News & Analysis
Elite Meme: Anything Is Better Than Gold
'Buy oil, not gold' ... Oil is a better bet for investors than gold, a leading fund manager has said. The gold price peaked at about $1,900 in August last year, but is currently at about $1,625...Trevor Greetham, portfolio manager of Fidelity's multi-asset funds, said gold did better when the dollar was weak and global growth was slowing. "A US-led global upswing could see neither condition hold true," he added. Gold was also becoming less attractive within the commodity asset class, Mr Greetham added. He said oil was "a much better hedge against geopolitical shocks", particularly when there were tensions in the Middle East. – UK Telegraph
Dominant Social Theme: Gold ... You can't eat it.
Free-Market Analysis: We have been covering an upsurge in articles about the "gold bubble" of late. We checked online at Google and in the last 24 hours there have been over 200 articles including the words "gold bubble."
Surprisingly, many of the articles are anti-gold bubble – as in the sense that one doesn't yet exist. But among mainstream media publications, it is an article of faith that a gold bubble is likely part of the economic landscape. This is borne out by articles like this one, excerpted above.
The power elite that wants to run the world obviously wishes to discourage the ownership of precious metals, and the financial industry is positioned constantly to promote paper products as a result. Fund managers, brokers, even private hedge fund managers, all have a bias toward paper instruments.
Unfortunately for the elites and the financial industry they control, this effort has not been very effective in the past decade. Gold and silver have risen nearly tenfold, outshining the paper investments that elites support.
It is not a short-term effort to be sure, and the elites are not giving up on this meme anytime soon. They've spent the past century building up central banking. The top dynastic families, those that apparently control 150 or so central banks around the world, use monopoly fiat money to drive their quest for global government and they depend on paper monopoly fiat for most of the enormous power they wield.
They regularly use dominant social themes – fear-based promotions – to talk down gold. These memes are distributed via think tanks, universities and the mainstream media itself.
The "gold as a barbarous relic" is also accompanied by action. There is an enormous amount of manipulation in the gold and silver market, most of it on the downside. The pressures leveled at gold and silver have retarded price growth.
There are some who say gold would be at US$5,000 by now were it not for so much manipulation. Of course, there is some doubt as to whether gold and silver will reach a price apex given the power elite's hostility to precious metals.
The elites have at various times hinted that a renewed statist gold standard would be attempted, or more likely a new global paper currency based on the IMF's SDRs. From our point of view of course, a private market in money would be ideal, one in which all sorts of money competed for acceptance including gold and silver.
This may happen, ih fact, if the world's economy continues to degrade into some sort of uncontrollable chaos. But the elites are a long way from surrendering their control, or promotions. This article in the UK Telegraph is indicative of what's going on. The fall in the price of gold from US$2000 approximately to US$1600 has predictably brought out the naysayers when it comes to the yellow metal. Here's some more from the article:
"The dollar has been strong in recent months as the likelihood of additional Fed QE [quantitative easing] has fallen," the manager said. "Meanwhile, the sovereign debt crisis is hurting the euro and the likes of the Bank of Japan and the Swiss National Bank are implementing policies designed to weaken their currencies." ...
Gold enjoyed a spectacular bull run until last summer, attracting investors worried that paper currencies would lose value as governments printed money in a bid to restart their stalled economies. The fear of economic meltdown during the depths of the eurozone debt crisis prompted many to seek gold as a safe haven, its traditional role in troubled times.
But more recently the euro crisis has eased and signs of recovery have made further QE less likely. The gold price peaked at about $1,900 in August last year, but is currently at about $1,625, a fall of about 1.3pc compared with Tuesday. Shares in gold mining companies also fell sharply.
We have recently written two articles on how the mainstream media simply refuses to acknowledge that markets move within the context of a Misesian business cycle. The cycle moves from the elite's artificial monopoly fiat money and then back to gold and silver.
For articles about gold, silver and the business cycle, just Google these terms and add "Daily Bell." There are plenty of them. We began predicting a bull market in gold and silver in 2000 and our track record is thus fairly good. We figure the bull market in precious metals will end with a blow off in the next few years, if it gets that far and the elites don't do something drastic to derail it.
Meanwhile, we shall have these mainstream anti-gold articles. Oil has nothing to do with the larger business cycle now taking place. Sure, oil may go up if there is a war in the Mideast, but that is looking less likely at the moment. And this analysis ignores the business cycle itself.
