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Author Topic: It's Official! Gold is a Flight to Safety!  (Read 1870 times)
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tamo42
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« on: 2011 Apr 19, 01:23:24 pm »

If you've been following the markets at all this week, you have probably heard that the ratings agency, Standard & Poor, downgraded the outlook for US Treasury debt. Essentially SP said that the US is headed down a bad road, and if it doesn't change course, SP will consider downgrading the debt.

Despite this announcement being very wishy-washy and tentative, the markets took it as a serious sign. After all, the ratings agencies are a cartel that is licensed by the government. So if these guys, who are in the government's pocket, are saying things are bad, things must be really bad. And that's true.

Meanwhile, the EU continues to have problems. Finland just had an election that promises to cause trouble for those wanting to bail out more debtor PIIGS, and yields on Greek and Spanish borrowings are rising rapidly.

The net effect of all this was that the dollar rose a bit (as the best of the worst i guess) and the markets took a hit on the chin.

Into this unsteady mix, the university of Texas announced that they converted right about a billion dollars of paper gold holdings into physical gold holdings. In addition, gold prices reached record highs (again). This shows us that the world now considers gold as a relatively safe place to park money.

This sounds trite because we all know that gold has always been a store of value, but you have to realize that the monetary authorities have spent the last 100+ years trying to prove that to be a relic of the past. The markets are showing them that gold is still a preferred source for sanity and trust, unlike the various fiat currencies of the world.
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Neal McSpadden
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badon
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« Reply #1 on: 2011 Apr 19, 01:27:20 pm »

Wow, Universities are buying gold? Next it'll be high schools, then elementary schools, then lunch ladies, then the school kids...

After all that, I'm sure the parents will start to catch on, and then boom!
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tamo42
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« Reply #2 on: 2011 Apr 19, 01:31:31 pm »

Yep. The guys at UT are catching on. Of course, they are holding their physical gold in New York vaults, probably at the Fed - and probably in a pooled account. So I don't think they have truly processed the message that the banking system is not to be trusted. They are getting there though.

Universities operate pretty large funds overall. I'd love to see more announcements like this.
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« Reply #3 on: 2011 Apr 19, 01:52:36 pm »

As news of record highs keep rolling in day after day, week after week, month after month, year after year, you can bet people will catch on eventually.
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If families are a problem for the system, then we must reject the system, not the families.
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« Reply #4 on: 2011 Apr 19, 05:56:19 pm »

I am suspicious of the timing of the S&P's announcement. Like Tamo said S&P is licensed by the government. Why now, especially with all the chaos around the world?
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tamo42
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« Reply #5 on: 2011 Apr 19, 06:05:07 pm »

It's a good question. A tail wagging the dog to distract from something else?
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« Reply #6 on: 2011 Apr 19, 06:33:52 pm »

It's a good question. A tail wagging the dog to distract from something else?

S&P's announcement was preceded by Pimco's Gross announcement of treasuries selloff in March. What kind of a message are they trying to telegraph? One more deflationary sell-off like the fall of 2008??
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badon
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« Reply #7 on: 2011 Apr 19, 07:15:30 pm »

They have to follow up with some kind of announcement, or they look like an "information minister" from more openly criminal governments. If they completely ignore the news it gets bigger. If they acknowledge it, then it's easier for them to distract people by bombing "terrorists" in an orphanage or a hospital or something.
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If families are a problem for the system, then we must reject the system, not the families.
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dobedo
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« Reply #8 on: 2011 Apr 19, 07:19:03 pm »

Time to up the debt ceiling!
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badon
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« Reply #9 on: 2011 Apr 19, 07:35:02 pm »

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/18_James_Turk_-_Negative_US_Credit_Watch_Signals_Dollar_Collapse.html
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If families are a problem for the system, then we must reject the system, not the families.
Founder of the Coin Compendium (forum, blogs, calendar, images, donate, contribute).
LBC makes you rich, with a free ebay gift certificate awarded every month!
The Coin Compendium and the china-mint.info forum, censure, disclosure.
Do not PM questions. Answers should be publicly available.
Backup is not enough. Protect your data with MultiPar.
Writer of LBC Chinese coin investment articles (list).
About me: User:Badon - MediaWiki.org
Badon effect: type 1 to 8, type 9.
I type faster on a TypeMatrix.
Use my work. Give credit.
Coin, medal, whatever!
Coin storage advice.
FreeArc is amazing.
User contributions for Badon - Coin Compendium
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