Thursday, December 19, 2013

Gold Getting Crushed

Some past gold and silver coverage here.

Also, updating those gold-implied hyperinflation probabilities from a year ago. Last year, you could buy a January 2015 $2450 gold call for $43.55 and sell a January 2015 $2500 gold call for $40, for a net debit of $3.55 for a call spread which would be worth $50 if gold cost more than $2500 in January 2015. (And surely it would, if there was "hyperinflation" by the end of 2014.) The market implied probability of hyperinflation before January 2015 was $3.55/50 equals 7.1%.

Now, you can buy that same $2450/$2500 spread for a net debit of less than $0.90, and it would be worth $50 if gold cost more than $2500 in January 2015. So, the market implied probability of hyperinflation happening in the next year is roughly given by $0.90/$50 which equals 1.8%.

1 comment:

theyenguy said...

The US Dollar, $USD, UUP, traded slightly higher to close at 80.75. Spot Gold, $GOLD, traded lower to $1185, on the sustained rise of US Stocks, VTI. These are polar opposites; so with US Stocks, VTI, in particular, the Investment Bankers, KCE, trading at rally highs, The Gold ETF, GLD, traded lower to 114.82.


The two great levers of liberalism's wealth are finally trading lower in value evidencing the exhaustion of the world central banks monetary authority. Junk Bonds, JNK, traded lower to close at 40.58; and the EUR/JPY traded lower to close at 142.41, communicating that the bond vigilantes have fully PIVOTED the world out of the paradigm and age of liberalism into that of authoritarianism.


Creditism, corporatism, and globalism are giving way to regionalism, Now with the means of economic destructionism, that is the Benchmark Interest Rate, ^TNX, rising from 2.88%, the dynamo of regionalism, will empower the beast regime, presented in Revelation 13;1-4, with its policies of regional governance diktat and schemes of totalitarian collectivism, to fully enforce debt servitude in the paradigm and age of authoritarianism.


In the age of authoritarianism, diktat money replaces liberalism’s fiat money; and fiat wealth, that is World Stocks, VT, and metrics of investment wealth such as M2 Money will be falling lower in value.


Under authoritarianism, the only form of sovereign wealth and sustainable wealth is diktat and the physical possession of gold bullion and silver bullion. Currently investors are long World Stocks, VT, and short Gold, GLD, as is seen in the chart of VT:GLD, which is crushing gold. One should start to dollar cost average an investment in gold, and take possession of it.

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