In the 1970s and now in the 2000s, the larger Western economy has been held in the grip of a bull market in gold and silver. The idea that a long-term bull market can be derailed by price fluctuations is somewhat dubious to us if one accepts the larger cyclical paradigm.
As we regularly point out, during these metals bull makets, physical is bid up first and then paper, and finally junior mining stocks during the climatic blow off. The gold/silver ratio closes too.
We're not guaranteeing it will work this way this time round. But it surely happened like this in the 1970s and the last decade has seemingly proven predictable as well. There are no certainties in a free market, but the point is, we'd suggest, that world economies are NOT free and thus tend to operate in predictable ways.
As far as oil goes, we'd agree it could travel upwards far and fast if the elite's scarcity manipulations continue and if the drums of war are banged loudly enough. Thus, this fund manager is arguing for oil based on a variety of geopolitical factors. He is certainly not making a case for oil based on the larger monetary economics in play.
Conclusion: Gold and silver are money, and have been so for thousands of years. The comparison between gold and oil is a false one. This fund manager, if he is sincere, should know better. At least he should have explained it better. We think we know why he didn't.
Posted by Danny B on 04/09/12 06:12 PM
This is an ABSOLUTELY BRILLIANT paper by Grant.
Click to view link
It has some brilliant solutions for a few of today's problems.
Posted by Agent Weebley on 04/09/12 12:36 AM
I am an alien, from MetaPhoria . . . here to help all humans adjust to freedom of thought. I use everything I experience and learn to forward the cause of freedom for all.
Do not be scared.
The key to freedom is free money for the people.
I am an Agent Of Peace. We are Agents Of Peace.
Click to view link
Posted by Bischoff on 04/08/12 11:32 PM
W: "But you were talking about the 'sell' price when you spoke of the 'value' of gold in Peru, Siberia and Alaska."
B: When did I ever talk about a "sell" price... ??? "Value" doesn't mean "price" when it comes to gold. It means "work" invested to produce it. The amount of work (joules)invested to produce 1/20.65 of an ounce of gold was initially declared by Congress to be one (1) USD. (Actually the market equivalent of gold to a Silver Spanish Pillar Dollar)
Whether you dig up 1/20.65 of an ounce of gold (one (1) USD) in India, Peru, Siberia or Alaska, I maintain that it takes the same amount of work (joules). Therefore, the amount of work, represented by 1/20.65 of an ounce of gold, becomes the measure of "value" called a USD. It's the same as taking a titanium rod of a certain length as the standard for linear distance called a "meter".
If you want to know the value of any other good or service, you judge it to the value of gold. The result of the comparison is a fraction of the value of gold called a "price" which can be expressed in USD, or any other monetary unit. Because, gold is the standard of measure, gold has no price. Figuring out the price of gold is like trying to figure out the length of a meter. It doesn't make any sense.
It is curious that I never talked about a "price" of gold. Yet, you claim I did, and you base your retort on that claim. Why... ???
W: "So here we are, at the end of paragraph one, my question unanswered, my wondering continuing; 'not varying much at all' will probably disappear down your memory hole to be denied at a later date."
B: Here you are making insinuations and assigning motives in a very serious tone, when you very well know you are wrong.
Look, Weebley. I know you are not dumb. You even knew all about the F-104 being prone to shearing off of its wings. You come up with all these clever comments and quotes. That's why I can't figure out, why you spend time twisting meanings or making insinuations when you clearly know you are wrong. You have done that with others that seem to swerve toward certain truths that go against certain special interests.
I have concluded that your critique about what I write has nothing to do with with honest discourse. It has to do with sowing doubt in the mind of other readers about the comments I make. It almost seems that you are some kind of an Agent. You are not really and Agent, Weebley, are you... ??? Tell me I am paranoid.
Frankly, I don't have a problem about someone disagreeing with me, but in your case I get the distinct feeling that it is much more than just honest disagreement. It is spreading misinformation.
If that is what you are doing, go ahead. Others have to learn to think for themselves to judge between my comments and the validity of your retorts.
So, don't expect me to keep helping you in your efforts in the future. Question my comments all you want. Then, let others make up their mind about the validity.
Posted by Agent Weebley on 04/08/12 10:10 PM
Thanks! Steve says I was ramblin' too much, oh yes, oh yes, oh yes, oh yes, oh nooooo . . . free
Click to view link
Ingo may give me some tungsten over that one! But, like everything and everyone, we evolve out of that foggy place, so we can break down the truth into its elements for all to see.
Funny how Ingo wrote 7 paragraphs and then a pie in the face . . . I love 7s.
Click to view link
Who's picking the banjo?
