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Monday, April 15, 2013

Stolen gold in Cyprus

They took the credit money.  Now the EU is going after the real money as well:
First they purloin the savings and bank deposits in Laiki and the Bank of Cyprus, including the working funds of the University of Cyprus, and thousands of small firms hanging on by their fingertips.

Then they seize three quarters of the country’s gold reserves, making it ever harder for Cyprus to extricate itself from EMU at a later date.

The people of Cyprus first learned about this from a Reuters leak of the working documents for the Eurogroup meeting on Friday.

It is tucked away in clause 29. "Sale of excess gold reserves: The Cypriot authorities have committed to sell the excess amount of gold reserves owned by the Republic. This is estimated to generate one-off revenues to the state of €400m via an extraordinary payout of central bank profits."

This seemed to catch the central bank by surprise. Officials said they knew nothing about it. So who in fact made this decision?
Pay no mind to the crashing gold prices, down more than $200 in less than a week. Look at what the elite financial institutions are doing, which is to say, getting their hands on as much of the so-called "barbarous relic" as they can manage.  At this point, Portugal, Italy, and any other EU member state has to be thinking about exiting the Euro before the Eurofascists can attempt to seize their gold.

UPDATE: At Goldman Sachs, a vice-president calls his clients: "Panic! Sell! Sell! Run to the safety of cash! Sell now! Sell it all!"  (hangs up, calls gold desk)  "Yeah, pick up another 10,000 ounces."

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117 Comments:

Anonymous Toby Temple April 15, 2013 9:02 AM  

Holy sh!t!!!

Anonymous Noah B. April 15, 2013 9:06 AM  

The EU is eating itself.

Anonymous Lulabelle April 15, 2013 9:10 AM  

Why are gold prices going down, if they are seizing the gold? Doesn't it seem like the prices would go up?

Anonymous Lulabelle April 15, 2013 9:11 AM  

"The EU is eating itself."

And not fast enough.

Anonymous Noah B. April 15, 2013 9:11 AM  

This still doesn't explain the massive outflows from COMEX gold inventories though. This is looking more and more like a coordinated takedown of gold and silver to sell people on the growth story that, at more than 4 years old, is looking more laughable by the day.

Blogger Nate April 15, 2013 9:13 AM  

See... its always nice to remember that in spite of the adversarial image created by the debate... economically speaking... Vox and I agree on virtually everything.

Gold is the real money.

The "price" of gold is irrelevant. Wealth is, and always will be, measured in gold.

Blogger Nate April 15, 2013 9:14 AM  

"This still doesn't explain the massive outflows from COMEX gold inventories though"

Gold doesn't disappear.

Where is it going?

Anonymous Noah B. April 15, 2013 9:15 AM  

"Why are gold prices going down, if they are seizing the gold?"

Whoever is taking custody of it must be selling immediately it rather than holding it. Otherwise you would be correct, and this move would force gold prices up.

Anonymous Stilicho April 15, 2013 9:17 AM  

Additionally, there have been massive outflows of physical gold "held" by the gold ETF GLD. The only question that matters is where is the physical gold going/located?

Anonymous Lulabelle April 15, 2013 9:18 AM  

"Whoever is taking custody of it must be selling immediately it rather than holding it. Otherwise you would be correct, and this move would force gold prices up."

Doesn't pass the smell test. Why would they seize gold to sell it for (perhaps soon-to-be) useless paper money?

Anonymous Josh April 15, 2013 9:18 AM  

Gold is the real money.

This is actually part of Mish's arguments on deflation. He argues that you can't point to am increase in the price of gold to show deflation because gold is different from other commodities in that it is money.

Blogger JartStar April 15, 2013 9:18 AM  

At this point, Portugal, Italy, and any other EU member state has to be thinking about exiting the Euro before the Eurofascists can attempt to seize their gold.

They may be thinking about it but so far I have to say that the Europeans on whole have been epic cowards throughout this whole debacle and I predict their gold will be stolen before they leave. I don't know if the US will fare any better when it hits the fan here, but it's hard to imagine rolling over so quickly and easily.

25%+ unemployment and the people are clamoring to stay in the EU and for more government? WTH?

Anonymous Salt April 15, 2013 9:20 AM  

Even YAHOO! is driving fear, asking, "Is the era of gold over?"

Of course, someone is buying all the way down.

Blogger Nate April 15, 2013 9:24 AM  

yes.. obviously.. after 5000 years... suddenly people don't want gold anymore.

/facepalm

Anonymous Noah B. April 15, 2013 9:28 AM  

"Doesn't pass the smell test."

