Goldman Sachs and gold

Interesting article on Goldman Sachs and Ashanti mines, and their demise, due to badly timed gold hedges, with Goldman (surprise surprise) playing both sides of the deal:


http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=180487

 

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GS is all over the place with deep pockets, influence, and pressure.

 

Goldman Sachs CEO Lloyd Blankfein: "I'm Doing God's Work."

 

It appears that Ashanti was very greedy also, in obviously selling more contracts than gold they could produce. Most gold producers had to hedge gold during that time so they didn't have to close down due to lowering gold prices, but not selling contracts for gold they couldn't produce. People who naked short stocks find themselves in the same situation.

To tag along with this,
http://www.tickerspy.com/newswire/?p=1745

Paulson, who worked with GS on the CDOs that brought about the GS Fraud charge ( which I don't expect to stick) , also is deep in gold with AngloGold Ashanti (AU), and his ETF ( GLD). Sooner or later, I expect some fallout here also. Much of the gain on gold prices, has been ( IMO) due to the demand from Paulson's GLD fund. I am sure that Goldman is involved in this relationship also.

Jim

 

So everybody here is short gold?

 

LOL! Nope, and I'm not selling either. But DZZ (the power shares double short gold ETN) might make a nice "hedge" if things get interesting.

 

Goldman-Sachs and Gold

Goldman Sachs CEO Lloyd Blankfein: "I'm Doing God's Work." Right, God once said, "all the gold is mine and the cattle on a thousand hills". God must be a banker.

I feel somewhat vindicated by bringing up the issue of accounability with a minister who connects with many wealthy investment types, last week. His Christian position was that God is a God of forgiveness and mercy. Plus, I corresponded with a former Goldman chief who is now in the ministry. I asked some hard questions. I referenced the Zero Hedge website. The silence was deafening! No more email responses. I asked him what he thought about hard assets and coin collecting. He said that the coin industry is frequented by low-lifes....I wonder who the real low-lifes are?

I'm hoping for a substantial dip in the price of the metals before the next surge so I can buy.

 

Have you considered the possibility that this might be the dip?:secret:

The price that everyone wants to buy at is always just a couple of dollars lower than today. And the same will be true tomorrow and the next day until the day it is too late.

 

The "Spot" Price

No one knows. I don't know how many trillions of total capitalization gold and silver represent, but this figure is dwarfed by the total capitalization of stocks and bonds and the ability of the money magicians to drive prices down and up.

Other issue: ultimately all investments have to go somewhere for a positive purpose. I don't want to be found dead with a safe full of gold and other valuable tangibles, when I could have wisely invested in the human dimension more through building a family, connecting with helpful fellowships more, like this one, and so forth. I think Warren Buffet has seen the total range of human experience, a father who was a hard asset man, and a current generation struggling to build lives for themselves.

The organic world depends on the inorganic world for its existence; inorganic things--minerals, sunlight, building materials, plastic, silicon-based units, and so forth. What happens when, like Midas, one's wealth--whether in tangibles or paper assets, eclipses the organic--the human dimension, positive virtues, proper priorities? Anyone who has lived long on the earth knows how dangerous it is to be poor and defenseless. Also, some of us have been ripped off by various con-artists, or have stuck to our guns and principles in the face of some very unaccountable entities.

There are investors who are giving the order to their funds this morning to buy or sell thousands of ounces of gold in a single shot. Most folks who are collectors/investors are not in that category. What is needed for some is a "life coach", sponsor, pastor, or other competant professional to guide the investor through their current financial position into investments that are in keeping with what they are trying to accomplish.

 

The bad news is:secret: -- there isn't any such person. It is something you need to learn on your own because 90% of the information in this area is either useless or wrong to the point of being dangerous. Even most of the folks who consider themselves "professionals" have been highly trained in techniques that don't work.

 

Often people do not recognize the progression needed for true investment. Even with the intelligent people on this forum, given some money would rush it to precious metals, guns/ammo, collectibles, real estate, whatever, without the knowledge and understanding to make it an investment rather than gambling.

The best investment might be books, courses ( not the get rich overnight group), apprenticeships, paper trading, and not a gold eagle. Knowledge is what will make your investment sound over the long run, not intuition, hearsay, or the popular rhetoric on forums or press.

 

Well said.:thumb:

 

I bought a fund that shorts gold and silver before gold went over $1000, now I am down about 50%

 

Ouch . Inverse funds can be really dangerous. And I don't think they improve by being held onto, since they decay over time even if the price action starts to go your way.

Isn't that heresy ? Adam Hamilton wrote an article arguing that funds like GLD have moved the price up, and that those who claimed ETFs were being used to suppress the price were physical gold dealers/owners trying to drive people into physical:

I don't think anyone has spoken to him since . In any case, IIRC my mailbox was flooded with irate rebuttals, and for the past three months incessant propaganda about paper funds vs. physical gold.

http://www.321gold.com/editorials/hamilton/hamilton121409.html

 

yea it shorting stocks are not long term things they are well short term investments and only if you are for 100% sure that industry is going to go down.

i would just cut my loss and get rid of it.

this GS thing and it's connection to washington just ****es me off. I am so sick of these guys screwing people and getting away with it.

gold is probably going to be all over the place until this is finished.

this reminds me of the movie The Producers.

I recommend the orginal one vs the new one but the new one is funny as well.
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Just to set a point straight, ML94539, did you buy a bear ETF like the DZZ that zuhara mentioned above, or did you short futures?

The ETF funds such as GLD ( Long fund for gold), and DZZ for double bear (short) GOLD ETF, are like stock shares in that they trade on the US stock exchange and not as futures that have expiration dates. You can hold it as you like, it doesn't expire in a certain time. The DZZ intends to reflect twice the inverse of the Deutsche bank optimum gold fund ( like GLD), so when gold goes up , DZZ fund goes down twice as fast. If gold goes down, DZZ fund goes up twice as fast. If you own physically present gold, you can figure how much DZZ you would need to offset any decrease in the value of the gold you have. It is like buying insurance on the gold price. True, the value of the DZZ stock would decrease badly if gold went to $2000, but then if you sold the physical gold, you could hang on to DZZ as a hedge against it going down again. If it did, you could sell the DZZ and add it to the money you got from selling the gold, and buy even more at the lower price.

Goldman Sachs holds about 2.4% of DZZ, most likely for the same reason

 

Not to worry about GS - just more political posturing in my opinion. Something more distracting will likely happen.

 

Goldman and Regulation

Peter Schiff, Connecticut Senate Candidate, has this piece today posted at Lew Rockwell:

http://www.lewrockwell.com/schiff/schiff87.1.html

I also received a posting from Ralph Nader's "Public Citizen" today on the mounting issue of more regulations of companies like Goldman Sachs: http://www.citizen.org/real-financial-reform

So what is the truth on this issue, more regulations?

 

More regulations are needed. Unfortunately, the Washington groupies are still licking the boots of Goldman Sachs and others.

for starters derivatives should be monitored by state gaming commissions. Banks should not gamble with depositors money and an updated version of the glass steagull act needs to be made law.

 

Goldman Case

http://www.ritholtz.com/blog/2010/04/10-things-you-dont-know-gs-case/

This case is going to be going on for a while.