Steve . . . the wild and crazy guy!
Hey clark . . . wanna go to the Tottenham Bluegrass Festival June 15, 16, 17, 2012. $65. 10 minutes from our home. I'll be the guy in the UC Agent Weebley T-shirt!
Click to view link
Posted by clark on 04/08/12 11:45 AM
Agent Weebley, thanks for posting.
Posted by Agent Weebley on 04/08/12 11:06 AM
For a previous CEO of a major printing company, I wonder why you would mix up cost, margin and sell price on gold. You did, however, change your stance on the cost of production ever so slightly, saying the cost to 'produce an ounce of gold does not vary much at all.' But you were talking about the 'sell' price when you spoke of the 'value' of gold in Peru, Siberia and Alaska. The market, however skewed by 'those that can and do' dictates the price, as you know, so why enter the sell price into the 'cost to produce?' Aggregate 'total world production' has nothing at all to do with my question, either. So here we are, at the end of paragraph one, my question unanswered, my wondering continuing; 'not varying much at all' will probably disappear down your memory hole to be denied at a later date.
You constantly remind me I am a bucket of feelings [paraphrased] yet your second paragraph is an odd lash out. Did you have a lot of Bre-X stock, back in the day? Not everyone 'gets creamed.' For every person that gets creamed, another is 'the creamer.' Looking at the 'USD cost of producing an ounce of gold' is the strangest thought I've heard all day . . . and I just got up!
Your third paragraph about 'the value of gold,' where you mix up cost and sell price again, has me wondering. You said the value of gold comes from the capital and manufacturing cost of producing it, not from the USD cost of producing it. Are you baffling yourself with oxymoronic bullsh*t, Ingo. Pray tell. It isn't working on me!
Your fourth paragraph about the 'one man dredger' was caught in your screen for just a moment, then alas, it fell through to the tailings pile; a gem of a nugget of a labour saving device, that does not meet your criteria of constancy; gone down the memory hole.
Your fifth paragraph was a final admission that you don't know what 'cost' means. 'Cost,' Ingo, is the cost to produce. 'Sell' is the sell price, which includes profit. Why would anyone pull gold out of the ground and sell it at or below cost? They want to make a profit, like everyone on this planet. Profit is the csrrot that pulls us ahead - a motivator. If they get caught short while pulling gold out of the ground while the price is dropping, they may store it, hoping the price will recover at a future date, but gold mines shut down when the cost to produce is higher than the sell price. Human action at work . . . in joules, no less! Which brings me to your fascination with joules. Your 'constancy' theory relies heavily on energy output to create your centre of the universe, which is gold. I'm still trying to figure out why 'constant joules' needs to be a centre of the universe, but still, after five paragraphs, you still aren't telling.
Your sixth paragraph, challenging me to fund a study, lumping me in with central banksters was odd, to say the least. I have no money, just a desire to help free minds and create a template for an honest currency at its most basic level, which is one step above barter. Whether it is MetaFlorin Game Pieces, or another honest currency 7 years from now when everyone realizes that our template is so simple it boggles the mind, or the world's economies are so fraught with chaos that there's nothing to do anymore except eat, make clothes out of cute empty grain bags, and play Monopoly, means not a jot to me. No-one ever asks me that, so I'm telling you, Ingo, as well as anyone else who is overly bored on this Easter Sunday morning, the wife is cooking the turkey, the extended FamJam has not begun, and has read this far into my analysis of your reply to me, and that they have realized they have stumbled on a nugget of gold in a seemingly empty riverbed. The way out of The Crying Game ARG at this point is to play games. The emergence of this game is right here, right now, Ingo. So to answer your question about me funding a study . . . 7 billion people have to fund a study, but not a study on gold; a study on investing in a new game of Monopoly in the new depression called 'nowadays,' where the rich get richer, and the poor getting poorer. The world is becoming a disgrace . . . but I digress.
Your seventh paragraph, asking me about gold tonnage per year over the last 80 years, asking me if there is a worldwide collusion to fix the output volume as a constant, had me wondering yet again. I have absolutely no idea what the annual output tonnage is, and why it has any bearing on anything . . . but could it be that the excess tonnage is skimmed off the top and lies where the king sits in his counting house, counting out his money? You see, Ingo, only a few people resolve their wealth equation using gold as the measure. Most people resolve their wealth equation with the good friends and family that surround them. How many people they have fun with. They can't spend their time fretting about why these 'Acts of God' seem to take away any gains they made during the last boom, so they may cry in their beer, they may be merry and poor, they may resign themselves that they cannot join together and rise up against the machine, but one thing is for sure . . . 'they' is 'we.'
