Like today, for example, when I am told that it is “essential” that I curtail my frenzied buying of gold, silver and oil this month so that one of the whining kids can go to the doctor (or dentist, I forget which) for some real or imagined discomfort, ache, pain, open wound, bloody discharge, festering sore, oozing abscess or gangrenous limb, like I am made out of money or something.

Normally, I would explain, with the patience of a saint, for the thousandth time, how the Federal Reserve is creating waaaaAAAAAaaaay too much money and credit so that the federal government can borrow and spend waaaaAAAAaaaay too much money, which is this selfsame “waaaaAAAAAaaaay too much money and credit” created by the Federal Reserve in the first place, which is a kind of strange circular logic, I admit, but which I think only serves to prove the bizarre, incestuous nature of the whole thing, but without any bodily fluids being exchanged.

And I told them, “If you don’t think so, just wait until the inflation in food and energy prices really gets here, good and hard, and when you look at the horrors this will create, you can tell me again how you don’t believe that inflation in the money supply leads to inflation in prices when all this new money enters into the marketplace, like a flood, adding massive amounts of money to the bidding for goods and services, which makes prices rise”, but they just kept whining, “No, daddy! I need to go to the doctor now, not when inflation is raging so that the cost will be higher and you will not want to pay those higher prices! So you want to send me now, when prices are lower!”

So you can see that there are two sides to every story; on the one hand this whole incident with crybaby kids and their whining, and complaining, and blacking out, and getting blood all over everything, and on the other hand there are “essentials” in the world, as in “essential insights”, which, in the case of Money Morning, is apparently true, as we note with surprise that David Stevenson writes in the newsletter that, in the United States, “Prices of commercial property – real estate – are down by 43% overall since the October 2007 top, says Moody’s Investors Service. Retail rents have plunged by a third from the peak. For offices, rents are down 40% and vacancy rates are as high as 18%.”

Now, most people, like me, and maybe like you, too, look at that paragraph and say, “Whew! That seems like a lot of numbers, which are already confusing by their very presence, which explains why I don’t understand!”

Being the peach of a guy that I am, I am going to show you – free! – the essential information in there, which is: If you own commercial property, you are screwed, and if you do not own commercial property, then it is getting cheaper and cheaper.

In the meantime, just keep buying gold, silver and oil stocks, not because I say so, which I do, and you should, too, but because we have no other choice, because if we did, I am sure that I would have read about, or heard about, someone buying it to successfully protect themselves against governmental stupidity at least one (pause) freaking (pause) time (pause) in the last 4,500 years of the economic history of the Whole Freaking World (WFW), especially since the whole thing seems to be about economic stupidities that flow from continual, ever-worsening government fiscal malfeasance, just like we have all over the world today and all over the world in all of the rest of history, but, in a word, I ain’t.

And, so, investing doesn’t get easier than that! Whee!

Gold, Silver and Oil: Buying the Essentials in Tough Markets originally appeared in the Daily Reckoning.

Related posts:

1. Gold and Silver Supply: Get Some While You Can
2. Is Goldman Sachs Thinking Of Buying Silver
3. A Bull in a Silver Shop

Related posts:

1. Exchange Rate Regime of Systemically Important Countries
2. Talk in Chicago on Testing, Dating and Monitoring of Structural Change of the Exchange Rate Regime
3. Talk at R/Rmetrics Singapore Conference 2010 on Measurement of the Exchange Rate Regime

Here’s a quick status report of this work:

• The key methodology paper is forthcoming: Testing, Monitoring, and Dating Structural Changes in Exchange Rate Regimes, in Computational Statistics & Data Analysis, Volume 54, Issue 6, June 2010, pages 1696–1706. If you don’t have access, here is a preprint.
• The R package fxregime has the full code. While this package has been in development for a long time, it is now at version 1.0-0 which is our way of saying it’s ready for use. You can do the full analysis of any currency series — testing, dating and monitoring for structural change in the exchange rate regime — using this package.
• An application paper on China and India: The difficulties of the Chinese and Indian exchange rate regimes, in European Journal of Comparative Economics, 6(1), June 2009.
• An application paper where the dates of structural change of the exchange rate regime are used in an analysis of firm data: Does the currency regime shape unhedged currency exposure?, in Journal of International Money and Finance, 2010 (forthcoming). If you don’t have access, here is a preprint.

