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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGold Declines on Way to Worst Year Since 1981 as Silver Drops
Gold fell for the first time in four sessions in New York, set for its biggest annual loss in three decades, as an improving economy cut demand for a protection of wealth. Silver futures also retreated.
Bullion slid to $1,186 an ounce on Dec. 19, near this years low set in June, before rebounding to a one-week high of $1,218.90 on Dec. 27. Global equities traded near the highest since 2007 before reports this week that may show gains in U.S. housing and manufacturing.
Were seeing improving economies with little or no inflation, Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago, said in a telephone interview. The fear has been stripped out of the market, and absent inflation, I think well see gold continue to grind lower into next year.
Gold futures for February delivery fell 0.8 percent to settle at $1,203.80 at 1:41 p.m. on the Comex in New York. Trading was 49 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Gold has tumbled 28 percent this year, set for the worst annual plunge since 1981. Some investors lost faith in the metal as a store of value amid a rally in equities and an improving economy, which prompted the Federal Reserve to pare its $85 billion in monthly bond purchases. Holdings in exchange-traded products backed by bullion dropped 33 percent this year to the least since 2009, data compiled by Bloomberg show.
more...
http://www.bloomberg.com/news/2013-12-30/gold-slumps-on-way-to-worst-year-since-1981-as-etps-decrease.html
Common Sense Party
(14,139 posts)Ouch.
ProdigalJunkMail
(12,017 posts)it all goes somewhere...
sP
KoKo
(84,711 posts)By MATT TAIBBI | Apr 25, 2013 AT 01:00PM
Photo: Illustration by Victor Juhasz
Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.
You may have heard of the Libor scandal, in which at least three and perhaps as many as 16 of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t" worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."
That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.
Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.
---Snip====
The Scam Wall Street Learned From the Mafia
Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.
"It's a double conspiracy," says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. "It's the height of criminality."
The bad news didn't stop with swaps and interest rates. In March, it also came out that two regulators the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. "Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks many other benchmarks are legit areas of inquiry," CFTC Commissioner Bart Chilton said.
But the biggest shock came out of a federal courtroom at the end of March though if you follow these matters closely, it may not have been so shocking at all when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.
"A farce," was one antitrust lawyer's response to the eyebrow-raising dismissal.
"Incredible," says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.
All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.
If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati this is the real thing, and it's no secret. You can stare right at it, anytime you want.
MORE OF This Article at::
http://m.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425
former9thward
(32,023 posts)Gold far outperformed. Gold was $270 in 2000 and is $1,200 now. Dow Jones index was 11,500 in 2000 and is 16,500 now.
rdking647
(5,113 posts)former9thward
(32,023 posts)I suppose we could go back to 1900. Were you alive then?
quaker bill
(8,224 posts)The gold bulls have not capitulated yet, but do not worry, $900 is not that far away...
I say once the price retraces through $1000, all bets are off. The time between 1,200 and 1000 may take a while, but the time between 1000 and 900 will be very short. The bottom is somewhere between 600 and 900, probably closer to 900 than 600. Silver will end up between $12 and $15.
Have you paid much attention? Mines are shuttering because the ore in them is so dilute that they cannot profitably produce for less than $1200. Big mining operations are taking huge losses and write downs.
There is no inflation or currency crisis. The rug is being pulled out hard.
former9thward
(32,023 posts)Gold is in high demand in the world's two most populous countries, India and China. I don't give a shit about gold jewelry but 2.5 billion people do. People always claim gold is in a bubble and is going to crash. When they are wrong year after year -- it is always 'wait until next year!'
quaker bill
(8,224 posts)Since the peak at $1895 in 2011, gold has fallen to close 2013 at $1205. This is a fall of 36% that has occurred in a fairly steady downward slope. Most of the big players are net short with expectations of prices in the range of $1000 this year.
Aggregate demand, worldwide to include the jewelry market in India and China consumes roughly 50% of annual supply at these prices. It is true that they like gold jewelry in India and China and that market alone accounts for 30% to 40% of the total worldwide demand. That said, all demand only consumes +/- 50% of supply. The excess has been parked in inventory and exchange traded funds. Exchange traded funds have been unloading large volumes for over a year now as people convert to equities (up 30+% in 2013).
