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Does anyone believe the posted price of gold ? - PART II: the Goldening

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Old
01-03-2014, 03:32 PM
  #176
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You're about to get charted.

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01-04-2014, 11:29 AM
  #177
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What would you do with 444 billion dollars ?

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01-06-2014, 01:24 AM
  #178
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http://www.bloomberg.com/video/gold-...Z2h~Iwwhg.html

In 1981, Rickards was involved in the Iran hostage crisis.[4] As general counsel for the hedge fund Long-Term Capital Management (LTCM),[5][6] he was the principal negotiator in the 1998 bailout of LTCM[7] by the Federal Reserve Bank of New York.

Rickards worked on Wall Street for 35 years.[8] In 2001, he began using his financial expertise to aid the U.S. national security community and the U.S. Department of Defense.[9]

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01-06-2014, 07:55 PM
  #179
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Originally Posted by kov View Post
... if the concern being raised here is that central banks are manipulating the price of gold to artificially reduce the price, what is the conjecture as to how they're achieving it?
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Originally Posted by LolClarkson View Post

I'll tell you how they do it later. It's quite simple
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Bump.

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01-06-2014, 10:52 PM
  #180
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In order for it to make sense, I will walk through the history of it.

They used to do it conventionally and in the open by dishoarding their gold reserves at strategic moments, and then by dishoarding their gold reserves regularly, more often, even every day, as the United States, United Kingdom, and seven of their Western European allies did during the 1960s through a public operation called the London Gold Pool. The London Gold Pool held the gold price at $35 per ounce until it collapsed in March 1968 under rising demand that drained the U.S. gold reserve from 25,000 tonnes down closer to the 8,100 tonnes officially reported today. Gold went up 2300%

After the collapse of the London Gold Pool the United States and its allies regrouped to figure out how to rig the gold market surreptitiously -- not just with dishoarding but also with the so-called leasing of gold; with the issuance of gold derivatives, including futures and options; and, more recently, with high-frequency trading undertaken through investment houses that are happy to serve as government's intermediaries in the gold market, since they can front-run government trades. When the rigging is done surreptitiously like this, much less central bank gold has to be dishoarded and the dishoarding that is done has far more suppressive influence on the price.

- the British economist Peter Warburton discerned that central banks were using investment banks to issue derivatives throughout the commodity futures markets to siphon away money that was seeking a hedge against inflation. That is, derivatives siphon money away from the hoarding of real goods, hoarding that would drive up consumer price indexes and make inflation even more obvious to the markets and the public. Most of these derivatives are essentially naked short positions that cannot be covered.



Definition of 'Naked Shorting'

The illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short. But due to various loopholes in the rules and discrepancies between paper and electronic trading systems, naked shorting continues to happen.

While no exact system of measurement exists, most point to the level of trades that fail to deliver from the seller to the buyer within the mandatory three-day stock settlement period as evidence of naked shorting. Naked shorts may represent a major portion of these failed trades.


Investopedia explains 'Naked Shorting'

Naked shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns.


Warburton concluded that the prerequisite of a hedge against monetary debasement would have to be some asset that was not associated with a futures market. He suggested good farmland and clean water supplies. For as the saying goes: "The futures markets are not manipulated; the futures markets are the manipulation."

This market rigging by central banks and their intermediaries explains the great disparagement of gold today: that, despite its tremendous price increase over the last decade, gold has not kept up with inflation since the metal's last great rise around 1980. Somehow no one who disparages gold asks why it has not kept up with inflation. The answer is that gold derivatives have created a vast imaginary supply of gold for which delivery has not been demanded, since most gold investors choose to leave their gold purchases on deposit with the bullion banks that sold them the imaginary gold.

As a result the world now has a fractional-reserve gold banking system that is leveraged 100 to 1.

As a result the world now has a fractional-reserve gold banking system that is leveraged in the extreme.

Yes, all commodity futures markets have created paper promises of supply that could not be covered by real product and have always been settled in cash. But most commodity markets are for goods that eventually are delivered and consumed.