Related posts:

1. Talk at R/Rmetrics Singapore Conference 2010 on Measurement of the Exchange Rate Regime
2. Exchange Rate Regime of Systemically Important Countries
3. China’s Exchange Rate Policy

I needed this kind of mental break to take my mind off of, for one thing, the sheer horror of today’s economic situation and how we are So Freaking Doomed (SFD).

Finally, I happened to catch a moment on CNBC just where Larry Kudlow was correctly making fun of Greece for saying that it will raise taxes and cut spending in an effort to get its ludicrous deficits and preposterous budget under control, and he had a deliciously snotty, supercilious, sarcastic attitude (the True Mogambo Way!) towards the idea of raising taxes and reducing spending as an economic stimulus of some kind! Hahaha!

I was with him all the way, too! And I had a few choice things that I wanted to say to Greece, too! Most of my complaints about Greece are about how Greek salads always seem to come with a damned oil and vinegar dressing that is terrible until you add some sugar, then it’s pretty good, so why in the hell don’t they add sugar to start with, the lazy bastards? God knows they had the money!

And then to add sour ripe olives to the mix – which is more of the same, only worse! – makes me want to jump to my feet and shout, “What is the matter with Greeks that they would they would do such a terrible thing to an otherwise delicious salad?”

So with Mr. Kudlow on the case to make sure that Greece gets its act together, I am sure that their deficit problem will soon be resolved, and this salad dressing thing will soon be a thing of the past, too, which may be part of the reason why I thought he was really good for about, oh, three seconds, which is about as long as the average period of time that I usually agree with Mr. Kudlow, or my wife, or my kids, or my boss, about anything.

The aforementioned three seconds during which I agreed with Mr. Kudlow is because he said something scornful in a rapier-like rebuttal, something like “Raising taxes and cutting spending is not the answer!” which is true.

But it is only true because there IS no answer! To even ridiculously assume that someone can come up with a plan to dissolve consumers’ debt and simultaneously pay off their creditors – the fabled “win-win” situation! – is ludicrous! Hahaha! Beyond ludicrous! Hahaha!

Mr. Kudlow and his little panel of “experts”, however, ignore my scornful laughter and the way that Icky Mogambo Spittle (IMS) shot from my lips, and implied that there really is a solution to this problem out there, somewhere, anywhere, maybe over here, maybe over here, which would marvelously, and magically, enable debtors to get rid of their debts without paying anybody anything, and creditors to get all their money back without being paid anything by anybody! Hahahaha!

But I understand that it’s Mr. Kudlow’s job to take positions on monetary, fiscal and economic policy that are the opposite of mine, because my job is to stay away from the majority, and his job is to get people to join the majority.

My position is so antagonistic because in these three cases, “the majority is always wrong.”

The majority is wrong in encouraging monetary insanity by always yammering for more and more monstrous Federal Reserve money-creation to buy the fiscal insanity of Congress’s avalanche of new government debt to fund Obama’s spendthrift imbecilities, which will cause inflation in prices, which is The One Big Freaking Thing (TOBFT) that you don’t ever, ever, ever want to have, which means that you can never, never, never allow excessive amounts of money to be created in the first place.

The majority is wrong on economics because they still, laughably, believe in the proverbial “free lunch”, a childish fiction where somebody gets something and nobody has to pay for it, and the majority are willing to bankrupt themselves, and destroy their own country, by letting Congress try to provide a free lunch to anyone and everyone who walks up with a hand out or a sad story.

