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TMFHousel (94.18)

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July 25, 2010 – Comments (35)

I just read this on MarketWatch; thought it was clever:

Gold dealer: The dollar is worthless. Gold is the only safe investment.

Customer: But all I have are these worthless dollars.

Gold dealer: We'll take 'em all.  

 

35 Comments – Post Your Own

#1) On July 25, 2010 at 9:04 PM, goalie37 (94.39) wrote:

lmao

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#2) On July 25, 2010 at 10:20 PM, TMFHousel (94.18) wrote:

Also reminds me of PIMCO: Stocks around the world are overvalued. But you can still buy stocks. Through us. 

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#3) On July 26, 2010 at 10:57 AM, silverminer (31.43) wrote:

Har-de-har-har.

The state of our currency is such a laughing matter.

$1 = 1/52,000th an ounce of real physical gold (the gold market is a concealed fractional reserve market with an apparent fractional reserve ratio of 2.3%)

$1 = 1/1180th of an ounce of combined physical and paper gold (with some derivative-based markets like the LBMA OTC exchange operating at leverage as high as 100:1).

In 1971, $1 was convertible for foreign holders to 1/35th an ounce of gold. That convertibility was "temporarily suspended" by Nixon, with no permanent change in structure ever declared thereafter.

I don't know what the purpose of this post was, but I can tell you that the underlying tone of contempt or ridicule toward a decision to consider gold as a safe haven from currency impairment was enough to leave this Fool feeling acutely disappointed.

Sinch

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#4) On July 26, 2010 at 11:29 AM, SkepticalOx (99.45) wrote:

#3... No need to get defensive (you goldbugs seem to be overly so, so often). 

There's some truth to that joke.

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#5) On July 26, 2010 at 11:36 AM, silverminer (31.43) wrote:

SkepticalOx

Perhaps because insulting labels like "goldbug" still get tossed around with all the associated baggage and spurious assumptions that go with them. If you note a defensiveness, and you are correct in doing so, ask yourself why that might be the case.

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#6) On July 26, 2010 at 11:39 AM, CharlieBeLong (30.08) wrote:

Just laugh people.  Or, at least smile.

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#7) On July 26, 2010 at 11:43 AM, thegrandpoobah (56.53) wrote:

I don't agree with gold investing either.

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#8) On July 26, 2010 at 2:54 PM, JakilaTheHun (99.94) wrote:

LOL.

So true. 

 

There is a great deal of irony with GOLDMANIA!!! right now.  All the conspiracy theories revolve around the investment banks "manipulating"* gold and silver prices; yet the investment banks are peddling gold right now and making a fortune off of it. 

 

* Thus far, the greatest "evidence" of "manipulation" I have read is that gold/silver prices have fallen at certain times, that seem to precisely coincide with general market plunges.  So apparently, JP Morgan rigs the entire market to plunge in order to manipulate gold/silver prices**. 

** Also, to this day, I have yet to find someone who can tell me how the investment banks benefit from artificially suppressing gold prices. 

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#9) On July 26, 2010 at 2:58 PM, catoismymotor (36.11) wrote:

Steal soup and sit on it until the market crashes and zombies roam the streets!

Cato, The Sundries Bandit.

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#10) On July 26, 2010 at 3:25 PM, silverminer (31.43) wrote:

* Thus far, the greatest "evidence" of "manipulation" I have read is that gold/silver prices have fallen at certain times, that seem to precisely coincide with general market plunges.  So apparently, JP Morgan rigs the entire market to plunge in order to manipulate gold/silver prices**.

Also, to this day, I have yet to find someone who can tell me how the investment banks benefit from artificially suppressing gold prices.

Any Fools want to step up and swing at these all-too-easy softballs?

I'm busy, but if that's the best evidence you've seen to date, then I submit you haven't looked very hard. 

 

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#11) On July 26, 2010 at 3:36 PM, Dow3000 (< 20) wrote:

Gold advocates should actually love the term gold bug b/c it shows that people still don't understand what fiat money is and why it will always fail....when the term gold bug finally goes away (and it will)...that is when you should be concerned.