So you end your 7 paragraphs by throwing my question back at me. Your 'reality' which I know to be only one of 7 billion 'realities,' is a constant, and you have no idea why that is so. Neither do I.
What I DO know, is that our site, ARG MetaPhoria, is full of wild and conflicting ideas; ideas that began with a focus on the deluded Don Quixote, dozens of other 'realities' since then, recently, The Ancients Of Mu Mu, and currently sits with George Orwell. We shall be moving on soon to another person's 'reality' to show whoever is experiencing our site, that nothing is constant. Everything changes. But the underlying message is that barter and inventing an easy way to trade, unencumbered by those that would bend minds to their own end of people domination is a fun path to take to get us out of this Crying Game ARG.
I have no 'reality.' I have no 'system,' so I am showing you as many other 'systems,' or 'realities' as I can until we join and rise up. That is why you wonder I am a moving target, saying not quite anything, yet, weirdly, I AM saying something. We need to shake the brainwashing of feudalism and war, but I will not force MY system on others. It will take 7 billion people to create a new one.
Understanding that you have been a victim of brainwashing is not a tipping point where you get angry because you have been 'taken for a ride' your whole life. You gather your mental belongings and move on together. This has happened before. And this is how it is done.
Click to view link
Posted by truthbetold on 04/08/12 12:30 AM
DB YOU DID IT AGAIN AND PENETRATED THE BS WITH THE FACTS AND NOTHING MORE... ..THANK YOU ONCE AGAIN
Reply from The Daily Bell
Thanks. Caps off please.
Posted by Bischoff on 04/07/12 09:06 PM
Posted by Bischoff on 04/07/12 09:02 PM
First, when I talk about constant amount of "work" required to produce an ounce of gold, I am talking about the total of world production. That's why the value of gold in India is the same as the value of gold in Peru, Siberia and Alaska. The difference between one mining method and another mining method in terms of "work" required to produce an ounce of gold does not very much at all.
You look at the "USD cost" of producing an ounce of gold to make your judgement. That's what investors do who buy equity in gold mining companies, and they get creamed.
The value of gold comes from the amount of work invested, including the work invested in manufacturing and maintaining capital equipment used in the mining and refining of gold, not from the USD cost in producing it.
It was interesting to hear all about the dredgers, and all the other modern technology that makes possible to get at gold where previously there was no chance, but does that refute my contention that the "work" required to produce an ounce of gold pretty much constant... ???
You talk about "cost". What do you mean by "cost"... ??? Tell me how the "cost", as you term it, relates to the exertion by humans in terms of "joules" to get an ounce of gold.
Maybe you can fund an academic study to determine the value of gold by counting human exertion measured in joules expended to mine gold. I know your central banker friends won't do it.
Just answer this, "Do you believe there is a worldwide collusion to limit the annual tonnage of gold production... ???". Well, if you don't, then why has the annual tonnage of gold produced remained constant over the last 80 years... ???
W: "Why does gold @ cost have to be a constant in your world, Ingo?"
B: Because I have to face reality in my world, Weebley. I can't indulge in these wild and conflicting ideas which you entertain in your world. However, I have talked about "work", not "cost".
Posted by Agent Weebley on 04/07/12 09:06 AM
Click to view link
Reply from The Daily Bell
Keep at it.
Posted by Agent Weebley on 04/07/12 08:55 AM
Why does your theory of gold have to be based on the "no labour saving device ever saves labour" theory?
Do you need a constant for gold to be a constant?
C4 4 U
In the late 1990s and through today, dredging has resurfaced as a popular form of gold mining. Advances in technology allow a small dredge to be carried by a single person to a remote location and profitably process gravel banks on streams that previously were inaccessible by the multi-story hundreds-of-feet-long dredges of the 1930s. Today dredges are versatile and popular consisting of both floating surface dredges that use a vacuum to suck up gravel from the botton and submersible dredges.
I know you're not a link clicker, Ingo, but here is the link for those that want to know that digging gold up in a mine in SA cannot cost the amount of labour same as dredging it out of a riverbed, which costs les now than ever before.
Why does gold @ cost have to be a constant in your world, Ingo?
Posted by Bischoff on 04/07/12 05:56 AM
"Unless of course one bought gold in 1980 and sold in 1999. For those who bought corn and wheat, well, didn't they come out ahead?"