You may not call a loss of 36% a bubble bursting crash, just a large correction. Jewelry is my business, I follow this market closely and this "correction" or "crash" is not done yet.
But don't take my word for it, buy and hold metals all you like, I will see you at the bottom with cash in hand.
former9thward
(32,023 posts)So your "fairly downward slope" since 2011 must have hit a bump the very next year. Don't know how that could have happened since you have all the facts in your possession and you "follow this market closely." No, I wouldn't take your word for anything. I am smarter than that.
http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx
quaker bill
(8,224 posts)if you set the charting period to see it. If you bought before May 2010 and are still holding today, you broke even. Of course you pay commissions on both ends, so if you have a good account with a good dealer, you only lost 5%.
To actually have made money selling at today's price, considering commissions only, you would have had to have bought in 2009. Now this only works if you hold physical, don't insure it or pay rent to store it securely. Any other option has higher fees.
It works for me because I did most of my buying in 2008, hold physical, and melt it to make jewelry that I sell at a considerable markup. I do not pay the premium when I sell, I collect it.
On the other hand, my investment in equities has netted a 300% gain over the same period. Better than 500% if you go back to the Clinton Admin. I paid front load on the equities, so redemption is free.
Buy and hold by all means, I will see you at the bottom. If you aren't selling then, someone else will be.
former9thward
(32,023 posts)On Scottrade I pay essentially nothing for commissions -- far less than 1%-- so your math does not work in my case. I am glad you made 300% on equities but your experience is not typical for the market. Gold has beat the market since 2000.
quaker bill
(8,224 posts)I come here for gems like how silver would never ever close below $24, ever again, which I got this time last year...
Gold generally has been the investment of conservative elders for cause. It is stable and usually just slightly underperforms inflation, so it can be used as a hedge. However from '78 to 2007 it was mostly down and on net, flat, not adjusted for inflation. Adjusted for inflation, a serious money loser, as inflation was pretty stout in the late 70's and early 80's.
With the recession and the overblown fear of imminent currency collapse, values spiked between 2007 and 2011. It has been declining with minor interruptions since, at no time in 2012 did gold reach the heights of 2011, and at no time in 2013 did gold hit the brief and temporary highs of 2012. The big players are now net short on gold and expect another -20 to -30% year in 2014. I think they are slightly wrong with a more bullish than accurate bias. Also I am not sure where the stops are once $1000 is breached.
Good Luck, and enjoy the ride.
former9thward
(32,023 posts)So what an asset has done over a long period has little meaning to me. Good luck to you too!
Common Sense Party
(14,139 posts)former9thward
(32,023 posts)And compare the dow inflation adjusted while you are at.
quaker bill
(8,224 posts)former9thward
(32,023 posts)It is your claim.
DrDan
(20,411 posts)April 2000 - $370
in Feb - $400
You seem to have picked the bottom of the gold market for your comparison.
*********************************
this chart is inflation adjusted - perhaps that is the difference.
former9thward
(32,023 posts)Vincardog
(20,234 posts)employment. When new collage graduates find jobs in their majors at a living wage try this line again.
Taitertots
(7,745 posts)liberal_at_heart
(12,081 posts)Festivito
(13,452 posts)When Clinton left office $2500 would buy almost 10 ounces of gold.
When Bush took over it wouldn't buy 2 ounces of gold.
Now, under Obama, it does buy those 2 ounces and then some.
And, it's getting BETTER.
Note: Better means gooderer.
Pretzel_Warrior
(8,361 posts)former9thward
(32,023 posts)$2500 would always buy 2 oz and normally 5 or 6oz on average. http://www.nma.org/pdf/gold/his_gold_prices.pdf
Festivito
(13,452 posts)Less than one-third of the buying power than it had when Clinton left.
Clinton left a trend of the dollar getting stronger year after year.
Bush left a trend of the dollar losing buying power year after year.
That Bush trend continued as Bush policies left jobs decreasing at a faster and faster rate each month. All Obama could do at first was decrease the rate of jobs being lost. Finally, months later that rate went to zero jobs lost in a month, then came job increases. The increases went faster and faster each month. But, we were so far down at that point it would take months more before the number of jobs would be anywhere near the jobs we had before the Bush policies started the fall.
During all that time, the dollar lost buying power. And, like the jobs, where it had been losing buying power faster and faster, it now, finally, starts gaining buying power.