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#12) On July 26, 2010 at 4:10 PM, catoismymotor (36.11) wrote:

Any Fools want to step up and swing at these all-too-easy softballs?

No. It would be a waste of time and annoy the cow.

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#13) On July 26, 2010 at 4:17 PM, goldminingXpert (29.80) wrote:

Cato:

I like cows. 

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#14) On July 26, 2010 at 4:25 PM, catoismymotor (36.11) wrote:

Me to. But have you ever tried to teach one to sing?

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#15) On July 26, 2010 at 6:09 PM, blesto (31.55) wrote:

I like gold, I keep some around in various places. I also like my fiat money. It still comes in handy.

But what I really like is being an owner of shares in companies!

Being the owner is a good thing.

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#16) On July 26, 2010 at 6:22 PM, Robuh (26.22) wrote:

Perhaps because insulting labels like "goldbug" still get tossed around with all the associated baggage and spurious assumptions that go with them. If you note a defensiveness, and you are correct in doing so, ask yourself why that might be the case.

I'll field this one. The reason is because, much like Star Trek fanatics that hate being called "trekkies", certain gold investors have lost touch with reality and start fusing their obsession with this metal (and scenarios of varying unpleasantness under which it appreciates in value) into their own identity.

The variety of backwater internet sites that allow groups of like-minded lunatics to find each other and participate in this little subculture instills a sense of brotherhood in its participants such that an affront against mother gold is tantamount to an assault on their family.

If you're a gold investor then be a gold investor and ignore what people say. I'm an old school discounted dividend investor which is a very unpopular approach on many investment sites. Feel free to call me "divvy", or "grampa", or whatever other witty disparagement you can come up with.

What sane person would ever be seriously insulted by being called a "trekkie" or a "goldbug"?  There are much larger issues in the world over which to feign disgust. Seriously, get a grip.

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#17) On July 26, 2010 at 7:40 PM, silverminer (31.43) wrote:

Robuh

I am not a goldbug. I have not lost touch with reality. I am not obsessed with the metal. And yet, still, I find your comments like "like-minded lunatics" incredibly unconstructive to a mature debate about gold. Comments like that routinely make no attempt to differentiate between wholly objective and rational investors on the one hand, and some tiny fraction of gold investors that may take it to a point of obsession on the other.

After years of taking care to promote intelligent discussions of gold, only to have the discussion take two steps back from posts like this, you don't think I have cause to challenge the unconstructive labels and dismissive presumptions used to disparage gold and those who invest in it?

If a label like "divvy", as you offer up for yourself, were to carry with it even a fraction of the baggage of deeply conditioned presumptions about the person on the other end of the label that are materially more negative and ill-deserved than any such common presumptions about a dividend investor, then perhaps you would indeed raise your voice in protest. 

As you just revealed in your response, the prevailing presumption associated with the term goldbug -- which I remind you is liberally used to refer to all gold investors absent any knowledge whatsoever about the individual in question -- is that they must have a screw loose. Gold investors are routinely, grossly mischaracterized as wishing ill for the future of humanity and preparing for utter societal collapse with some kind of sick fascination. I have been investing in gold for 6 years now, and have been in contact with thousands of fellow gold investors throughout that period, and I have yet to encounter more than a handful of individuals that might actually "be" goldbugs as per the above presumptions.

And yet still, the word is tossed around as if we are all raving lunatics with no grasp of reality. That convenient, completely irrational set of assumptions, furthermore, is routinely used by those seeking to speak ill of gold as an investment in order to steer people away from the metal. {i.e., "only the tinfoil hat conspiracy nut crowd invests in gold ... and you don't want to become like them!"} 

Label, insult, and dismiss ... it's not an unfamiliar tactic ... but nor is it one befitting a community of open-minded investors seeking a free and balanced exchange of ideas.

To answer your final question... I am one sane person who is indeed insulted by the term goldbug. So seriously, show some respect.

 

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#18) On July 26, 2010 at 8:01 PM, TMFHousel (94.18) wrote:

Chris,

Sorry you were offended.

When you say: "Label, insult, and dismiss ... it's not an unfamiliar tactic ... but nor is it one befitting a community of open-minded investors seeking a free and balanced exchange of ideas."

