Sunday, October 26, 2008

MCR wrote:

THE HIDDEN GOLD PREMIUM -- Congratulations to Jamey Hecht


Last night a whole lot became clear about what's going on with gold prices. Not everything is explained but much more of the map has been filled in.

I was at the wedding of former FTW writer Jamey Hecht who also edited"Rubicon" for me. He and his new wife Sava were just beautiful together and the ceremony, at a time of great fear, was a welcome relief for all of us. It was probably the most beautiful wedding I've ever attended and I know we all send Jamey and Sava Hecht our best wishes. They are an amazing pair.

Seated at my table was an executive for a precious metals company. What he told me was something I have seen suggestions of, but nothing made it as clear as his explanation.

1. There's virtually no gold out there to ship, at any price.
2. Major dealers are paying some serious premiums to actually get physical gold. I was told that currently the major vendors are paying a $70 an ounce premium over spot price when they order lots of 5,000 or more ounces. Order fewer than 5,000 ounces and the premiums are much higher and even then there's no guarantee of delivery. So what's being charged small retail customers who just want an ounce or two? The best answer I could come up with is "whatever the markets will bear". So the so-called posted spot price is now meaningless and I smell a possible (I emphasize "possible") embryonic black market for gold emerging. That is something I hadn't expected for a couple of years yet.
3. Even with the premiums there is so little actual gold available to ship that half the big companies have stopped writing orders because they don't know if they'll ever be able to deliver. The other half are still writing orders on the hopes that they will get some gold --sometime.
4. The credit crash has made it difficult for large vendors to get float loans to finance purchases and expensive delivery and insurance costs. The only gold out there is dealer-to-dealer or whatever is being sold by private holders.

The problem appears to be global.

That means that I could take one of my Maple Leaves, add maybe $100 to the spot price, then add the standard Maple Leaf premium of say $10 anounce and then go out and demand an even higher price based on which dealer needed the coin the most. I can easily add $120 an ounce over spot to arrive at a reasonable market price. The executive's words were "Nobody is paying attention to the spot price anymore. It doesn'tmean anything."

That means that gold is being hoarded and kept off the market. There's only one reason for that IMO. Sure, one could argue that the hoarding is intended to drive up prices. But is that happening? Nope. Prices are low. What this says to me is that some with insider access are holding gold off the market pending a large breakout. When I suggested this the executive agreed instantly. It would have been like selling Iraqi oil at $40 a barrel instead of leaving it in the ground to sell at $80 or $100. Of course, that brings us smack dab into collision with the fact that plummeting oil prices are doing nothing to increase demand. TPTB and the economy itself have no choice but to unwind completely now. The plug was pulled too hard when oil hit $147. Whether that was inadvertent or intended we have yet to see but anyone hoping that falling oil prices will stabilize things is drinking some real bad Kool Aid.

Gold's breakout will be much different than what's happening with oil.

So we have opium/heroin/cocaine and gold being withheld from the markets at a time when cash is in short supply and credit is virtually non-existent. That confirms my position -- a position shared by many economic experts -- that the worst economic news is yet to come. The executive agreed that a major breakout in gold prices is imminent.

Yes, as one poster observed on the blog, things are happening very quickly. This next week is likely to be very tough. When I saw theWells Fargo chairman suggesting no bottom for six months I wondered how it could possibly take that long at the rate things are going."What'll be left in six months?", I asked myself. It's hard to say. I shared my analogy with the exec about how it seemed like the markets had dysentery and were on the verge of evacuating and he loved it."That's exactly it", he responded. "Very little is making sense anywhere and almost no one understands where they really stand. People are trying to redefine their positions at a time when there's nothing solid to stand on."

By definition then, we're a long way from the bottom. Because when the bottom is reached, everyone knows exactly where they stand... on the floor.

Right now all I'm focused on is getting through an election and an inauguration. I don't see any possible chance that anything remotely looking like a bottom -- with capitulation -- will happen before Bush and Cheney leave office. That's at least three months. It will be interesting to see if a strong psychological rally begins on November 5th. It will be a hollow rally and another round of folks going back to the bar after the Titanic has already been hit by the iceberg. In the meantime, those who get it are busy building lifeboats.

Stay low and stay dry. Make yourselves economically "small" in terms of exposure. I really believe the scariest part of this ride is yet tocome.

Oh, and for the person who yelled out that they wanted me to talk about ROOT CAUSES... That's all I have ever talked about. I wrote one book on them and published a newsletter that did nothing but talk about them for eight and a half years. You'll have a new book that talks more about them early next year. It will also more fully address the infinite growth paradigm.

