Haystack November 2011

[Indiana Jones]

The only solution left that will definitely solve the current Euro problems and that’ll save the Euro is market priced Eurobonds.

Gee, and this comment is posted by the most prolific poster on a board called "Freegold Forum"... don't you think it possible that a revaluation of physical gold may also be a contender to solve these Euro (debt) problems?

Could be, but why are Eurobonds not issued/ quoted in gold?
When they were, we wouldn’t have such huge euro problems.

[Indiana Jones]

Yes, Gold prices will go up and up

And in the end physical gold will win

But freegold theory could end up here:
(other solutions for the same problem)

[Blondie]

why are Eurobonds not issued/ quoted in gold?

That would simply encumber gold with more claims, and would prove very difficult to repay should gold be revalued significantly higher in the interim.
Besides, the market has not demanded bonds be denominated in gold. Only a fool would actually issue such a thing, IMO.
Theoretically possible, but highly unlikely.

But freegold theory could end up here:
(other solutions for the same problem)

Being overruled with force? Who do you propose would be administering this force? Against whom?

[Indiana Jones]

But freegold theory could end up here:
(other solutions for the same problem)

Being overruled with force? Who do you propose would be administering this force? Against whom?

Now be honest with me.

Cosa Nostra, Ndrangheta, and other names …. There was never honesty among these people or organizations for the past several 100 years and there will never be.

And that is what we are dealing with in our western world right now. White collar Cosa Nostra versus white collar Ndrangheta and other names. These men and organizations are often called ‘the men behind the curtain’. Like Armstrong describes these financial people and organizations are really vivid. They own politics, they own judiciary and they own US.

Do you really think they want an honest financial system like freegold for us the people?

Maybe you believe so, but I don’t.

Indy

[Gwyde]

The rationale for investing in gold bullion by way of elimination.
Nothing really is what it claims to be:
- Equity isn't equitable,
- Securities aren't secure,
- Bonds don't really bind debtor to creditor, (instead they're traded, renegotiated and get CDS's interposed)
- Gold delivery contracts are bets between a seller who doesn't own and a buyer who doesn't want to purchase and take delivery...
- Only gold bullion remains gold bullion...

[Rasta]

SEC's Lack of Regulatory Authority
Now What's Going On

[Rasta]

Financial Sense Newshour: John Williams: Third Quarter GDP Numbers Have No Relation to Reality



mp3 podcast [29:30]

[Blondie]

The rationale for investing in gold bullion by way of elimination.
Nothing really is what it claims to be:
- Equity isn't equitable,
- Securities aren't secure,
- Bonds don't really bind debtor to creditor, (instead they're traded, renegotiated and get CDS's interposed)
- Gold delivery contracts are bets between a seller who doesn't own and a buyer who doesn't want to purchase and take delivery...
- Only gold bullion remains gold bullion...

We could also say that all tangibles are what they are, but yes as far as those for whom other tangibles have been affected by diminishing marginal utility are concerned, gold is where its at.

Do you really think they want an honest financial system like freegold for us the people?

Maybe you believe so, but I don’t.

I don't believe it comes down to what some nefarious group want, at the end of the day.
It comes down to what the market wants, and Gwyde has succinctly identified the logic which will eventually attain critical mass in the consciousness of said market.

I understand your thinking; I thought that way myself for much of my life (fatalistically) but I do so no longer.
To be fatalistic is to unnecessarily surrender your sovereignty, your power to make your own choices. En masse fatalism is what gives these groups you speak of their power. Individuals give it away. I think you are underestimating the scope of the pending change, and quite what effects seemingly small changes may produce.

Sometimes things change, but only when they must.

[Indiana Jones]

Tuesday, November 15, 2011

Farm Land - the Latest Bubble

In private conservations with various friends I have been discussing the very real possibility of a bubble-like price increase in farm land across this nation. There are several reasons but suffice it to say that soaring grain prices have led not only farmers, but investors to hit the trail looking high and low for tracts of good farmland that they can scoop up.

Farmers acquiring top quality farm land to increase their production is a normal response to higher food prices as supply will need to increase in order to keep up with the growing global demand for food. I do however have serious misgivings when I see hedge funds, and other assorted characters seeking to capitalize on this situation by setting up vehicles designed with the sole purpose of acquiring farmland for speculative reasons. This smacks of a mania to me and today that was pretty much confirmed by a report out of a conference held in Chicago which was hosted by the Federal Reserve Bank of Chicago.

The Chicago branch of the Fed, and the Kansas City branch, both reported that farmland values increased 25% from the previous year (according to a report by Dow Jones). This was the largest increase since 1977.

I have always been a fan of the American farmer and am pleased to see these hard working folks reap some of the benefits of increasing global demand for their product as well as seeing their land rise in value, but I am very worried that this could easily turn farmers against wild-eyed speculators who are chasing land, not directly for its productive capacity and value, but rather for an investment which they can later flip to another speculator. We have all seen what these fools did to the real estate market after packaging those mortgages into so many combinations of letters of the alphabet securities (CDO's, SIV's, etc.) that one could hardly keep up with them all. What happens if we see a repeat of that folly?

Obviously, some speculative buyers of farmland will lease the land out to farmers for agricultural use but the notion of hedge fund money sloshing into and out of farmland makes me extremely uneasy. What might happen if enough of these speculative buyers amassed significant holdings of quality farm only to see a drop in value at some point down the road? Would we witness the first domino falling and setting off another chain reaction like we saw in 2008 or any other bubble that has come and gone?

Maybe - Maybe not - all I know is that the combination of hedge funds/investors and farm land does not sit well with me.

Posted by Trader Dan at 4:16 PM

[Goudvink]

I found an interesting article about gold quality swaps between the US Treasury and the Bank of England. A gold quality swap is a trade in different grades of gold. This information suggests that the US Treasury needed to sell its coin melt bars for good delivery bars in 1981 as a part of the hostage deal with Iran in January 1981. This would suggest that the US Treasury sold all of its good delivery bars more than 30 years ago.

'The referenced gold quality swap was for the expressed purpose of procuring “good delivery bars” of gold bullion. What the good delivery bars were required for at that time is moot. Known [advertised] U.S. gold reserves [8,100 metric tonnes] are supposed to contain 4,500 tonnes of good delivery bars of gold bullion – which the U.S. Treasury has steadfastly maintained has not been altered or otherwise “in play” for decades. The fact that America needed to procure good delivery bars tells us that back in 1981 – the U.S. DID NOT POSSESS ANY GOOD DELIVERY BARS of gold bullion. Additionally, the notion that America needed to mobilize “coin melt” as early as 1981 would carry with it the strong likelihood that the U.S. has “burned through” or squandered their ENTIRE STASH of sovereign gold bullion – and perhaps owns NONE.'

http://news.goldseek.com/GoldSeek/1321292580.php