Friday, Oct 17, 2008
Gold prices 1, Conspiracy theorists 0
FT Alphaville: Gold prices 1, Conspiracy theorists 0
Want to know why gold isn't performing like it should?
You could ask s2r1 - he'll blame it on 'market manipulation'. Or you could read the informed comment of the FT's commodities correspondent.
Posted by james @ 02:50 PM (833 views) Add Comment
30 Comments
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1. P. Doff said...
currently $782/oz
2. p. doff said...
Seems to drop quite regularly on Friday afternoons for some reason. $779/oz @ 16-15 pm
3. layers said...
Bet you believe everything Gordo tells ya too eh James?!
But seriously, as the first comment says: "Your argument is moot.
You’ll never know the truth as the Fed & Treasury will not permit a physical audit of gold reserves."
What we DO know is that physical gold has been restricted recently which implies that there're 2 markets - 1 for the paper-based gold and one for the metal, with the former being heavily speculated on. And, only the paper-based version is really quoted. Still feeling smug?
Gold, which one physically owns is, and should be an insurance policy only.
But James, you wont need that because not matter what's happening now, it'll be sorted and you can go back to sleep, happily dreaming that Super Gordo really only wants what's best for you and is spending unlimited money and energy to that end.
4. Sharpe said...
ironic that the so called "conspiracy theorists" predicted that the physical market would move away from the paper market.
the quoted price is falling, yet the whole of the US and Europe is clean out of physical gold - you try finding some
i was looking at coininvestdirect.com - they are almost out of 1ounce coins, clean out of silver bullion and almost out of gold bullion - the story is the same everywhere
5. cornishman said...
James - you come up with some good stuff - and pick up some good weaknesses in people's arguments. However I feel your 'vendetta' is a distraction.
The argument in the article makes a lot of sense. The fact that the gold price has held up so well considering the way the other commodities have been hammered down would seem to imply that at some point, once the hedge funds have liquidated their commodity holdings/paid back cash - then investment/safe haven buying of gold should increase the price for a while.
I wonder what the near term low will be. I've heard $720 and $640 bandied about.
How do the tea-leaves look techieman?
6. p. doff said...
2. layers said...''Bet you believe everything Gordo tells ya too eh James?!''
Speaking as a risk averse person, I neither know or care whether gold will go up, down or sideways, but on balance, I think I too would rather believe the FT than Prison Planet, Youtube, Infowars or the Mayans.
7. James said...
pdof - quite. It's not a vendetta, either. It's just that there are perfectly rational explanations for a lot of the stuff s2r1 claims proves his nonsense, but pointing these out gets me called an NWO schill / 'Common Purpose' goon, and threatened with him saying 'I think we know who you are'. That's where the animosity's from.
The title of the post is the title of the article on Alphaville.
8. James said...
layers - Why do you believe an unattributed, unevidenced comment more than the article itself?
That's the amazing thing - you call people foolish for believing rational evidenced stuff, but you're prepared to believe anything, seemingly, as long as it *doesn't* have any evidence behind it and *isn't* from a mainstream publication!
Oh well. There's owt so queer as folk. As for an 'insurance policy' - I'd prefer my insurance policy to be not quite so volatile as gold, thanks very much.
9. layers said...
p. doff - As a risk adverse person too, I would rather hedge through a 'currency' that has been around since the dawn of man than trust super Gordo to not destroy the £ by 50%.
Not sure your polarisation of putting the FT as ultimate truth (vis a vis your view that said publications are ultimate nonsense), is warranted, but hey, I believe you're entitled to your own opinions.
Here's tip - the truth is probably somewhere in the middle.
10. p. doff said...
5. layers said...''your polarisation of putting the FT as ultimate truth (vis a vis your view that said publications are ultimate nonsense)''
That's not what I said. I was just giving my opinion on which source I personally think is the more reliable.
11. sold 2 rent 1 said...
All markets are manipulated at some time or another.
Surely central banks lowering or raising IRs is manipulation of markets
The important thing to note is the manipulation is built into the Elliott wave, and on a more deeper level, the cosmic plan.
Spring 2010 for the mania in gold
12. James said...
layers @ 5 - that is an utterly ridiculous argument. If person A, a respected scientist, says the moon is made of rock, but persons B, C, D & E set up websites saying it's made of cheese, would you think the truth lay somewhere in the middle?