Does this apply to you when you called Dennis Kneale a "an unbelieveable dufus hack shill"? http://caps.fool.com/Blogs/the-recession-is-over/220477

Or when you commented on a fellow Fool's analysis by saying "You don't need to hear it from the kid in that video." http://caps.fool.com/Blogs/tarp-inspector-bailout-could/231442?&mrr=1.00

Or does the manners thing only apply to people who aren't long gold?  

 

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#19) On July 26, 2010 at 8:08 PM, TMFHousel (94.18) wrote:

Ah, I hit post when i mean to hit edit. I meant to add this to last post:

I'm not trying to pick on you. But I don't think it's fair to automatically cast off people who disagree with you, even if they use words you don't find flattering, as being inappropriate or rude. Hearing words you may not like is part of debate -- as you've proven with Kneale. 

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#20) On July 26, 2010 at 11:01 PM, JakilaTheHun (99.94) wrote:

Robuh is 100% correct. 

The other thing worth mentioning is that all the nutty conspiracy theories concocted by goldbugs allow them to avoid accountability for their investment actions.  If I buy a stock and the company has issues; thus causing the stock to fall and me to lose money --- I make a mistake and I have to deal with the consquences of that mistake.  I might begin to ask what errors I made and how I could avoid a repeat of that mistake.  This can take a lot of work, discipline, and thought. 

Goldbugs avoid this dilemma by chalking up all declines in their investments on conspiracy theories. 

Silver price going down?  It's a bunch of evil bankers at JP Morgan causing it!  It's not our fault! 

So the goldbug avoids accountability.  In reality, goldbuggery is more of a religion than a legit investment school.  Which is why goldbugs lash out so vehemently at anyone who disagrees with them.  

 

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#21) On July 27, 2010 at 2:17 AM, silverminer (31.43) wrote:

TMFHousel

1. Had you read the entire Kneale post, you'd have encountered my attempt at a retraction and acknowledgement that I contradicted my own standards for Foolish discourse:

Some of the words I used above did not constitute "professional, rational debate". In keeping with the standards of mutual respect that you've all seen me endeavor to uphold here in the CAPS blogosphere, I wish I'd focused more on the message than the messenger.

My opinions about a particular pundit, strong as they may be in this case, are irrelevant to the Foolish discussion of the ideas presented.

I can rip his claim about the recession being over to shreds using a mountain of contrary evidence, which is what I will seek to do in an upcoming article or blog post.

To err is human ... to learn from it is Foolish. :)

2. Again ... had you read the entire post you referred to in the second case, you'd have found that I had no notion that the posted video had been created by a fellow Fool since no such context was given in the original post. It appeared to me like a random posting of some anonymous young dude's opinion, and I responded as such. Here again, once I realized the video was created by the blogger in question, I apologized for the mis-step:

Was that you in the video? If so, I certainly apologize about my tongue-in-cheek comment above

How many hours of your life did you spend combing through old blog posts to locate those two links, and once you labored so hard to find them what prevented you from reading through the posts to find that in each case I recognized and apologized for my transgression?

 

And I didn't try to cast anyone off above, as you suggest. I took exception to being called a goldbug in comment #4, and later with language and the presumptions contained in #16, and did so respectfully and Foolishly.

 

Speaking of manners, your original post seems aimed at ridiculing the long-gold position. As I said in my response, I don't know whether that was your intent, but that is how it appeared to me. If that was not your intent, by all means please set the record straight.

For the record, I love engaging in respectful debate with those who have opinions that are contrary to my own ... and no one here has spent more hours debating the topic than this Fool ... it's just that so often the remarks and opinions expressed against gold are accompanied by insults, ridicule, or spurious, irrational presumptions about those investing in gold.

 

Sinch

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#22) On July 27, 2010 at 2:59 AM, whereaminow (46.24) wrote:

Just so I can get in here and p*ss everyone off, I'm going to point out that prices are determined at the margin by marginal buyers and sellers - a term which applies to neither sinchy nor housel.  So the whole conversation, while a fun read, was a complete waste of time.

