expect silver’s price to outperform gold).
Perhaps most telling of all, the February 2009 COMEX gold contract fell into backwardation against the March 2009 contract on Feb. 6 and again on Feb. 9. Last Friday, the February contract price closed at $913.90, while the March contract ended at $913.80. On Monday, the February contract finished at $892.40, while March closed at $892.30. The last time that the COMEX gold contract went into backwardation, where the spot month traded at a higher price than future months, was in 1980. Being only 10 cents higher and only being higher then just the following month may not seem significant, but the fact that this has not occurred since 1980, as the price of gold exploded, could be the clearest sign that gold is due for a major rise soon. (For full disclosure, I note that the less active New York Stock Exchange LIFFE contract for 100 oz of gold closed Feb. 9 at $892.20 for the February contract and $892.30 for the March contract.)
In sum, a variety of factors are coming together very soon that I think will clobber paper asset values even more than they have suffered in the past 20 months. As these troubles mount, as the Managing Director of the IMF and the former president of the World Bank forecast, the prospects for gold look ever better.
Note: at the huge Long Beach Coin show in California last week, a lot of rare coin buyers were taking a wait and see attitude – except for circulated and lower quality mint state US Double Eagles. Between the start and the end of the show for instance, the wholesale price of the Mint State-62 $20 Liberty jumped almost 6%, even as the gold spot price fell slightly! Supplies of these and other lower-premium U.S. gold coins were the lowest I have seen in more than 20 years attending this show!
Prison
Planet.tv Members Can Watch
Fall Of The Republic
Right Now Online -
Don't Miss Out! Get
Your Subscription Today!
CANCER CONSPIRACY? Are
"they" suppressing the cure? Will YOU
be the next victim? Learn
the Secret Truth! - READ FULL STORY
-
- Social bookmarks
- Email this article
-
- Print this page
February 11th, 2009 at 11:52 am
i hope this is right
cause i have got two hundred ounces
and i didnt pay 600 an ounce
horray for me
. Reply:
February 11th, 2009 at 12:48 pm
Gold bugs agree:
http://www.youtube.com/watch?v.....annel_page
ric Reply:
February 11th, 2009 at 3:36 pm
it is easier for a camel to pass through the eye of a needle than a rich man to enter the kingdom of heaven servant of jesus, can you give me some then? i’ll go to hell for a quick buck
February 11th, 2009 at 12:44 pm
Gold bugs understand:
http://www.youtube.com/watch?v.....annel_page
February 11th, 2009 at 1:16 pm
still waiting, 3 years and counting, the same “buy gold or else” message. after 1000 days, i call bulls---. alex jones, this is pure bulls--- sensationalism that you decry. how the standards are doubled.
Charles Reply:
February 11th, 2009 at 2:27 pm
If we had bought gold when Alex first said, when it was what, 200 dollars an ounce, we would have made what, 600 to 800 dollars an ounce now *factoring in when / if we sold it… few months ago it was close to 1000 dollars an ounce*… so, that would have made a hell of a lot more money than the investments I had in the stock market, that crashed and burned.
If nothing else, I could have made some gold teeth and sold them to local thugs, for cash money, instead of watching it all disappear.
gladidontpayalexjones Reply:
February 11th, 2009 at 8:05 pm
if “ifs” and “buts” where candy and nuts….
Harryhipants Reply:
February 11th, 2009 at 7:45 pm
gladidontpayalexjones you are truly an idiot. Have you not seen what the price of gold has done, even in the last 14 months? $550 then to $950 now. Do the math.
gladidontpayalexjones Reply:
February 11th, 2009 at 8:05 pm
is it the only commodity to have ever done that? in all history? wow. open your bloddy mind!!
Harryhipants Reply:
February 11th, 2009 at 9:02 pm
Um… where has anybody said anything about this being the only commodity to have ever done this? Also how is the price of silver going up 400 years ago relevant to gold being a fairly good choice as a safe haven for wealth preservation in the current economic climate? Aside from that I think you have confused the message. It’s not buy gold or else, its buy gold if you want to preserve some wealth while the currency drops. Simple message, not sure how you got so confused.
openmind Reply:
February 11th, 2009 at 9:07 pm
Because major commodities are dollar denominated, there is an inverse relationship between them and the value of the dollar. Manipulation of prices does suppress some prices for a while. But in the end, they will all act the same. They will go up when the dollar goes down. Just look at monthly charts of commodities to see it.