The first thing that confuses you, is that you think gold is a commodity which has a "price". Wrong. Gold is Money, and Money doesn't have a price.
The second thing that confuses you, is that you think the "gold market" is part of the precious metals commodity market. It actually is not. Gold should be part of the currency markets. However, if that were so, it would immediately expose the value of irredeemable currencies in terms of the value of gold. Central bankers don't not want that exposure. They want you to think of the value of gold in terms of fiat currency, not the other way around.
It is clear from your comment that you fell for their trick. Here is why:
The value of one (1) USD represented by 1/800 of an oz of gold in 1980 reflected the market price for wheat and corn in 1980, just as one (1) USD represented by 1/280 of an oz of gold reflected the market price for wheat and corn in 1999.
Because an oz of gold dropped from 800 USD in 1980 to 280 USD in 1999, an oz of gold did not gain nor lose a cintilla between 1980 and 1999.
My point is that the quantity of "work" required to produce an oz of gold in 1980 was the same amount of "work" required to produce an oz of gold in 1999. Since there was no loss of gold, i.e. the oz of gold remained exactly an oz of gold from 1980 to 1999, gold preserved value (work performed) perfectly. That is why gold is not only the ultimate store of value (work performed), but also an excellent standard to measure value (work performed).
Only, if you measure value (work performed) to produce wheat or corn in terms of USD instead of in ounces of gold could you possibly think that you came out ahead. Yet, that's exactly what you are doing.
Posted by jlax23 on 04/07/12 04:55 AM
I think his point was that the original "work performed" is never lost.
Posted by clark on 04/07/12 02:26 AM
Bischoff wrote, "They found that gold was the best commodity in which to store the "work performed" without experiencing a loss."
Unless of course one bought gold in 1980 and sold in 1999. For those who bought corn and wheat, well, didn't they come out ahead?
Posted by Danny B on 04/06/12 11:52 PM
This is an excellent article by FOFOA regarding a gold standard. It's long but, he is particularly keen on accuracy. He makes a very interesting point about "double counting" gold, wealth and money.
"Funds flowing out of the United States into a gold-exchange-standard country, for instance, increase by a corresponding amount the money supply in the recipient market, while the money supply in the American market is not reduced. "
"By the same token, the gold-exchange standard was a formidable inflation factor. Funds that flowed back to Europe remained available in the United States. They were purely and simply increased twofold, enabling the American market to buy in Europe without ceasing to do so in the United States"
Click to view link
Gold is "Off" for the moment partly because of the strike in India.
"Imports of the precious metal shrank to 90 tonnes in the January-March 2012 period, as against 283 tonnes in the corresponding quarter of last year."
Now is the perfect time trash-talk gold.
Posted by Bischoff on 04/06/12 11:37 PM
The gold price curve, and the oil price curve are syncronous. Oil is priced in USD/FRN. The oil price is set by Saudi Arabia. The oil markets merely arbitrage delivery costs, delivery time and the quality of crude.
My point... ??? Gold is money. Oil prices are the value of the irredeemable USD/FRN in relation to gold. The Saudis enforce the oil price through OPEC.
Posted by jlax23 on 04/06/12 11:16 PM
I wouldn't recommend eating gold, especially in it's monoatomic form, where it would interdigitate with DNA and possible cause cancer. I imagine it could possible be used as a treatment for someone who already has cancer, where the multiplying cancer cells would sequester the gold particles, killing the cells, but not as a preventative. I'd rather experiment with colloidal silver before I'd willingly experiment with monoatomic gold.
I'll do some more research however and see what I find.
Posted by Bischoff on 04/06/12 11:04 PM
Ok, Danny B...
Yes, you can eat gold. As a matter of fact, I have once eaten gold leaf as part of a piece of cake in a Konditorei in Innsbrook.
However, by eating it, I didn't change the chemical nor the physical properties of the gold by one iota. It passed right through me, and it remained the same gold I injested.
Now that you proved "you can eat gold", are you going to make it part of your regular daily diet... ???
Gold a necessary consumption item... .please, gimme a break.
Posted by Danny B on 04/06/12 09:38 PM
ACTUALLY, you can eat gold. There is recent investigation into the ancient practice of eating monatomic gold. The so called, White Powder of Gold. Recent research shows that it has quite an effect on the brain. This vid has much info on the subject.
Click to view link
You would have to do your own follow up research.
Posted by free on 04/06/12 06:04 PM
100% on your question today, I find that very interesting, no one that answered it has any trust in the government ,there is a revolution coming, thanks to the internet. Its going to get very ugly or should I say uglier.