WARNING: Why ONLY physical? How it will pop!

[The Golden Rule]

You get it now!!

I read ya loud and clear GoldNuggetBug.

Given though the world is not ready, nor will it be in the immediate future, to trade goods on a day-to-day basis on purely gold, the perceived value of gold is still going to be measured against some form of currency.

I was talking about what happens if Comex fails (which some people have said it could happen in December) and the 'spot price' is so out of whack with the physical price that it is a joke.

Which platform, or currency, will be the next yardstick by which the percieved value of gold is traded? The holders of gold (banks, governments, producers, mints, investors etc) are not going to be bartering their gold for goods come December.

The ironic thing is, those who are saying Comex could fail, and the price of Gold is going to skyrocket, are saying it is going to be worth xxxx amount of USD. Even in extreme crisis, people will still need to measure the worth of there gold against some standard...as currencies are the basis by which the world has become so entrenched in to trading goods locally, domestically and internationally. There will have to be some currency indicator step up to the plate where the current value of physical gold can be ascertained.

Your right,
Don't kid yourself either in a food crisis they are very valuable.

Yeah - food would be extremely valuable in extreme circumstances, though jellybeans may not be as highly regarded as staples.

[muntvriend]

hahaha too funny Oz. you know if you keep saying it will pop, sooner or later it might will. let's see, last time we were hovering in the 900 range and you expected a massive surge, week later it traded with a 6 handle!!! now your saying it will pop again after a miserable prediction a mere week ago?? this is like watching a comedy that is not funny anymore.

I think the OZ reasoning is quite logical and the fact his logics did not always work out is not his fault but due to constant intervention in the markets from all sides.
NOT a single analyst / economist or what ever -ist TOP brains and institutions, even those with a longstanding experience have not been able to predict the flight of this fizzling bird. They all predicted end of the tunnels when somebody on these threads a year ago already said that they were just seeing the headlight of the train which is gonna run over all of us.
The predictions of all those "trust us small chap, we know it all, we think for you" were and still ARE FAR more ridiculous that those OZ has been forwarding.
When you read that year to year about 30 trillion has been destructed and the world elite is cementing the falling house with two trillions and Gold is not doing better, we all know somebody is trying to keep the goldbull within the corral. I think all those who believe you can just switch on and off an economy are living on a virtual planet and that's the main problem.
Physical gold is a reality, paper virtual. Whatever the outcome of the election, the train is gonna ride over all of us and in a near future, nobody will want to buy scurvy treasury bonds anymore unless they pay you 15 pct/ annum.

[GoldNuggetBug]

I read ya loud and clear GoldNuggetBug.

value of gold is still going to be measured against some form of currency.

TGR the golden rule trade!! What you have and what I want. Why have other paper yardstick that can be manipulated.

[astraflyr]

I think we are definitely seeing the disconnect in platinum already. Super high premiums!

[The Golden Rule]

In response to the COMEX questions, I've written this blog http://goldchat.blogspot.com/2008/10...end-chart.html and then proceeded to go off on a tangent.

Thanks for the link, and a well-written post. You have some interesting material there to mull over.

[chrisiden]

I think we are definitely seeing the disconnect in platinum already. Super high premiums!

yes you are very correct and its going much higher..maybe back to 2000 soon

[muntvriend]

Yes, that is true. And just to be clear, I am not advocating paper gold as such, and prefer physical.

Is Comex and its inventory holders going to risk everything by allowing such a disconnect to take place?

.

those financial chaps behave like rally drivers, always seeking to go harder and harder looking for the extreme, because that's what the spectator and the investor want.
Paper elasticity ( credibility ) is very big, until it snaps.
The problem is every time the same, financial bodies get everytime infested and inflated with the same virus, - abuse of confidence -, and this is over and over staged by the one and same gang.
You cannot expect crooks to make anti-crook laws, so you should realize that the only way out of this situation, what gold concerns is to go into physical. Gold isn't wheat or lumber. It is easy to handle and ship gold and send it from the one to the other part of the world within 24 hours. A 1000 oz bar does not represent even the space of two liter and its value is nevertheless approximately 750 000 $ for the moment, would say it is easier to send some goldbars than to issue a Letter of Credit.
I think it to be an aberration when you pay spotprice for a coin or small weight pamp, there is a cost to make and dispatch / handle them and it is clear that when demand for such goods is much higher than normal, production lags behind.
To every industrial it is obvious that an abnormal demand is enough a reason for a price increase if you want it "NOW", but that has nothing to do with the spot price itself.
The problem is not the premium but the leverage of a gold contract on Comex.
How much Gold the issuer of goldpaper must hold and what guarantee he gives he will be able to deliver?
A danish bank sells papergold you can only redeem in money, not by taking delivery, but they tell you, so you know you buy a bet, nothing else.
But at Comex what are the rules there? Or is it just another kind of game the gang is playing?

[The Golden Rule]

A danish bank sells papergold you can only redeem in money, not by taking delivery, but they tell you, so you know you buy a bet, nothing else.
But at Comex what are the rules there? Or is it just another kind of game the gang is playing?

Yeah - I would think Comex is increasingly appearing definitely more of an under-handed game; rigged and biased to the house (as are most casino-like entities who have electronic means at their disposal).

But one thing that is apparent though is that increasingly greater numbers of people know something is wrong with the so-called 'spot price'.

I saw this today, at http://www.marketoracle.co.uk/Article6942.html

"John Embry of Sprott Asset Mgmt has raised the possibility of a December gold futures contract default. He is not predicting it, or claiming it as certain, but rather mentions how talk centers on the December gold contract as having extreme stress for actual delivery. Pressure is building. The December contract not only is end of quarter, but end of year. He suggests a possible default. He said, “there is probably going to be such an event to change perceptions.” He cited a possible force majeure that could act as a “seminal event that defines the whole situation.” He explained that the physical gold price would then dictate the paper gold price, a return to normalcy, and with a gigantic move up in the gold price. Right now the paper gold market is overwhelming the physical side, but the physical side is constricted on supply. He explained that hedge funds are being unwound on a massive scale, slaughtered by margin calls. The long side must call for delivery on many contracts. He also expects there will be many questions on the Exchange Traded Funds soon as well, although those are surely not as important as the COMEX contract defaults. Watch and listen to his interview on the Canadian Business News Network (CLICK HERE ), and be sure to move to the 10 to 11 minute mark."



So it seems, we might just get a more accurate spot-price soon enough after all, in the event of a Comex default

[Goldman2008]

Love the miners at this price - discount .

Bye

GOLD is money

[greenbeard]

Well, gold stocks are paper and they will be going up more than physical gold.