So, I guess, I blame Bush for our buying power dropping to a $1500 ounce of gold even though it hit that mark during the Obama era. I hold that Bush's policies drove us to not allowing $2500 to buy two ounces of gold.
Technically, you are correct to call me on that. I did not offer that explanation. The clearer statistic that Bush dropped our buying power down to a third of what it was when Clinton left is good enough to smack Bush on his tush.
former9thward
(32,023 posts)We are in a global economy where everyday more countries are able to do things we alone (or almost alone) could do. That will not get better. These economic policies are not determined by presidents. They are determined by global competition which both parties endorse.
Pretzel_Warrior
(8,361 posts)louis-t
(23,295 posts)I hope the idiots that bought gold from Glenn Beck lost their collective asses.
Pretzel_Warrior
(8,361 posts)And the carnival barker made millions
bonzaga
(48 posts)It's used for jewelry, which is a luxury item that only does well when people have a disposable income, and has a few industrial uses, but not many. It has a little bit of intrinsic value, but not much. It's not an investment, it doesn't really produce all that much wealth, and basically just sits around under ground, with speculators playing with the price in a grand pyramid scheme.
I believe it was Warren Buffet who said something to the effect of people being out of their minds "investing" in something that we dig out of the ground because of its shiny color only to put it back in under lock and key.
Purveyor
(29,876 posts)rdking647
(5,113 posts)and by small i mean no more than 5% of their total assets. just in case.
Logical
(22,457 posts)Logical
(22,457 posts)Purveyor
(29,876 posts)will hang on to it just in case.
panader0
(25,816 posts)DCBob
(24,689 posts)That is what many investors are speculating on. I doubt it would happen but it could.
indie9197
(509 posts)There is only 150 million ounces of at Fort Knox. The U.S. money supply M0 is sbout 3 trillion dollars.
Hoever , in my opinion as an amateur, a true gold standard can't work because it does not allow you to create wealth thru industry, natural resources, intellectual property, etc.
You can see how much things have changed since Nixon took us off the gold standard. No doubt the Wall Street bankers were behind it.
I like gold more than dollars at this point, but it is risky to have a lot of it. What do you do- put a massive safe in your house with armed guards 24-7?
bonzaga
(48 posts)In essence, the gold standard was little more than a government declaring a physical thing to be a medium of exchange and a store of value, which is exactly what fiat currency is in the first place.
The true value of any commodity, whether it be minerals from the ground or time for labor, is the value of what can be produced from that commodity to better human beings. Gold is not used for anything all that useful. Like I said, a few industrial applications here and there, and jewelry. That is the true value of gold. The demand for those industrial applications and for those shiny rings and necklaces intersected with the supply of gold determines the actual price of gold. All else is speculative.
And by definition, speculation is not investment. People who buy gold with the hopes of selling it at a higher price are speculators, not investors. There is nothing wrong with being a speculator, but just understand that you are one. Gold is not an investment.
DCBob
(24,689 posts)They have convinced their tiny brains we are on the verge of massive economic collapse.
former9thward
(32,023 posts)Gold is bought for a post WW I Germany economic situation. Paper money was nearly worthless and people with gold did just fine. Germany did not have a "massive economic collapse" but its banking system and paper money did have severe problems. Anyone who has bought gold on a regular basis has done better than stocks over the same period. That said I have most of my money in stocks with a small gold and silver holding.
1000words
(7,051 posts)Like another poster stated, gold is a good insurance policy.
Logical
(22,457 posts)oberliner
(58,724 posts)Goldline anyone?
doc03
(35,346 posts)oberliner
(58,724 posts)Money talks and nobody balks.
doc03
(35,346 posts)all they do in Washington is rearrange the deck chairs on the Titanic. Then after the commercial he totally contradicts what he just said.
oberliner
(58,724 posts)Pretty sad.
Plus, I've noticed that radio shows try to blur the lines between the commercials and the actual content.
vt_native
(484 posts)True 'dat.
Niceguy1
(2,467 posts)from Glenn Beck and Randy Rhoads
winstars
(4,220 posts)I don't think it is economically feasible for them to do that at this price level. I did see a repeat of a recent show where one of them said: "next year, when gold is $3000 per once..."
Maybe not.
sakabatou
(42,155 posts)Kurska
(5,739 posts)Time for bed!