(and for the record, I really like both of you, so I hope you don't hate me now)

=D

David in Qatar

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#23) On July 27, 2010 at 9:46 AM, silverminer (31.43) wrote:

JakilaTheHun

The July 21 edition of a major German business magazine, Focus Money, carries a huge and profusely illustrated article written by its editor, Johannes Heinritzi, about gold market manipulation by central banks and governments:

http://www.focus.de/finanzen/boerse/aktien/rohstoffe/tid-19212/gold-mani...

The article begins with reference to the mysterious and surrpetitious gold swaps recently undertaken by the Bank for International Settlements. It cites speculation that central banks do not really have the gold they claim to have. It notes that there has been no audit of the U.S. gold reserve for half a century. It repeats former Federal Reserve Chairman Alan Greenspan's famous testimony to Congress that "central banks stand ready to lease gold in increasing quantities should the price rise." It reports that Asian central banks have become gold buyers. And it quotes gold analyst Ronald Stoferle of First Group Bank in Vienna as saying that the motives of central banks and governments to suppress the gold price "are clear and plausible" and that it would be "naive" to think that they're not doing it.

 

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#24) On July 27, 2010 at 10:00 AM, TMFHousel (94.18) wrote:

Chris,

I think both of us are expending too many brain cells on this. (although i posted my message a few minutes after yours, to answer your question of "how many hours ..") 

My only point is that professionalism and rationality can be perceived differently depending on which side you're on. I don't think anyone who uses the word goldbug is trying to ridicule or insult you. They're just describing someone who is long gold. And I think you have, perhaps innocently, described people who disagree with you in ways they find less-than-flattering as well at times. And I think that's ok. 

Carry on. Fool on.

Morgan  

 

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#25) On July 27, 2010 at 11:03 AM, outoffocus (23.66) wrote:

Morgan,

To back up Chris's point, I think we should avoid labeling people all together based on their opinions. If a person wants to label themself as something that is fine.  But once you label someone as something simply because they hold a certain opinion, you are bordering on offensive. I've been labeled as a "permabear" before simply because I hold bearish opinions.  I am by no means a "permabear" and take offense to being called one.  The same goes for being labeled a "goldbug".  The decision to diversify my portfolio into precious metals does not in itself make me a goldbug.  I'm no permabear, permabull, goldbug, divvy, or whatever you want to call me.  I am simply an investor trying to make money and would appreciate if I was addressed as such.

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#26) On July 27, 2010 at 8:07 PM, JakilaTheHun (99.94) wrote:

TMFSinch,

All you've got is some obscure German magazine that doesn't even publish in English as your proof?   Moreover, the basic thesis you give is merely:

'One would have to be naive to not believe in gold market manipulation.'  

That's a non-argument. 

To me, that reads, "I have no proof of this vast conspiracy theory, but I will call anyone who disagrees with it an idiot." 

This is a continuing theme in all your arguments.  If people don't believe your outlandish theories, they are idiots/naive/etc.   You rely on appeals like this to sustain your point; you never provide much evidence.  Moreover, every piece of "evidence" I see provided by goldbugs can be torn apart fairly easily:

(1) Silver prices drop at certain times of day --- those times happen to coincide with market plunges and silver  has a higher beta than the rest of the market.  Hence, it should not be a surprise that silver price would dramatically plunge with a general market plunge.

(2) Gold ETFs have not been audited --- actually, they are auditied; to my knowledge, all the major ones are audited by public accounting firms; just like any publicly-traded company.  It is completely a myth that they are not. 

(3) Such-and-such says there is a clear motive to suppress gold prices --- but this is an appeal to authority; which is ironic since goldbugs seem to be automatically disbelieve anything a central bank says, but will blindly believe any gold analyst that is peddling their own POV. 

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#27) On July 28, 2010 at 10:10 AM, USNHR (65.93) wrote:

 I am simply an investor trying to make money and would appreciate if I was addressed as such.

Aren't the people at  Goldman Sachs and JP Morgan "investor"s as well? I think I'd rathe be called a "goldbug" than an "investor".