Until you change the way money works, you change nothing. Money is still trying to work the way it has for more than a century -- but it's finding the resistance to that increasing as one paradigm ends and a new one begins. Let's pray that Alan Greenspan has an epiphany and suddenly remembers and understands what he did to help create this. I wonder if it will make him sleep better. Somehow I think he's sleeping pretty soundly. He did what he intended to do.

******************

JO wrote:

Some bullion now comes (if it comes at all) with a delivery period of up to three months and a hefty disclaimer: If they can't get a hold of the gold, you have the option of waiting another month or getting your money back; either the current price of the gold or the price when you bought it, whichever is higher.

What this means, of course, is that the dealers expect the price to remain suppressed for at least another three months, til the inauguration.

The schizoid disconnect between the suppressed price and the scarcity, even the unavailability of gold has been covered by GATA, the Gold Anti-Trust Association whose website, for those who might be new to this game, is http://www.gata.org/

PS: Sixty Minutes did a report this evening on Credit Default Swaps in which they asserted that, "Nobody knew how many there were."

Perhaps they should read another GATA-affiliated website, www.lemetropolecafe.com which provides the following on derivatives:

"as of December, 2007 there were:

$9 trillion Commodities Contracts (excluding gold) outstanding
$56 trillion Foreign Exchange Contracts outstanding
$393 trillion Interest Rate Market Contracts, outstanding

http://www.lemetropolecafe.com/chien_du_cafe.cfm


Congratulations, Jamey and Sava!

30 comments:

Peter J. Nickitas said...

Reuters had this article:

www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true - 85k -

How do you put this into the big picture? Does this complement the recent Foreign Affairs article calling for a basket of currencies to reign in a post-Bretton Woods world? Does this presage a statement by Russia that concurs with China and announces a Shanghai Cooperation Organization (SCO) action to make a multipolar world a reality at U.S.'s expense?

If Pravda:USSR::NYT:US, is People's Daily:PRC:: Pravda:USSR?

Peter of Minneapolis

businessman said...

I just looked on ebay. People are bidding $925-$950 for American Eagle one ounce gold coins right now.

The spot price of gold closed at $734 an ounce on Friday.

Rice Farmer said...

High oil prices needed to sustain production
http://www.independent.co.uk/opinion/commentators/david-strahan-youre-wrong-pm-we-need-higher-oil-prices-973700.html

Isis said...

The gold business is brisk in Japan. I haven't noticed a problem with supply until the last couple of weeks. It seems coins from the Canada mint are getting to be in short supply.

FTW admin said...

Andrea Murrhteyn has left a new comment on your post "MCR wrote: THE HIDDEN GOLD PREMIUM -- Congratulat...":

Mike,

I'm still mad at you, but someday I guess you may, or may not, 'get over' whatever it is that makes you think that sticking your head in the sand, and refusing to communicate with someone is somehow going to resolve the issue. Anyway, until then...

In the meantime, some may appreciate this Voltarian perspective, from Red Exile League:
-----------
Free fall markets

First it was Berlusconi who said it, but no one is going to take that warped little s*** seriously, but now Prof Roubini, guardian of the keys to the Temple himself, has suggested that now would be a good time to close the markets for a week or so, in order to prevent total panic from setting in. A talking head on Bloomberg scoffed at this idea as he said it would trigger capitulation in the bourses because it would be THE sign that things were finally out of control.

Here at REL our single share in Cadbury's suffered a bit of a dip today. Looking at the list of FTSE companies, Cadbury's was reported as having lost 99% of its value. Surely not? I paid two euros for this Flake. And it doesn't taste all that great. I wonder if it's got some Chinese protein substitute in it. If the markets close how the hell can I liquidate my position?

In a pan I suppose.
--------------
Lara

FTW admin said...

Andrea Murrhteyn has left a new comment on your post "MCR wrote: THE HIDDEN GOLD PREMIUM -- Congratulat...":

Mike,

I'm still mad at you, but someday I guess you may, or may not, 'get over' whatever it is that makes you think that sticking your head in the sand, and refusing to communicate with someone is somehow going to resolve the issue. Anyway, until then...

In the meantime, some may appreciate this Voltarian perspective, from Red Exile League:
-----------
Free fall markets

First it was Berlusconi who said it, but no one is going to take that warped little s*** seriously, but now Prof Roubini, guardian of the keys to the Temple himself, has suggested that now would be a good time to close the markets for a week or so, in order to prevent total panic from setting in. A talking head on Bloomberg scoffed at this idea as he said it would trigger capitulation in the bourses because it would be THE sign that things were finally out of control.