The traditional logic of selling short is that one hopes to buy something back for less than they sold it for. People do this and make money at it all the time, although most of us aren't able to get away with massive, outright theft to facilitate our market timing. But given that the bankers are held accountable for their criminal actions, why pay any attention to things like laws?

Anonymous Noah B. April 15, 2013 9:29 AM  

sorry -- that last bit should read "aren't held accountable"

Anonymous Salt April 15, 2013 9:29 AM  

Silver is currently down $2.04 at 23.81

I think I see the Blue Light Special sign being lit.

Anonymous Nathan Meyer Rothchild April 15, 2013 9:32 AM  

@ Nate yes.. obviously.. after 5000 years... suddenly people don't want gold anymore.

/facepalm


I see your /facepalm and add an /eyeroll.

In 1812 I pulled the same kind of scam using the Battle of Waterloo as a foil.

As soon as the battle was over, my field agent Rothworth quickly returned to London, delivering the news to me of Wellington's victory 24 hours ahead of Wellington's courier.

A victory by Napoleon would have devastated Britain's financial system. I stationed myself in my usual place next to an ancient pillar in the stock market.

As a powerful man, I was not without observers as I hung my head, and began openly to sell huge numbers of British Government Bonds.

Reading this to mean that Napoleon must have won, everyone started to sell their British Bonds as well.

The bottom fell out of the market until you could hardly give them away. Meanwhile, I began to secretly buy up all the hugely devalued bonds at a fraction of what they were worth a few hours before.

In this way I captured more in one afternoon than the combined forces of Napoleon and Wellington had captured in their entire lifetime.

Anonymous Lulabelle April 15, 2013 9:37 AM  

"The traditional logic of selling short is that one hopes to buy something back for less than they sold it for. People do this and make money at it all the time, although most of us aren't able to get away with massive, outright theft to facilitate our market timing. But given that the bankers are held accountable for their criminal actions, why pay any attention to things like laws?"

Ah, I see.
Ty for the response.

Blogger Nate April 15, 2013 9:39 AM  

"In 1812 I pulled the same kind of scam using the Battle of Waterloo as a foil."

And that boys and girls... is how its done.

Blogger Nate April 15, 2013 9:39 AM  

"I think I see the Blue Light Special sign being lit."

You certainly do.

Anonymous Aeoli April 15, 2013 9:48 AM  

I know it's probably history repeating itself, but if it's different this time (which I doubt it is, remember), then here's a theory. The powers that be have determined that their financial (and political) power is great enough that they can remove gold from circulation almost entirely in order to make it implausible to form parallel economies with "real" money. Paralell economies would be forced into inefficient exchange systems that would make them more vulnerable to destabilization and reduce the number of people willing to chance "illegal" trade, even to feed their families.

This is obviously a risky play, because if they screw up they get no monopoly on the all-fiat money supply, and all those billions spent buying and confiscating gold are wasted.

But if they succeed...well, it's tempting to imagine what you could do with 7 billion workers on subsistence wages.

Anonymous Aeoli April 15, 2013 9:48 AM  

I know it's probably history repeating itself, but if it's different this time (which I doubt it is, remember), then here's a theory. The powers that be have determined that their financial (and political) power is great enough that they can remove gold from circulation almost entirely in order to make it implausible to form parallel economies with "real" money. Paralell economies would be forced into inefficient exchange systems that would make them more vulnerable to destabilization and reduce the number of people willing to chance "illegal" trade, even to feed their families.

This is obviously a risky play, because if they screw up they get no monopoly on the all-fiat money supply, and all those billions spent buying and confiscating gold are wasted.

But if they succeed...well, it's tempting to imagine what you could do with 7 billion workers on subsistence wages.

Anonymous VryeDenker April 15, 2013 9:50 AM  

What exactly does "excess gold reserves" mean?

My spidey sense tells me the gold price has been driven down by someone in anticipation of this event. It also tells me that now would be a good time to stock up because they'll want to drive the price up before selling off again.

But please don't spend your life savings on something I said. I am poor, hence my advice on these matters is bad.

Blogger Nate April 15, 2013 9:54 AM  

"My spidey sense tells me the gold price has been driven down by someone in anticipation of this event. It also tells me that now would be a good time to stock up because they'll want to drive the price up before selling off again."

I don't think they are done driving it down yet. I'm hoping to see it drop to around 1200.

Blogger IM2L844 April 15, 2013 9:55 AM  

If you're holding PM ETF's today, you're sporting a big ol' RAPE ME tattoo on your ass.