Gold is different, for gold is not consumed but rather hoarded, as a means of exchange, as money, even as most gold purchased in the futures markets is never delivered at all but rather left on deposit with those financial institutions that purport to sell it. This system has produced a very disproportionate amount of imaginary, elastic, but undeliverable supply, even as people buy gold precisely because they assume that its supply is not elastic, that its supply is limited to total past production plus annual mine production.

You can get an idea of the vast imaginary supply of gold by reviewing the incomprehensibly huge gold and interest rate derivative positions attributed to the U.S. investment bank JPMorganChase in the reports of the U.S. Comptroller of the Currency.

Just look at what happened today


Gold Flash Crashes, Halts Trading As "Velocity Logic" Circuit Breakers Triggered


UPDATE: Gold futures are back in the green for the day...



Rumors of a 'fat finger' abound from the gold futures pits but the precious metals complex just collapsed instantaneously... and the market was halted for the now traditional 10 seconds as circuit breakers were triggered, only this time instead of Stop Logic the event was "Velocity Logic" or lack thereof. Of course, the timing is perfect as it occurs right before the first POMO (Permanent open market operation)of the new year.

Definition of 'Permanent Open Market Operations - POMO'

When the Federal Reserve buys securities outright in order to permanently add assets to the Federal reserve balance sheet.

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01-06-2014, 11:03 PM
  #181
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^

These are all simply naked short positions set up by the Fed banks.


Just before the start of the first POMO of the new year, gold was slammed lower by 2.1% on more than 8000 contracts in what the CME subsequently said was not an erroneous trade. Humor aside, how the CME justified the immediately following 10 second halt, was trough the invocation of a "velocity logic" event, not to be confused with the familiar "stop logic" circuit breaker which we have profiled in the past. Which obvioisly brings up the question: what is a velocity logic event.

Here, straight from the exchange's mouth, is the explanation:

Description

Market Remains Open


An aggressing order that requires particular market scenarios (e.g., Fill and Kill, Minimum Quantity, Fill or Kill) that would trigger Velocity Logic will be rejected via an Execution Report-Reject message (tag 35-MsgType=8, tag 39-OrdStatus=8), with tag 58-Text=Order price submitted/derived violates Velocity Logic Threshold. The market will remain open.

Market Is Reserved


If the execution price has moved the market up or down outside a predefined points value within a predefined time period, the Velocity Logic functionality is triggered and the instrument is placed in reserved state for a predetermined amount of time.

The old stop "Stop logic" event. These ****ing guys...

It was precisely a month ago when, in "Vicious Gold Slamdown Breaks Gold Market For 20 Seconds" we wrote:

There was a time when, if selling a sizable amount of a security, one tried to get the best execution price and not alert the buyers comprising the bid stack that there is (substantial) volume for sale. Of course, there was and always has been a time when one tried to manipulate prices by slamming the bid until it was fully taken out, usually just before close of trading, an illegal practice known as "banging the close." It appears that when it comes to gold, the former is long gone history, and the latter is perfectly legal. As the two charts below from Nanex demonstrate, overnight just before 3 am Eastern, a block of just 2000 GC gold futures contracts slammed the price of gold, on no news as usual, sending it lower by $10/oz. However, that is not new: such slamdowns happen every day in the gold market, and the CFTC constantly turns a blind eye. What was different about last night's slam however, is that this time whoever was doing the forced, manipulation selling, just happened to also break the market. Indeed: following the hit, the entire gold market was NASDARKed for 20 seconds after a circuit breaker halted trading.

Moments ago it just happened again. As part of the already noted massive gold slamdown just before 9 am Eastern, when "someone" sold an epic 2 million ounces of gold in one trade, the CME just went dark for 10 seconds, blaming it on an appropriately named "stop logic" event.

What is Stop Logic? Basically, it is a the mother of all stop hunts, which takes out the entire bid stack and continues until such time as there is absolutely no liquidity left in the entire market.

Naked short BOOM

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01-06-2014, 11:40 PM
  #182
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For those keeping track, that's two more images from zerohedge.

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01-06-2014, 11:49 PM
  #183
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And it's funny to just select snippets of his posts and see where he's drawing them from. Most of the last two posts were copied and pasted from zerohedge and something called the Gold Anti-Trust Action Committee.