And the biggest reason to go against the majority is in investing, because it’s less than a zero-sum game, and thus the majority must lose money and be bled dry by a ghoulish financial services industry (that is so large that it makes up 70% of all profits made in the country, and thus pays most of the taxes, which are actually paid by the “investors”) so that a minority of people (hopefully, me!) can make money despite being bled dry by the financial services industry and despite paying taxes on the gains. “Investing for the long term!” Hahahaha! I snort with derision! Snort!

So you can see why my natural anti-establishment makes me pound the table for gold and silver simply because the majority ignores them!

Okay, the real reason is that today’s dire economic condition, due to a staggeringly incompetent government and incompetent citizenry, has been played out thousands of times in the last 4,500 years, and in each case, the only thing that saved anyone’s butt was gold and silver.

There are those, of course, who say, “That explains why you are buying gold and silver, but it does not explain why you are always screaming at people to invest in oil, as well as in gold and silver.”

Well, since you asked, I say invest in oil because it has the most energy per cubic centimeter, and now that it is used in practically everything everywhere, nobody in the industrialized world can live without lots and lots of it, with guaranteed continual rising demand, but it is being rapidly depleted. Rising demand and falling supply? Who could ask for more in an investment?

As for those who go on to say, “Well, that is pretty convincing, alright, but it doesn’t explain why you are such a hateful, disrespectful, little creep”, I admit that, no, it doesn’t.

Bet Against the Majority. Buy Gold. originally appeared in the Daily Reckoning.

Related posts:

1. Gold and Silver Supply: Get Some While You Can
2. Gold, Silver and Oil: Buying the Essentials in Tough Markets
3. Fake Tungsten Gold Found

I was surprised to see how small the market reaction was (this image is from Yahoo Finance):

What am I not understanding?

Join the forum discussion on this post - (1) Posts

Related posts:

1. Corporations and OTC derivatives
2. New Executive Order: National Emergency to Stabilize U.S. Financial Crisis
3. Bretton Woods II: Will a New Financial-World Order Solve the Economic Crisis?

Already my eyes are glazing over at the sudden overload of information, most of which I know nothing about, but know that I should, and feel uneasy that I don’t, and guilty that I don’t even want to because it involves work and initiative, or, in this case, listening to the equivalent of, “blah blah blah silver and gold are going to go to the moon not only because the Fabulous Mogambo has thus foretold it, and the Austrian school of economics has explained it, but that blah blah blah at the Comex warehouses” and then I end up getting most of it wrong anyway and I look like an idiot.

So, already reeling in confusion, I was thus rendered almost comatose when he relentlessly went on, “The withdrawal to deposit ratio for registered silver is 14:1 and in gold it is 5:1” and which, again, is meaningless to me because I am, as I already admitted, ignorant and lazy, which is a crushing handicap, now that we are talking about it, that should enable you to qualify for a Handicapped Parking sticker for your damned car so that you can get some of those terrific Handicapped-Only parking spots, right up front, wherever you go, but the application for which can be rejected by a snotty clerk, out of hand, on her personal say-so, although she volunteered that my “abrasive, demanding, incoherent and repellent personality is a real handicap, too, but there is no sticker for that, either.”

As I fell asleep, eager to again escape reality and responsibility, I began dreaming of some snappy comebacks I could have said to the Handicapped Sticker lady, like, “Well, I assume that there is a Handicapped Sticker for anyone who is mentally handicapped, and I can tell by looking at your stupid Department of Motor Vehicles face that you are not buying gold, silver and oil to protect yourself against the government’s massive deficit-spending and the Federal Reserve’s creation of all the new money and credit that will be necessary to soak it up, which is really stupid of you! Hahahaha!”

I really like it when the dream gets to the stage where some hot young honeys make their appearance, stage left or stage right, it makes no difference to me, but we never got there because apparently the sound of my snoring made Mr. Douglas aware that he is talking “over the head” of the biggest dullard in the crowd, which violates the politically-correct stance on “inclusion” and “diversity” of persons such as me.