I think I see the Blue Light Special sign being lit.

So much for the holing pattern. Some other stuff I've had my eye on might just have to wait.

Anonymous allyn71 April 15, 2013 9:56 AM  

currency =/= wealth

PM's (esp. Gold) = wealth

Fiat currency is paper notes that have a shelf life and are meant to be used up not held as a securitor of wealth. That is what the "barbarous relic" is for.

Hmm, the COMEX is running out of gold, a Dannish bank defaults on physical delivery, the EU steals Cyprus gold and a week later the bottom drops out of the market. Almost seems like someone that can influence things understands what would happen to fiat currencies if gold reached it's true value.

Naa, must be those green shoots popping up everywhere. A buddy told me about all of them he saw when he went to sign up for an EBT card and his Obama phone.

Blogger Nate April 15, 2013 9:57 AM  

I have fantasies about silver dropping below 20 bucks.

Anonymous FUBAR Nation Ben April 15, 2013 9:58 AM  

Finally this gold correction is ending. Load up the truck!

I recommend you panic and sell your gold to me.

Anonymous Godfrey April 15, 2013 9:59 AM  

But... but gold is a barbaric relect... it isn't money at all.

Can someone please explain this to me?

Anonymous Godfrey April 15, 2013 10:03 AM  

relic

Blogger IM2L844 April 15, 2013 10:05 AM  

I have fantasies about silver dropping below 20 bucks.

If silver goes below 20, I might even max out my credit cards.

Anonymous Other Josh April 15, 2013 10:07 AM  

War is coming to Europe. The nationalists will only tolerate the abuse of the elite for so long. It's obvious the elite won't allow a peaceful exit through the democratic process, so the nations will exit via war.

Anonymous Stilicho April 15, 2013 10:09 AM  

I don't think they are done driving it down yet. I'm hoping to see it drop to around 1200.

This

Blogger JartStar April 15, 2013 10:13 AM  

Two surprises from Cyprus: They went after the demi-wealthy's money first, and then hit up the central bank for the gold, second. Will the vampire squids be happy with what they have stolen, or is this just the appetizer before they clean out the bank accounts of the little guy and then go after individuals with gold?

Anonymous allyn71 April 15, 2013 10:13 AM  

A related market timing commentary in the line of Vox's pattern recognition mantra.

I had a little money on account at Goldline left over from when I bought my first PM's (they pay to have their name show up first on a search engine for a reason).

It wasn't alot of money and while I hadn't forgot about it, I went to other outlets for my PM purchases and let it sit. Periodically they would call me about it and offer me some deals that "I might be interested in". I never bought anything and 4-6 months would go by and then they would call me again. Never thought much of it and then I started to notice that recently they would only call me at the top of the market and shortly after their call, the market would make significant downward moves.

This has happened the last three significant downward pricing moves. The latest call was about three months ago and silver had just hit $32/ounce. Since then it has been nothing but red for Au. It is almost like someone knows something about the future pricing structure of PM's.

Unfortunately I cashed out this last time because I was tired of them calling me. Might be worth it to send them a couple hundred bucks as a market barometer. Goldline calls and you know the price is going down soon.

Blogger Nate April 15, 2013 10:18 AM  

"One possibility: could they be driving down the price of gold as a prelude to confiscation a la FDR? Ie, so they pay people as little as possible for their confiscated gold?"

I don't know about Europe... but its not possible to confiscate gold in America today. There simply is no mechanism for it. People are still paranoid about the last time.

Anonymous Stilicho April 15, 2013 10:20 AM  

One possibility: could they be driving down the price of gold as a prelude to confiscation a la FDR? Ie, so they pay people as little as possible for their confiscated gold?

Doubtful. The U.S. Dollar hegemony is based upon pretending that gold is a barbarous relic that has no value to the financial system. Should the pretense fail, so will the Dollar. Plus, gold is not widely held in the U.S., so there would not be enough to immediately confiscate to make it worthwhile (unlike 1933).

Anonymous allyn71 April 15, 2013 10:20 AM  

"Two surprises from Cyprus: They went after the demi-wealthy's money first, and then hit up the central bank for the gold, second. Will the vampire squids be happy with what they have stolen, or is this just the appetizer before they clean out the bank accounts of the little guy and then go after individuals with gold?" - JartStar April 15, 2013 10:13 AM


There is more debt than there is "money" (regardless of what your definition of money is) to pay it off. The entitlement state is growing, the baby boomers are retiring (worldwide phenom.) They powers that be are not gonna stop because the demands they face will not go away. Time, demographics, and ideology are not on their side. This is cannabalism.

