UPCOMING GOLD DEFAULT (by Jim Willie) -

[silverman]

http://www.kitco.com/ind/willie/oct302008.html

Source: www.kitco.com

THIS IS JUST ANOTHER EXCELLENT ARTICLE BY JIM WILLIE!

[Selene]

Silverman, I respect your fears, BUT......

Willie says "When December contracts in gold & silver are demanded to be satisfied via delivery of the metal, we could easily see the COMEX fail in delivery. A default is highly likely."

Ummm, with all due respect for Jim Willie's degree in statistics, speaking as a former (Refco) commodities trader myself - oils and gold - you should note that his critical thesis here is factually flawed and historically incorrect.

Better that 99.999% of all futures contracts never take delivery. They are not intended for that. Never. Ever. (What would you do if someone delivered 2,000 lbs of frozen pork bellies...on your lawn?)

The beauty of trading futures contracts on paper is that they remain entirely on paper. They're (hello?) speculative.

Sure, if everybody - or even some traders - decided to take delivery there'd be some mighty raised eyebrows. Especially because the entire contract would first have to be settled in cash in full....real bucks instead of just the deposit leverage you put down to open the contract. That would be impressive. And if you wanted the metal, why would you bother to trade the futures if you just wanted to buy in cash? The futures market can move against you bigtime, too. Trust me on that one, kiddies. If you wanted to buy bullion, you'd wait for a good (cheap) day in the cash market and place an order. There's no odds in waiting for a futures contract to get cheaper. (Son, that 's what 's called a "Texas Hedge": you buy the physicals and go long on the futures....truly dumb.)

And the drop in open interests? Puleeze - equal drop in technical trending. Any experienced trader knows to wait until a tradeable trend takes hold. About 80% of the time, most markets are "nontrending". And when cash is at a premium, any sane trader will put his money into the trending markets.

And it goes without saying that Kitco - which sponsors that blog - sells gold and silver coins, bullion, etc. Their bias has to be relentlessly bullish - buy now! Don't wait! etc. etc. They do have an interest here.

Read with caution. Don't get stampeded. Ain't likely to happen on this planet. (Which is not to say that the price of gold could not ever go up, but not for the reasons cited here by Willie.)

Sleep well tonight, my friends.

Cheers,
Selene

[silverman]

Originally Posted by Selene

Silverman, I respect your fears, BUT......

Willie says "When December contracts in gold & silver are demanded to be satisfied via delivery of the metal, we could easily see the COMEX fail in delivery. A default is highly likely."

Ummm, with all due respect for Jim Willie's degree in statistics, speaking as a former (Refco) commodities trader myself - oils and gold - you should note that his critical thesis here is factually flawed and historically incorrect.

Better that 99.999% of all futures contracts never take delivery. They are not intended for that. Never. Ever. (What would you do if someone delivered 2,000 lbs of frozen pork bellies...on your lawn?)

The beauty of trading futures contracts on paper is that they remain entirely on paper. They're (hello?) speculative.

Sure, if everybody - or even some traders - decided to take delivery there'd be some mighty raised eyebrows. Especially because the entire contract would first have to be settled in cash in full....real bucks instead of just the deposit leverage you put down to open the contract. That would be impressive. And if you wanted the metal, why would you bother to trade the futures if you just wanted to buy in cash? The futures market can move against you bigtime, too. Trust me on that one, kiddies. If you wanted to buy bullion, you'd wait for a good (cheap) day in the cash market and place an order. There's no odds in waiting for a futures contract to get cheaper. (Son, that 's what 's called a "Texas Hedge": you buy the physicals and go long on the futures....truly dumb.)

And the drop in open interests? Puleeze - equal drop in technical trending. Any experienced trader knows to wait until a tradeable trend takes hold. About 80% of the time, most markets are "nontrending". And when cash is at a premium, any sane trader will put his money into the trending markets.

And it goes without saying that Kitco - which sponsors that blog - sells gold and silver coins, bullion, etc. Their bias has to be relentlessly bullish - buy now! Don't wait! etc. etc. They do have an interest here.