So, quickly remedying the situation, he explains that this means that “If this rate of drawdown continues, the registered inventory of silver will be exhausted in 18.8 months and in just 8.5 months for gold!”

And before there is any mistake made by the casual reader, that concluding exclamation point in the previous sentence was his, not mine, although it was totally unnecessary, as I was already freaked out at the implications!

Thus, I was ready to race home and frantically root around in my wife’s purse for some extra money, so that I could buy some more gold and silver, when I was transfixed to the spot when he went on that he estimates, “as much as 50,000 tonnes of gold has been sold that does not exist. That is equivalent to all the gold reserves in the world that are yet to be mined, or put another way, 25 years of gold production.”

I was ready to edit his remarks to put an exclamation point at the end, as it certainly deserves one, but before I could do it, he followed up with, “That is the grand-daddy of all short positions!”, which had an exclamation point, and so I let it go at that, and saved myself a lot of work that will – I guarantee! – show up in the narrative section of my Productivity Report, which is coming due pretty soon, and which is always pretty disagreeable.

But I will get through this new assault by “higher-ups in the executive food chain” with Classic Mogambo Equanimity (CME), as I always do, and I would probably have gone completely Mogambo Freaking Nuts (MFN) a hundred times before this if I hadn’t always remembered, sometimes at the last minute, that I own gold, silver and oil, whereas these gold-less, silver-less and oil-less bozos are questioning my ability (“I think you are too stupid!”), my competence (“You seem to have no idea what you are doing!”) or my sanity (“I think you are insane!”), while never even mentioning my numerous off-setting good qualities, such as my twinkling blue eyes or the fact that none of my employees or former customers have a Restraining Order on me that is still in force.

If you are even half as smart as I think you are, then you get the obvious message, which is to buy gold, silver and oil.

Some of you, on the other hand, also got the more subtle message that a long list of miscellaneous people are all going to be very, very upset and angry at the horrifying inflation in prices that is inescapably coming, due to this massive expansion of the money supply by the Federal Reserve to pay for the unbelievable tons of money Congress is deficit-spending, and you had better take your gold, silver and oil into a bunker of some sort and arm yourself to the teeth because it is going to get Very, Very Ugly (VVU), and you will want the options of buying your way out or shooting your way out.

On the other hand, if you do not buy gold, silver and oil, then, as they say, “the angels will weep for you.”

I, personally, will laugh at you. It will sound sort of like this: “Hahahaha! Moron!”

The Mogambo Guru
for The Daily Reckoning

Gold and Silver Supply: Get Some While You Can originally appeared in the Daily Reckoning.

Related posts:

1. Gold, Silver and Oil: Buying the Essentials in Tough Markets
2. A Bull in a Silver Shop
3. COMEX Gold And Silver Margin Requirements Raised

Nick from ShareLynx Gold passed on to me today the following from the producers of the video (all personal info was removed by him before forwarding):

vielen Dank für Ihre Anfrage.
MANY THANKS FOR YOUR ENQUIRY

Das Video ist tatsächlich bei Argor in der Schweiz aufgenommen worden, allerdings in einem ganz anderen Zusammenhang.

THE VIDEO WAS EFFECTIVELY TAKEN AT ARGOR IN SWITZERLAND, ALTHOUGH IN A COMPLETELY DIFFERENT CONTEXT

Unten eine englischsprachige Erklärung hierzu, die Ihnen einige weitere Hintergrundinformationen gibt. Der Barren wurde übrigens schon vor über 10 Jahren bei Argor zum Einschmelzen abgegeben; sofort entdeckt und aus dem Verkehr gezogen. Gefälschte Barren kommen extrem selten vor, unsere Kollegen in den Schmelzen können sich an keinen Fall in den letzten Jahren erinnern, in denen ein solcher bei Heraeus zur Aufarbeitung eingeliefert wurde.