They will not stop until they are stopped.

Anonymous RINO April 15, 2013 10:23 AM  

It's not going to get confiscated ... can you imagine the freakshow that would ensue if they even tried?

But if that extremely low probability event keeps you up at night then go for silver, it's better anyways.

Anonymous cheddarman April 15, 2013 10:23 AM  

Great article over at zero hedge, looks like the usual suspects are at it again


http://www.zerohedge.com/news/2013-04-15/gold-crush-started-400-ton-friday-forced-sale-comex

Blogger Nate April 15, 2013 10:25 AM  

' Plus, gold is not widely held in the U.S., so there would not be enough to immediately confiscate to make it worthwhile (unlike 1933)."

False. Extremely amazingly false.

Blogger Nate April 15, 2013 10:26 AM  

i should explain my assertion.

Gold is like Cocaine in the US. Its widely owned and totally unreported.

Blogger Shimshon April 15, 2013 10:31 AM  

When gold and silver dived back in 2008, I remember supplies drying up (I live in Israel) at anything but very high markups over spot. Junk silver was typically going for 10x face (~$14/ozt) even when silver was below $8. I predict that it will be the rare retail buyer who will be able to buy either for anything close to current prices.

Blogger Shimshon April 15, 2013 10:31 AM  

When gold and silver dived back in 2008, I remember supplies drying up (I live in Israel) at anything but very high markups over spot. Junk silver was typically going for 10x face (~$14/ozt) even when silver was below $8. I predict that it will be the rare retail buyer who will be able to buy either for anything close to current prices.

Anonymous RINO April 15, 2013 10:34 AM  

' Plus, gold is not widely held in the U.S., so there would not be enough to immediately confiscate to make it worthwhile (unlike 1933)."

False. Extremely amazingly false.


There's a good amount of gold floating around but it still wouldn't be worthwhile. 1933 didn't have twitter, fox news, or drudge. They would have to fight the PR disaster while trying to shake people down for gold that they may or may not even be able to prove they have.

Anonymous allyn71 April 15, 2013 10:34 AM  

While I have no statistical evidence to tie this assertion to, I would be willing to bet that there has been a huge boom of domestic US gold ownership starting in 2008.

This is just based on my own small sample of friends and family members (that I even know about holding gold, some probably haven't told me that do). I would say since 2001 it went from 5% to 75%.

If you wanted to get a parallel statistic that would be a good indicator to track gold ownership in this country, you could follow firearm ownership, esp. Stoener/Klashinakov rifle ownership. The # of people that have bought one of those platforms since 2001 is probably representatvie of the # of people that now hold physical PM's.

Anonymous Harsh April 15, 2013 10:34 AM  

If you're holding PM ETF's today, you're sporting a big ol' RAPE ME tattoo on your ass.

My position in IAU has been on her back with legs spread for two days now...

Anonymous TheExpat April 15, 2013 10:34 AM  

its not possible to confiscate gold in America today. There simply is no mechanism for it.

Huh, I thought that "confiscation mechanism" was the catch-all technical term for ETFs and holding vaults.

Anonymous Stilicho April 15, 2013 10:36 AM  

Gold is like Cocaine in the US. Its widely owned and totally unreported

What is your basis for your assertion? Admittedly, I based mine upon respective levels of reported assets.

Anonymous allyn71 April 15, 2013 10:36 AM  

First line was supposed to say "... a huge boom of domestic US gold ownership starting in 2001." not 2008

Blogger Cogitans Iuvenis April 15, 2013 10:37 AM  

I think Nate is right about the ownership of gold, or even silver for those of use who can't afford gold, is widely under reported. I own some precious metal, quiet a bit for someone of my generation, and I have never been forthright about how much I have even with my family. There isn't a chance in hell that I would ever tell anyone asking, especially if they were a representative of the government, how much, if any, gold or silver I owned.

Anonymous jay c April 15, 2013 10:37 AM  

Silver is currently down $2.04 at 23.81

I think I see the Blue Light Special sign being lit.


Except it's getting very hard to find physical silver, which doesn't make sense re supply & demand. Until you realize that most of the silver trading hands and driving the price down isn't "physical" silver, but paper, aka fiat, silver.

Blogger Nate April 15, 2013 10:37 AM  

"1933 didn't have twitter, fox news, or drudge. They would have to fight the PR disaster while trying to shake people down for gold that they may or may not even be able to prove they have."

