gold. so, for example, by law, in the early 20th century, the price of gold was set at $20.67 an ounce. there was a fixed relationship between the dollar and certain weight of gold. and that in term helped set the money supply and helped set the price level in the economy. there were central banks that helped manage the gold standard, but to a significant extent, a true gold standard creates an automatic monetary system. basically, money is tied to gold. now unfortunately, gold standards are far from perfect monetary system. one small problem which is not on the slides but i'll just mention is that there's an awful big waste of resources. what you have to do to have a gold standard is you have to go to south africa or some place and dig up tons of gold and move it to new york and put it in the basement of the federal reserve bank of new york. and that's a lot of effort and work and it's, you know, it's milton freedman used to emphasize that was a very serious cost of a gold standard. that a

is where gold is scarce gold is valuable right now i imagine that b.-i yes the bank of international settlements they also came out with a report last year as a recurring ongoing look at the positions in a derivative markets because they are in fact in fact in these markets and that's where the data came out originally about j.p. morgan's three billion ounce of short sell for they've got a pallet see that looks like mt vesuvius the day before blows up it's over get over fifty. j.p. morgan stock is worth zero that's what i thought my work's tells me what is what do you see on that front david morgan. ok well not to pick an argument max i first of all everything you said i agree with secondly i mean they're totally insolvent they're totally broke right now i mean they are absolutely insolvent so how do you blow up a bank that's totally blown it sucked up already it's just no one seems to realize it other than those athol it works like yours but what will happen if it goes above fifty or one hundred or whatever in my thinking it'll just be another too big

her are we ever going to get our gold back in the gold treasure of the germans in new york this is from bill the largest circulation newspaper in germany so they're calling it the incredible gold candle they found out that the buddhist bank has not actually audited their alleged gold reserves in the new york fed for over three years and they're supposed to body every three years they were supposed to audit in two thousand and ten apparently they have not done that also germany is looking what happened to greece as part of the troika the i.m.f. the world bank the e.c.b. . trolling for assets in greece they've already seized one hundred eleven tons of gold that was held in greece the greek gold reserve the central bank that's gone it's now the property of the troika so they know that people are looking for gold around the world and so they're very very nervous as they rightly should be as we reported at the time and we got confirmation within the bank itself confirmed face to face that in fact the gold was not there also you're seeing an awareness of the citizens of the post world war two

we begin with gold. there's a demand for gold for investments, for the circuits in cell phones and computers, and of course for jewelry. and mining it often comes at a huge cost, one of which you probably haven't heard very much about. in the democratic republic of congo, gold and other minerals are fueling the deadliest conflict since world war ii. in november of 2009, scott pelley went to the heart of central africa and found a campaign of rape and murder being largely funded by gold that's exported to the world. >> this is a gold mine in eastern congo, dug from the side of a mountain by the bare hands and stooped backs of 100 men. they've lifted tons of dirt one pan at a time, building terraces as they descend. the hunger for gold drives men into the earth so that other men can kill. you good? >> thank you. >> anneke van woudenberg has spent ten years in congo. she investigated the mines for human rights watch and wrote one of the most respected studies on the trade. you know, this is a little bit dan

s gold, we are holding gold for other governments. foreign governments, does hold some u.s. gold as well but our gold primarily held at fort knox. >> what industry is the largest consumer of gold, bob? >> far and away, about 55% of the gold in the world is consumed for jewelry. one of the thing wes did was we visited stuller, the largest goal jewelry manufacturer in the world, certainly in the united states. there is the site, lafayette, louisiana, we went all the way down there those are gold pellets used for julie manufacturer, again, they are also make their own gold on site. we saw a fascinating method called the lost wax method which is how they make jewelry, they put them in these molds that are there i think you will look at some of these molds they are using here aurptd put wax in, do a model of it on wax and then melt it around it and it moments out, there is the mold and you actually can pour gold back into the mold that is how these gold rings are made and most gold is made. >> different grades of gold, bob? >> sure, differ

do you think on gold, mark? >> i think largely the same. we're back down to about the 200-day moving average. i think oil prices continue to move higher on the back of continuing easing. even though the fed has paused for the moments, others are still liquefying their respective countries' balance sheets. as a consequence, this bodes well for goad prices. >> mark and peter, thank you so much for joining us. we've been up now for four straight weeks. where are the big guns putting they are noen in you see where institutional investors are investing, where they're putting their money and taking it out from. steve leisman is at orlando at the common fund forum. tell us about the kind of people you meet down there. >> last night at dinner i salt next to a guy with i $4 billion fund eyre chicago hospital. next to him say guy with i $60 million fund for the small school up near pittsburgh. the most interesting guy is a guy to manages a $200 million fund from a guy in delaware that was a boatsman and moved to the south