BELOW AN EXPLANATION IN ENGLISH TO THIS ISSUE, THAT WILL GIVE YOU SOME FURTHER BACKGROUND INFORMATION. THE BARS, BY THE WAY, WERE DELIVERED TO ARGOR ALREADY MORE THAN TEN YEARS AGO FOR SMELTING; WERE IMMEDIATELY DISCOVERED AND WITHDRAWN FROM CIRCULATION. COUNTERFEIT BARS ARE EXTREMELY RARE, OUR COLLEAGUES FROM THE FOUNDRY CANNOT RECALL A SINGLE INSTANCE IN THE LAST YEARS IN WHICH SUCH A BAR WAS DELIVERED TO HERAEUS FOR PROCESSING.

Statement:

The video shown on www.youtube.com is an extract from the weekly German television broadcast Galileo that discusses scientific topics. This particular broadcast covered the topic of gold including testing the purity of gold bars.

The presentation of the scene of (gold) production at the Argor Heraeus refinery – that was put on youtube.com in another context – when seen together with the text could therefore give an incorrect impression.

The false bar shown in the broadcast was a bar not produced by Heraeus; it was sent to the company for refining and detected already at the time of delivery. Compliance Management at Argor-Heraeus is very important and plays an important role at the company. Among others, it has very stringent rules for handling and dealing with precious metals.

Therefore, and combined also with strong and effective quality controls, Argor-Heraeus is able to assure the authenticity of gold bars produced by the company itself at all times.

Internet: www.heraeus-edelmetallhandel.de
Heraeus Metallhandelsgesellschaft mbH
Heraeusstr. 12-14, 63450 Hanau, Germany

So the video is about ten year old fake bars. Another example of commentators jumping the gun and hyping a story without any fact/background checking. To be fair, it really is only someone like Nick who has a worldwide well-connected subscriber base who can do that sort of checking.

I also find it interesting that the video Zero Hedge linked is the only upload of YouTube user wolframgold who only joined on 28 Feb 2010. This leads me to a conspiracy I am surprised none of the more rabid commentators have come up with yet, namely that the source of the tungsten rumours since October 2009 is either a refinery/mint trying to scare people away from the secondary market and ebay and into only buying new bars and coins OR producers of testing equipment!

Nick also passed on to me a link to BullionAnalysis.com, which has some nice pictures of fake Englehard silver bars that their equipment would have detected. This does undercut RunToGold’s conclusion from the tungsten scare that “if one is concerned about the quality of their gold then the other precious metals like silver and platinum are good alternatives”. Ouch.

I would also disagree with RunToGold’s statement that “detecting a high-quality fake tungsten gold bar would be extremely difficult. It would likely require significant and material alterations to the bar being tested and this would negatively affect the marketability if its hallmark veracity were vindicated.”

Ultrasonic testers will do the job without having to damage a bar. I quote some techo stuff from KK&S Instruments:

The 1090 Flaw Detector allows you to look into the Bar for voids/defects as well as UT velocity which is determined the products elastic modulus i.e Tungsten Velocity is 5183-5460m/sec and Gold is 3,240m/sec. For example if you calibrate for Au then the testing Tungsten bar of the same thickness, the UT thickness would read approximately half the actual because of the speeding-up of the sound through the Tungsten.

Problem is that it does require some technical knowledge to use the machine, so out of reach of retail investors and small coin dealers. It is probably prohibitively expensive as well.

I also think that it is fairly likely that the unintended consequence of commentators pushing the tungsten story is to drive mom & pop newbie gold investors into the ETFs. Making the decision to buying gold is a big change for the average investor and you can be sure they are seeking reassurance. Sow doubts in their mind about the “dangers” of physical gold and you will push them into ETFs, because mom & pop see them as regulated and thus safe. The very opposite of what many (if not all) commentators would want. I doubt they think about these consequences when they are looking for their next headline.