They didn't have to shake anyone down the way they did it. They just went after the deposit boxes where everyone's gold was kept and that was that.

They of course blamed the gangsters... and everyone fell for it. Right up until they lost their own gold. Then it was to late.

Won't happen this time because no one keeps their gold in deposit boxes. Hell most folks have double-secret places its hidden.

Anonymous Salt April 15, 2013 10:40 AM  

@Nate

I disagree on volume of people holding gold. People have added to their stash, but I'd actually be surprised if >10-15% own any, except for jewelry.

Anonymous Stilicho April 15, 2013 10:41 AM  

While I have no statistical evidence to tie this assertion to, I would be willing to bet that there has been a huge boom of domestic US gold ownership starting in 2008.

Look at U.S. Mint sales of Eagles for a start, then compare that to nominal value of other "investment" assets held. After that, you can compare those levels to 1933 levels if you wish.

http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2012

Blogger Nate April 15, 2013 10:43 AM  

we're measuring the numbers differently. You're talking about the precentage that owns gold... and I'm talking about how much gold they actually own.

15% of the population is like... 50 million people here. lets say 10oz each shall we?

500 million ounces of gold is worth um....

a lot.

Anonymous allyn71 April 15, 2013 10:44 AM  

"They of course blamed the gangsters... and everyone fell for it. Right up until they lost their own gold. Then it was to late." - Nate April 15, 2013 10:37 AM

History ryhmes. This time it will be because of the drug/gun smugglers and the illicit black market traders that they will take down cash and move us to a cashless society. Once a good scapegoat, always a good scapegoat.

Anonymous allyn71 April 15, 2013 10:48 AM  


"Look at U.S. Mint sales of Eagles for a start, then compare that to nominal value of other "investment" assets held. After that, you can compare those levels to 1933 levels if you wish.

http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2012"

That would definetly work Stilicho. Unfortunately the reason I didn't have a statistic to tie to instead of a gut feeling was that I was to lazy to do the work, not because it wasn't out there to be found. Maybe if I get a little spare time today I will do so and report back here.

Or I could wait for a month or so. It will probably come up in a DHS report on the rise of domestic extremism as a metric to claim that Nate is a terrorist (again).

The next metric to watch is the number of boating accidents that occur should any confiscation be mentioned. Make sure and wear your life jacket, those damn boats are dangerous.

Anonymous FUBAR Nation Ben April 15, 2013 10:52 AM  

Nate, you know a bottom is close in gold when Karl Denninger has a post lambasting it.

Blogger Nate April 15, 2013 10:53 AM  

"Look at U.S. Mint sales of Eagles for a start, then compare that to nominal value of other "investment" assets held. After that, you can compare those levels to 1933 levels if you wish."

You don't know many gold bugs do you?

maple leafs are more common than eagles.

Like I said... do the math. You get to 700 billion in gold in private hands really quick.

Anonymous Salt April 15, 2013 10:56 AM  

@Nate

500 million ounces of gold is worth um.

@1500/oz, 7.5 Trillion

Blogger IM2L844 April 15, 2013 10:57 AM  

The next metric to watch is the number of boating accidents that occur

Funny you should mention that. A good friend of mine, in the middle of divorce proceedings recently had just such an "accident". Seems he ran into a cordless drill, on a big lake, somewhere near the dam at 3:00 am.

Anonymous John Regan April 15, 2013 10:58 AM  

This is actuall fascinating reading:

http://en.wikipedia.org/wiki/2012%E2%80%932013_Cypriot_financial_crisis

Note that after the Cyprus government accepted a loan from Russia that seemed both prudent and responsible as such things go, Moody's suddenly downgrades Cypriot bonds to BB, meaning - coincidentally, I'm sure - that those bonds were no longer acceptable as collateral for more Euros.

This may be an entirely contrived "crisis" to punish Cyprus and make an example of her for going outside the EU - and especially to Russia - for financial assistance.

Post Soviet Russia is an interesting entity. Lots of tension between it and the rest of the west, assuming you consider Russia part of the west.

Anonymous Salt April 15, 2013 10:59 AM  

oops,,, error will robinson.

750 Billion. Not that much in the scheme of things.

Blogger JartStar April 15, 2013 10:59 AM  

The confiscation from individuals won't be necessary as the easier solution is just a heavy redemption tax.

Anonymous allyn71 April 15, 2013 11:01 AM  

Eagles or Maple Leafs it wouldn't matter what you used. You will never capture all the ways that folks are stocking up. Any metric you used would be an indicator only.

