Gold Hits Record High - Confidence Slides - Are We Crashing the System ? # Goldwatch

[TotalMayhem]

How so? Chavez's gold is held in London, if he demands deliver6y of gold what will likely happen?

The LBMA might have troubles with the delivery.

Zerohedge reported such an incedent recently, and if the word gets out they might have a full fledged "bank run" at their hands and the opportunity to get real metal will be closing fast

[Skrimshander]

So the value of actual gold will continue to increase ad infinitum?

http://dailyreckoning.com/the-greate...e-of-all-time/

Musashi, heres an article that explains whats happening at the moment relating to gold versus fiat

[Steewal]

Newb:

Unlike cash that can be printed, gold is a finite resource that untimely can't be 'printed' . In effect this means that it decreases the inflationary effects of qualitative easing (QE) that is printing money to ease debts etc.. Mark my words when I say that a new economic system much like the gold standard of yore , will be coming into place to replace our current broken system. This new system will be 'Asset Backed' in the sense that it will be pegged on the commodities such as gold, silver etc. If say for example, there is 10 trillion ounces of gold in the world and each ounce is $1900, then the maximum value of gold is 1900 x 10 trillion which in effect caps the total amount that can be spent. Of course this is a very rudimentary example and it needs to be qualified but the idea is the same. If gold appreciates in value ( as is happening on an almost daily basis now) then the value of the world wealth also increases and vice versa. This system therefore helps eliminate or at least mitigate the effects of inflation. Also it structures the global economy in such a way as to regulate the sending that countries can spend. In times of recession investors flee to safe haven commodities like gold and this pushes up it's value, Economies modeled on an asset Backed system, will ultimately protect themselves from severe economic shocks and spikes that damage the economy. Complex financial instruments like CFD's credit default swaps, derivatives etc won't be so attractive and appealing as the upside is limited as a result of being asset backed, the converse in the sense of the downside also holds true. These complex and confusing financial instruments helped to inflate wealth beyond realities and helped to exacerbate the economic collapse that is happening. While very very few people actually became extremely wealthy as a result, plenty others lost a lot. Gold or an asset backed mechanism means that there would be a more structured less free wielding reckless risk taking shenanigans that has happened now!

[ang]

We've been warned: the system is ready to blow:-

Lesson number one is that the financial and social causes are linked. Lesson number two is that what links the City banker and the looter is the lack of restraint, the absence of boundaries to bad behaviour. Lesson number three is that we ignore this at our peril.

AND:-

To understand the mess we are in, it's important to know how we got here. Today marks the 40th anniversary of Richard Nixon's announcement that America was suspending the convertibility of the dollar into gold at $35 an ounce. Speculative attacks on the dollar had begun in the late 1960s as concerns mounted over America's rising trade deficit and the cost of the Vietnam war. Other countries were increasingly reluctant to take dollars in payment and demanded gold instead. Nixon called time on the Bretton Woods system of fixed but adjustable exchange rates, under which countries could use capital controls in order to stimulate their economies without fear of a run on their currency. It was also an era in which protectionist measures were used quite liberally: Nixon announced on 15 August 1971 that he was imposing a 10% tax on all imports into the US.

Four decades on, it is hard not to feel nostalgia for the Bretton Woods system. Imperfect though it was, it acted as an anchor for the global economy for more than a quarter of a century, and allowed individual countries to pursue full employment policies. It was a period devoid of systemic financial crises.

http://www.guardian.co.uk/business/2...tem?CMP=twt_gu

[C. Flower]

We've been warned: the system is ready to blow:-

AND:-

http://www.guardian.co.uk/business/2...tem?CMP=twt_gu

Hapax posted yesterday on the links between debt and war. The big leaps in indebtedness in the 20th century were all related to the costs of war. At this stage even though the US is spending trillions on resource wars, and that partly accounts for increased debt, there seems to have been an exponential growth in debt.

Gold over 1900 again.

http://www.politicalworld.org/showthread.php?t=9382

[DCon]

This seems a bit of a stretch as a way to acquire Gold..

A man from Northern Ireland has been jailed after an experiment in which he attempted to turn his own faeces into gold went wrong and started a fire in a block of flats.



Paul Moran will now serve three months in jail and a further 12 months on license after the failed experiment caused a fire at his Housing Executive home in Derrin Park, Enniskillen.



Moran admitted arson and endangering the lives of others in the fire, which reportedly caused over £3,000 worth of damage.



It is thought that as part of the bizarre experiment Moran left his faeces, along with other waste products such as fertiliser, on a heater.



In his ruling Judge McFarland told Moran: “Rather bizarrely you were attempting to make gold from human faeces and waste products.



“It was an interesting experiment to fulfil the alchemist’s dream, but wasn’t going to succeed.”



