Monday, August 8, 2011

A Conspiracy Theory on Why Banksters Want You to Buy Gold Now

Here's the latest thinking on why bankster JPMorgan Chase has put out a note advising that gold might hit $2,500 an ounce by the end of the year.

Some suspect the banksters are trying to suck new gold buyers in now, only to burn them with a huge drop in gold after they are all in. It's possible given that there is a huge holder of gold who might be forced to sell.

 ZeroHedge explains:
With Bank of America getting taken to the woodshed, we can only hope that Paulson managed to sell all of his stock in the name, or otherwise just like Bruce Berkowitz is organizing a call to defend Bank of America on Wednesday, Bank of America would have to organize a call today to protect JP from his LPs. Alas, Bank of America is just the start of Paulson's problems. For a just as big problem we shift our attention to the next worst bank in America, Citigroup, which as the excerpt below demonstrates, was a bragging point in the firm's January 2011 letter. Alas, there is little to brag about these days. Which is why we wish to caution investors to be vary careful with liquidation-like selloffs in gold. Should D-Day strike at Paulson, the firm's multi-billion GLD "gold share class" will likely have to be sold very fast to preserve liquidity. When that happens we may see a 20-30% correction in gold in one day. This is just a theoretical warning, and we hope to have some sense of when, if at all, it would take place. But just something to keep in the backs of your heads...

From Paulson January 2011:


Uh, ok...

Here is why Paulson is now likely down 30% for the year and the margin calls may soon commence.

I buy gold on dips. Long-term even if you buy at highs you will be okay as long as governments continue to print money. But be very careful buying during up spikes.

15 comments:

  1. I've just been buying as money is available to do so. If I get a paycheck, whatever I can afford from it goes into gold. Do you think over the next month or so that that's a good policy to continue or would you suggest holding off and saving up for a dip?

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  2. Anon, so long as you don't mind the volatility and price swings we will see, I'd say your strategy is just fine.... In 2008 gold dropped 30% only to return with a vengeance a year later... Gold goes up during times of uncertainty and fear... My view is this uncertainty will continue and the fear will get worse.... We are nowhere near a bubble top IMHO.

    -Mac

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  3. Hi ho, hi ho, it's off to work we go, to dig our gold, to dig our gold, hi ho, hi ho. The lovely Snow White will have our dinner at the end of the day, and a nice video too.

    http://www.youtube.com/watch?v=ipJTqCbETog&feature=player_embedded

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  4. This makes a lot of sense. The private market is making government "money look worthless in comparison, and austrian econ views are more popular than ever.

    This is a last, desperate move to attempt to create some credibility for the Evil Empire.

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  5. That's idiotic. Gold is going up partly because the dollar is losing value and partly because central banks around the world are buying it. We'll be seeing hyperinflation in the next few years. Gold will probably be over $20,000 an ounce five years from now.

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  6. when the QE I, II, and (III?) SHTF gold will be at $5000 /oz.

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  7. @Wenzel,

    Just curious but which Money Supply figure do you prefer to use at when judging money growth? M1, M2, M3 or TMS (via Mises.org)?

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  8. They want to drive the price of gold up and them make it illegal to own. Didn't the terrorist FDR do something similar?

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  9. I've already bought my share of gold for the month; but I'm on the fence right now on buying some more (this month) since it can either continue to go up or wait for a potential correction based off of this "conspiracy"

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  10. JP Morgan probably has quite a lot to gain if gold rises considering their mammoth purchase of copper last December.

    Putting aside coppers "tie" to the industrial market it still responds to general commodity levels and if gold ownership among us plebs is "outlawed" again JP Morgan doesn't look like the bad guy if they've been buying copper....

    Just a guess of course.

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  11. If gold were ever to drop 20-30% in one day from this (I would still be ahead on my long position) I would be really tempted to leverage up and buy. I've never considered that to be an especially responsible move and I'm not saying I actually would, but it would be really tempting.

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  12. If gold drops $350-500 in one day, or a few days, down to +/-$1300 I will beg, borrow and steal money to load up.

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  13. This is why gold is different than stocks. People want to own gold and so you have people hoping for a 20-30% correction so they can buy. Stocks on the other hand get sold when they dip and are much more likely to crash. The reason for this is because we are all pirates at heart and need to fill up a treasure chest to bury so that our kids and grand kids can have fun hunting for it.

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  14. Gold is the best thing to own, but this is what I do. Keep your gold position long, but buy option puts every month, so just incase, your gold value is safe. You will gain more by gold dropping and still you own gold.

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