Here at REL our single share in Cadbury's suffered a bit of a dip today. Looking at the list of FTSE companies, Cadbury's was reported as having lost 99% of its value. Surely not? I paid two euros for this Flake. And it doesn't taste all that great. I wonder if it's got some Chinese protein substitute in it. If the markets close how the hell can I liquidate my position?

In a pan I suppose.
--------------
Lara

tim said...

This is the first time I've written to this blog, but I've read Rubicon and read most of the site. I have a question for all you very intelligent, wise FTW bloggers. I'm an Electrical Engineer who has worked for the oil industry for 25 years, so I know that most of what you say is true. What if the amount of oil in the ground is irrelevant? What if investment in alternative energy is irrelevant because very powerfull alternative energy already exists?
"The prospect of cheap fusion energy is the worst thing that could happen to the planet"-Jeremy Rifkin
"Giving society cheap, abundant energy...would be the equivalent of giving an Idiot child a machine gun"-Paul Ehrlich
TPTB believe cheap abundant energy would only lead to the masses becomming more massive! Chaos! Not allowed!What do you all think...especially Rice Farmer?

prettywitch13 said...

Does anyone know if this has anything to do with the recent tv ads asking people to mail in their old, "broken" gold jewelry for cash? I probably don't even have to ask, do I?

http://cashforgoldusa.com/?cid=11&gclid=COjS0fm9yJYCFQhMGgodA1WWyA

cornsilk said...

Mike...

I agree with your remark about Alan Greenspan. I think he did exactly what he was intended to do.

It's the most staggering concept I've wrapped my mind around in years. Where does this go? Can it be stopped?

I have a very bad feeling.

Rice Farmer said...

Well, judging by the media here in Japan, the panic button could be pushed at any time. The high yen is already becoming a drag. Interestingly, while eating breakfast I listened to a financial commentator discuss how stock exchanges are heading for Armageddon. He wrapped up his talk by answering a question about the efficacy of the US government's bailout. He said, "It's like giving a shoulder massage to someone with abdominal pain." Which reminded me of the evacuation scenario...

Tim -- Well, I'm flattered that you ask me, despite the presence of other, more qualified people. We have seen the results of cheap, abundant energy. It's just enabled us to chew our way through the planet faster, and to wage war on a scale and intensity never imagined. I'm not the first person to observe that all those smiling hyper-consumers are really just empty shells. An energy surplus is good because it lets us elevate ourselves above mere subsistence. But indeed this huge surplus has been a machine gun in the hands of an idiot.

But let's hear from others on this. I don't have a monopoly on insights or good ideas.

Bruce said...

To Tim, regarding Fusion energy-

For most of the first 18 years of my life I wanted to be a Physicist who contributed to the development of nuclear fusion, as the only way to avoid collapse and die off (I did lots of math and ecology, and had read a lot of Isaac Asimov). I did study Physics, but specialized in global energy resources, instead.

I agree with Tim's quotes. The human race clearly lacks the maturity to deal with limitless cheap energy. E.g. nuclear fusion. Look at how badly we've done with fossil fuels, and tell me honestly that we could handle an energy source orders of magnitude more powerful ...

Fortunately, it's very unlikely that we'll ever develop limitless cheap energy. Instead, we'll collapse and die off over the next couple decades (starting about now). Thus, we will lack the time, energy, resources, and secure facilities required for the large-scale industrial implementation of a replicable net-energy-positive nuclear fusion power plant.

As Tim suggested, this is probably for the best. Perhaps our species will eventually 'grow up' enough to handle this responsibility, sometime in the distant future.

Olivier N said...

Does anyone think that dramatically darker events could take place in a short time window ?

I truly hope this lady is wrong, but it does not smell very good to me...

This article was published on Global Research, and there is also a related video on this rather "explosive" subject. That might be what's holding on all that gold and drug cash flow.
And as we all know, cash flow is everything.

Here is the link to the article, worth reading:

http://www.globalresearch.ca/index.php?context=va&aid=10689

and the You Tube video :

http://www.youtube.com/watch?v=_PtI29tcECE

FTW admin said...

olivier, this is mostly speculation on her part. the best researchers generally prefer to focus on known facts.