Moran’s barrister mentioned that his client was a man of ‘considerable intellectual ability’ but that he had problems battling drug abuse

http://www.zerohedge.com/news/northe...turn-crap-gold

[C. Flower]

This seems a bit of a stretch as a way to acquire Gold..



http://www.zerohedge.com/news/northe...turn-crap-gold

As this is not far off the Eurobonds idea, can we expect to see a lot of jail sentences of EU leaders ?

[Count Bobulescu]

Short neat vid on how/why Gold became the metal of choice!

http://www.washingtonpost.com/blogs/...VYCN_blog.html

[unspecific]

Sorry to go off topic for a moment, but can anyone clarify for me what would happen if the eurozone became a state with full fiscal powers like any other state?

Basically I'm wondering if the ECB took over all national debt in the eurozone would that solve the crisis? Currently eurozone national debt is on average 90 percent. If it assumed intra-state debts then they could surely be rationalised(i mean if italy owes spain 60 and spain owes italy 40 then it would just become spain owes italy 20) and hence the final count will be lower. All remaining debt would then be able to be refinanced at German market rates.

Has anyone worked out if that would work? It sounds like we could have a shared national debt of possibly even the magic <60 percent mark.

[Starfire]

Now $1788 /ounce

[DCon]

This article suggests that German people are starting to lose confidence in the euro

The uncertain financial markets and the euro crisis have left many Germans feeling nervous. Worried about the security of their savings accounts, increasing numbers of people are deciding they would rather invest in material goods like art, vintage cars and real estate instead. But experts warn that nothing is 100 percent safe any more.
Info

Franz Herrmann, head of the German Association of Savers (BDS), has spent half a century trying to be a good investor. As a child, he filled piggy banks and, as an adolescent, he put money away in his savings account. Later came a building loan contract, in addition to 12 life insurance policies. "Money attracts money," his father liked to tell him, quoting a German saying. "I was hardwired for saving money," Hermann explains.

At 52, he says he figured out "what's going on." He'd earned money through his business selling beer steins and jewelry in Munich's city center. But he became convinced that he'd actually lost money through his savings efforts and cancelled his insurance policies, while the small interest earnings from his remaining savings accounts were "eaten up by inflation," he says. To fight back, Herrmann formed the BDS. Now he makes appearances around the country, warning of "money-destroying instruments." He's certain that saving is "state-sanctioned robbery."

Those who can afford it are putting their money into their own homes, in the form of better insulation or renovations. Roofers are booked out for weeks in many regions. The sector is one of the winners of the crisis, growing some 5 percent in 2011 to reach almost €8.5 billion in turnover.

He expects inflation to rise as high as 6 percent in the coming years, which means the forms of investment most dear to German hearts -- savings accounts, bonds or fixed-term deposits -- will make losses. People are sensing that they need a kind of "reset," says Vorndran. But he doesn't believe in a new currency. "The reduction of debt will take place within our monetary system."

The man standing in the elegant counter hall of the Pro Aurum gold dealing house in Berlin begs to differ. The zookeeper looks -- and smells -- a little out of place amid the gold bars arrayed behind reinforced glass. He's just come from mucking out stables at Berlin Zoo. All these unsecured loans are like toothpaste, the man said. "You can get it out of the tube, but it won't go back in."

Politicians are only making the final bankruptcy more likely by shelling out ever higher sums and setting up new rescue funds, he says. That's why he has converted his and his wife's life insurance and almost all their cash reserves into precious metal. "No one can take my gold away," he says.

http://www.spiegel.de/international/...806990,00.html

[C. Flower]

Prices of fine art in Europe have gone up 30% this year, in spite of "austerity"

All these things are shaky, as they are not readily exchangeable.

Hard to see why gold has gone a lot higher. A lot of people who think they have bought gold have bought a "gold financial product".....

[C. Flower]

Germany looking for its bullion back from the US ?

http://www.spiegel.de/international/...8.html#ref=rss

[DCon]

The German gold is "stored" here

There are no doors into the gold vault. Entry is through a narrow 10-foot passageway cut in a delicately balanced, nine-feet-tall, 90-ton steel cylinder that revolves vertically in a 140-ton, steel-and-concrete frame. The vault is opened and closed by rotating the cylinder 90 degrees. An airtight and watertight seal is achieved by lowering the slightly tapered cylinder three-eighths of an inch into the frame, which is similar to pushing a cork down into a bottle. The cylinder is secured in place when two levers insert large bolts, four recessed in each side of the frame, into the cylinder. By unlocking a series of time and combination locks, Bank personnel can open the vault the next business day. The locks are under “multiple control”—no one individual has all the combinations necessary to open the vault.



The weight of the gold—just over 27 pounds per bar—makes it difficult to lift or carry and obviates the need to search vault employees and visitors before they leave the vault. Nor do they have to be checked for specks of gold. Gold is relatively soft, but not so soft that particles will stick to clothing or shoes, or can be scraped from the bars. The Bank’s security arrangements are so trusted by depositors that few have ever asked to examine their gold.

http://www.zerohedge.com/news/2012-1...safe-and-sound