Related posts:

1. Fake Tungsten Gold Found
2. Silver premiums and fake spots
3. Gold ETF League Table

Just like a $100 bill costs about $.04 to produce leading to a profit of $99.96 from such unethical currency production so likewise with the price of gold at $18,000 per pound and the price of tungsten around $25 per pound there is, for the unscrupulous, an opportunity for arbitrage.

GOLD PROPERTIES AND TUNGSTEN PROPERTIES

As Rayner Hesse observed on page 191 of Jewelry Making Through History, with the Stamp Act of 1854 the purity of gold jewelry was reduced and required to be hallmarked at 9k, 12k or 15k and so the search for gold alternatives began. Within a few decades the House of Cartier had gone international and Edward the VII named it the ‘Jeweler of Kings and King of Jewelers’. Presently, many watches are being made with tungsten carbide instead of gold because it is lightweight, takes a polish and is scratch resistant.

Gold has a density of 19.30 grams per cubic centimeter at room temprature and a liquid density at the melting point of 1,947.5°F of 17.31 grams per cubic centimeter. Tungsten has a density of 19.25 grams per cubic centimeter at room temprature and a liquid density of 17.6 grams per cubic centimeter at the melting point of 6,192°F.

But despite being used for jewelry and having similar densities gold, AU 79, and tungsten, W 74, are not the same element. But a 400 ounce bar with 1/16″ gold surrounding a tungsten slug would cost about $50,000 to make and would likely pass sound, feeling, chemical and weight tests along with an x-ray fluorescence scan. On the other hand, the higher profit margin $500 bar using small tungsten slugs with lead alloy would still pass a sound and feeling test but would be slightly underweight and it is likely that neither a chemical test nor a x-ray fluorescence test would be passed because the gold coating would not be thick enough.

HOW TO DETECT A FAKE TUNGSTEN GOLD BAR

Detecting a high-quality fake tungsten gold bar would be extremely difficult. It would likely require significant and material alterations to the bar being tested and this would negatively affect the marketability if its hallmark veracity were vindicated.

This is likely a reason why page Page 11 of the GLD prospectus states “Neither the Trustee nor the Custodian independently confirms the fineness of the gold allocated to the Trust in connection with the creation of a Basket [issuances].”

Nevertheless, the truly determined and experienced can ferret out whether there is tungsten contained in their gold bars. In fact, some already have found tungsten in bars which purport to be gold and this is how.

GOLD ALTERNATIVES

If one is concerned about the quality of their gold then the other precious metals like silver and platinum are good alternatives with the silver prices and platinum prices being strongly correlated with the gold price. One reason they are safer is because both silver and platinum have industrial applications and are widely consumed. The silver and platinum stock are rotated on a regular basis being melted down and fashioned into cell phones, catalytic converters, etc. and so the purity and integrity of the above ground stockpile is held to strict account because of physical demand market forces.

CONCLUSION

There is plenty of profit motive for fraudulent gold bars that are stuffed with tungsten. Imagine the pandemonium if the central banks not only had less than half the gold they claim but if of the gold they have the majority of it is filled with tungsten. Tungsten filled gold bars being ferreted out in Germany is disturbing. This is just another example of why to buy platinum or silver.

DISCLOSURES: Long physical gold, silver and platinum with no interest in the problematic SLV, Streettracks Gold ETF Trust Shares or the platinum ETFs.

Join the forum discussion on this post - (1) Posts

Related posts:

1. Fake Tungsten Gold Story
2. Silver premiums and fake spots
3. COMEX Gold And Silver Margin Requirements Raised

Gee, I wonder who that someone was and what they are thinking. Originally, I was thinking of posting their home address, picture, resume, social security number and other websites they visited but they are not safe for work and considering the hostile feelings towards the company I decided against the personal information. But Eric Schmidt, CEO of Google, would probably not mind considering his statement to Maria Bartiromo:

I think judgment matters. If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. If you really need that kind of privacy, the reality is that search engines — including Google — do retain this information for some time and it’s important, for example, that we are all subject in the United States to the Patriot Act and it is possible that all that information could be made available to the authorities.

