Yesterday’s $40 drop in gold. A gift.

Gold Slammed









Today, gold jumps back up $30. I have often wondered by gold bulls complain about “manipulators” slamming the gold price. Ah men!  If someone wishes to make an uneconomic decision or force weak speculators to sell then they subsidize more rational buyers. Ultimately, for higher or lower prices, the fundamentals will prevail.

If gold is sound money with supply only changing about 1.5% a year then what causes such volatility?  The amount of speculative hot dollars jumping from one pocket to the other.


As I grind my way through writing the CSInvesting Handbook, I will not be posting much unless someone wants to share material.   I hope to have another chapter in a few days. Thanks.

12 responses to “Housekeeping

  1. John,

    I read the first chapter and it was so good! Please focus and grind through the book.

  2. John,
    I e-mail you a book donation back on Sep. 5th, did you receive that e-mail (you Yahoo account) ?

  3. i’m sorry where i can find your book ?

  4. Assuming gold were priced to perfection today vs the dollar. Would you than expect gold to change in value vs other currencies based upon the difference in yearly supply for gold and currency?
    I.e. if gold supply increases 1.5% and USD supply increases 3.5% = 2% gold appreciation vs USD?

  5. No. Gold always does the right thing (maintain purchasing power –one oz. buys a fancy man’s suit in 2013 and in 1888) but never right away. Human action (the supply and demand for gold) has no FIXED ratios.

    So you see monetary debasement accelerating with the monetary base growing while gold price goes down in U.S. dollars.

    I think gold at these prices is an attractive store of wealth (not an investment) Why? The danger of monetary chaos, the Fed is inept, and the supply of gold is constrained–just the price changes.

    So can the price of gold fall another few hundred bucks, sure, but who wouldn’t want cheaper insurance for the dollar.

    Learn more here: Paste this into your browser.

  6. I meant “…gold to change in intrinsic value vs …” That would be about right, right?

    Those videos on hiddensecret are pretty scary. How do you recommend owning gold? Seems problematic buying physical gold…

    • Gold has no cash flows because it is money. What is the cash flow of a dollar? But you can see its exchange ratio for the Dow, oil, Soybeans. Think in terms of ounces not dollars per ounce.

      I can’t know what the “intrinsic” value of gold, but for a stable supply money like gold, a sharp move up or down seems absurd.

  7. I own through CEF with a 5% discount to NAV. The risk is that you don’t have the gold / silver in your possession.

    The world isn’t coming to an end, you just need to be aware that we live in interesting times–never in world history have nations had so much debt in a fiat currency system.

  8. Not sure how you define “the world is not coming to an end”. 🙂

    I did go back and read all posts tagged “gold” (planning to do a more thorough re-read later). I came across this post (
    where you comment on having a 75% position in gold stuff — explaining: “…I am making a bet that the Fed will lead us to a bust, financial chaos and deflation.”

    That sounds pretty awful…

    Care to comment on why prefer CEF over GTU?
    I would love to hear more about how you have constructed your gold holdings. It seems like a very contrarian view.

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