FTW admin said...

tim,

since sustainability is not a high priority for humankind, particularly as it conflicts with our economic paradigm, you are spot on. this is one reason a number of peak oil experts prefer a fast crash to a slow burn.

kenneth said...

the problem i see with a new, powerful energy source is the infrastructure to implement it. it would take i believe decades to develop. if we could start tomorrow, where would the capitalization come from? but then again since we are headed for massive hyperinflation what's additional trillions of dollars to pay for it. that's if the dollar can survive the new bretton woods agreement the rest of the world wants. unfortunately building a new energy infrastructure would take tremendous quantities "cheap" oil. if oil has peaked or is nearing peak, how can we supply this additional energy needed, in addition to the energy we need to keep the infinite growth paradigm mentioned above to continue? let's see we need infinite growth because we keep loaning dollars into existence. so we add debt to solve debt problems. at current rates of extraction many of our critical natural resources could all be gone in 20-30 years. we have boxed ourselves into a corner this time. by the way i used to live in the san francisco bay area. i used to drive from the now bankrupt city, vallejo to san francisco via interstate 80. at one point going across the bridge heading west out of vallejo, you could look down, and see the water. if america can't solve everyday infrastructure needs like bridges, alternative energy infrastructures seem so distant.

Isis said...

Tim - there are too many factions in the world to control the emergence of a new power source and keep it from coming into use. Just look at the state of nuclear nonproliferation. If someone achieved controlled nuclear fusion, it would be put to use.

IMO it is not around because of the difficulty of producing it, not because some cabal is suppressing it.

Olivier N said...

Thanks a lot for your answer.

I know that its speculation for most of it, but Powell and Albright comments don't look too much like speculation to me.

As Albright said "a statement of fact" concerning the engineered 21-21 january crisis.

I just found that the link between the upkeeping of cash flow from gold and drugs and the event of a false flage would be a rather good combiantion to make quick cash when the correct timing comes in.

Bring another 9/11, make gold price skyrocket, then sell what's in the vaults, and bring back cach flow by flooding the system (well Citigroup and Paulson's pals) with drug cash.

Does this look like a possible cashing out method for the Bush clique ?

trevbus said...

Speaking as an engineer, Focus Fusion is the only fusion technology I have come across that seems to have a plausible end-to-end solution covering the following issues:

* commonly available and cheap fuel
* heating the plasma
* confining the plasma
* not producing excessive neutrons
* extraction of waste products from chamber
* and crucially, capturing the resulting energy in the most efficient manner possible.

focusfusion.org

tim said...

Thanks for your comments. You see, I'm not sure I agree with those quotes. As you all said, history has shown how irresponsible we've been with abundant, cheap energy. Maybe after the crash we'll mature because we suffered enough. It's just at the present time, even if we had working fusion energy or some other device, the ruling class would not ALLOW it to be used. It's as if the crash is being engineered to kill billions of poor on purpose.

Pete said...

"You'll have a new book that talks more about them early next year."

That's if there's any publishers left that can afford to publish *anything*, Mike! :-)

FTW admin said...

for tim:

http://www.oilempire.us/free-energy.html

Andrea Murrhteyn said...

Tim (11:21 AM)

What if investment in alternative energy is irrelevant because very powerfull alternative energy already exists?

Are you obliquely referring to the existence of -- DisclosureProject.org related very powerful alternative energy, the reality thereof being intentionally suppressed for a myriad number of reasons?

Or just to the possible existence of nuclear fusion energy?

Lara

tim said...

Isis, Lara, Bruce:
I'm posting here because you guys really are trying to help each other get through this crash. I don't want to sound like a conspiracy-theory nut. I'm not. Lara: any technology that may help us, not just fusion. Isis: that cabal might be the patent office which will place a "gag order" on any patent or technology that might upset the status quo. If you violate that gag order you end up like Senator Wellstone. Bruce: in your experience, is fusion being held back or discredited because it really does work? The electrical grid is very easy to add to. Anything from low-power solar panels and windmills to nuclear reactors. I'm wondering if alternative energy is being suppressed because 6.7 billion "common folk" will turn it into another "Animal Farm" experience.

FTW admin said...

tim has left a new comment on your post "MCR wrote: THE HIDDEN GOLD PREMIUM -- Congratulat...":

Isis, Lara, Bruce:
I'm posting here because you guys really are trying to help each other get through this crash. I don't want to sound like a conspiracy-theory nut. I'm not. Lara: any technology that may help us, not just fusion. Isis: that cabal might be the patent office which will place a "gag order" on any patent or technology that might upset the status quo. If you violate that gag order you end up like Senator Wellstone. Bruce: in your experience, is fusion being held back or discredited because it really does work? The electrical grid is very easy to add to. Anything from low-power solar panels and windmills to nuclear reactors. I'm wondering if alternative energy is being suppressed because 6.7 billion "common folk" will turn it into another "Animal Farm" experience.