BUYING SILVER INTENT

The brilliance of the Google Superbowl ad was in its ability to communicate an entire story with only a few lines of text.

Truly, one’s search patterns can reveal intentions. Now, what can be discerned by these virtual footprints from one of Goldman Sachs’ 36,000+ employees? Conclusively, probably not much and we (NSA) would need access to more transactional databases and the passage of S. 733 the Cybersecurity Act of 2009 but we can still speculate about talk around the water cooler or higher order drama. Who knows if that someone was the secretary, their boss or both. It was 11:15PM after all!

SILVER BACKWARDATION CLOSE

Lately I have not followed the SIFO rates closely so this was my initial suspicion and once again it appears that silver is nearing backwardation. While the paper silver market which has an unlimited supply of silver and the physical silver market is constrained by actual metal the fractures between the two are beginning to emerge again.

In 2009 I chronicled the silver backwardation that led to a 60% rise in silver prices over a seven month period. Additionally, the gold to silver ratio has moved over 10% in less than two months. With silver recently slipping below its 200dma it is becoming a good value. But with silver getting cheaper this move in the ratio portends a slowing of the precious metals bull. And so there are conflicting signals.

CFTC SILVER MARKET INVESTIGATION

The slide towards backwardation is particularly enthralling given the CFTC’s three investigations of the silver market in five years. Ironically, silver analyst Ted Butler who has been particularly vehement of the CFTC’s faux investigations seems to like the new Chairman Gensler and on 10 February 2010 wrote,

I have been unabashed in my praise for Chairman Gensler since the time he assumed office. I have called him the greatest chairman in CFTC history. … I understand that disagreement [with the praise]. Yes, he was a partner of Goldman Sachs, the dreaded “vampire squid” of the financial world. Yes, he was a participant in the deregulation of 2000, which added greatly to the financial crises of the past couple of years. Yes, he is an “insider,” with connections and access to those in power.

What could Goldman Sachs know about the silver market, what might be being discussed around the water cooler and how might Chairman Gensler’s influence with his old cronies play into this?

CONCLUSION

The digital world offers tremendous opportunity to covertly monitor and draw inferences. In this case, someone at Goldman Sachs was researching about buying silver and they could have easily cloaked their behavior with anonymous web surfing. Imagine the latent power Google and the NSA have and would using it constitute ‘insider trading‘?

Yet, a former Goldman Sachs employee is the CFTC chairman who is embarking on the third investigation of the market in five years while the metal drifts towards backwardation. The paper price of gold and silver may be drifting lower but the physical silver is getting cheaper and a better value.

If you do not have a core position, to protect against the Laboon of sovereign debt defaults, negative FDIC funds, quantitative easing, etc. then yesterday was when you should have acquired. If you already have a core position then it may good to wait a little while longer for even better silver prices such as 0.95x the 200dma.

Order the new Bank Privacy Report before the end of February and get 50% off.

DISCLOSURES: Long physical gold and silver with no interest in sovereign debt from Greece, Portugal, Italy, Ireland, Spain, etc., GS, or the problematic SLV, Streettracks Gold ETF Trust Shares or the platinum ETFs.

Related posts:

1. Gunning For Goldman Sachs Gangbangers
2. Gold, Silver and Oil: Buying the Essentials in Tough Markets
3. Silver Slips Out Of Backwardation

And it gets worse when another popular response is “What about the stock market? Will it go up or down?” and my answer is, being as polite as I can be, always the same: “What is it with you greedy people always asking two questions at once, which only confuses me and makes me angry? Get out of my sight, you silly rude persons, or I will, as was said in ‘Monty Python and the Holy Grail’ and from which I am obviously ripping off this stilted style of dialog because I have no creativity or talent of my own to come up with anything better, taunt you again!”

