New record gold price today

[Sparky]

The spot price spiked to $1574.70 shortly after 2 PM EDT today. This breaks the previous intraday record of $1570 set on April 29.

This is significant for two reasons:
1) It's mid-July, which is historically the weakest time of the year for gold.
2) It comes after many media-types and financial experts had declared that the gold bubble had burst. I'm pretty sure that burst bubbles aren't typically followed by record highs two months later.

[Large Sarge]

this is all the mess in the Euro, a lot of folks are realizing their is no solution
and they look at the U.S. and the potential "debt ceiling" issues, etc

and there are no safe havens

I believe it was Jim Willie (or maybe james turk)?
anyway one of them said in 2008-2009, during the lehman collapse, everyone fled to the dollar / treasuries as a safe haven, and then got burned

those that fled to the Euro got burned also (greece, etc)

so he said they all learned their lesson, and this time they will all flee to gold and silver...

[willie pete]

The spot price spiked to $1574.70 shortly after 2 PM EDT today. This breaks the previous intraday record of $1570 set on April 29.

This is significant for two reasons:
1) It's mid-July, which is historically the weakest time of the year for gold.
2) It comes after many media-types and financial experts had declared that the gold bubble had burst. I'm pretty sure that burst bubbles aren't typically followed by record highs two months later.


from my perspective, I hope it continues to spike

[Sparky]

For the record, Zero Hedge points out that the record is still $1577 on May 2. But this is unusual strength for this time of year, and it has clearly dispelled the "bubble" theory.

[osoab]

What does this say with the lack of a move in silver? Still under 40 with record gold.

[Sparky]

What does this say with the lack of a move in silver? Still under 40 with record gold.

I think it says that the move from $35 to $50 was driven by speculation and momentum. Silver historically overshoots and undershoots. It's nicknamed "the restless metal".

[Son-of-Liberty]

Well we cracked 1577.

Silver will take off again just might take awhile to gain some momentum.

[JohnQPublic]

I think it says that the move from $35 to $50 was driven by speculation and momentum. Silver historically overshoots and undershoots. It's nicknamed "the restless metal".

I think the move to $50 was some of the short covering we have been talking about all last year and this year. For the moment it is under control so the price came back down to the real level. Gold moving up now allows silver to follow rationally. GS ratio is now ~43. In 2008-2010 it was in the 60s and 70s.

[Son-of-Liberty]

Silver almost up $2 today. Hoping this holds.

[Dogman]

Silver almost up $2 today. Hoping this holds.

Watch out, if silver gets too frisky, Silver Art bar will chime in He really wants to win "THE BET".

262

[osoab]

Silver almost up $2 today. Hoping this holds.

Just caught that myself. Nice move. To the moon!

[osoab]

I think this is on the back of the bucky's move down. Is this due to Bennie speech?

http://finviz.com/fut_chart.ashx?t=DX&cot=098662&p=m5

[mamboni]

Mamboni comments: The fraud that is unbacked paper money is close to collapse. Bernanke’s denial of gold is a biblical falling from grace. The entire world financial system is pyramided on top of the U.S. dollar, the world reserve currency. The Federal Reserve calls all dollars into existence upon the creation of an equal quantity of debt – these represent superdollars as they can be leveraged into many multiples of dollars by the private banking system. The dollar is backed by no commodity or asset – it is merely a receipt for the extinction of a debt. It is backed by nothing but the “full faith and credit” of the United States. The United States government is bankrupt by any corporate definition of bankruptcy. The total outstanding credit equaling all electronic and physical currency leveraged through fractional reserve lending upon Federal Reserve superdollars now equals ~$52 trillions. This total has not increased since 2008. In order for the fiat debt pyramid to not implode, new money equal to the interest owed on principal debt extant must be created. The private sector economy is in depression and is paying down debt which is extinguishing money. The federal government is attempting to prevent a deflationary collapse by running up gargantuan deficits and spend “for” and “create debt” for the private sector. In the end, nothing can prevent the eventual implosion of the fiat money system, either by deflationary collapse or hyperinflationary flame out. For thousands of years, hundreds of paper currencies have come and gone, destroyed by irresponsible government spending on wars, social welfare and sundry boondogles – today’s monetary and fiscal problems are nothing new – if you know your history. In every case of paper money collapse, the people and government always demand and revert to history’s most enduring and time-honored store of wealth: gold.



Fed Chairman Bernanke Says "Gold Is Not Money" ... But His Predecessor Alan Greenspan Disagrees




Submitted by George Washington (http://www.zerohedge.com/users/george-washington) on 07/13/2011 14:25 -0400

Agency Paper (http://www.zerohedge.com/taxonomy_vtn/term/335)
Alan Greenspan (http://www.zerohedge.com/taxonomy_vtn/term/9992)
Ben Bernanke (http://www.zerohedge.com/taxonomy_vtn/term/304)
Central Banks (http://www.zerohedge.com/taxonomy_vtn/term/10130)
Federal Reserve (http://www.zerohedge.com/taxonomy_vtn/term/9244)
Federal Reserve Bank (http://www.zerohedge.com/taxonomy_vtn/term/12403)
Goldbugs (http://www.zerohedge.com/taxonomy_vtn/term/11870)
John Exter (http://www.zerohedge.com/taxonomy_vtn/term/11469)
New York Times (http://www.zerohedge.com/taxonomy_vtn/term/303)
Precious Metals (http://www.zerohedge.com/taxonomy_vtn/term/11344)
World Bank (http://www.zerohedge.com/taxonomy_vtn/term/9351)
→ Washington’s Blog (http://www.washingtonsblog.com/)

Fed Chairman Bernanke told (http://blogs.forbes.com/afontevecchia/2011/07/13/bernanke-fights-ron-paul-in-congress-golds-not-money/) congress today:
‘Gold isn’t money’

But Bernanke's predecessor - former Fed chair Alan Greenspan - disagrees.