Without looking anything up, the anecdotal evidence suggests that both % of the pop. and the # of ounces per holder have been doing nothing but going up. At the end of the day it will add up to a serious $ amount.

Back to the idea of a related metric with Stoener and Kalashnikov sales. Which way has that # been going? Most of the people I know that bought a rifle for the first time had PM's before they bought the AR.

The mint isn't suspending Silver Eagle production and the retailers aren't running out of junk silver for nothing.

Anonymous patrick kelly April 15, 2013 11:10 AM  

VryeDenker: "But please don't spend your life savings on something I said. I am poor, hence my advice on these matters is bad."

I feel your pain. Already lost more than my share in various "speculations".

Blogger Nate April 15, 2013 11:13 AM  

"750 Billion. Not that much in the scheme of things."

That's because you're comparing it to imaginary debt, and not deposits.

750 billion of real money... is a lot.

Anonymous Harsh April 15, 2013 11:15 AM  

I used to think you guys that stock up on physical gold and silver were kind of nutty... I'm starting to come around.

Blogger Nate April 15, 2013 11:15 AM  

Just to give some perspective... Have you seen Cowboy's stadium?

You could build 750 of them.

15 of them in every state.

Anonymous Josh April 15, 2013 11:22 AM  

15 of them in every state.

PAAAAWWWWLLLL, why don't bama got one of em kinds of stadiums? Saban needs at least four, one on campus, one in Birmingham, and two for practice fields, one for the offense and one for the defense. ROLL GODDAMN MOTHERFUCKING TIDE Y'ALL!

Anonymous Stilicho April 15, 2013 11:24 AM  

You don't know many gold bugs do you?

maple leafs are more common than eagles.

Like I said... do the math. You get to 700 billion in gold in private hands really quick.


Math based upon unsupported assumptions is worthless.

2001-2012 gold sales (inclusive) = 7,836,000 oz. = $10,970,400,000. Let's assume double the amount(oz) of maple leafs sold into U.S. market during same period. That still only gets you to $33 billion. Peanuts on the scale were talking about.

Let's look at earlier years (1986-2000, inclusive): 11,423,000 oz. = $15,992,200,000. Let's triple that (to account for your claim of Maple Leaf bias). We're only looking at an additional $48 billion (grand total = $81 billion). Still peanuts.

Now, this isn't the only way to hold gold bullion, but I suspect there are not many individuals holding London good delivery bars in the U.S. The attractive target will be the gold held by large custodians (tons, not oz).

Anonymous Salt April 15, 2013 11:26 AM  

@Nate

750 billion of real money... is a lot.

Yes it is. But the government is not operating with ~real money, and in the grand scheme of things, 750b is nothing as to government's needs.

That's because you're comparing it to imaginary debt, and not deposits.

Mush of deposits are but claims on digital dollars. Wipe them out and what will you have?

Anonymous John Regan April 15, 2013 11:26 AM  

I think Cyprus is just in the wrong place at the wrong time. They have a history of that, don't they?

http://strikelawyer.wordpress.com/2013/04/15/whats-up-with-cyprus/

Blogger Nate April 15, 2013 11:26 AM  

Stilicho... honestly... that isn't even remotely valid in terms of measuring the amount of gold in the US.

I'm embarassed for you that I may have to explain why.

Blogger Nate April 15, 2013 11:27 AM  

"Mush of deposits are but claims on digital dollars. Wipe them out and what will you have?"

There is no wiping them out. Why would you wipe out digital dollars when you can give them to your friends?

Anonymous Stilicho April 15, 2013 11:27 AM  

Eagles or Maple Leafs it wouldn't matter what you used. You will never capture all the ways that folks are stocking up. Any metric you used would be an indicator only.

This is true. But it is a useful metric given that it is the most popular way for individuals to buy gold. Please note, owning shares of a gold etf (even Sprott's) is not the same as owning gold.

Anonymous jay c April 15, 2013 11:29 AM  

Don't forget the krugerands, philharmonics, and libertads.

Anonymous Salt April 15, 2013 11:30 AM  

@Nate

Also, you're equating gold into current Dollars. Tomorrow that value could change, drastically. Since even the government sees fit to own gold, it's axiomatic, imo, that dollars have a relationship in gold no matter the non-convertibility.

Anonymous jay c April 15, 2013 11:30 AM  

And all the gold that changes hands via pawn shops and craigslist.

Blogger Nate April 15, 2013 11:34 AM  

"Now, this isn't the only way to hold gold bullion, but I suspect there are not many individuals holding London good delivery bars in the U.S. "

Again... wrong. There are lots and lots of 10oz and 100 oz bars out there.

but my point was never that they will come after citizens gold. They probably would love to... but its not 1933. Its impossible today. Gold owners are paranoid as all hell.