peter's market you know they trade about one hundred times more paper gold actual real physical gold access silver it's about one hundred thirty five times more but what's even more astounding is where you look at you know the total solar supply it's a thousand and ten when you add in scrap metal as well so anyone my production you look at about seventy percent of that is used up right production all purposes so if you thousand and ten there's only about one hundred million ounces of silver left for best minutes or per monetary purposes so again you never mix a seven hundred billion galaxies trace on chrome x. ray so thousand times more such a project market yeah. and you know it's interesting at this warren buffet trying to down talk down gold meanwhile in the troika in europe what's the first thing they did when they got greece to sign off on the memorandum when it's practically losing their sovereignty they now have a claim on greece's gold one hundred eleven tons of gold and of course this is now a factor in the troika's land grab an asset grab all over europe i guess they're loo

has gold shorts trapped do you concur and for the audience explain what it means that gold swords tracked and what you expect to see in this case next i actually don't concur with. that in the sense that those shorts are going to get over on it you know because shorts again what that means is the big banks are short gold and if you just mark it as a whole price rises basically you know no way out besides going along to counter it out and the reason i say that is because remember back then so was that everyone said st big silver shorts were going to get run over but as we've seen in the past the bankers come up with some kind of scam to overcome that so in the case of silver that's time those go through the c.m.e. that reason is short and maintenance margins to trick rational really can change laws or in the event that you know say they do get over or look your best some from just the faulty as you saw on m.f. global right there is nothing to stop them from doing whatever they want so in that sense i remain just a little bit skeptical that they can get over on i will i imagine so over let'

global gold standard. and achieving that much gold would be very expensive. cost a lot of resources. but more fundamentally than that is that the world has changed. so the reason the bank of england could maintain the gold standard even though it had a very small amount of gold reserves was that everybody knew that they were going to -- their first, second, third and fourth priority was staying on gold. they had no interest in any other policy objective. but once there was concern that bank of england might not be fully committed, then there was speculative attack that drove them off gold. now, economic historians argue that after world war i -- after world war i the labor movements became much stronger. and there was a lot more concern about unemployment. before the 19th century people didn't even measure unemployment. after world war i you began to get much more attention to unemployment and business cycles. so in a modern world, the commitment to the gold standard would mean that we are swearing that un

means is that people your bags are short gold and if you choose market as a gold price rises basically you know no way out besides going along to counter it out and the reason i say that's because remember back then so was that everyone said st big that silver shorts were going to get run over but as we've seen in the past that bankers can come up with some kind of scam to overcome that so in the case of silver that's i'm just go to c.m.e. there is an issue all maintenance margins to crash silver that can change laws or in the event that you all say they do get over what prevents them from just faulty as we saw in m.f. global rate there is nothing to stop them from doing whatever they want so in that sense i remain just a little bit skeptical that it can get over on i really imagine so over let's talk about silver reportedly an attempt an attempted paper silver raid last week when one hundred two million paper answers were dumped on the market within seven minutes it didn't succeed this time in driving down the price john so the follow up on what you're just saying there in terms of th

gold bars in your portfolio. why you may be better off taking physical delivery of gold than buying futures and samsung slams apple and china. why the opportunity makes samsung a better buy than apple. welcome to "fast money" halftime report. lots of trade today. let's do it with vix plunging to the lowest level since july. what's it signaling here? >> you brought it up at the very top. talked about ranges we've seen. on top of that contraction we've had a steady plotting move to the upside. s&p 500 continues to push above 1350 area toward 1370. seems to be a consistent pattern that we see and watching that volatility index continue to be the leadership. we talked about it on many occasions and even sell-off days where volatility pops but that pop only lasts a couple sessions. we were talking last week. we've had three days since january 19th where we actually stayed above 20 three times. we've never done that in succession. it does tell you something about the markets right now and there is a level of comfort at

basically, money is tied to gold. now, unfortunately, gold standards are far from perfect monetary systems. one small problem, which is not on the slides, but i'll just mention is that there's an awful big waste of resources. i mean, what you have to do to have a gold standard is you hav to south africa or some place and dig up tons of gold and move it to new york and put nit the basement of the federal reserve bank of new york. it's milton friedman used to emphasize that was a serious cost of gold standard all this gold was being dug up and then put back into another hole. there are more concerns that showed practical experience were part of a gold standard. one of them was the affect of the gold standard on the money supply. since the gold standard determines the money supply, there's not much scope for the central bank to use monetary policy to stabilize the economy. there was no flexibility for the central bank to lower interest rates in recession or raise interest rates in inflation. some people view that as a be