FTW admin said...

tim has left a new comment on your post "MCR wrote: THE HIDDEN GOLD PREMIUM -- Congratulat...":

Isis, Lara, Bruce:
I'm posting here because you guys really are trying to help each other get through this crash. I don't want to sound like a conspiracy-theory nut. I'm not. Lara: any technology that may help us, not just fusion. Isis: that cabal might be the patent office which will place a "gag order" on any patent or technology that might upset the status quo. If you violate that gag order you end up like Senator Wellstone. Bruce: in your experience, is fusion being held back or discredited because it really does work? The electrical grid is very easy to add to. Anything from low-power solar panels and windmills to nuclear reactors. I'm wondering if alternative energy is being suppressed because 6.7 billion "common folk" will turn it into another "Animal Farm" experience.

Bruce said...

Tim and others interested in free energy (such as nuclear fusion)-

The prevailing sentiment regarding Energy supply issues has always been, "Well, I'm not going to worry about it, because 'they' will think of something". As a Physicist specialized in energy resource issues, I'm one of the 'they' people speak of in this context. I am not aware (even on a plausible rumor level, and I've looked) of ANY suppressed or non-suppressed technology that is capable of replacing the energy now being lost to global industrial civilization as a result of fossil fuel depletion. I've explored the assorted 'free energy' conspiracy theories, and have not found any of them to be plausible. If, indeed, there is some 'suppressed technology' that could 'save us' from energy decline, then it has not yet generated even one watt of useful commercial energy, and whomever suppressed it did such a good job of it that no information leaked out. While I can't discount the possibility, I think it would be a grave (pun intended) mistake to include this (remote, IMHO) possibility in any practical decision making.

If anyone makes a verifiable claim to have generated even one watt of useful energy from any of the various 'free energy' concepts, then I will surely sit up and take notice.

Nuclear Fusion is certainly the most plausible source of 'free energy', in that fusion reactions have been net-energy-positive since 1983 (my high school AP Physics class celebrated the event). However, there is no plausible evidence that any organization will even know how to build an actual commercial nuclear fusion power plant within the next 20 years, much less be able to build one. Thus, if this form of energy ever becomes useful to humanity, it will only be AFTER we have suffered the worst effects of energy decline, probably including radical culture change, global collapse, and massive die off.

Sorry to sound pessimistic, but my scientific training forces me to be a realist regarding energy issues.

Regards,

Bruce Stephenson

Andrea Murrhteyn said...

Bruce,

"I am not aware (even on a plausible rumor level, and I've looked) of ANY suppressed or non-suppressed technology that is capable of replacing the energy now being lost to global industrial civilization as a result of fossil fuel depletion.

Depends How Hard You Look.....

A principle of reality is that great secrets are right in front of you. You go right past them, not knowing or realizing what you have been looking at.

One you went right past -- that contained documented reference, with reasons and plenty of evidence, from over 400 individuals, risking their life's military, scientific, political, intelligence agency, etc... reputations of what you were allegedly looking for...

See my prior comment, or not; depends how hard you want to 'look' and not see.....

Lara

Olivier N said...

Anyone ever heard about :

The Z machine (a nuclear solution ??)
Kite wind generator ?(efficient windmills)
MHD (magneto-hydro-dynamic) for propulsion.

These actually look like real answers, but hey, who knows ?

tim said...

Jenna;
Thanks for the link to oilempire.
Lara, thanks for the link to the Disclosure Project. This has answered all my questions, it's crystal clear. I hope I haven't touched on a taboo subject.

Andrea Murrhteyn said...

Tim,

Lara, thanks for the link to the Disclosure Project. This has answered all my questions, it's crystal clear. I hope I haven't touched on a taboo subject.

It's a pleasure, glad you found the information informative. And no, the Disclosure Project issues (all of them) are certainly not a taboo subject, for me to discuss; at all, if they had been I wouldn't have gone on a very controversial hungerstrike for those witnesses.

However, as one of my DP witness hero's (John Callahan) says, for some people the issues are certainly taboo; and so when you start talking about them, "they look at you as if you arn't wrapped too tight"!

And I know I ain't intellectually wrapped too tight (narrowminded); and more so I aint emotionally, nor psychologically, nor sexually, nor spiritually wrapped too tight -- so for allot of people -- FOR THEM I AIN'T WRAPPED TOO TIGHT (in a negative sense).. But John disagrees, and a few others too, so I ain't the only one!! ;-)

Lara

PS: You may find Milton "Bill" Cooper's views on DP issues interesting: be prepared to 'unwrap and unplug!! ;-)'; and add new dimension on suppression of issues..; or as Black Pope of Lebed Dofenism says, 'Take Your Mind on a JoyRide!!' ;-)