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01-07-2014, 12:20 AM
  #184
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Originally Posted by Ilkka Sinisalo View Post
For those keeping track, that's two more images from zerohedge.
You mean the biggest non neo keynesian financial news outfit ?

who would have though....

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01-07-2014, 12:37 AM
  #185
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Originally Posted by LolClarkson View Post
You mean the biggest non neo keynesian financial news outfit ?

who would have though....
Well, you wrote on page three of this very thread:

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Originally Posted by LolClarkson View Post
Considering the main sources of information on the thread are from Bloomberg, Wiki, the ECB and the Federal Reserve . Not Infowars (I hate Alex Jones), not ZeroHedge, not Daily Paul (never been on the site)

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01-07-2014, 01:04 AM
  #186
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Originally Posted by Ilkka Sinisalo View Post
Well, you wrote on page three of this very thread:
Tough for conspiracy nut like LolClarkson to not go back to his roots, eh?

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01-07-2014, 01:45 AM
  #187
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Originally Posted by Ilkka Sinisalo View Post
Well, you wrote on page three of this very thread:
Somebody asked me to explain how gold is controlled. I did.

It just so happened that I was using Zeroheges coverage of the story. Bloomberg almost always covers these manipulations too.

I'll check who covered it today


Gold Futures Rebound After Price Slump Triggers Trading Halt
Debarati RoyJan 06, 2014 3:32 pm ET[/SIZE][/B]

Jan. 6 (Bloomberg) -- Gold rebounded after a plunge triggered a trading halt in New York, while slowing growth for U.S. services increased demand for an alternative asset.

On the Comex, gold futures for February delivery fell as much as 2.1 percent in trading of more than 8,000 contracts, each for 100 ounces. CME Group Inc, which owns the exchange, halted trading for 10 seconds at 10:14 a.m. as prices dropped more than $30 an ounce in about a minute. That triggered a “velocity logic event,” Chris Grams, a CME spokesman, said in an e-mail. Prices settled little changed at $1,238 at 1:40 p.m.

“These kinds of price movements are becoming very common, and it seems some players are putting in very large orders to trigger this kind of slump,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “The exchange needs to look into these kind of spikes.”

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01-07-2014, 01:47 AM
  #188
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Originally Posted by Wetcoaster View Post
Tough for conspiracy nut like LolClarkson to not go back to his roots, eh?


Yeeah ok

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01-07-2014, 01:54 AM
  #189
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Where is that stock bug ? Paging the stock bug and Warren Buffet fans..

On December 31st, 1964, the Dow Jones Industrial Average stood at 874. On December 31st, 1981, it stood at 875. In Buffett’s words, “I’m known as a long term investor and a patient guy, but that is not my idea of a big move.”

To see in stark black and white how the US stock market could spend 17 years going nowhere– even when the GDP of the US rose by 370% and Fortune 500 company sales went up by a factor of six times during the same period– the price chart for the Dow is shown below.


So the US stock market suffered a Japan-style lost decade, and then some. Back to Buffett, again:

“To understand why that happened, we need first to look at one of the two important variables that affect investment results: interest rates.



“These act on financial valuations the way gravity acts on matter: The higher the rate, the greater the downward pull. That’s because the rates of return that investors need from any kind of investment are directly tied to the risk-free rate that they can earn from government securities.



“So if the government rate rises, the prices of all other investments must adjust downward, to a level that brings their expected rates of return into line.



“In the 1964-81 period, there was a tremendous increase in the rates on long-term government bonds, which moved from just over 4% at year-end 1964 to more than 15% by late 1981. That rise in rates had a huge depressing effect on the value of all investments, but the one we noticed, of course, was the price of equities.

“So there–in that tripling of the gravitational pull of interest rates- -lies the major explanation of why tremendous growth in the economy was accompanied by a stock market going nowhere.”




So how you feel about asset allocation this year should largely be a function of how you feel about interest rates.

And if you fear that interest rates are more likely to rise– triggered, perhaps, by a combination of Fed tapering and general weariness / revulsion at the manipulation of so many financial assets– then you should perhaps question your commitment to western equity markets as well as to bonds.

As Buffett wrote in a 1999 article in Fortune magazine, “Secular equity bull markets occur when long-term rates are dropping… and secular bears occur when rates are rising.” This is hardly rocket science.