February 11th, 2009 at 1:29 pm
I have a question perhaps someone can answer. If you buy gold to get OUT of the US buck and it goes up in value COMPARED to the US buck, what difference does it make how much it’s worth in worthless paper. It would be kind of stupid to think the value of your investment has risen in value because the only way to realize that profit is once again to cash in the gold for paper money…which you bought gold with to get away from. So people tell me to cash in the gold for a foreign currency, but to use that currency it has to be changed once again into US dollars. When everything goes south in a worldwide crash just how the hell do you unload your gold then? When people are starving and there’s no food around how much is your gold worth then? If I have a loaf of bread and you’ve got an ounce of gold..how much is the gold worth then? I’ll tell ya…whatever I say it’s worth..and that’s even if I’m willing to trade. So, what difference does it make how much gold rises to in this collapsing system?
Charles Reply:
February 11th, 2009 at 2:30 pm
Doesn’t really matter what it’s worth compared to a worthless dollar, it’s the fact that no matter what currency we use, it’s worth X amount of that Currency. AKA, Gold retains value, because it is a natural resource, it is scarce and it is hard to come by.
Wouldn’t matter if you traded it in for Franc’s, Pounds, Euros, or whatever, it would still have a value.
Even if we went completely cashless, people would barter and trade for gold, silver, etc… because they are the so called standards of valuable metals.
admin Reply:
February 11th, 2009 at 2:30 pm
It doesn’t go up, it maintains its value. The dollar in your pocket has never maintained its value. Keeping your dollars and paying more and more for goods and services while the currency devalues is a bad move. Gold has been the currency of last resort for thousands of years, no matter what the crisis.
hmm Reply:
February 11th, 2009 at 3:01 pm
Look, if the dollar hyperinflates and becomes worthless, gold and silver will be tradable on the black market for just about anything–food, water, medicine, etc. But you must have stores of these already. You would then use gold/silver to fill in the blanks or to get out of dodge and cross borders…That’s one scenario. But keep in mind, we are all dependent on each other. So your community is your best asset. An organized community is a much more effective asset. You have to cover your weaknesses with the communities’ strengths, bringing your strengths to the table. And stay out of fear. Whatever happens happens. Do the best you can, and prepare for the fire now–not when its raging. Now, if the dollar deflates (that is, goes UP in value), then gold will lose value compared to the dollar. Be prepared for that situation too. Never put your eggs all in one basket. Risk mitigation demands diversity of funds and resources (gold, silver, food, medicine, toilet paper, ammo, water, etc.). We don’t know that the police state will take over. It is too soon to tell. Regardless of what Alex says. Remember, stay out of fear–it will not serve you.
Destroyer of Worlds Reply:
February 11th, 2009 at 3:27 pm
There are a couple of things to keep in mind. Have small denominations of gold like 1/20 oz and 1/10 oz for purposes of bartering things like food, fuel, and the like. Also, I agree that keeping all kinds of preps in place helps like long term storage food. Finally, you have to remember, for many of us, if it is life or death for our children or others we love, we will not be negotiating the price of bread in gold. Rather, in such a life and death situation, I suspect you will be negotiating who lives and who dies – largely from the business side of a firearm.
Jim Reply:
February 11th, 2009 at 3:49 pm
This is how I explain it. Say a person buys 10oz in gold in coins now at @ $950.00 in Fed Reserve Notes…10 x 950 = $9500.00 and this person stores them in a home safe. And another person deposits $9500.00 in FRN’s into a savings account at his local bank. Both are expecting to hold these long term. Let’s say for the sake of argument that both persons are homeowners who bought their homes at the same time at about the same price with the same money down with a fixed mortgage rate at 6% and both hold relatively safe jobs with about the same pay…let’s say $50,000.00 per year. Both have about the same bills to pay each month. Let’s say that after 10 years gold is at $3000.00 per ounce value in FRN’s and the savings account holder receives 1% per year interest in his savings account. The person who bought gold would have an investment worth $30,000.00 while the savings account holder would have an investment worth $10493.76. Now let’s say that at this time both persons lost their jobs an needed their investments to live on until they found employment again. Which persons investment situation would you rather be in? Both are valued in FRN’s but the gold investors situation is far preferable to the savings account holder. You could even recalculate this scenario using gold price statistics from the last ten years and stock market averages for the last ten years and the older of gold comes out ahead. Gold is a storage of VALUE! While FRN’s will reflect a diminishment of value through inflation the value of gold will rise to reflect it’s value against inflation. This is why you receive interest or dividends when holding investments in paper long term…you have to have some reason or reward (or bribe some would say) to park your investment without it losing it’s value. Gold pays no interest or dividends because it owes nothing. It is a safe store of VALUE against fiat currencies!!