Actually, I am rude to these people because they are so stupid compared to, apparently, the incandescent brilliance of my Super Mogambo Brain (SMB), which clearly sees nothing but total, unmitigated disaster from the current monetary and fiscal position of the US and the world, and although it seems so blindingly obvious to me, I figure my surprising genius is the result of my (for one thing) living under a yellow sun, here on this planet you call Earth, and which we call Glabbynakker on my home planet, which refers to the shiny excretory pellets, which are little blue, watery balls, of a stupid creature called Glabby (actually the Greater Glabby, versus the Nervous Glabby, which doesn’t stink as much), and if you could see a glabbynakker and the Earth side-by-side, you would see the resemblance and understand why we don’t call it, like I said, Earth, and it has nothing to do with the fact that Earthlings are, apparently, morons, although the analogy of comparing Earthling intelligence to alien poopie is entirely apt, in a kind of rude, crude and inappropriate way that was not intentional at anytime heretofore, up until now, when I just thought of it, so that, from now on, it will be.

But I digress, and more to the point, if these people had been polite to me, I would have told them that they are obviously new around here, because everybody in THIS stinking little one-horse, provincial little nowhere town full of buttheads, already knows EXACTLY how I feel about the Federal Reserve creating so much excess money and credit (inflation in the money supply), especially so that the Congress can deficit-spend it (inflation in the debt), which results in inflation in prices of something, or some things, or most things, or all things, which has, fortuitously, resulted only in inflation in stock prices, inflation in bond prices (thus driving interest rates low), inflation in housing prices, although it has also produced inflation in the size and expense of government, inflation in the percentage of the population living on the government’s handouts, simmering inflation in consumer prices that will soon explode, (making the poor poorer), inflation in wages and – lest we forget! – the literal creation of the derivatives market and its massive subsequent inflations in themselves and Every Freaking Thing (EFT)! Hahahaha! We’re freaking doomed!

But the essential point is not that the idiotic Congress and the Federal Reserve disregarded the Constitution because some stinking, know-nothing lowlife bastards on the Supreme Court in 1934 said, and reaffirmed at every legal challenge since then, that it was OK to have a fiat money instead of gold as money even though the Constitution itself said otherwise, but what happens when you start creating too much money and credit; you get inflation in prices.

And as for the stock markets? They will go up and down, but mostly up, with heart-stopping falls and amazing rises, because there is a constant torrent of government deficit-spending money coming into the economy and it all, every last dime of it, will eventually come finally to rest as a profit in somebody’s pocket, and that person will have to “do something” with it.

And since the stock market will have been going up, up, up due to all the previous trillions of dollars coming into people’s pockets and being “put to work” in the stock market, it is a “natural” place to invest all of this money, as it is one of the few places such immense amounts of money, such mountains of money, such Unbelievable Freaking Scads (UFS) of money, can be conveniently “put to work”, being merely stored on computers.

Then, one day, you’re sitting on the sofa watching TV and listening to your family whining about something, probably about how you watch too much TV and eat like a pig until now you are a fat, stupid slob with stains on the front of my shirt and down the front of my pants and even on my socks (“Mom! Dad spilled food on his socks and now his feet smell even worse!”), which is really getting on my nerves, if you really want to know.

So there you are, not suspecting anything when, suddenly, out of a clear blue sky, one of Taleb’s “Black Swan Events” will come bursting onto the scene and everything will be wiped out, either figuratively (in which case gold, silver and oil should soar in price as inflation in the prices of necessities soar, as indeed the Black Swan Event could be massive inflation in food prices and a bond market collapse), or literally (in which case it won’t matter because we will all be dead).

Hoping for the best, go with gold, silver and oil! It’s not only the smart play, but also easy, as in, “Whee! This investing stuff is easy!”

Stock Market Rallies: Nothing Lasts Forever originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today’s markets. Its been called “the most entertaining read of the day.”

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