Anonymous Salt April 15, 2013 11:34 AM  

There is no wiping them out. Why would you wipe out digital dollars when you can give them to your friends?


/facepalm

Blogger Nate April 15, 2013 11:35 AM  

"Tomorrow that value could change, drastically. "

Dollars change.

Gold doesn't.

if it will build 750 cowboys stadiums today... it will build 750 cowboys stadiums 100 years from now.

Anonymous Stilicho April 15, 2013 11:36 AM  

Stilicho... honestly... that isn't even remotely valid in terms of measuring the amount of gold in the US.

I'm embarassed for you that I may have to explain why.


Save your embarrassment for yourself. You simply do not understand the concept of measuring interest in gold. If you want to measure all of the ounces, get your scales out and hit the private stashes and jewelry boxes. That stock has a fairly low velocity. And, even if we accept your 500 million oz guess, it is still small in monetary terms or in terms of other assets.

Blogger IM2L844 April 15, 2013 11:37 AM  

I think Cyprus is just in the wrong place at the wrong time.

Islands are popular proving grounds.

Anonymous Stilicho April 15, 2013 11:38 AM  

Its impossible today. Gold owners are paranoid as all hell.

We agree on this point.

Blogger Nate April 15, 2013 11:38 AM  

"/facepalm"

feel free to explain it. Vox could use your help.

Anonymous Rally April 15, 2013 11:59 AM  

Most likely if you own physical gold, you:

1. Paid cash for it, no paper trail
2. Don't trust the government

They mostly don't know who has gold, and those who do are not going to volunteer the information. They don't have the manpower it would take to do the thorough searches required to find it.

Anonymous Roundtine April 15, 2013 12:06 PM  

Denninger has a post up explaining what this might be, if this is the worst case scenario. You see folks, no actual gold has been sold. There were some sales prior from the ETFs, but there's been no physical sales reported as of yet. What has taken place is a collapse in the futures market, which offers 10:1 leverage. What could be happening, again worst case, is that this is the collapse of the entire financial system, starting with gold. The whole financial system is leveraged.

Personally, I think good old deflation is the better answer, which could still mean a big market crash will follow in stocks. The gold trade is always crowded with inflationists and all the news: Fed wanting to slow or end QE, China rebalancing, Cyprus is deflationary. Of course, gold does the best during panic deflations.....

Anonymous Salt April 15, 2013 12:07 PM  

Denninger has his take on the dive in gold.

There's no "reflation" trade. Nor is this "manipulation."
You just heard a "pop."
Ignore it at your own peril.


He hates gold.


Anonymous Josh April 15, 2013 12:08 PM  

KD is a greenbacker idiot

Anonymous LES April 15, 2013 12:15 PM  

Paul Craig Roberts on assault on gold:

http://www.paulcraigroberts.org/2013/04/13/assault-on-gold-update-paul-craig-roberts/

Blogger shazbot April 15, 2013 12:25 PM  

Gold and silver are unfortunately going to crash is price with everything else when the SHTF in the deflationary depression. It happened in 2008, and its going to happen again. Then you will have the buying opportunity of a lifetime.

Anonymous FUBAR Nation Ben April 15, 2013 12:31 PM  

Going to happen again? Where the hell have you been the last couple of days?

Anonymous Salt April 15, 2013 12:34 PM  

Here's an interesting take at ZeroHedge

Anonymous FUBAR Nation Ben April 15, 2013 12:39 PM  

Vox, I almost pissed my pants with the update you posted. Lloyd is backing up the truck. The f'er knows where it's at!

Blogger shazbot April 15, 2013 12:47 PM  

"Going to happen again? Where the hell have you been the last couple of days?"

All the indexes, precious metals, commodities, real estate, oil, etc. are going to crash AGAIN almost in tandem. Look at where the numbers were in 2007-2008 and where they are now. There is much, much more room to fall.

Anonymous Orion April 15, 2013 1:14 PM  

"It's not going to get confiscated ... can you imagine the freakshow that would ensue if they even tried?"

Illinois senate has passed a bill requiring "registration" of holdings:
http://xrepublic.tv/node/1726

waiting on amendments in house. First they register, then they seize. For your own good.

Anonymous Orion April 15, 2013 1:28 PM  

Since the markup on Eagles has been higher than any other minted gold coin, some have always elected to buy elsewhere. Austrian, Canadian, South African, all have a place in a gold owners stock because the gold is the same but purchased cheaper.