Pandoras out... Reply:
February 11th, 2009 at 7:00 pm
Excellent comment!!
For those whom haven’t taken the time to look at this with a bit of common sense,
this an excellent analysis
Pandoras out... Reply:
February 11th, 2009 at 7:01 pm
this IS an excellent comment
j Reply:
February 12th, 2009 at 1:55 am
This is a very good analysis but people need to keep in mind that Gold has no utility (or very little) beyond being a form of exchange for goods or services. That is, you cannot eat, drink or shelter yourself with gold as mythicshadow has said above. If the very worst of the worst scenarios were to come upon us (i.e. nuclear war, etc), I’d be far better off with supplies than gold. In the end, sterile rubber gloves could become just as valuable as gold should there be a VERY short supply of them and they become needed in order to perform surgeries without the risk of post-operative infections. So yes, Jim’s analysis is valid in a economic state where some form economic trading still exists. But in a worse case scenario you’re going to die in under a week if you just hold gold and no means of purifying your water. So the best thing to do is first: use your money NOW to stock up on supplies – water purification methods, 3 years worth of food, medical supplies, etc. THEN buy gold. Once you have these, you can say that you have looked after your family’s needs.
Everything else you’re doing with your time is just spoiling yourself with society’s trinkets.
Filbert Flubottom Reply:
February 11th, 2009 at 4:23 pm
The answer doesn’t lie in monetary exchanges but in tangible things that can be used for daily living such as land, seeds, tractors, small businesses that produce products that people will need even in trying economic times.
Become more self sufficient, start buying locally grown produce and barter with your friends and family for as many necessities as you can.
February 11th, 2009 at 1:42 pm
You can’t eat gold…
Anyone looked into Fort Knox recently? Bet you it’s empty.
February 11th, 2009 at 2:51 pm
Beware gold bull traps. There were two big ones in 2008 designed to fleece the public. Could be one now. Be careful.
openmind Reply:
February 11th, 2009 at 9:49 pm
Bull or bear traps are terms traders use. I’m not so sure that is what this discussion is about. “Designed to fleece the public” implies an us vs. them mentality. I would agree w/that. News is new to the ones not in the know. Traps will always exist. Buying gold or other tangible assets buys one’s time in case we wake up one day and the atm’s are turned off. If your a trader, then you know double tops are always a red flag-although sometimes temporary, i.e. gold. We are approaching the high for gold, no “trap” here.
February 11th, 2009 at 2:53 pm
Everything in life is supply and demand. It TRULY is a law. When the U.S. dollar will be overprinted and chasing too few goods, there will be too much supply of the dollar and not enough demand, therefore devaluing it. INFLATION.
Gold has always been on low supply and ALOT of demand, so naturally, its valuable and its going to be valuable, unlike paper money.
Supply and demand applies to women too. Why is it that when you go to a club, there is always less hot girls then ugly/fat girls? Because the demand for hot girls is always high, and they are always taken. Ugly/fat girls are NOT in demand.
Destroyer of Worlds Reply:
February 11th, 2009 at 3:29 pm
funny….I sure wish they would have taught economics that way….I would have paid attention.
February 11th, 2009 at 4:12 pm
I was wondering how any and all of you out there feel about this idea:
http://www.youtube.com/watch?v=Uns4n_Rd1do
It’s an inspiring 4 minute video. I spent 60 hours putting this together trying to do SOMETHING to affect REAL change in this world…
Please watch and comment.
Thanks!
