CNBC financial journalist Maria Baritromo interviewed Marc Faber, a contrarian Swiss investor and publisher of the Gloom Boom and Doom Report.

“You said a minute ago that markets go up and down, doesn’t gold go up and down too?” said Baritromo.  “Yes it does go up and down but I am fearful of a systemic crisis, wars and so on and it is because I am fearful that I own gold,” said Faber.

Faber then asked Baritromo if she owned any gold.  Her response was that I own earrings and jewellery. Faber relied, “Sorry to say you are in great danger because you don’t own any gold…but you have a golden personality!”

 

 

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From Goldcore:

Today’s AM fix was USD 1,674.50, EUR 1,234.88, and GBP 1,058.47 per ounce.
Yesterday’s AM fix was USD 1,666.25, EUR 1,230.70, and GBP 1,057.20 per ounce.

Silver is trading at $32.08/oz, €23.76/oz and £20.40/oz. Platinum is trading at $1,677.50/oz, palladium at $736.00/oz and rhodium at $1,200/oz.


Cross Currency Table – (Bloomberg)

Gold rose $13.80 or 0.83% in New York yesterday and closed at $1,676.50/oz. Silver slipped to a low of $31.24 in the morning, but it then ran up to a high of $32.24 and finished with a gain of 2.01%.

Gold hovered nearly unchanged after surprise GDP figures showed that the U.S. economy contracted and the U.S. Federal Reserve maintained asset purchases. Platinum is on track for its most stellar month’s performance in a year.

The U.S. GDP was -0.1% for Q4 and it was expected at 1%. This was its largest drop since 2Q 2009 as U.S. military defence spending plummeted. The Fed left their $85 billion bond-buying stimulus plan intact, citing the monetary stimulus was critical to decrease unemployment, however mentioned this lull in the U.S. economic recovery was temporary.

Investors will be watching the nonfarm payrolls data out tomorrow.

Gold reached multi year highs in Japanese yen again overnight.

TOCOM’s December contract, reached a record 4,944 yen a gram or 153,000 yen per ounce. Gold as climbed more than 6% this year on a weakening yen after Prime Minister Shinzo Abe called on Japan’s central bank to ease policy even more aggressively.


XAU/JPY 5 Year – (Bloomberg)

Reuters reported a dealer in Tokyo saying “Of course a weaker yen attracts buyers, but I think we shall wait for the price to hit 5,000 yen before we see some selling.”


Gold Silver Ratio, Quarterly – (Bloomberg)

India’s government announced it does not have plans to for additional taxes or curbs on imports of gold as it waits to see the impact of recent tax increases, said a finance ministry official yesterday.

Respected CNBC financial journalist Maria Baritromo interviewed Marc Faber, a contrarian Swiss investor and publisher of the Gloom Boom and Doom Report.

“You said a minute ago that markets go up and down, doesn’t gold go up and down too?” said Baritromo.

“Yes it does go up and down but I am fearful of a systemic crisis, wars and so on and it is because I am fearful that I own gold,” said Faber.


Maria Baritromo and Marc Faber – (CNBC)

Faber then asked Baritromo if she owned any gold.  Her response was that I own earrings and jewellery.

Faber relied, “Sorry to say you are in great danger because you don’t own any gold…but you have a golden personality!”

This tiny snippet of an interview highlights what research at GoldCore has been saying for years. Although many people think gold is a huge bubble like the housing market that burst, it is simply not the case.

How many people do you know that diversify their portfolios with precious metals like silver and gold bullion?  Systemic risk is defined as “financial system instability, potentially catastrophic, caused or exacerbated by idiosyncratic events or conditions in financial intermediaries”. This is akin to the effect of the proverbial pebble when dropped in the pond, it ripples outward.

The global marketplace is interconnected and potential danger across the pond such as the Lehman Brothers catastrophe affects investors across the world.  Bullion investment is a proven hedge to diversify against systemic risk.