Read with caution. Don't get stampeded. Ain't likely to happen on this planet. (Which is not to say that the price of gold could not ever go up, but not for the reasons cited here by Willie.)

Sleep well tonight, my friends.

Cheers,
Selene

Hi Selene,

thanks for your reply.

Lets start with the "frozen pork bellies"-arguement. Yes you are right this is not something somebody wants to get delivered but it is definitely not what some central bank might still have in their vaults.

I believe you missed some news and I believe you don't have a single physical ounce of gold and silver. You definitely didn't try to buy some ounces the last couple of weeks otherwise you would not argue to wait for cheaper cash / spot etc....

The idea behind go long silver or gold @ comex and then exercise is because US government / FED together with JP Morgan and Goldman Sachs heavily manipulate the price of gold and silver...and of course to the downside to make all investors believe, that precious metals are no alternative in a financial crisis....

They prefer desperate investors to purchase FED funds and treasuries...

Fact is that world wide it is getting more and more difficult to buy real physical silver and gold....

Fact is that investors are already willing to pay for one ounce gold Kruergerrand a premium of more than 10% for one ounce of Silver Britannia or other 1 ounce silver coins premiums are between 50 to 100%..

If a US citizen intends to purchase US liberties or buffalos he won't get any since US mint stopped to deliver, same in Canada and Australia...

I am Swiss and all major banks which offered precious metals are getting delivery problems. One the biggest player is Zurich Kantonalbank. They have ETF's on all precious metals and an investor can exercise them and gets then the physical metals. The same bank just announced that they cannot deliver 1 kilogramm silver bars this year anymore. Probabely in January again.

Same situation is with the biggest independent precious metals dealer called www.proaurum.de. The don't have anything anymore to sell.....

So please tell me:

Why is gold and silver price falling, when there is no physical material available anymore?

I once learned in my life, that when something is getting rare or almost not available anymore but many individuals wants to buy or get it, the price goes up? Do you agree?

Do you believe crude oil price will drop, if we don't get crude oil delivered anymore? Probabely not isn't it?

Why does COMEX intend to change rules to avoid to deliver physical gold and silver?

Why does US government together with JP Morgan and Goldman Sachs manipulate the price? Why did they block short selling on financial stocks and not as well on gold and silver? Since funny enough US still seems to have the biggest gold reserve of all!

Since many blind centralbankers and wallstreeters believe that gold and silver is for nothing, why don't they let go up the price? Ok I tell you why, because gold is STILL money, this will never change, never, Illuminatis, Bushs, Freemasons, Paulsons, Bernankes can do what they want.....Gold will always be money as well

....and this is their big problem! They can devalue the US Dollar and come up with the AMERO, US can and will soon go bankrupt. Gold will not go bankrupt never!

So please, don't blame anybody, who goes long gold or silver futures at COMEX and exercises for physical delivery, BECAUSE

WHAT COMEX, JP, GS, FED, BEN, PAUL, GEORGE AND SO ON ARE DOING IS HIGHLY CRIMINAL AND THIS HAS TO BE STOPPED AS SOON AS POSSIBLE!

But the good thing about all the crisis is, that the above mentioned guys are running out of amunition and soon, they won't have the money, the power, the time to "take care" to pressure precious metal prices.....

And maybe you know, that gold and oil have a sort of positive correlation. I believe crude oil will go up big time very soon.

Now since you have not a single physical ounce of precious metals in your pocket I bet the following with you:

1. COMEX WILL DEFAULT UNTIL 31 MARCH 2009
2. CRUDE OIL PRICE WILL TRADE ABOVE USD 100 BEFORE X-MAS 2008
3. GOLD WILL TRADE ABOVE USD 1'000 BEFORE X-MAS 2008

Each time I am wrong you get 1 silver ounce (please click on link to see the picture of the coin).

http://www.proaurum.de/edelmetallsho...pe=productlist

Greetings,
silverman

[Selene]

Well, Silverman, since you've jovially presumed:

"Now since you [Selene] have not a single physical ounce of precious metals in your pocket I bet the following with you:

1. COMEX WILL DEFAULT UNTIL 31 MARCH 2009
2. CRUDE OIL PRICE WILL TRADE ABOVE USD 100 BEFORE X-MAS 2008
3. GOLD WILL TRADE ABOVE USD 1'000 BEFORE X-MAS 2008

Each time I am wrong you get 1 silver ounce (please click on link to see the picture of the coin)...."