February 11th, 2009 at 4:22 pm
Diggy/Destroyer.There’s a Uk Tv show called Red Dwarf. The lecture on supply and demand delivered by Kryten and the Cat with the reply. Funny.
February 11th, 2009 at 4:46 pm
Vultures
For generations we’ve put up with the Federal Reserve stealing money from us. They devalue the money in our bank accounts on a continual basis. They are effectively stealing directly from your bank account.
And what do we do in response? Do we throw out the criminals by switching to an alternative monetary system? Do we prosecute the criminals? Do we restore some semblance of sanity to our economic systems?
No, we just buy precious metals to prevent being robbed.
We shouldn’t have to scamper out looking for gold and silver just because our monetary system is run by degenerate vultures.
It’s time to get rid of the vultures…
All we need to do to get rid of the vultures is stop using their money. When we switch to an alternative currency their system will fall. The central banks will dissolve and their political actors will be out of a job.
Click the link below to explore a new inflation-proof currency, new economic format and new social structure that leaves the criminal bankers and corrupt politicians out of the picture altogether.
Don’t fight the system:
Replace it
http://socialviability.com/
February 11th, 2009 at 4:57 pm
Ditto what mythicshadow said upthread, if the dollar becomes worthless then you might just as well claim that it will be 3 million dollars an ounce, as the dollar will no longer be a unit of measure. Put your money into non-dollar (concrete) investments now, savvy?
February 11th, 2009 at 5:00 pm
http://www.midasresources.com/.....er_AJ.html
Great eh. Not only does Alex sell you the water filters, make money of the ad’s that sell you prepared food, but now gold too. Gets paid for his radio show to bring you the “truth”, pp subscriptions, dvd’s, tshirts and even bumper stickers for f---s sakes and you sheeple just swallow it up.
Lets face it, as long as Alex keeps creating this “fear state”, you people keep buying into it. I can guarantee that the midas resources website got alot more hits and more gold coin sales today, what with being on the same page as this story and all.
I wonder what bank Alex stores his millions in?
Of course you people will just call me a troll because you fail to see that this is big business for Alex and that he takes in way more than “the tooth” should cost.
BoughtTheGold Reply:
February 11th, 2009 at 5:44 pm
Fear state? Just where do you think all the so called money is coming from to pay for the “stimulus” package? Or TARP? Just what does 10.725T FRNs look like? Is there any other nation on earth that even comes close to the level of indebtedness that we are in? When will *you* get a clue?
Truth_Hurts Reply:
February 11th, 2009 at 6:54 pm
I heard this on CNBCs Fast Money:
$1 trillion is equal to:
If you gave someone $1,000,000 per day, every day from the birth of Christ through today, the amount of money would only be $750B.
That puts things into perspective.
Truth_Hurts Reply:
February 11th, 2009 at 7:04 pm
So, choose not to buy.
I find his information invaluable. How would you propose he creates revenue to support payroll, rent, utilities, the unGodly amounts of bandwidth, purchase / maint of servers, creation of 16 documentaries, etc?
I pay $238 a month for real-time securities prices and charting software b/c it helps me. I don’t care who gets the money as long as I benefit.
Alex Jones provides his show for $0 and documentaries for $5.99 a month (or $0 via on internet).
Dilbert McGunnut Reply:
February 12th, 2009 at 5:47 am
Stop supporting Alex if you are worried that he is getting rich. Start getting all your news from CBS, NBC, FOX, ABC, CNN, etc. They will tell you that everything is going well and their advertising revenue comes from various large corporations. Alex is not perfect but has some of the best info and best guests on his show. The whole idea is to GAIN KNOWLEDGE from people like Alex and then use that knowledge to make decisions to better your situation. If you don’t want to buy gold or stock up on food then don’t, but don’t give the reason as “Alex is getting rich”. I would recommend reading the book: Patriots, Surviving the Coming Collapse by James Rawles. I won’t make a dime if you buy the book but, like Alex, I’m trying to get you and others the info you NEED to make informed decisions.
