***Citibank Internal MEMO......in their own words***

Quote from flytiger:

The number one thing that that really drives gold demand is 'bad news'. Pretty simple.
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If Citibank triples in one week it doesnt means the world thinks the financial system is saved and they don't have all that shit on their balance sheet anymore.

It just means there are more buyers than sellers.

Same should apply to gold.

Always these crap analyses on what gold did on a day to day perspective.

Doesnt has to have a reason.

Just more buyers than sellers.
 
Why Gold?

If massive inflation hits then ag and energy commodities will soar and keep pace with more utility than gold (after all what we are trying to do is protect purchasing power right?, no guarantee that gold will keep pace with higher ag and energy prices recent history teaches us that, also no guarantee that gold will do anything in financial chaos either, after all I think the current crisis qualifies and despite all the fear and all the bailout money having been created what has gold done? If you had posed the scenario we are in to any gold bug a year ago you would have been told that gold would be at $2000 by now, so much for that)

If the whole system collapses then again not sure why physical gold (as you can forget any kind of non physician instrument in such a situation, GOLD futures/ETF please don’t make me laugh) would retain any more value than farm land, grain in a silo, gasoline, livestock, or a cache of weapons and ammo.

Wouldn't it be ironic if gold bugs who have lived in fear of the great collapse, be it of currency or social order, for most of their life wake up one day only to find that every bit of chaos they predicated has come to pass but that their big pile of gold is essentially useless and has done nothing to protect them after all. These guys at citi not only have no credibility (catching a bubble in gold once every 20 years does not make you a market oracle) but they are alarmist chicken little’s to be charitable, to be cynical they are probably long a bunch of gold futures and are now in a panic because gold is not doing anything despite all the chaos and money pumping.

Looking at a chart of gold it is clearly in a downtrend and if anything this latest rally is a great place to get short using the very close DTL as a stop. Certainly looks to me as though Gold hits $600 before it sees $1000 again but I would rather stick with long positions in ag complex for now and then energy next before I would think about touching gold.
 
Quote from Mvic:

Why Gold?

If the whole system collapses then again not sure why physical gold (as you can forget any kind of non physician instrument in such a situation, GOLD futures/ETF please don’t make me laugh) would retain any more value than farm land, grain in a silo, gasoline, livestock, or a cache of weapons and ammo.
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Physical Gold is money... period... It represents a store of value and an asset which is noone elses liability... It always has and it always will. Not that I am opposed to other commodities (quite the contrary), but it can be difficult to stick x barrels of crude, or y bushels of softs into your briefcase and be off. But you can for a few kilo's of gold and easily convert this to the local medium of exchange anywhere in the world.

IMO, in a world where currency devaluation and uncertainty reigns, Gold is a prudent storehouse for cash and a little insurance policy. I will leave the speculation and timing to others.

Or as Ron Popeil is known for saying... "Set it and forget it" :)
 
Quote from Mvic:

Wouldn't it be ironic if gold bugs who have lived in fear of the great collapse, be it of currency or social order, for most of their life wake up one day only to find that every bit of chaos they predicated has come to pass but that their big pile of gold is essentially useless and has done nothing to protect them after all. These guys at citi not only have no credibility (catching a bubble in gold once every 20 years does not make you a market oracle) but they are alarmist chicken little’s to be charitable, to be cynical they are probably long a bunch of gold futures and are now in a panic because gold is not doing anything despite all the chaos and money pumping.

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Most interesting and insightful point.
 
Quote from ehorn:



IMO, in a world where currency devaluation and uncertainty reigns, Gold is a prudent storehouse for cash and a little insurance policy. I will leave the speculation and timing to others.
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Agreed. Nothing wrong with a little insurance policy.

Looking at Long term(>50 years) crb index chart has to be cause for concern for commodities though. Looks like they fell off a cliff.
 
Can one walk into a local bank in the US with a bar of gold and exchange it for US dollars??

Has anyone actually done this?


SteveD
 
Quote from Mvic:

Why Gold?

If massive inflation hits then ag and energy commodities will soar and keep pace with more utility than gold (after all what we are trying to do is protect purchasing power right?, no guarantee that gold will keep pace with higher ag and energy prices recent history teaches us that, also no guarantee that gold will do anything in financial chaos either, after all I think the current crisis qualifies and despite all the fear and all the bailout money having been created what has gold done? If you had posed the scenario we are in to any gold bug a year ago you would have been told that gold would be at $2000 by now, so much for that)

If the whole system collapses then again not sure why physical gold (as you can forget any kind of non physician instrument in such a situation, GOLD futures/ETF please don’t make me laugh) would retain any more value than farm land, grain in a silo, gasoline, livestock, or a cache of weapons and ammo.

Wouldn't it be ironic if gold bugs who have lived in fear of the great collapse, be it of currency or social order, for most of their life wake up one day only to find that every bit of chaos they predicated has come to pass but that their big pile of gold is essentially useless and has done nothing to protect them after all. These guys at citi not only have no credibility (catching a bubble in gold once every 20 years does not make you a market oracle) but they are alarmist chicken little’s to be charitable, to be cynical they are probably long a bunch of gold futures and are now in a panic because gold is not doing anything despite all the chaos and money pumping.

Looking at a chart of gold it is clearly in a downtrend and if anything this latest rally is a great place to get short using the very close DTL as a stop. Certainly looks to me as though Gold hits $600 before it sees $1000 again but I would rather stick with long positions in ag complex for now and then energy next before I would think about touching gold.
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That's why you have to think outside the box. Try Osmium?

:D
 
Quote from drsteph:

That's why you have to think outside the box. Try Osmium?

:D
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Certainly more exciting than Gold, in the fugu sashimi sense. On the plus side, if the world devolves in to anarchy and no one will take your precious metal at least with Osmium you can take a sniff and solve all your problems, not so with Gold.

:)

On a more serious note, keep an eye on the Baltic Dry Index to potentially signal a turn in commodities and DRYS and an early sign that credit is flowing again (letters of credit) and that the global economy is picking up steam, could signal an entry point in FXI.
 
Just to be hedged against the worst case scenario I'm going into food production, maybe sea salt production too.. and if the shit never hits the fan I'll grow legacy veggies and herbs in a classy organic garden at the very least... seems like a no-downside thing to me..
 
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