NEWS
Gold Trades Near One-Week High on U.S. Economy, Fed’s Stimulus – Bloomberg

Gold holds near 1-wk high on Fed; TOCOM hits record – Reuters

Gold rises on surprise drop in US growth, Fed – Reuters

Gold, Silver Climb on GDP Data, Stimulus: Commodities at Close – Bloomberg

COMMENTARY
Gold or Platinum—Which Will Get to $2,000 First? – CNBC

 

Things That Make You Go Hmm – Such As Currency Wars – Zero Hedge

 

  1. Date: Tue Feb 24 1998 21:46 
    ANOTHER (THOUGHTS!) ID#60253:
     
    Ladies and gentlemen, today, the paper gold market is larger than available, tradable physical gold, by a factor of three! This market will continue to expand until we reach a massive gold derivatives failure. This will come about as those, who had no wish to gamble, but traded paper gold anyway, make a mad rush to dump paper and buy gold. Very, very few of them will succeed! You see, the largest bulk of the tradable physical gold will never come back into the market, “in terms of currency”! It will return as a trade for “another commodity”! OIL!
    What do we look for to see the coming end of this present overleveraged economic system? The complete and total destruction of the world gold trading system!
    From Another: ” the destruction of the present currency system will be preceded by the total unlinking of all gold for currency trading” “gold may find a price of $50US/oz or $50,000us/oz, but the truth will not be known as an open market” ” yet gold will find an increase of value of biblical proportions”

  2. Date: Sat Mar 07 1998 13:19 
    ANOTHER (THOUGHTS!) ID#60253:
    A Noble Purpose, This Oil For Gold
    When one considers the merits of a specialized world oil currency, the thought usually turns immediately to “send in the military and stop them”. I must ask, why? If an oil currency is born before or out of the shambles of an financial meltdown, and it offers great benefit to all, again I ask, why stop it? Look at the merits of such a move:
    In a very real “currency sense”, oil will be devalued in terms of gold. As one makes a currency weaker by increasing the money units per ounce of gold. Oil will become very cheap in gold, as the amount of gold paid per barrel will fall dramatically as compared to today’s ratio. There will be much more than enough gold worldwide to quantify a “world oil currency”. To that end, the world paper “reserve currency” at use in that time, will continue to be traded for oil at an extremely low price relative to today. The only change will be the addition of a “unit of real value” added to each trade, a “world oil currency”, gold! However, in terms of today’s currencies, gold will be “upvalued” to perhaps $10,000 to $30,000 an ounce. So as not to rewrite what is already an excellent piece on this coming readjustment, I will repost part of Mr. Allen ( USA ) ‘s perfect article on the subject along with his requested changes per his :

    Date: Mon Dec 15 1997 11:06
    Allen ( USA ) ID#246224: 
    Date: Sun Dec 14 1997 18:59
    Allen ( USA ) ( More ruminations re: ANOTHER’s recent posts ) ID#255190:
    Last one on this topic until more ANOTHER posts. I’m not sure that it would be necessary to have that large a cabul in on the “offer” of oil for gold. Given the rather small market in gold in comparison to oil/currencies it would only take one or two well endowed oil states to pull this off. Here’s why.
    Let’s say the Saudi’s have been accumulating gold through the back door ( approx. 5,000 tonnes ) . They sell say 20 Mln Bbl oil a day. Close enough. At one ounce of gold per thousand Bbl oil that’s 10,000 ounces of physical gold per day. That’s a lot of physical gold.
    The first few moments after the Saudi’s proposal to trade oil for gold at a very steep discount of 1000 Bbl/oz ( approx. 1.5% of current US$ price ) there would be roars of laughter. One fast thinker after another would think “Hey. I buy some gold at $300/oz, trade for oil to receive 1 Mln Bbl, then sell the 1 Mln Bbl for US$ 10 Mln. Net profit is
    $10,000,000-$300,000=$9,700,000. Easy money.” .
    Everyone at once turns to the gold market to buy, which promptly shuts down. Now no one is laughing. Because everyone realizes that gold is now worth at least $10,000 per ounce and no one is prepared for that revaluation. Whoever has gold now has 66.67 times the purchasing power in that stockpile. What appeared to be a stupid offer has now become a complete revaluation of all gold stockpiles vs all currencies.
    Who has the gold?

    ( per corrections :Date: Mon Dec 15 1997 11:06 Allen ( USA ) ID#246224: )

