mark mchugh
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Latest Comments144 Comments
Five Questions on Gold for the House Banking Committee
I wish that Ron Paul had talked less and made Ben squirm more the other day. I agree with Mr. Powell. Understand, I'm not bashing Ron, but he kind of let Bernanke off the hook.
I would have preferred it if he asked your questions.
The Gnomes of Zurich Will Have Their Revenge
U.S. Mint Makes Drastic Cuts to Its Collector Gold and Platinum Coin Offerings
Paulson has the right to suspend the sale of the collectibles coins and coin sets (basically all the products mentioned in the article), and needs no justification to do so. So, he is not breaking the law by cutting production of those coins (and that includes the Platinum Eagles).
The important thing to remember is he must produce gold and silver eagles (of the non-collectible variety) in quantities sufficient to meet public demand and has no discretionary authority to do otherwise. I was glad to see that KITCO is once again offering gold and silver eagles (just in the last week).
The treasury could do a whole lot more to nurture public demand of precious metals. Like making gold and silver coins available for purchase at banks (because the mint's other coins go there), post offices (like they're doing in India) or through the treasurydirect.gov website. I'm not too fond of the idea that they only deliver to a very small network of dealers, but the law on this is not very specific.
To me, the availability of the gold and silver production coins is the key issue, and as long as they are available, I won't be screaming for Hank's head. I'd also like to thank the SA community for tolerating my repeated rants on this one point, and to apologize for beating it to death.
I'm going to post the link (hopefully for the last time), to the laws governing the Treasury and mint's coining. It's not fun reading, but worthwhile. By the way: the word "notwithstanding&... means "in spite of" in legalese.
www.law.cornell.edu/us...
Attention Gold Bugs: Hyperinflation or Deflation?
Yes Mark, one of them is the most overvalued asset in the world.
Using Futures to Buy Metals Wholesale
Section (q) deals with the $50 gold Buffalo, not the eagle (sorry to keep arguing).
Seriously though, I really do appreciate all your effort. Most people are unwilling to discuss these things. All this talk of manipulation would die if the mint was producing coins to meet public demand and making them available directly to the public.
I looked seriously into crashing the COMEX party, but it's not for me. If we can't get coins from the mint, it is clearly the next best way to end manipulation.
Thanks again.
Using Futures to Buy Metals Wholesale
The production coin:
(3) For purposes of section 5132 (a)(1) of this title, all coins minted under this subsection shall be considered to be numismatic items.
The proof coins:
(C) All coins minted under this paragraph shall be considered to be—
(i) numismatic items for purposes of paragraph (1) and section 5111 (a)(3);
However,
Section 5111 (a)(1) does apply, which puts the decision (and shortage) right in Paulson's Lap. So, the burning question is, why has Paulson decided that the limited production is all that is necessary?
Because he is 100% complicit in the manipulation of the gold price.
Thanks for the discussion. It's always good to have someone force you to tighten up your argument.
First Fuel, Now Metals - Forecasts Lowered
Using Futures to Buy Metals Wholesale
(1) Notwithstanding section 5111 (a)(1) of this title, the Secretary shall mint and issue the gold coins described in paragraphs (7), (8), (9), and (10) of subsection (a) of this section, in quantities sufficient to meet public demand, and such gold coins shall—
(A) have a design determined by the Secretary, except that the fifty dollar gold coin shall have—
The "may" that you are referring to is:
The Secretary of the Treasury may mint and issue only the following coins:
I'll say this, one of us has a reading comprehension deficiency.
Using Futures to Buy Metals Wholesale
You are wrong about the coinage laws-
Here is the legislation link:
www.law.cornell.edu/us...
You are asking the retail investor to perform a service that our government is required to perform.
I contacted so many futures brokers looking for physical delivery (and I'm pretty sure Lind-Waldock was one), I only found one that would facilitate physical delivery of futures.
It was Ryan Fox of MF Global advisors (good guy) - (800) 814-8328. no mini's, though.
I came to the conclusion that it makes more sense to buy big bars from dealers (while they still have them) than to try to navigate the COMEX.
Using Futures to Buy Metals Wholesale
Can you name a single broker who will arrange physical delivery of mini contracts?
When I finally found a broker who would arrange physical delivery of contracts (not mini's), I learned that there are multiple fees involved with delivery, can you total the costs and determine how much above spot you will pay in the end?
What does it cost to have bars re-assayed?
What does it cost to have the metal made into smaller bars or coins.
It seems to me that you are echoing the CFTC party line that there are "no identifiable obstacles to physical delivery".
There is absolutely no real reason the US Mint can't produce coins for the public. Making coins is about as simple as it gets. The Mint is required by law to sell those coins directly to the public at market price (plus production and marketing costs). That's all, folks.
The fact that they can't (or won't) is a national disgrace at best.
Look,
Gold: War of Attrition
The NYMEX is a joke, and anyone who suggests that anybody can buy a futures contract, get delivery, smelt it and re-sell it hasn't done the homework to see what is involved.
The easiest way to end the precious metals price manipulation is to force the US Mint to sell coins at market price directly to the public (not dealers) at market price. Not because gold bugs want them to, BECAUSE IT'S THE FREAKIN' LAW!
www.law.cornell.edu/us...
Go to treasurydirect.gov - they sell all the bubblicious treasury products there, directly to the public. The Mint is part of the treasury, so why can't I buy coins there? Because, Paulson, while crooked as the day is long, is no fool and is unwilling to sell me gold at an artificially low price. The "we can't get coin blanks made" cover story has to be the lamest lie I've ever heard (yet, people like Jason C actually buy it).
The constitution states clearly that only gold and silver are money. So, unless there's an amendment I don't know about, we've let the CEO of Goldman take the real money out of the hands of citizens.
Sell the gold and silver, Hank, no more excuses.
Expecting Epic Gains in Gold Miners
What world are you from?
Is This the Last Great Bubble?
Issuing short term debt is printing money. You say "potentially high return assests", I say gambling. Going gambling with newly printed money means you are probably going to need to print more very soon. How does it end? When no one wants to lend you money anymore.
If US citizens held the vast majority of US debt (as is the case in Japan) I'd agree that this could go on for quite some time. But we are dependent on the kindness of strangers, who quite frankly, never liked us much. What we are vulnerable to is a stampede out of treasuries.
I can't predict when the US will lose it's credit rating, but it's credibility rating is already gone.
Gold in a Credit Crisis
You're absolutely wrong about gold (and silver) as a currency.
en.wikipedia.org/wiki/...
And while it's true that all the gold's still around (because it's indestructible), there still isn't even one ounce for every person on earth.
Is This the Last Great Bubble?
To try to answer Alex's question (and I don't mean to speak for Nick): We've been trying to solve the problem of easy money (abundant low interest loans) with more easy money. The treasury is issuing low interest debt at an unbelievable place, almost half to foreigners. We do not have the means to pay this debt in real terms, so we will print more and more money to pretend we are covering the debt. When it dawns on everyone that this is what we are doing, they will dump our debt, and the Fed will have no control over interest rates.
It's important to understand that when rates rise, existing bond prices fall. A while back, I ran some examples and I figured if rates go to 10%, treasury long bond holders will lose about 50% (flight to safety?). So, it's just a question of when the world loses it's appetite for our debt. And your guess is as good as mine.
I hope Nick would agree with that explanation.