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Derivatives Collapse and the China Gold and Silver Markets

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posted on Sep, 11 2009 @ 09:32 AM
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reply to post by OBE1
 


Very good posted info OBE1...

The reason I say metals go down is because in my trading experience I have found that the market always does exactly opposite of what the masses are being told. Since we BOTH know that the markets are manipulated by TPTB, then it would fall right into their plan of getting the masses to buy the piss out of metals, so they can sell the piss out of their holdings and wait for it to come crashing back down so they can buy it back even cheaper.

Someone has to be selling all that stuff to people.....

just my 3 billion pennies worth...




posted on Sep, 11 2009 @ 10:11 AM
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Nice call on the contrary investing approach. TPTB smoked us in tech stocks. Smoked us in the housing market. Now will smoke us in metals.

At the rate I see people buying gold and silver on ebay, and the demand for it on the board here, there is going to have to be a gold/silver bailout when the true SHTF.

Headline:

Obama proposes bailout for Goldbugs!

Everyone states they were not buying on speculation.



posted on Sep, 11 2009 @ 10:33 AM
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If you want to invest in metals, I prefer brass and lead.

Guns and ammo will never go down in value, along with groceries.




posted on Sep, 11 2009 @ 11:08 AM
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reply to post by hotrodturbo7
 


It was late when I commented last night, and should have included the same point on brass and lead. You are right on about that!


I, too, believe ammo and the components to reload will be worth more than their weight in gold (no pun intended). In our area, few folks trust the state police, and are concerned about troops (our own or U.N.) taking necessities by force, or people becoming so desperate that they resort to looting if all heck broke loose. Most are fairly prepared to protect their well-being... and many are looking for those metals to practice and replenish in the meantime.

So, again, you made a very important point.



posted on Sep, 11 2009 @ 11:35 AM
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reply to post by packinmomma
 


I am more concerned with the two legged fiends that will be starving, cruising the streets looking for easy targets.

LEO's and military will be looking out for their own, most likely. Those that are not prepped may try to get what they need by abusing there so-called "authority", but they can be dealt with.

Too many peeps this day and age that have no clue how to even begin to fend for themselves and they will not be prepared. So if they have to take from you and yours, I'm sure there hunger-clouded conscience will have no problem with that.

Sadly, many of these will be younger folks, in much better shape than I am, and desperate. Sorry grasshoppers, this ant doesn't have enough to go around. When it comes down to Darwinism, you are ready or you are screwed.

I am still wondering if I can look someone's hungry children in the face and turn them away.



[edit on 11-9-2009 by hotrodturbo7]



posted on Sep, 11 2009 @ 02:21 PM
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Originally posted by GCDrift
...I have a question regarding this thread. If China pulls out, America gets left holding the bag, how would they fix this? they wouldn't be able to ignore it would they? and with employment rates and numbers dropping this would cause more strain? ...


There are a number of possible scenarios in this case. Most of them involve the total destruction of all global financial achitecture...which is why it is not likely, IMHO, for China to "pull out" suddenly. They will pull out more slowly, over a period of years.

What you will see is a slower, more grinding, and more long-term event that will not be dramatic day-to-day (hopefully) but will instead be deeply unpleasant in the long term (unfortunately). We are already seeing major foreign creditors (China, Japan, EU, Arab nations, etc.) pull away from their dollar holdings and invest increasingly in a number of other things, including resources, raw materaials, and other "real stuff."

What this this means is the long-term collapse of the US dollar as a sole global reserve currency. I don't think a sudden "run for the exits" or rout that ruins the dollar in a super-short period of time is likely (although its certainly, chillingly, possible). The dollar is likely to survive as part of a "basket of currencies" (like IMF "special drawing rights") and be one of many investements.

Of course, if the US domestic authorities act like complete idiots (quite possible) we could have a "spark" that detonates some kind of serious domestic unrest. This could cause chaos and a rapid collapse...like the fall of Communism, for example...It only took the USSR a scant few years to fall compeltely from a well-prganized global power to a nation run by gangsters and mired in poverty and near-chaos. (Russia has risen from the ashes to a great extent since the Yeltsin days, but that's another story.)

Executive summary: Long slow grind downward, less Asian involvement in the US, deep budgetary issues, possible domestic unrest, international power void (no "global unipolar leadeship" by a single hegemeon), growth of emerging markets, but limits to what they can do --hundreds of millions of Chinese and Indians will remain mired in poverty, and ensuing social inequality could cause domestic issues in such nations as well. Slow bakaway from Anglo-Americn style capitalism. Bullish on commodities, rare-earth and precious metals, ariable land, water rights, mining, oil/natty gas, etc. Obligatory dsclamer: solely my personal opinions and not to be construed as investment advice, etc.


[edit on 9/11/09 by silent thunder]



posted on Sep, 11 2009 @ 04:15 PM
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reply to post by silent thunder
 


Dude, you do not hoard gold while they are sky high. Ten years from now when WWIII is over gold will return to pre-crisis. Why? Because people are stupid and they have a short memory.





posted on Sep, 11 2009 @ 04:57 PM
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Originally posted by eldard
reply to post by silent thunder
 


Dude, you do not hoard gold while they are sky high. Ten years from now when WWIII is over gold will return to pre-crisis. Why? Because people are stupid and they have a short memory.