    Saudi stockpile guest-imate 5,000 metric tonnes = 5,000,000,000 GRAMS not ounces. Gold now at US$9.65 per gram revalued by multiple of 66.67 = US$643.37 per gram x 5 Bln grams = US$3.2 Tln.
    Germany 2900 metric tonnes = 2.9 Bln grams, revalued to US$1.8 Tln.
    USA 8,085 metric tonnes = 8.1 Bln grams, revalued to US$5.2 Tln.
    Is this plausible??? How is it possible by making one little change in oil dealings could this ever happen? It is simply the very intelligent use of the scarcity of gold and the necessity of oil. It is the desire of one party, who is big enough to swamp the gold market, to make it the preferred vehicle for buying oil. In fact if not one ounce of gold is ever transacted for oil, but the offer is continued intact, then gold will be revalued simply by the possibility of trading. Those who are in a bad way in their currency situation can always get oil with their gold.
    What would the impact of this revaluation of gold and currencies do? It would instantly shift economic and financial power into the hands of those who own large amounts of gold: CB’s, Saudi’s, Roths et al. It would mean that gold/oil would be THE CENTRAL POINTS OF ECONOMIC REFERENCE. It would mean that currencies would be devalued by a factor of 1000 in relationship to the new standard of gold ( as a proxy for oil wealth ) It would upset an awful lot of people. There would be no TARGET to shoot at or take over, however, because all other oil producers would immediately jump on this band wagon. Its a simple matter of what an interested party is willing to receive for their goods. Venezuela, with gold and oil reserves and production capacity, would be one of the wealthiest nations on earth. The world would be turned upside down geopolitically, wouldn’t it. Literally “..the ‘have-not’s of the world will become the ‘have’s..”

    Mr. Allen ( USA ) ,
    Another thanks you for this thinking. It should be read by everyone with an interest in this area. It should also be studied by students wishing to learn of market dynamics. We also offer this piece as an addumnum to the above, also by the same author.

    Date: Mon Dec 15 1997 10:49 
    Allen ( USA ) ( Quick Note to JTF re: 23:05 post – US$ oil float ) ID#246224:
    US$ price of oil is floating. The “proposal” to offer oil for gold at say 1000 Bbl/oz is far below the present float price in US$. The gold market is SO SMALL that if the oil nation that made this proposal was pumping enough oil the gold market would be swamped by oil buyers who were looking to make a few ( !! ) US$ on the discrepancy in price. In effect this would revalue gold by inserting an entire different group of buyers into the gold market who have ALOT of money.

    Why is it the oil nation would not just buy at market? Same as above. Their effect in the open market would basically shut down the market thereby frustrating their efforts to buy gold. Conversely, why would they then make the “proposal”? Because either they have enough gold to buy the world at the new price, there is a crisis in which they feel it is to their advantage to do this ( such as a US$ crisis ) or they might have a geopolitical rational. In the new valuation the US$ would still be intact. But its monopoly role would be altered. Its not that currencies would become worthless but that gold would become worth much more in relationship to paper currencies.
    To answer the “military” question, asked at the begining of this article, I say:
    The massive increase in the “reserve currency” price of gold would, no doubt be ushered into the USA house of congress as a godsend answer to Americas debt problems. With the “full production” of oil, now viewed as a sure thing, The world may well see the USA send the military into the Middle East just to ensure that this “deal” is not disturbed. After all, it is oil that will be massively devalued by gold.

    • Well, as an “old bald headed guy” myself, I KNOW whom to trust.  Love the pretty girls but trust them?  NO WAY!  My Mammie didn’t raise no fools!  lol
       

  3. ““You said a minute ago that markets go up and down, doesn’t gold go up and down too?” said Baritromo.  “Yes it does go up and down but I am fearful of a systemic crisis, wars and so on and it is because I am fearful that I own gold,” said Faber.
     
    I watched this interview live on CNBC because any time Marc Faber chooses to speak, the wise among us should choose to listen.  
     
    That said, I was disappointed in his choice of words.  I do not buy gold or silver because I am afraid of what *might* happen in the future.  I buy them because of what I KNOW IS HAPPENING in the present; and that is the cheapening of the US dollar via massive over-printing and the incompetent handling of the US economy by the Fed and the Gov.  Peter Schiff has commented to this effect and I agree with Peter.  Also, this was the perfect place to mention that gold does not move up and down but that floating fiat currencies do, which only gives the impression that gold is moving up and down. 

  4. Yes, I’ve been thinking about the illusion the world represents when it’s buying gold and pretending it’s worthless at the same time. It’s value increasing drastically doesn’t seem to be what any of the major players want–seems like they like their hedge for now (plus they want to repatriate their gold without a war). However, ponder this one. (I haven’t decided what I think yet.) What if all the major players have a way to keep their reserve gold as a base relatively static with repatriation in play, keep their oil base un-devalued, but devalue the dollar at the same time–which it seems they’re aiming for. What would do that? My thought is, why monetizing silver as a currency. That way, gold stays “relatively” unchanged, oil stays “relatively” unchanged, and dollar is devalued. If I were China I might consider a silver Yuan rather than a gold Yuan for this reason. Then, for the debt we owe them, they could just say, “dollars, nah. We want your silver. Oh and by the way, keep that gold coming at 1700 an ounce.” Just a thought…

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