March 22, 2009

If you own or invest in gold, this should make you very, VERY nervous

Gold may go parabolic, as Bernanke debases the currency and the sheeple in this report rush in.

Or it may simply collapse, as the sheeple rush in, and the insiders, hedge funds and serious money gets out.

Check out this story. The fact that former mortgage brokers are now into gold should tell you everything you need to know.

The gold rush is on at a party near you

Neighbors gather for food, conversation and a little buying and selling - Forget the Tupperware party. Today’s social/business craze is the gold party.

Beth Maynard started Gold Rush at Home a little more than a year ago after a 20-year career in mortgage lending, joining dozens of similar entrepreneurs across the country. As gold prices have skyrocketed to more than $900 an ounce while paychecks and job prospects have been shrinking, gold parties have tapped into a powerful market.

“They need money, and they’re very excited,” Maynard said. “I’m writing checks to people, and they love it. They come to a party, they don’t have to spend any money. ... They think a little tiny bit of gold is $25, and I give them $100.”


Budvar said...

The only thing this tells me is that people who are short of cash are selling off trinkets. These people are selling not buying!!

Singular said...

Do not the American people ever learn? Run from one bubble to another straight away. WTH? If it was that easy to make money, everyone would be wealthy.

Anonymous said...

keefer gold hasn't even risen in a parabolic way like in 1979...

is a contrarian signal yes...but Helicopter Ben is printing trillions....the inflation will hit out of the blue then everyone will moan gee what happened....the messiah will then go on Letterman

Grifter Gus said...

A grifter only knows one game. I take this not as a bubble signal but as a measure of desperation among the general population.

Anonymous said...

Why would it crash?

Aaron said...

Bear in mind that prescient, honest investment gurus like Peter Schiff, Jim Rogers, and Eric Janzsen are still bullish on gold. Calling a top in gold is like calling a top in housing in 2002. Give it a few years to really get out of control, then sell.

matt c said...

If the sheep are selling, I'm buying. When my neighbors are telling me about their gold stocks, THEN I'm selling.

Lets see about that optimism thing:
(1) next wave of alt-a and option arms
(2) commercial RE
(3) credit cards
(4) auto loans
(5) state tax revolts
(6) riots because unemploment is defaulted on
(7) whats next, whats next?

Anonymous said...

The only thing this tells me is that people who are short of cash are selling off trinkets. These people are selling not buying!!

Budvar is right on. This is the exact opposite of Joe Kennedy getting stock tips from the shoesine boy. I'm still buying. Heliben is printing and I am dumping. Speaking of dumping, I need to go take a Bernanke.

Anonymous said...

I've been waiting for this bubble to start and soon I'll finally be able to unload most of my gold on these sheeples.

only question is how high will the price of gold climb before it implodes spectacularly...

Miss Goldbug said...

I heard about these 'gold parties'. They're absolutely selling their gold at the wrong time. But to put perspective on it...

these folks are desperate. They need some kind of money right now. Even if its to pay for the phone bill.

In my town, jewelry stores are advertising they buy gold. On SF bayarea Craig's List, more and more listing under jewelry are advertising they buy gold. Never have seen this before - ever.

I think we are no where near a collapse in gold. People arent obsessed about it like they were houses.

We went in to our CPA for taxes on Friday, and were discussing the economy. Our CPA said there's nothing to invest in right now... I said to 'buy gold', and I got a deer in the headlight look from him...No comment whatsoever. I didnt say anything else about gold... Probably thinks I'm very primative and financially unsophisticated...although, he said we are 'lucky' to have made money in interest income, not like most of this clients.

He told us most of his clients lost 50% of their money in either the stock market or their 401k. Not counting if they put down 100k on a house back in 2003, now they're underwater...these clients he said are really hurting.

Imediately, he replied his RE holding were 'holding steady'. We're talking about someone who bought real estate income property in Utah, and plots of land in the out skirts of Palmdale(in the desert) during the bubble because an investor sold it to him saying that "everything is booming out there"....

Trust me on this. No one is thinking about gold like we are. Its not even on their radar. The only people thinking about it and trading it is Wall Street. And until main street catches gold fever, from Wall St., gold will remain stable in the $900 range.