We'll see. People were calling me a fool for buying physical gold in 2003/4. Not to brag, but my returns speak for themseves.

These days I've acually scaled back my gold holding and am more focusing on rare-earth metals and silver, both of which are historically undervalued and have strong industrial uses, especially in the Chinese and Indian markets. China has unveiled a massive silver investment program, which I believe will drive prices up. Silver also has water-purification uses, which is becoming increasingly important. I aslo see a contuned upside on gold for various reasons. Other areas of interest: water rights, highly ariable land, and gas/oil.



posted on Sep, 11 2009 @ 06:16 PM
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reply to post by silent thunder
 


I think you're right about the investments in silver/rare earth metals. To bring up another thread you all may have read recently, about the energy saving light bulbs, think about it. All that mercury pollution into the natural water supply - silver (like you said silent thunder) helps with the water purification process. Just things like that, all build up, and will taint our water systems, some I can easily see silver prices going upward, slowly, but surely over time. I mean that is just one use for it, I think if the currency problems became bad enough, that silver would be a great way to trade for whatever items we need.

Everyone has to realize that putting your money into the right places is crucial at this point in time, to help secure a financially sound future for us all. Unfortunately, everyone is going to find it hard to look out for others, because they are so worried for themselves and their families. "Honor thy neightbor"... just ain't going to cut it anymore.



posted on Sep, 11 2009 @ 10:37 PM
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You should just make all you money into gold and them hord hord hord if it's good enough for dragons it's sure as h*ll good enough for me, because im human.



posted on Sep, 11 2009 @ 11:45 PM
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Originally posted by theonlyrusty
The reason I say metals go down is because in my trading experience I have found that the market always does exactly opposite of what the masses are being told. Since we BOTH know that the markets are manipulated by TPTB, then it would fall right into their plan of getting the masses to buy the piss out of metals, so they can sell the piss out of their holdings and wait for it to come crashing back down so they can buy it back even cheaper.



Hi theonlyrusty. Sorry , with all due respect , no way does a Chinese default on their derivatives contracts benefit TPTB , but lets see if I understand your post in the context of the OP.

My take....

If Chinese institutions re-neg on their derivatives contracts , the collateral ostensibly backing the Comex commercial short position collapses , and not only would the counterparties (PTB agent bullion banks JPM , GS et al) absorb massive financial losses , but they'd be exposed as major violators of CFTC regulations prohibiting naked short selling....the Comex would default....litigation of biblical proportions would ensue as CFTC regulatory authorities are implicated as co-conspirators in a multi-decade market scam that dwarfs , and I mean DWARFS the Berine Madoff scandal...and...the "integrity" of the US futures market would be destroyed in the process.

****

Your take ?

This would somehow please TPTB because the resulting run-up in prices; "would fall right into their plan of getting the masses to buy the piss out of metals, so they can sell the piss out of their holdings and wait for it to come crashing back down so they can buy it back even cheaper."



They're already selling the "piss" out of Gold/Silver theonlyrusty , and there are much less complicated methods for manipulating the POG.

The powers that be are intimately familiar with them all.



Someone has to be selling all that stuff to people.....


Guess who....

COT shows that the commercials (agent bullion banks) , increased their Gold short position this week by a mind boggling 57,000 contracts. Yes , that's a 5 , and a 7 , followed by three 0s
1000 Gold has obvious enemies....and yes , we know who they are. If the well funded PTB were setting-up for a major pump & dump , they wouldn't be fighting the price tooth & nail here.

In spite of this massive selling pressure , Gold managed an EOW above 1000.

You see , in the teeny-weeny Gold market , the Boyz may be adept at manipulating algorythms , running retail stops , and scaring the diapers off the sissies in the Gold pit......but now they've taken on an entire country...heavily populated...$ rich...and really , really PO'd.

Rots-O-Ruk


The Chinese Put , and why....

China can no longer afford to let gold or silver price slump


[edit on 11-9-2009 by OBE1]



posted on Sep, 12 2009 @ 10:40 AM
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reply to post by warrenb
 


S and F - many of us - since last year have been saying the market is so rigged and manipulated.

It is amazing how much bashing takes place too here - when you mention buy gold and silver and take the physical.

At some point in the near future people will be shocked at the lack of real gold and the scams that have taken place in the gold and silver market.

TPTB - have been scrambling around - suppressing the prices,

but now with China encouraging their citizens to buy gold and silver, Hong Kong, Dubai, Germany all wanting their metals out of storage in the U.K> and U.S. to hold themselves now. With China defaulting on derivatives, with Barrick now dehedging their gold off the markets - the pressure is building for an explosion very soon in the metals market.

I believe people will be shocked at possible doubling of prices etc of metals, when the truth comes out. But there won't be any available at that time either (most probably).

The other thought, I have been reading from those who know the markets, is metals will take a big dive, when the stock market starts crashing (next week?) and people and corporations will sell off their metals to raise fast money to cover their margin calls, etc.