I must say:

a) You are incorrect about my precious metals position(s).
b) I do not - as a matter of practice - ever discuss my own position(s) nor advise others in that regard,
c) My views on Willie's blog ideas do not preclude seeing stronger or weaker metals prices over the next xx months regardless, and
d) I have not presumed any link between oil and gold futures here.

Therefore,

I must regretfully - and in good humor - decline your playful bet , and look forward to your further metals postings.

(And - with apologies - wish you all good and peaceful night. It is past my bedtime! A demain!)

Cheers,
Selene

[Waterman]

Since you all are into "fuzzy math" I thought you all might like this link

http://solari.com/

[silverman]

Originally Posted by Selene

Well, Silverman, since you've jovially presumed:

"Now since you [Selene] have not a single physical ounce of precious metals in your pocket I bet the following with you:

1. COMEX WILL DEFAULT UNTIL 31 MARCH 2009
2. CRUDE OIL PRICE WILL TRADE ABOVE USD 100 BEFORE X-MAS 2008
3. GOLD WILL TRADE ABOVE USD 1'000 BEFORE X-MAS 2008

Each time I am wrong you get 1 silver ounce (please click on link to see the picture of the coin)...."

I must say:

a) You are incorrect about my precious metals position(s).
b) I do not - as a matter of practice - ever discuss my own position(s) nor advise others in that regard,
c) My views on Willie's blog ideas do not preclude seeing stronger or weaker metals prices over the next xx months regardless, and
d) I have not presumed any link between oil and gold futures here.

Therefore,

I must regretfully - and in good humor - decline your playful bet , and look forward to your further metals postings.

(And - with apologies - wish you all good and peaceful night. It is past my bedtime! A demain!)

Cheers,
Selene

Thanks for your reply,

ok no bet as you wish and I agree you did not talk about crude oil....

and yes I try to post as much as I can about precious metals because it is a very important topic for the near future and believe me not only for the view precious metals bugs but even more importantly for central bankers all over the world...

The first central bank that decides to gold-back its currency will have a strong and stable currency....

Gold standard comes back...I can imagine, that Switzerland is the first country to get back to this....and there is going on something right now into this direction....

If US, Canada and Mexico really come-up with the AMERO it needs to be goldbacked as well otherwise investors will have no trust into AMERO and this is probabely also the reason why United States didn't sell (at least officially) an ounce of gold the last couple of years....

Lets see what comes, but I am sure we'll have some nice surprises....

Greetings,
silverman

[TAXMASTER]

goodby dollar.....most likely there will be a new metals backed currency coming from china/russia. look for signs at next weeks g20 meeting. i am a day trader and i can spot the charts when manipulation is going on. i got caught with my shorts down recently with the drop in gold by $60 within a few minutes. the market quickly over reacts to world news in oil prices. every since oil was in the $120 range, it had no reaction to news of hurricanes, civil unrest in oil countries, or lack of inventory news. you could tell that someone in the backroom had an agenda. day traders focus so much on technical indicators and underlying reasons for moves ie overbough, oversold macd etc. lately, the movement of price has been on a mission. its all been about pumping up the dollar before the election. what a laugh...the dollar is stronger now after printing a few more trillion dollars and taking on trillions of debts. any 3rd grader can see the agenda.

Namaste'

[silverman]

Originally Posted by TAXMASTER

goodby dollar.....most likely there will be a new metals backed currency coming from china/russia. look for signs at next weeks g20 meeting. i am a day trader and i can spot the charts when manipulation is going on. i got caught with my shorts down recently with the drop in gold by $60 within a few minutes. the market quickly over reacts to world news in oil prices. every since oil was in the $120 range, it had no reaction to news of hurricanes, civil unrest in oil countries, or lack of inventory news. you could tell that someone in the backroom had an agenda. day traders focus so much on technical indicators and underlying reasons for moves ie overbough, oversold macd etc. lately, the movement of price has been on a mission. its all been about pumping up the dollar before the election. what a laugh...the dollar is stronger now after printing a few more trillion dollars and taking on trillions of debts. any 3rd grader can see the agenda.