Anonymous said...

keith, gold is money. so is silver. if someone sells gold and silver, then what do you suggest we get in its place? fiat money? give me a break? keith, there is no other place to go and hide from what is coming. it hasn't even started yet. if gold and silver are so bad to own, then why is it the same people at the city of london that started all of this financial collapse own most of it? why is that keith? it is because they know as well as anyone , since the run the finances of this world, that gold and silver are real money. they have always known this and most of the kingdoms of this world have always known this,up until the 20th century. come hell or high water, i will not turn. i will not give in. i am a bug and always will be until the day i die.

investorinpa said...

I'm missing something is SELLING your gold the sign of a top? Wouldn't buying gold despite historic high prices be a better indication?

Anonymous said...

keith look at the gold chart. does that chart look parabolic to you? seems to me there is a great deal of volatility in it. who knows when the gold and silver bull run will be over. maybe never. during the days that come, the thieves will attempt to protect themselves. there is no honor among crooks. banks will hoard gold to protect themselves, no matter what anyone else tells them. watch and see.

Afterthought said...

This actually suggests a blow-off top somewhere in the 2000+ range.

Another word on inflation/deflation: you can have inflation and declining prices if demand destruction is outpacing monetary inflation.

The down side? When demand returns to balance with supply via supply destruction or through increased demand, then you will see all the inflating that has been done in the mean time.

We've had monetary deflation and demand destruction offset by the Helicopter; the monetary deflation will continue as other loans default (credit card, homes, commercial, student).

The trickle-down bailout isn't working. I've only seen 1200 dollars, and I'm likely representative of the average person.

1200 dollars ain't diddly squat.

Daphne64 said...

+1 to Aaron's comment. People are only starting to wake up.

patrat said...

Hmmm ... Beth, ex-mortgage lender, is saying it's a great time to buy gold. Does this mean it can only go up? I think I have heard words like that before.

Hold the Gold said...

The Gold Bubble is just beginning to grow. Buy, don't sell.

Anonymous said...

Don't be nervous. The brokers are only selling their gold since they are desperate for money. Gold should be selling for at least $7,000 ounce adjusted for inflation.

Lady Di said...

Yeah, these gold parties are all the rage in my town. I've thought about going out of curiosity - just to see how much these women are being ripped off in the exchange.

On top of being a sign of desperation, they are also a more socially acceptable way of getting cash as opposed to visiting a pawnshop.

Personally, my sign to sell gold will be when a line is waiting outside my coin store and people are buying anything gold, regardless of the mark up. (similar to the housing boom when lines would form for the next phase release which were sold via a lottery system)

Right now, I can walk into the coin shop, have my pick of the coins (except Buffalo's and lately Eagles), and usually be the only one in the store.

Gold is clearly still off the radar.

jim said...

“They need money, and they’re very excited,”

This isnt investing in a bubble, these are people selling of family jewels for eating money.

If people were buying bullion and stocks, I would be worried.

Anonymous said...

Follow the Yellow-Brick Road
Follow, follow, follow, follow,...
Follow the Yellow-Brick Road

Wind Farmer said...

I'd say not having gold or silver should make you very, VERY nervous.

Then there's this from the US Mint Website:

American Eagle Gold Uncirculated Coins
Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .”

The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.

SAME for the American Eagle Silver:
The United States Mint will resume the American Eagle Silver Proof and Uncirculated Coin Programs once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.

an overleveraged sob said...

Former Mortgage Brokers, the new contrarian indicator.


Paul E. Math said...

I agree with most of the other posters. I regard this as a bullish signal for gold.

This would signal a bubble in gold if these people were getting together to buy gold. But these fools are selling.

Question: what happens when everyone has already been to one of these parties and sold all their trinkets? What I mean is, what happens when this component of gold supply goes away?

The answer is that a line graph of the price of gold becomes parabola shaped.

will shill for coin said...

>They think a little tiny bit of gold is...

Upp, Stop right there. The sentence is complete.

>They think a little tiny bit.

keith said...

I always expected gold to go parabolic before its spectacular crash during this cycle. Like the 70s

But instead, it's just been a nice, safe store of value. Very rational.

My fear is these late night commercials and realtor-hosted gold parties might now do the parabolic thing. And then a crash back to where we are now.

Be careful out there. But enjoy the ride.

Anonymous said...

But Susan researched this and said gold would "always go up"

Miss Goldbug said...