13. Will said...
Great Chart - but only if you were in gold from 2000 -7. But not if you bought since this crises began.
14. layers said...
@6 p.doff - Yes but by implication you link the term 'conspiracy' to those sites and undermine the whole nature of the word, just as the FT did. The next logical conclusion is that the FT is the ultimate source of truth, 'cos any divergence of opinion is labelled 'conspiracy'.
On the whole I would agree that the FT is probably more reliable, but the possibility that, as a news source they aren't above being a VI for powerful interests, has to be considered, particularly when THEY use the highly emotive term 'Conspiracy', which you're then quick to defend with all that Alex J stands for. And whilst I'm not a fan of Mr J, some of what he talks about IS true today. Ergo, it isn't all a conspiracy.
And so WHY did the FT say this?! That's the point. But then you and James just use is a 'told you so' reflex reaction - as it probably was intended!
Finally, do you disagree with my thoughts on the 2 tier market or just find it easier to debate the merits of conspiracies?
15. James said...
s2r1 - nope, just plain wrong. Again.
Being very simplistic - You know what the price of stocks is meant to represent, right? So if we lower rates, lowering interest costs hence increasing profitability and promoting investment whilst increasing consumer spending, by making consumer borrowing cheaper, it's perfectly clear why the stockmarket 'should' respond by ticking up.
Market 'manipulation' implies moving the market without any rationale behind it via rumour-mongering, etc.. It's illegal and it's a completely different thing. I hope you see why.
Again, I appeal to you. If you want to understand this stuff, get a proper grounding in 'real' economics. You do seem interested and seem to have a lot of time to spend on it, so this shouldn't be beyond you. The problem is, you've started at the wrong end - reading all the esoteric stuff and being convinced by it because you can't see how wrong it is on the basics alone. You then come on here, disseminating stuff that is just plain wrong, but using the long impressive sounding words you've learnt so that people believe you because you sound like you know what you're talking about. You don't.
16. p. doff said...
Sorry Layers - can't be bothered to play today.
We're off for our usual Friday pub meal shortly.
Have a good weekend.
17. James said...
layers - If there was a '2 tier' market - why don't you just go out and arbitrage it?
As for 'why did the FT say this'? They said it because there's so much wacko garbage being guffed about on the gold price and this article gives very clear reasons why it's wrongheaded.
Did you read it?
Did you understand it?
Can you say what you disagree with and why your theory is better?
Because that would be a debate, you see, not just claiming the FT is a mouthpiece for 'powerful interests'.
18. mountain goat said...
To think that gold is not manipulated is naive I'm afraid James (also, shame on you for picking a conflict with a fellow blogger on this site). However, the actions of the past few days has little to do with conspiracies in my view. There is desperate struggle to survive by selling everything for hedge funds as investors withdraw money. Gold was the most liquid asset and so last commodity to be sold.
I am delighted gold is falling because if it gets to $600 I will start to add to my little pile. In my view this credit crunch will eventually hit Western Governments themselves. When their line of credit gets cut (i.e. buyers strike on gov bonds), then their fiat currencies are going to hyper-inflate versus gold. Gold and silver are the currency with no debts.
19. James said...
MG - It's the internet. I only started to have a problem with s2r1 when he threatened me and started a smear campaign.
Anyway, why is it naive MG, any proof, any evidence, any-bloody-thing to support that wild assertion? Define 'manipulation' as well. If it's 'selling' - that's not manipulation, that's just something you don't like because you have a vested interest.
20. denzil said...
While I don't condone James for singling out a blogger directly in the title he was correct.
"s2r1 did let one falsifiable prediction slip. Gold at $1500/oz at the end of June. I look forward to proving him 100% wrong."
http://www.housepricecrash.co.uk/newsblog/2008/05/blog-year-debt-bubble-ready-to-burst-13219.php
21. titaniccaptain said...
A good article but James your out of order..........if someone doesnt follow your rationalistic reductionist view of the universe you deem it right to single them out and try to humiliate them? that is bullying.......we are all here to try and make some sense of this mess so narrowing down the spectrum of opinions doesnt do anybody and favours.