February 11th, 2009 at 5:41 pm
I keep hearing this, we’ll see! All I see is the dollar going up in value, hence gold should go down in dollars, but gold is near its top. Consider that from the 2001 high the dollar dropped only 42% to the low in 2008. In that time gold went up over 300 percent. Does that sound right? In fact the median price of gold holds fairly constant at about $400-$500 in Sept. 2007 dollars. Consider that the dollar is now about 15% more valuable than these Sept 2007 dollars now, so gold should be actually around $400 or less now. So you’re paying over twice as much as its worth on average now. Does that sound like a good idea?! And why buy gold anyway? Silver and platinum went up FAR more than gold. Buffet was the smart one buying billions in silver at $3 and change.
Truth_Hurts Reply:
February 11th, 2009 at 7:30 pm
Over 400 fiat currencies / economies have failed – gold always keeps value. They all do. There’s not going to be a grand announcement that on a particular date the USD will fail.
The reason why FDR signed the Executive order to confiscate all US citizen’s gold in 1933 is so that he could, and did, devalue the USD (and by extension the US debt) by 40%.
During the Revolutionary war, the US had a fiat currency called the Continental; that failed as well.
Within 3 weeks time in 2008, Iceland’s economy collapsed and inflation shot up to 31%. Look around today; Zimbabwe, Hungary, Pakistan, Russia (7 devaluations in 2008), Argentina (collapsed in 2000 and is collapsing now).
Protect yourself by informing yourself.
openmind Reply:
February 11th, 2009 at 10:33 pm
So are you shorting gold now, or just running your mouth?Commodity prices are like the ocean tide. W/ trillions in debt, which side of the tide do you want to be on? You guys(”buygoldhere”,included) are so obvious.
openmind Reply:
February 11th, 2009 at 11:14 pm
I would rather consider 1913 dollars. According to Ron Paul, the U.S. dollar is worth 4 cents from then. I shouldn’t waste my time w/ you. This is for the true patriots. Don’t be discouraged by tools like him.
j Reply:
February 12th, 2009 at 2:02 am
Yeah, but Buffet got completely out of silver years ago.
February 11th, 2009 at 5:48 pm
Time to get out in the rivers and dredge for gold and nugget hunt with a metal detector! they say around 90% of gold is still in the ground and just waiting to be found!
February 11th, 2009 at 8:00 pm
Read about the president’s wheeling and dealing behind the scenes…
http://imperialamerica2009.blogspot.com/
February 11th, 2009 at 10:11 pm
DON’T sell your gold yet. Hang onto it as if it was, ummm…… gold.
Gold in Australia has gone gang busters. By far the best investment I have had. I’m glad I saw the NWO’s depression signal: “The Bin Laden Trade” and sold all my shares and bought gold.
Thanks NWO for at least making the signal available to those who are alert.
I don’t think we can actually bring down the NWO, but we can study them and exploit that knowledge we gain as best we can.
I wonder what the next “Event” will be. I hope not nukes, but it prolly will be. They are very diabolical.
February 11th, 2009 at 10:44 pm
Stock up on ramen noodles, hot sauce, water, rounds, Brazilian canned beef, an entrenching tool, chicklets, s---ter paper, all will be more valuable than gold and lighter!!! On that note, “All ‘HAIL’ Thermal Expansion!!!”
February 11th, 2009 at 10:46 pm
WOW! I need gold now who can I buy some from ? You are all Slaves Welcome to USSA lol
February 11th, 2009 at 10:49 pm
I wish I bought gold at $200.00 per OZ Invest in Weed Price hasn’t changed in 20 Years
February 11th, 2009 at 11:55 pm
I bet our gold is in israel.
February 12th, 2009 at 6:16 am
i get very confused aout buying gold and silver. how many coins do you get if you buy an ounce of gold? i mean if you get one coin for 600 an ounce thats insane. also, when the economy collapses and you are buying with gold, how do you get change for it? what if you want to buy a loaf of bread and you only have a 50$ gold coin, what then? email me if you can explain it a little better @ michaeldever00@yahoo.com thanks!
Hal Reply:
February 12th, 2009 at 9:34 am
Because the gold retains it value it can be exchanged for the currency of the land. For example. Looking at ExactPrice right now gold is trading at 947.70 an ounce. So one gold coin equals 947.70 dollars. If you buy that coin today and when/if the dollar crumbles and gold goes up your one gold coin can be exchanged at that time for 3,000 dollars. Your purchase today would have increased dramatically.