:)

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#28) On July 28, 2010 at 11:06 AM, outoffocus (23.66) wrote:

Aren't the people at  Goldman Sachs and JP Morgan "investor"s as well? I think I'd rathe be called a "goldbug" than an "investor".

I wouldnt necessarily call them "investors". What I would call them I don't think would be appropriate for a refined site such as TMF.

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#29) On July 28, 2010 at 12:14 PM, goldminingXpert (29.80) wrote:

Jakila: By that logic, can Germans call any English magazines that don't ever publish in German "obscure?" While I agree the case for manipulation is weak, no need to go bashing legit sources.

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#30) On July 29, 2010 at 9:23 PM, JakilaTheHun (99.94) wrote:

Jakila: By that logic, can Germans call any English magazines that don't ever publish in German "obscure?" While I agree the case for manipulation is weak, no need to go bashing legit sources.

GMX --- I didn't say any publication that doesn't publish in English is "obscure." You misinterpreted my statement. 

My point is that Sinch couldn't find any English-language sources on this --- he had to cite a German source that no one here (other than portefeuille) can read.  That's completely useless on an English-based message board.  

Moreover, since no one likely reads this German publication, no one here can really verify its record. We probably can't even Google it and find stuff on it, because it's meant for a German audience. 

So what is the point in citing German-language sources in an English-language discussion?   It's not like this is Spiegel or something that is normally translated into English either. 

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#31) On July 29, 2010 at 11:38 PM, goldminingXpert (29.80) wrote:

fair enough.

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#32) On August 02, 2010 at 9:59 AM, ChrisGraley (30.30) wrote:

Google translate down?

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#33) On August 09, 2010 at 9:05 PM, XMFSinchiruna (27.99) wrote:

goldminingXpert

The case for manipulation is weak? Which part: the part where a London trader sacrificed a lucrative career in order to tell the world that JP Morgan traders in London were routinely manipulating silver prices downward? Or perhaps the weak part is the fact that gold derivatives that investors presume to be backed by physical gold 

Care to elaborate?

JakilaTheHun

You are certainly consistent with your confrontational and scattered retorts. I have posted ample evidence of gold price manipulation ... whether you choose to find the evidence convincing is entirely up to you.

GMX tossed you an underserved "fair enough" in response to your comment above, but I aim to take that back. That wasn't even close to "fair enough".

The German article was merely one of scores of sources I have cited on this site ... your presumption that this is somehow the one key publication that is required to make the case is completely unfounded. Your statement about "what is the point citing German language sources" truly speaks for itself ... thank you.

1. It is an absolute falsehood that the sharp intraday drops in silver prices at patterned times of the trading day correspond to simultaneous drops in the Dow or broader equity markets. As someone who watches both on a regular basis, I have observed the phenomenon as commonly on up days for the Dow as on down days. You made a completely unsubstantiated claim that had no evidentiary basis whatsoever.

2. I have never claimed that the bullion ETFs are not audited. So after accusing me of making a "non-argument", you proceeded to build a straw man. Congratulations.

3.  You state: "goldbugs... will blindly believe any gold analyst that is peddling their own POV". You have conveniently sidestepped the issue of whether the rationale given in support of there being an incentive to manipulate gold prices has merit as an argument.

You routinely attack my point of view while accusing me of dismissing those who don't share mine ... when I have done nothing but openly debate this issue here in this community over the past 3 years.

You place your interpretations of my words in quotations as if to cite me, which is a deceptive practice. You also take the words of a gold analyst from a Vienna bank analyst and ascribe them to me. Because of the tactics you employ, I find it quite a waste of time to engage you in any attempt at debate.

I will therefore aim to reserve my time to respond to those willing to discuss these topics with a respectful attitude and without the aggressiveness you bring to the table.

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#34) On August 22, 2010 at 6:29 AM, XMFConnor (97.85) wrote:

O.K. regardless of what you think about gold, I thought this post was pretty funny. Didn't know it was meant to spark a huge debate haha

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#35) On August 29, 2010 at 10:03 PM, ElCid16 (98.10) wrote:

I think TMFHousel should post this exact same blog again and see what happens...

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