Death of Gold Bull Market Seen by Gartman

[Sammich]

Thank you, too.

If I really needed a special reason to argue it'd be that my money is bailing Europe out. The EU (the bureaucracy) is clueless for its monetary policy. The US (the bureaucracy) is clueless too for the same reason and it hasn't started to unravel yet but I think we're even worse, which is why I think betting on the US dollar long term is not a wise idea. If I really thought that Greece/Europe was clueless to the exclusion of the US I'd be buying the dollar, ie. I'd have been agreeing with you. I have no ill will towards Greece at all. I think Greece should deal with its own problems like we have to. If the EU wants to bail you out that's their business but while I offer no money in your support, I don't think you'll be coming here and bailing out Detroit MI or Youngstown OH anytime soon either.

Perhaps the most invasive non-violent action the government can take on people is the control of our money, the medium of exchange in every transaction we make. There is tremendous power in manipulating the money supply and the value of money. The government (via the Fed) enjoys a heavy hand in all of our economic activity due to this control.

Iceland is the only country that has taken the correct course of action. No bailouts. Let the crooked banks fail. Arrest, prosecute and jail those responsible for their criminal acts that led to the crisis. The criminal investigation is reportedly going to take until 2014 to complete. Put in safeguards that will prevent such a mess from happening again. The country is well on it's way to recovery, while others who keep playing footsie with the money junkies are on the verge of default.

[Yamato]

Iceland is the only country that has taken the correct course of action. No bailouts. Let the crooked banks fail. Arrest, prosecute and jail those responsible for their criminal acts that led to the crisis. The criminal investigation is reportedly going to take until 2014 to complete. Put in safeguards that will prevent such a mess from happening again. The country is well on it's way to recovery, while others who keep playing footsie with the money junkies are on the verge of default.

Good points! It's refreshing to see that you're aware of this early. In 2014 it'll look a lot more obvious and you'll have much greater numbers of people coming to your camp who agree with you.

[Caesar]

I think there are two things right now that could be bringing the price of gold down, either there could be banks in the Eurozone that are selling gold to bring in more cash or the U.S. dollar is getting better.

[questionmark]

I think there are two things right now that could be bringing the price of gold down, either there could be banks in the Eurozone that are selling gold to bring in more cash or the U.S. dollar is getting better.

The gold bubble is, and was, always a dollar hysteria, dollar gets weak gold goes up, dollar apparently gets better gold goes to normal. Just have a good look at the previous spike in the 80s.

[Caesar]

The gold bubble is, and was, always a dollar hysteria, dollar gets weak gold goes up, dollar apparently gets better gold goes to normal. Just have a good look at the previous spike in the 80s.

But I don't think the dollar has been that good, just better then the Euro.

[questionmark]

But I don't think the dollar has been that good, just better then the Euro.

During the previous panic it did not really improve either, it just stabilized at low level. Most monetary panics have nothing to do with reality, and it is questionable whether buying some "Safe Haven" metal helps any against currency devaluation. It just is not alternative to currency.

[acidhead]

Just curious...

Been reading this thread and this is for Questionmark and Yamoto.

Where is the money and gold MF global is responsible for to it's clients in your opinion..... and why hasn't Terrance Duffy's CME group simply coughed up the billion and a half dollars they say is insured through their company from the 100 billion of protection money should such a screw up happen? Where is the gold and money? More importantly... where the hell is the physical gold to back up their deals?

These aren't my words either. Listen to Duffy here claim they have 100 billion to back this up while he hosted a press conference last May 2010 when his company was looking for a 100 million tax break because....... cough...... his company creates so many jobs:

[Sammich]

Just curious...

Been reading this thread and this is for Questionmark and Yamoto.

Where is the money and gold MF global is responsible for to it's clients in your opinion..... and why hasn't Terrance Duffy's CME group simply coughed up the billion and a half dollars they say is insured through their company from the 100 billion of protection money should such a screw up happen? Where is the gold and money? More importantly... where the hell is the physical gold to back up their deals?

These aren't my words either. Listen to Duffy here claim they have 100 billion to back this up while he hosted a press conference last May 2010 when his company was looking for a 100 million tax break because....... cough...... his company creates so many jobs:

Probably because CME never had the money and just made that claim to get a $100 mill tax break and MF lost so much money gambing in the European markets there is no way they could have delivered any of the gold.

It gets even better, anyone that had physical silver and gold stored with MF is going to lose it all too.

Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global

[acidhead]

Probably because CME never had the money and just made that claim to get a $100 mill tax break and MF lost so much money gambing in the European markets there is no way they could have delivered any of the gold.

