$1150 within 3 months!

correct. and besides...

a) every mine has a different cost structure.. some may well produce at $1000, but there are certainly some able to produce at 500 or even lower... that's just how it works.

b) most mines produce more than one ore/mineral. the mine stays in business as long as it makes money on its overall operation.

c) the gold price is dictated by supply and demand... Indian and Chinese households buying aggressively will push up prices, and central banks selling gold will depress prices no matter what the cost of production..

So... you guys saving up for one of these or something?



http://www.bbc.co.uk/news/magazine-21994873

An Indian man has bought one of the world's most expensive shirts, made with more than 3kg of gold and worth $250,000. His is an extreme case of an Indian obsession with the precious metal.

Totally true. The way it is described by academics is an "experiment". You buy/own/sell something with no real substance (a coin is just a set of (pointless) mathematical proofs stored in a computer file). The best way to find an analogy is the .com run in the 90s. Someone who owned any .com domain no-matter-how-silly.com could sell it at a high price becasue everyone wanted to join the .com fun. People built prorfolios of 100s of domain names they 'owned' as an investment hoping the price will rise, but the fad evaporated quickly once people realised the futility of the whole idea. Another problem with the bitcoin is that, if successful, there is nothing preventing other organizations eg say, amazon, to create a parallel, identical scheme so the value will be diluted. (Unlike the .com business). There is nothing unique / patented with the current bitcoin scheme

1. Same as gold and cash
2. I'm not sure what your point is here? Can you explain?
3. You can't have a run on bitcoins as you have a run on banks as, currently, bitcoins are not loaned on a fractional basis
4. Prices are set by the market (bitcoin is exchange traded)
5. They can't. I don't see it as a currency in the near term. More like gold in that it attempts to be a store of value. Currently early days for bitcoin so likely to see a lot of volatility until the price settles


actually, there is some degree of analogy. domain names are also digital, but also scarce (there's only one mcdonalds.com address).

there's also nothing unique about DNS. other people have tried to create alternate DNS systems and domain roots and these have all largely failed (google alternic).

people have already tried to create bitcoin clones, and these have also largely failed. nobody wants to use a 'clone' system. it would be interesting if google/amazon came out with a scheme, but one of the pulls of bitcoin is that it is decentralised and is not (ostensibly) under the control of any single organisation.

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back on the subject of gold, apparently John Paulson lost about a BILLION $$ yesterday from the fall in gold...

I imagine he didn't enjoy his drink very much last night.

George Soros, on the other hand, must be feeling rather smug, having cut his gold portfolio by 55% in December...

Maybe it is all a trader scam to buy Cyprus gold cheaply

don't know about a scam, but the net is rife with talk about 'manipulation'.

here's one comment..

Consider the 500 tons of paper gold sold on Friday. Begin with the question, how many ounces is 500 tons? There are 2,000 pounds to one ton. 500 tons equal 1,000,000 pounds. There are 16 ounces to one pound, which comes to 16 million ounces of short sales on Friday.

Who has 16 million ounces of gold? At the beginning gold price that day of about $1,550, that comes to $24,800,000,000. Who has that kind of money?

What happens when 500 tons of gold sales are dumped on the market at one time or on one day? Correct, it drives the price down. Investors who want to get out of large positions would spread sales out over time so as not to lower their sales proceeds.

The sale took gold down by about $73 per ounce. That means the seller or sellers lost up to $73 dollars 16 million times, or $1,168,000,000.
Who can afford to lose that kind of money?

And remember - he's talking about Friday! The fall on Monday was almost 3 times as severe!!

cyprus have denied selling off their gold. although i wonder if this could anyhow be absorbed by demand from china et. al.

I think you answered your own question

the person with $24,800,000,000 can afford to lose $1,168,000,000

Cor!!

Mind boggling!

Imagine if you had to deliver the gold bars to back that paper

It was said that most gold buying in 2012 was by central banks. I do not see central banks sitting back & watching their assets melt away in value.
So what can/will they do?
Speculation on next steps welcomed

Not quite that much, but still a heck of a drink to swallow: http://www.forbes.com/sites/afonteve...old-bloodbath/

I think that's the point of the paper-gold: there's none.

From an http://www.globalresearch.ca/paper-g...-asia/5331570:

Quote:
"Our suggestion: if you hold paper gold, contact your broker and convert it into physical gold. "

I had to chuckle on this one. As pointed out previously here, taking delivery is all but a simple mouse-click....
If those emitting paper-gold had any, they wouldn't print paper ;-)

The dollar strengthening? Against what? Is the Fed decreasing or increasing the money supply by $85 billion per month?
In my book the $ will only strengthen against real values if the fed is decreasing its dollar supply.

The sellers made money by selling, they did not receive the lowest price of the day on average.

Central banks always screw up, they have been buying so you safely assume it's over priced & will fall further.

Cyprus were the obvious suspect, but guess what - their total holding is a mere 15 tons.

apparently it was a single seller dumping 400 tons on Friday that started the rout..

I am not the only bear, 800 seen as fair value!
http://www.marketwatch.com/story/gol...nce-2013-04-16

I'll buy more at 1250

Test to see if my new blog comes up in my signature.

PS On the gold front read this report by Paul Craig Roberts that gold is hard to come by in the US.

http://www.paulcraigroberts.org/2013...craig-roberts/