Namaste'

Taxmaster,

I completely agree with you! There is plan a sort of a road-map. I don't know if you saw the rumour, that Bush family tried to flee to Paraguay. If this is just a little bit more than a rumour, the world will be a much much different one in the next couple of days!

The rising dollar is big time a big big joke and I am looking forward to next weeks market moves.

What they achieved with all those market manipulations is just nothing...ok they killed some hedgefunds.....thats it..

Let them play around a little bit....they are criminals and they know. They know that more and more people think that way and it is getting hot for them....

greetings, silverman

[Rocky_Shorz]

Originally Posted by Selene

b) I do not - as a matter of practice - ever discuss my own position(s) nor advise others in that regard,

Cheers,
Selene

Hi Selene,

Since you are sitting on a Big ol pile of Gold and silver, you might not have even looked around recently.

Waterman gave a very nice link for converting 90% silver coins to Dollar value.

Just for the fun of it, I asked what $50 = ~$ 7 face value.

So that means you should be able to buy 28 quarters for $50 dollars.

I'm not sure what area of the Galaxy you are from, but just for the fun of it, call a local dealer and ask what 280 quarters would cost for you to buy, drive down and pick them up today price. According to the paper market price, it should be $500.

I'd be curious to hear what they say...

[Selene]

Hi, Rocky!

My apologies for the delay in replying - I've just noticed your post.

You were wondering (yesterday) "So that means you should be able to buy 28 quarters for $50 dollars...."?

Not quite, actually. Coins of any kind always command a premium over pure bullion, since they are considered "collectibles" in their own right and valued for their artistic merit, rarity, etc. In addition, dealers are free to set their own prices for anything they sell. The current cash price in London or New York for the pure bullion is only one factor in pricing minted coins, even so-called "junk" (circulated and/or worn) coins. Dealers also factor in their own shipping costs, rent and overhead - and the financing cost of keeping certain coins in their inventory, perhaps for years before someone buys them. Remember, they're the ones that have to "buy at wholesale but sell at retail."

Even large 100 or 400 ounce bars command certain customary premiums for assay, storage and shipping beyond their bullion price. That's life.

And - hey - the current flap over minted coins "sold out" or even bars being out of stock at some dealers is a bit of hype, guys. If you place an order at an agreed-on price, and take delivery at that price, it's no big deal that it might take your dealer a few days to deliver those goods from a central location. They're not mind readers; they don't keep more stock on hand than they might "normally" need - and price volatility/The Panic Factor has reared its sweet head only rather recently (Again. As it does regularly....).

There are two great movers in the markets: greed and fear. Equities move on Greed. Gold moves on Fear.

There's been a lot of that going around lately....

Cheers,
Selene

[pineal-pilot-in merkabah]

its all rigged,gold ,oil,stocks non of it means anything. im thinking precious metals will be zero value in northen hemisphere. be good to have tho incase of surviving poss armageddon and heading south.. i was gonna get some 1/10th krugerands but decided food and seeds to be a better option

[FrostyMcunicron]

thats a joke & a half. Oh its no big deal an instant trading commodity has stalled out & will be delayed a month+ for a single order. Days? psh

[777 The Great Work]

JIM WILLIE

[Rocky_Shorz]

Originally Posted by FrostyMcunicron

thats a joke & a half. Oh its no big deal an instant trading commodity has stalled out & will be delayed a month+ for a single order. Days? psh

it takes days to deliver the certificate that says they have your metals on Deposit...

most people don't understand because they haven't tried.

We've had a few on the Forum say they bought, but I haven't seen anyone say they took deliver yet...

[beegee]

I'm sorry to say this but.........anyone who trades precious metals on paper is a fool and you know what they say about a fool and his money? Don't know? Well, they say they are soon parted.

No offense to anyone who traded this but, they got you again.