Of course, 2014 could be yet another year in which equity markets rise further, driven by hopes and expectations of still more QE. But that’s not a bet we’re entirely comfortable making.

Since we’re primarily attracted by valuations and not by momentum, we’re now fishing for equities in a clearly demarcated pool (Asia and Japan– because that’s where values are most compelling).

We are not interested in most western markets because the value isn’t visible to us and the underlying growth (fundamentals, anybody?) looks pathetic.

And our monetary authorities have showered financial markets with kerosene by ensuring that the conventional ‘risk-free’ alternative to equities (i.e. government debt) is anything but.

Yet our exposure to ‘alternative’ assets, primarily precious metals, proved variously problematic last year.

2013 was the year that the mainstream financial media went aggressively anti-gold, and in his magisterial (and deeply witty) 2013 Year In Review, Cornell chemistry professor and economic agent provocateur David Collum cites three pertinent quotations from the New York Times:

“There is simply nothing in the economic picture today to cause a rush into gold. The technical damage caused by the decline is enormous and it cannot be erased quickly. Avoid gold and gold stocks”;



“Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels”;



“The fear that dominated two years ago has largely vanished, replaced by a recovery that has turned the gold speculators’ dreams into a nightmare.”


But as Collum also points out, these quotes are from 1976, when the spot price of gold fell from $200 to $100 an ounce. Thereafter, gold rose from $100 to $850.

Why do we continue to keep the faith with gold ? We can encapsulate the argument in one statistic.

Last year, the US Federal Reserve enjoyed its 100th anniversary, having been founded in a blaze of secrecy in 1913. By 2007, the Fed’s balance sheet had grown to $800 billion.

Under its current QE programme (which may or may not get tapered according to the Fed’s current intentions), the Fed is printing $1 trillion a year.

To put it another way, the Fed is printing roughly 100 years’ worth of money every 12 months. (Now that’s inflation.)

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01-07-2014, 02:02 AM
  #190
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http://www.zerohedge.com/news/2014-0...mple-statistic


Aren't you supposed to provide a link to the source of the information that you're just copying and pasting here? I'm surprised you're not a bigger fan of Rand Paul, considering how much you each seem to enjoy plagiarizing the intellectual property of others.

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01-07-2014, 02:06 AM
  #191
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And by the way, that zerohedge blog post was reposted from something called sovereignman.com. Here's the description from the front page of that website:

Quote:
Are You "Uninsured" Against Governments And Central Banks Gone Wild?

The truth is that the fiat currency experiment is ending – in fact the US dollar has lost 97% of its value since 1913. If you have not already taken steps to protect yourself then you risk losing everything. Your livelihood. Your savings. Your house. Your car. Your retirement funds. Your precious metals. Even your personal safety.

It does not have to be that way though, and Sovereign Man is all about taking steps to protect your assets and your life, steps that make sense no matter what happens, so that you can sleep well at night knowing that you’re on the right side of history.

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01-07-2014, 02:41 AM
  #192
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Originally Posted by LolClarkson View Post


Yeeah ok
The reference was to Zero Hedge.

BTW I thought you were not responding to me any longer.

Along with your other mental health issues discussed earlier, it seems you are having serious short term memory problems. You should consider getting help from a mental heath professional.

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01-07-2014, 02:45 AM
  #193
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Originally Posted by Ilkka Sinisalo View Post
http://www.zerohedge.com/news/2014-0...mple-statistic


Aren't you supposed to provide a link to the source of the information that you're just copying and pasting here? I'm surprised you're not a bigger fan of Rand Paul, considering how much you each seem to enjoy plagiarizing the intellectual property of others.
Pretty clearly LolClarkson is not certain exactly what the underpinnings of his loony arguments might be. He is all over the map and as has been pointed out by a number of posters as many of his posts are contradictory and internally inconsistent.

Not all that surprising when once considers the source.