On the other hand, I have advocated PM ownership for years, but only one friend and my mother listened. For my mother, it proved the best investment she has ever owned (including all the funds advisers had told her to purchase) more than double before she sold some. Maybe I run in the wrong circles, but Americans by and large bought into the "barbarous metal" from what I have seen. Of course, few think on decade plus timelines. I just wish I the money to get in on these cheap prices.

Anonymous Red April 15, 2013 1:58 PM  

I've read several stories over the last few months about nations requesting their gold stores from fort nox and not receiving them. The bubble in paper gold may have just popped and it's taking the over all gold price with it.

Anonymous Lysander Spooner April 15, 2013 1:58 PM  

@Salt

Great comments too, almost feels like the 'ilk'.

I'm buying more .223, some .45 full metal jacket and some silver Spoons, The Spooner house shall have silver spoons !! And it was done.

Anonymous Cryan Ryan April 15, 2013 2:05 PM  

Paul Craig Roberts thinks there are 2000 lbs per (metric) ton, and 16 ounces per lb.

And he's giving us advice?

You don't want him doing the calculations when you are buying gold (if you can find any to buy)

Anonymous RINO April 15, 2013 2:05 PM  

waiting on amendments in house. First they register, then they seize. For your own good.

How do they get people to tell the truth? Empty threats?

Blogger JartStar April 15, 2013 2:10 PM  

It's very possible the paper PM market was a bubble and so the value could very easily plunge 50% as the speculators bailout.

Blogger James Dixon April 15, 2013 2:17 PM  

> For my mother, it proved the best investment she has ever owned (including all the funds advisers had told her to purchase) more than double before she sold some.

If you had bought RGR at $10.05 on Dec. 11th, 2009, you could sell it today for over $48. Unfortunately, we sold ours at $21. :(

Gold was not the only good investment out there.

Anonymous Dan in Tx April 15, 2013 2:24 PM  

So is Denninger basically (if I'm reading him right) arguing for Vox's deflationary scenario playing out right before our eyes in PMs? My instincts are screaming "BUY BUY BUY" but then again, I'm a broke ass so I don't necessarily trust my instincts.

Anonymous Josh April 15, 2013 2:27 PM  

So is Denninger basically (if I'm reading him right) arguing for Vox's deflationary scenario playing out right before our eyes in PMs?

He's arguing that the sky is falling and DOOM!!! As is his wont.

Anonymous Josh April 15, 2013 2:28 PM  

If you had bought RGR at $10.05 on Dec. 11th, 2009, you could sell it today for over $48. Unfortunately, we sold ours at $21. :(

The market demands an atf etf!

Anonymous Dan in Tx April 15, 2013 2:45 PM  

Josh: "He's arguing that the sky is falling and DOOM!!! As is his wont."

Yes, I have noticed he tends to have a penchant for that.

Anonymous allyn71 April 15, 2013 2:56 PM  

Not that I often agree with Denninger, but I would say overall the big picture points to "the sky is falling and DOOM" as being an accurate assessment.

Anonymous Josh April 15, 2013 3:12 PM  

Not that I often agree with Denninger, but I would say overall the big picture points to "the sky is falling and DOOM" as being an accurate assessment.

Unlike Karl, you don't habitually declare DOOM!!! on a weekly basis. Do you?

Anonymous allyn71 April 15, 2013 3:44 PM  

Not publically, but privately every time I catch up on world events (usually a weekly occurence) DOOM seems to be the one constant.

OpenID simplytimothy April 15, 2013 10:03 PM  

Is Nate vs Vox playing out in real-time, in real markets ? I hope so!
Civil debate resolved by actual economic collapse during the debate would be a feather in the cap for both men.











Blogger Nate April 15, 2013 11:38 PM  

"Not publically, but privately every time I catch up on world events (usually a weekly occurence) DOOM seems to be the one constant."

There is a very good reason for that. But unless you find yourself claiming "THURSDAY AT 3:00PM!!! CERTAIN DOOM!!!!" Then on friday morning you literally act like you never said it...

Then you're not Karl.

Anonymous JRL April 16, 2013 12:41 AM  

The confiscation from individuals won't be necessary as the easier solution is just a heavy redemption tax.

Ditto this. Give people a window to redeem. Convert to bank notes outside the window, you get taxed.

Anonymous Glacierdude April 16, 2013 5:30 AM  

Don't know if there is any connection but it is interesting this would happen at the time countries and states want their gold back.

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