When that happens - metals will drop big time - that is when people need to buy - because after it all settles down, and those who needed to sell off the metals, have. The metals market will skyrocket to the moon - and not come down again anywhere close to what they are right now.

Patience is a virtue - but soon it will be pleasure for those who are gold bugs.



posted on Sep, 12 2009 @ 11:46 AM
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OBE1...

I thoroughly enjoy reading your very informative posts and do not disagree with the things you say. All the numbers show what SHOULD happen in the metals but as we have seen in the past, the market has a strange way of doing some very weird things.

I was in S&P put options on 9/11/2001. You are probably saying to yourself, "Great call, probably retired him".......That's what I would have thought too. As we all know what happened in the next 4 days to the markets, it is upsetting to say that I did not walk away with a home run on that because the way the markets were manipulated.

That was caused by the most atrocious crime to take place in the history of mankind and when the next one hits, which it will at some point, it will be so horrendous that people will care less about PM's and will be more apt to be focusing on survival or detention/internment. The only people left at that point to purchase any PM's would be whatever governments are still in place and they would more than likely manipulate the price down because the "average joe buyer" is nowhere to be found. They are out there trying to find their next meal and wondering where to find clean drinking water.

On the day 911 happened, I didn't really see that peoples immediate thought was to go out and buy precious metals, even though some of us thought, "This is it, it can't get any worse". If the SHTF and the markets plummet, the only folks buying gold will be the Chinese and they will be able to buy it at firesale prices cause there will be no demand elsewhere.

As far as any other metals for industry and such, if things have been devastated and unemployment is rampant, what do they need the metal for? They won't be producing anything cause there will be no demand. I certainly will be more concerned about buying beans and wienies instead of a new laptop. And most likely, it will be more of a barter system by then. You certainly don't want to be lugging gold bars around with you to get fresh water from a street vendor. That's how the whole fiat money system started in the first place.

I think after we analyze all the data, it's still a coin toss either way. When I find a profitable way to bet both sides of the market, I will be KING!!!!
hahahaha

Great stuff OBE1.

seeya



posted on Sep, 12 2009 @ 03:20 PM
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Hi theonlyrusty. The Gold community fully understands what a Chinese default on short PM derivatives would represent should it occur in the context of the OP: a catastrophic , and permanent alteration of the internal dynamics of the global Gold market....totally unrelated to TPTB pump & dump schemes, or a short-term contrarian selling ops.

The BB's are exposed to infinite risk on gargantuan short positions. Three successive NY closes above the psychologically critical 1000 mark , launches a new era in the POG. As buying pressure continues to overwhelm , you can bet they're sweating bullets.

By Sept 11 , 2001 , I was out of general equities , and fully invested in the commodities/precious metals sectors , primarily energy & mining stocks.



Originally posted by theonlyrusty
On the day 911 happened, I didn't really see that peoples immediate thought was to go out and buy precious metals, even though some of us thought, "This is it, it can't get any worse". If the SHTF and the markets plummet, the only folks buying gold will be the Chinese and they will be able to buy it at firesale prices cause there will be no demand elsewhere.



It's understandable if your attention was diverted elsewhere , but on "911" , a rush to procure secure assets like precious metals was precisely the immediate market response....




As sure as the sun rises in the East , Gold always climbs a 'wall of worry' theonlyrusty , you can bank on that for a trade...but it's the actions/reactions of global monetary authorities that ultimately dictate , and sustain Gold' LT future.

*Interesting that after a sustained bear market , Gold actually bottomed in 2001*

****

No , it's not TEOTW...just TEOTWAKI...though it may feel like TEOTW for those that could have , but failed to preserve the purchasing power of their hard earned $.

Transportation comes to a screeching halt...gangs roam the streets in search of food/gas/water...neighbor shoots neighbor.....neighbor eats neighbor. Nice fantasies for the apocalyptic fundamentalist/survivalist groups.....I guess.

The society of sheep I live in...has more of a totalitarian slouch.



posted on Sep, 12 2009 @ 03:29 PM
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reply to post by questioningall
 





The other thought, I have been reading from those who know the markets, is metals will take a big dive, when the stock market starts crashing (next week?) and people and corporations will sell off their metals to raise fast money to cover their margin calls, etc.

When that happens - metals will drop big time - that is when people need to buy - because after it all settles down, and those who needed to sell off the metals, have. The metals market will skyrocket to the moon - and not come down again anywhere close to what they are right now.


And that is exactly what happened last time and I have watched it happen that way many times. Gold and their stocks tank with the market.

Patience is Key.



posted on Sep, 16 2009 @ 06:24 AM
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Gold is way over a thou right now.There's psycho-babble in the various analyses about the grand factor,as in once it goes over a G and solidly stays there for weeks,people get used to dealing with gold over a G and hence sally forth with a new pricing schedule in their heads.Dollars worth less is all...I just don't see it coming down any time soon.Maybe a dip or two under a thou as the stabilization settles on this paradigm,but up and away for the most part.I won't be buying more now that's for sure.Silver dimes are what I'm getting now.The volatility in price is exciting to observe.Not too cheap thrills.



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