Out of everyone I know, the only one I can talk to about gold is my husbands cousin and an antiquing friend. The cousin been buying gold for at least, the last 5 years. My antiquing friend buys gold coins whenever he can, and also buys from the US mint.

When I see friends and family talking about owning/buying gold (including my CPA) then, and only then would I say we're in a gold bubble.

Anonymous said...

Why don't these POS fuckin mortgage brokers go out and get a real job. Go flip a burger you useless leaches.

Anonymous said...

these people are SELLING not buying - the realtors are convincing the sheep to SELL!

Anonymous said...

Why don't these POS fuckin mortgage brokers go out and get a real job.

Were whores, are whores, always will be... WHORES!.

Anonymous said...


notice that they said that they will resume once "sufficient" inventories can be acquired?

Who says they'll be able to acquire sufficient inventories?

What is "unprecedented" demand?

Is it going from barely selling *any* to selling a teensy tiny bit?

Wait until people line up for it like condos.

If a commercial/advertisement is asking you to don't buy, rather you sell. Just like all the early 2008 infomercials for stocks and foreclosures.

On the other hand, if they are asking you to sell...what do you think you should do?

Anonymous said...

Some posters have written that when they hear about gold from a lot of people, they will sell.

We must run with different crowds.

People I regard as normally sane are willing to diclose to me that they have converted much of their savings to gold. Some of these people have stopped contributing to a 401(k) altogether and are buying gold for cash.

My adviser who is always good for a chuckle asked me if I had considered gold 6 months ago.

Gold parties indicate a higher level of interest in gold.

The gold4cash SuperBowl commercial indicates business is brisk. Higher transaction volume is indicative of a bubble. Think housing and the '99/'00 stock market.

Finally, my brother in law is thinking of taking out a small business loan to open a pawn shop specializing in gold. His last great idea was getting his realtor's license in 2006 and he hasn't worked since. If that guy is doing it, run.

Anonymous said...

Were whores, are whores, always will be... WHORES!.


sandman said...

Interesting comments. Many folks here have an interest in gold. Well so do I - 100 oz.

But here is the deal. You need to buy physical gold for asset preservation. As the old saying goes - a banker "keeps 10% in gold and prays he never needs it."

For the commenter who said - "Gold will be $7000!" Question - will you exchange for fiat then at 7K?

People who think "they're gonna get rich on gold" - you're lost. Best case - you preserve your capital. Worst case - you lose your shirt.

Trade well.

Just my 2 cents.

Jeff said...

Food will win in the coming years. The fundamentals behind peak oil are still there.

How about water treatment? Basic infrastructure and low order commodities will never have collapsing demand. Even if all industry dies, you still need to eat and drink to live.

Another idea: defense contractors. I work for a large Sikorsky subcontractor and 2009 will see our orders go up by 60% for blackhawk parts.

area 51 said...

Didn't you even read the story you posted?
Guess not.
This isn't "sheeple" standing in line overnight to pay $XX over asking for gold (a house).
This is "sheeple" selling their gold for pennies on the dollar because they're desperate for cash.

People who know something about gold and the future are willing to pay jackass mortgage brokers (seasoned scammers) to scam people out of their gold, where they can resell on the open market for a tidy profit.

Kinda like "flipping gold", but no fix-up costs associated..

Wake me up when you have a story about people going to parties to sell their multiple houses for pennies on the dollar.
Then you can draw your parallels.

Mitesh Damania said...

Ravi Batra says we'll see only a decline of 20% in the dollar and it will eventually be partially backed by gold.

Anonymous said...

People are to much in debt, to fuel another bubble.

Don't expect another bubble in gold. It just won't happen. There is no liquidity out there for such a thing to take place.

As for the hyperinflationists out there.....keep dreaming

eric in vegas said...

My only worry about buying gold is if it gets too high the government will confiscate it or tax it to hell.

Anonymous said...

Food will win in the coming years. The fundamentals behind peak oil are still there.

How about water treatment?

You do realize that you can a buy water cooler type of machines that produce 5 gallons of water/week through condensation, right? I have one and it looks, tastes, and works nicely. Oh, and it costs $0.16 per gallon produced:

Hey by all means, you can believe in all those scams and pay premium to drink Al Gore's "special green" water that saves fluffy polar bears.

What are the odds that the Oil mafia would be spreading rumors about Peak Oil to jack up prices?

Funny how they never allow for independent geologists to check how much oil is under Alaska or Montana.