It gets even better, anyone that had physical silver and gold stored with MF is going to lose it all too.

Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global

Is it safe to asumue the CME group is going to file for Chapter 11 bankruptcy as well?

Hey, what's your opinion on Jon Corzine? If I walked into the local grocery store and left without paying for a loaf of bread I'd be cuffed, printed and a court appearance scheduled. What's the deal with this guy? I know he's Obama's buddy too..... hosted a $38 000 plate dinner fundraiser for him not too long ago. Just curious why the media hasn't jumped all over this.

Edited December 19, 2011 by acidhead

[Yamato]

Just curious...

Been reading this thread and this is for Questionmark and Yamoto.

Where is the money and gold MF global is responsible for to it's clients in your opinion..... and why hasn't Terrance Duffy's CME group simply coughed up the billion and a half dollars they say is insured through their company from the 100 billion of protection money should such a screw up happen? Where is the gold and money? More importantly... where the hell is the physical gold to back up their deals?

These aren't my words either. Listen to Duffy here claim they have 100 billion to back this up while he hosted a press conference last May 2010 when his company was looking for a 100 million tax break because....... cough...... his company creates so many jobs:

I can only speculate in either case. Looking at the company profile on Yahoo, CME's involved in just about everything. Duffy did mention $100 billion in collateral but it's not in gold or money and I can only speculate what kind of collateral it actually is. We'd have to ask him or maybe the answer is out there already from some other source. They have $875 million in cash on their balance sheet.

I think the real questions are much deeper and more systemic though than any exercise in going after ABC or XYZ corporation and asking where the gold is can address. The gold isn't backing our currency universally (rather it opposes our currency) so isn't it unfair and inadequate to pick on specific examples when everyone is playing with the same stacked deck? Companies aren't in business to acquire and sit on large amounts of cash or near-cash equivalents in gold anyway. A company raising huge amounts of cash on their books is a big red flag to anyone looking at that company. Why are they hoarding cash? Don't they have anything better to do with it? It appears like the company is bereft of ideas. The system doesn't reward the accumulation of money, it rewards what's done with it. Investors want money to be reinvested. They want growth. Even the concept of value-vs-growth which in value's case often includes large companies traditionally paying a dividend will give the bulk of their cash back to their shareholders with the expectation that the shareholders will reward that company with loyalty and spend that money and contribute to economic growth in their communities, on the products and services that they believe in (that they're investing in), and in the overall national economy. Oftentimes a good answer to the question "What are you doing with your money?" is "I'm giving it back to you!" And so the point is that money must be moving around constantly.

The rhetorical question that we can ask any insurance company: "How can you afford to pay for a catastrophe?" is just as well applied to any bank enjoying our Fractional Reserve system. What becomes of the money we deposit at our bank? It's not there. We won't know that until there's a run on the banks and they wind up having to lock their doors to keep us out because it's just like I said, the money's not there.

[questionmark]

Just curious...

Been reading this thread and this is for Questionmark and Yamoto.

Where is the money and gold MF global is responsible for to it's clients in your opinion..... and why hasn't Terrance Duffy's CME group simply coughed up the billion and a half dollars they say is insured through their company from the 100 billion of protection money should such a screw up happen? Where is the gold and money? More importantly... where the hell is the physical gold to back up their deals?

These aren't my words either. Listen to Duffy here claim they have 100 billion to back this up while he hosted a press conference last May 2010 when his company was looking for a 100 million tax break because....... cough...... his company creates so many jobs:

The client's money is in somebody else's pocket. The question now is how it got there.

We have two aspects to this story, one MF going long on the Euro as soon as they started heating up the "Europe is going bankrupt" rhetoric. At that point most everybody was expecting the Euro to go over $1.50 (yeh...like the export dependent Europeans were going to let that happen). And between 150 and 135-136 as the Euro was at the point MF finally had to give up is a loong way.

As for the "insurance", my bet is that it does not apply once wrongdoing is expected or demonstrated...like diverting client's fund to cover companies shorts (of funds caused by being long on paper ).

[questionmark]

in related news:

CME's Duffy vs MF Global's Corzine: A question of trust

(Reuters) - The drama over the meltdown of the brokerage firm MF Global pivots around a clash between two veteran traders who rose from relatively humble roots to the very top of the futures-trading business.

One is Jon Corzine, the firm's former CEO who just testified in Congress about the mystery surrounding some $1 billion in customer money that vanished from MF Global before it failed. The other is Terrence Duffy, the chairman of CME Group Inc, the huge Chicago exchange where MF Global did most of its trading.

Read more