The Golden Truth: The Truth Will Set Warren Free

Monday, November 1, 2010

The Truth Will Set Warren Free

By now everyone knows that Warren Buffet stated a couple weeks ago that he would recommend avoiding gold and buying stocks. Here's why:

See the problem? "Hat tip" to my colleague Hal for this chart. As you can see, Buffet's primary wealth vehicle (that we know of) has substantially underperformed gold for the past 10 years.

To have a great understanding of why gold/silver will start to accelerate in price vs. everything, please read the latest posting from Jim Willie: LINK This essay does an epic job of explaining why the U.S. banking/financial system is on a catastropic precipice and what to watch for in terms of the impending massive monetization that is about to be implemented by the Fed/U.S. Government.

JW explains the Fannie Mae will be used as the vehicle to monetize the mortgage fraud. For the record myself, along with a couple long-time colleagues, have been predicting that this would occur since 2002.

7 comments:

AnonymousTuesday, 02 November, 2010
Hi Dave,

All of GATA people & you are invested in GOLD & Silver since year 2001 onwards. On those days circumstances (monetizing for dotcom bubble & Gold Fractional reserve accounting in LBMA) all of you were calculating possible Gold price of of USD 1000 & above.

Then came Sub prime crises in 2007 & new projected Gold price due to various monetize-san scheme (AIG, Bear Stance, JPM etc)is now around USD 3000 to USD 5000.

Now newer & newer monetization scheme is introduced almost every 6 months to delay the inevitable collapse of the present monetary system.

So according to your conservative estimate as on date what will be the possible price of Gold & Silver(please exclude mass madness factor)?

Thanks.

pgd
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AnonymousTuesday, 02 November, 2010
Isn't it better to buy physical silver and gold instead of say SLV/GLD or the Sprott physical funds because you dont have to pay tax on gains?
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Dave in DenverTuesday, 02 November, 2010
pgd, i've ceased and desisted from putting time frames and definitive forecasts on the price of the metals, and the markets in general.

Quite frankly, from a fundamental perspective, the Dow belongs under 3000 and gold belongs who-knows-how-high...

Here's what I have come to believe. Eventually China or China + others will roll out a gold/silver-backed currency. At the same time, they will revalue the price of those metals substantially higher in order to create a solid backing of the new currency with the gold/silver they possess. I don't know what price that will be. Eric King did a radio broadcast in like October 2008 I think, you might be able to find it on his website or on Puplava's website archives. In that interview he justifies a $38k price of gold based on assuming Central Banks will revert to using 40% of their reserves as gold. I believe his number is derived from taking the current reserve levels of all CB's and applying a 40% backing of gold and then backing into what the price would have to be in order to imbue enough value into that gold for achieve the 40% backing.

This is a topic of heated debate. All I know is that gold/silver are going much higher for quite some time.
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HalTuesday, 02 November, 2010
just ponder of how HUI outperformed albeit with far more volatility and with the anchor of a couple of large hedged companies in the index.
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AnonymousTuesday, 02 November, 2010
Hi Dave,

Thanks for your input.

As per your theory both Gold & Silver will rise as any normal investment instrument till any Gold back currency is evolved. (no time frame)

Then overnight it will revalued as per Central Banks reserve position at that time. (40% or about Gold Reserve)

Am I correct? And what about Silver? Will it be valued at that 16:1 ratio?

I know any forward looking price projection is a function of many futuristic events but what I am trying to do is just understand the different scenarios that may take place & how it will affect the Gold & Silver price?

Hope I am not disturbing you.

Thanks.

pgd
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halTuesday, 02 November, 2010
in all fairness to Warren, despite the fact he does not like Gold, he does like Wells Fargo and he did like selling 36 billion of (notational value) index puts back in December 2007. These were 20 years puts or something like that so there is plenty of time for inflation to bring up the indices. And he gets to use the difficult to decipher mark to fantasy accounting for those puts.
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AnonymousWednesday, 10 November, 2010
Buffet pays a dividend... Gold, none
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Add comment

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.