As I noted (http://www.washingtonsblog.com/2009/09/greenspan-backs-exeters-theory-of-gold.html) in 2009:

Professor Emeritus of Mathematics Antal Fekete has argued for years that gold is the ultimate - and only - safe haven when things really hit the fan.

For example, in 2007 Fekete wrote (http://docs.google.com/gview?a=v&q=cache:_CvekWxbQRwJ:www.professorfekete.com/articles/AEFCanWeHaveInflationAndDeflation.pdf+%22Exter%27s +Pyramid%22&hl=en&gl=us):

The grand old man of the New York Federal Reserve bank’s gold department, the last Mohican, John Exter explained the devolution of money (not his term) using the model of an inverted pyramid, delicately balanced on its apex at the bottom consisting of pure gold. The pyramid has many other layers of asset classes graded according to safety, from the safest and least prolific at bottom to the least safe and most prolific asset layer, electronic dollar credits on top. (When Exter developed his model, electronic dollars had not yet existed; he talked about FR deposits.) In between you find, in decreasing order of safety, as you pass from the lower to the higher layer: silver, FR notes, T-bills, T-bonds, agency paper, other loans and liabilities denominated in dollars. In times of financial crisis people scramble downwards in the pyramid trying to get to the next and nearest safer and less prolific layer underneath. But down there the pyramid gets narrower. There is not enough of the safer and less prolific kind of assets to accommodate all who want to "devolve”. Devolution is also called "flight to safety”.

Darryl Schoon (http://www.drschoon.com/) makes the same argument.

Here's a visual depiction Exeter's inverted pyramid, courtesy of FOFOA (http://fofoa.blogspot.com/2009/09/end-of-currency.html):



(Click here (http://i30.tinypic.com/1zmkpj5.jpg) for full image)

Are Exeter, Fekete and Schoon right?

I don't know. But Alan Greenspan just lent some support to the theory.
Specifically (http://www.bloomberg.com/apps/news?pid=20601083&sid=acrGvxBXPDfk):

Gold prices that jumped above $1,000 an ounce this week are signaling that investors are buying metals to hedge against declines in currencies, former Federal Reserve Chairman Alan Greenspan said.

The gains are “strictly a monetary phenomenon,” Greenspan said today at an investment conference in New York. Rising prices of precious metals and other commodities are “an indication of a very early stage of an endeavor to move away from paper currencies,” he said...

“What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment,” Greenspan said.

In other words, Greenspan is saying that investors are moving out of the second-to-lowest step on the pyramid (currencies and government bonds) and into the lowest step (gold).

Greenspan is also verifying what goldbugs like Exeter, Fekete and Schoon have been claiming: that "the barbarous relic" still holds an important place in the modern investor's psyche.

Moreover, as I reported (http://www.washingtonsblog.com/2010/09/greenspan-fiat-money-has-no-place-to-go.html) last year:

Alan Greenspan told (http://www.nysun.com/editorials/greenspans-warning-on-gold/87080/) the Council of Foreign Relations last week:

Fiat money has no place to go but gold.

Greenspan also said that supply and demand explanations treating gold like other commodities “simply don’t pan out."

Greenspan also spoke of how, during World War II, the Allies going into North Africa found gold was insisted on in the payment of bribes, and said:

If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.

As I pointed out (http://www.washingtonsblog.com/2011/06/why-gold-is-good-long-term-investment.html) last month:

Utah has declared gold and silver to be legal tender - with the value of the coin determined by the weight of precious metal it contains

As the New York Times notes (http://www.nytimes.com/2011/05/30/us/30gold.html):

The law is the first of its kind in the United States. Several other states, including Minnesota, Idaho and Georgia, have considered similar laws.
World Bank president Robert Zoellick noted (http://www.marketwatch.com/story/world-bank-chief-calls-for-new-gold-standard-2010-11-07) last year:

Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.

Moreover, as FT reported (http://www.ft.com/cms/s/0/f1bcb30a-eb49-11df-811d-00144feab49a.html) last year:

Intercontinental Exchange, the US futures exchange group, has followed rival CME Group by allowing its European clearing house to accept gold bullion as collateral for transactions.

Zero Hedge notes (http://www.zerohedge.com/article/article/morning-gold-fixing-jp-morgan-accepts-gold-bullion-collateral-%E2%80%93-silver-backwardation-lead-sh):

JP Morgan Accepts Gold Bullion As Collateral.
And Phoenix Capital Research argues (http://www.zerohedge.com/article/article/if-central-banks-believe-paper-money-why-are-they-loading-gold) that central banks are themselves loading up on gold because they know that the entire fiat money scam will soon collapse.

[solid]

Fed Chairman Bernanke Says "Gold Is Not Money" ... But His Predecessor Alan Greenspan Disagrees


That should have been Ron Paul's follow up question. "You say gold is not money, your predecessor Alan Greenspan says it is. Why is your belief different from his?"

[zap]

$ 1616.00 gold and 40.52 silver right now ! ;)