22. malct said...
what titaniccaptain said with bells on
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
james and p.doff need to go to bed tonight and get out the other side tomorrow
their negativity is a drain humanity doesn't need right now - we already have a bunch of psychopaths running the world.
we have a lot of positive work to do -
but I can see what james is frightened of
23. Yoss said...
Yoss putting his TFH on again.
All comods track the oil price to a certain extent as energy is needed to extract/process and take them to market, all comod's it seems except gold?
Oil has dropped from $147 a barrel nearly 50% yet the gold price has held up very well?
Those that buy physical will tell you getting hold of the stuff is hard and the premium for it has massively increased.
Also Notice OPEC has called an emergency meeting to discuss production levels in light of the collapse in the oil price....Incidentally right after the US go to the polls!
Sure we may squeal at production cuts in the West, but many oil fields aren't productive unless the black stuff is priced at over $90 a barrel, and sadly due to lack of action on building alternative means of power generation, they have us over one!
I expect gold to tank until November OPEC meeting, then those (Many of which object to US policies) will tighten the screw, all the time we a struggling to prop up our failing housing and banks.
Sod £1.50 a ltr, sod the household shopping budget jumping 15%....Look my house price is losing 15%, look at my mortgage payment going to 7% despite the base rate of 4% ... The sheeple will be looking the other way.
Negative real interest rates, and inflation about to be brought under control......(ON THE CONDITION) OPEC are happy with oil at the current price, and that is one cartel the US has less and less sway with, even though their armed forces are parked on the doorstep!
24. planning4acrash said...
I hope I didn't add to the negativity having a go at S2R's Mayan Calendar. I like his Elliot Wave analysis and other secular cycles, but the new age stuff, well, I'm starting to understand that a lot of the new age is deceptive and designed to achieve social engineering, like, think the collapse is an inevitable part of the "evolution of consciousness" - and you won't resist, and maybe, the moral relativism of much of the new age, like, nothing is right or wrong, so you' not even care when the corruption happens. It it is correct, I think its because it fits into an illuminist plan, and that its more to do with predictive programming.
Thing to remember is that the FT is the paper of the established financial peeps., so, whilst its more spot on than most, it is riddled with propaganda. It is very clear that gold is being manipulated, otherwise, mints wouldn't have run out and bullion wouldn't be selling for significantly over spot from dealers.
The way I see Gold, is much the same as the housing market. Gold reacts to fundamental's, and, the manipulation cannot go on forever, once its on its trajectory, well, it can't be stopped, just like the housepricecrash. I think that we are waiting for credit defaults on the paper market before things get out of hand. I just hope that the institutions holding gold are forced to sell their holdings to the general public (Not to Paulston and chums) to meet their margin calls.
25. planning4acrash said...
I meant to say, if its correct, it will be because it tracks a plan, like, a plan to achieve all of the main unions by 2011, and a world government under the UN by 2012.
26. renting2 said...
For the conspiracy theorists, let me make the introductions. Cat, pigeons - pigeons, cat!
http://www.nytimes.com/2008/10/18/world/18nations.html?hp
Turkey, Austria and Japan won nonpermanent seats on the United Nations Security Council on Friday, defeating Iceland and Iran in elections in the General Assembly.
27. Luckjim said...
Fair post James.
28. Maihem said...
s2r1 said "the manipulation is built into the Elliott wave, and on a more deeper level, the cosmic plan."
Okay... *plonk* into the insanefile
29. Jimmy Jim said...
LOL, conspiritards don't like it up 'em.
30. Emily said...
Calling people conspiracy theorists because they believe the gold price is being manipulated is very puerile.
Even the FT admits central bank sales depressed the gold price in the past.
http://www.ft.com/cms/s/38c8d46c-8d7e-11dd-83d5-0000779fd18c,Authorised=false.html
"European central banks have cut their sales of gold to the lowest level in almost a decade, reversing the practice of recent years when hefty sales helped depress prices."
The central banks knew that hefty sales would have this effect.
Now why is it so surprising to some people that powerful interests would seek to depress the gold price in order to protect the dollar value? Wouldn't that in fact be a sensible policy if you wanted to maintain confidence in fiat currencies at a time when confidence is very low?