Last edited by Wetcoaster: 01-07-2014 at 04:52 AM.
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01-07-2014, 03:38 AM
  #194
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01-07-2014, 08:22 AM
  #195
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Originally Posted by LolClarkson View Post
Somebody asked me to explain how gold is controlled. I did.
I did; thanks. Just so I'm clear, you are saying the Fed is selling gold contracts in large enough quantities to move markets and drawing an analogy of that to naked shorting? The analogy is severely flawed, but I get your point: the futures contract is used because it leverages larger quantities through it's notional value. Let's just stick to that and leave the semantic debates about naked shorting to others.

So presuming that the Fed has been shorting gold futures throughout the run-up, where would all those losses appear? And what evidence is there that they've been doing this? And by evidence I mean real evidence, not just market drops. Frankly, I've seen fat-finger crashes happen firsthand and the examples you cite don't surprise me at all and happen on a regular basis. Automated trading has increased their frequency, because somebody just has to feed an algo a parameter with too many zeros and the algo will do way more damage than a human trader ever could.

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01-07-2014, 08:53 AM
  #196
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Originally Posted by Ilkka Sinisalo View Post
You probably need to have a job in order to earn money to buy gold.

Check, Check and yeah, pretty please with a cherry on top, just simply: **** you.

I'm weighing out the risk reward ****. I knew at 880 that it could be a good time. Now at 910 I certainly know it was a good time. Whatever.


I saw this lunatic post:

Quote:
What would you do with 444 billion dollars ?
What in the world is wrong with you people? Oh I know, basicially none of you have read or engaged in eco sciences/ money politics.

One person making 444 billions dollars would lead to liquidity shortage elsewhere. Less liquidity, less demand. Less demand, our beautiful supply economy crashes. No liquidity, maybe a credit? More money, lower interest rates, lower yields and so on and so on.

I won't argue this further, since most of you don't give a flying **** anyhow. But one (or ten) persons making 444 billion dollars a year, would be like one person eating 90.000 calories a day.

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01-07-2014, 09:01 AM
  #197
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No one is disagreeing with him on this (I don't think): it's pretty basic stuff

What I'm challenging is his notion that gold will always be the best thing to invest in

Limited options for a limited mind I guess

Well at this point in history, it might be the worst thing. You'd have to be very slick and markets must go crazy in order for you to make enough money on gold speculation, in order to buy yourself some land and ****. Sustainable stuff you know?


Things to invest in: Arms and ammo, before dat gov. shuts the door on that. Land, seeds, water (purification systems). Your health and such.

In case of inflation: goods and guns. In case of deflation: cash and guns. In any case you'll be damned if you just simply sit on some gold coins ... and the moment you go out to buy something with that gold, some other guys will simply take it away, unless you can defend yourself.

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01-07-2014, 09:15 AM
  #198
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Originally Posted by NYRFANMANI View Post
What in the world is wrong with you people? Oh I know, basicially none of you have read or engaged in eco sciences/ money politics.

One person making 444 billions dollars would lead to liquidity shortage elsewhere. Less liquidity, less demand. Less demand, our beautiful supply economy crashes. No liquidity, maybe a credit? More money, lower interest rates, lower yields and so on and so on.

I won't argue this further, since most of you don't give a flying **** anyhow. But one (or ten) persons making 444 billion dollars a year, would be like one person eating 90.000 calories a day.
No one is realistically talking about one individual making $444 billion a year. It came up from a Warren Buffett quote when he was talking about the utility of investment options where he talked about what you would get out of buying all the world's gold or using that money to buy up an equivalent value of companies.

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01-07-2014, 09:17 AM
  #199
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Originally Posted by Troy McClure View Post
No one is realistically talking about one individual making $444 billion a year. It came up from a Warren Buffett quote when he was talking about the utility of investment options where he talked about what you would get out of buying all the world's gold or using that money to buy up an equivalent value of companies.

Ok good. Because that would be simply economic fascism.

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01-07-2014, 09:23 AM
  #200
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Originally Posted by NYRFANMANI View Post
Ok good. Because that would be simply economic fascism.
While the example was presented as a choice made by one person, no one has enough money to make it happen, but you can expand it pretty easily.

Do the people who buy stocks that pump out $444 billion in annual dividends end up with a better investment than the people who buy gold and bury it in coffee cans in their back yards? If you go back a way in the discussion, you can find someone comparing the returns of gold versus GE stock, and GE stock totally destroyed gold's returns over a 30 year period.

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