but central banks around the world are buying gold you know gold gold iyam gold look gold is the collateralthat is the foundation for the entire global banking system it's a. misnomer to say that we're not on a gold standard we are the gold standard we always have been we always will be sometimes we choose to believe or not and they would puff up seven hundred trillion dollars at the derivatives but it's still so resting on a coup or value of gold central banks understand this people who want to protect themselves against fraud should be buying gold and silver and when you're buying gold to put it into a technical term for you hedge fund traders out there it's like buying a volatility straddle ok you know the vix which is the volatility index you can buy straddle could put in a call the saying strike price and then that only only way to lose is that there's no bala telling if you buy gold the only way you lose is if the economy progress as smoothly without any interruptions whatsoever given the amount of fraud and the amount of misallocation and malinvestment and outright scandal was psycho

gold. and i will talk more about gold in a few moments. now, the lender of last resort function which i mentioned earlier became important in the mostly, in the 19th century. early in the 19th century the bank of england was doing a lot of this type of activity and they became very good at it. as we'll see, while the united states was suffering with banking panics in the latter part of the 19th century, banking panics in the united kingdom were quite rare. so the bank of england sort of set the, set the pace in some sense. it was the the most important central bank and it helped establish the practices and approaches that we still use today. now i need to talk a little bit because it is less familiar about what a financial panic is. in general a financial panic is sparked by a loss of confidence in an institution. i think the best way to explain this is to give a familiar example. how many of you have ever seen the movie, "it's a wonderful life"? less people are watching christmas movies th

there are problems with gold. hayak wrote a book back in 1976 called "denationalization of money" basically arguing for competitive currencies, looking at money like any other good or service you provide. and argued that if individuals were out there, companies could go out there and freely compete, you would end up with the best money, who would better come up with good money, barney frank or steve jobs. we all know the answer. we do have a problem in that the constitution gives the power to congress to coin money and set the value thereof. but it does not give the government a monopoly right. basically what it does is specify the government has to come up with definitions for payment of goods and services, the government, and collection of taxes. so you have to have a standard, we call it legal tender by which is the fallback and by which you pay your taxes and by which the government puts out its money but that doesn't preclude private entrepreneurs with coming up with money except we've got two things. the tre

tyler will tell you about owning gold stocks versus gold. the problem with gold stocks is the additional risk associated, the commercial risk of the strikes and disasters, the political risk of governments honing in on your business and wanting more of it, the hedging risk and the production risk. can you make a case why you should own gold stocks over gold? >> well, there are several reasons that you could make here. one is that gold stocks now are particularly some of the bigger more established players paying very strong dividends. and you can look at companies like newmont mining good as or better than the market. and secondly every year they've been replacing their reserves. so if you like, you're generating dividends and cash flow through the year. and then you end up with the same gold in the ground. so when you're buying a gold stock, you're buying gold reserve. plus you're getting a return. >> very quickly, patrick, your three top picks are barrick, randgold, pick one and which would be it by and why? quickly. >> right now i think r

gold and oil as well as we track the commodity space, crude oil giving a fraction back today, but gold certainly isn't. up 1.33%. let's get to our fast five stories. it looked like the fed chief was turning on us, but clearly equity traders, bernanke's got your back. what are the best trades of his dovish comments? gold trade is back on big-time today. and dennis gartman coming on on whether it's time to reload. insatiable hunger for "the hunger games," the talk of tinsel town and trading, lionsgate stock. >>> nasdaq headed for the best quarter since 2009. not just apple. old-tech in a names like microsoft taking the reins. and kate kelly with the latest on new speculators coming into oil. the biggest influx of this sort we've seen in years. watch out at the pump that's the word there. welcome to the "fast money" halftime report. let's start doing it with the bernanke bump. what you should buy if bernanke has got your back. joe? >> bernanke put. he's keeping it in place in order to get growth you have to have the wealth effect. and bernanke is behind that effort. >> i no he what it is.

i know sharon's watching that closely as well as gold. gold is also higher today.10-year yield. we're falling a bit. the yield at least 2.2334 at this point in the session. let's move along to the winners and losers for the s&p 500. a lot of names worth watching here today. discover financial and morgan stang the way higher on the upside after getting some nice upgrades from the likes of goldman sachs upgrading the entire credit card sector to attractive. morgan stanley also getting a nice mention as well in another report. seema mentioned micron technology, definitely the biggest laggard on the s&p 500 today. nike also a loser after the earnings after the bell last night. now, let's go into sharon epperson. sharon has the metals closing right now. what a move gold has made in the last 24 hours. >> court, you're right. we're up $20 right now for the price of gold $1662 an ounce. metals are higher across the board. and the weakness in the dollar definitely a factor helping the metals market. but keep in mind when you look at the one-week chart in gold, we are basica

what is a gold standard? what is a gold standard? the price of gold was set at $20. $20. gold standard. money was tied. i am tired of watching them my problem is that it is wasting resources. there was tons of gold put in the basement of this. it used to emphasize that this is a cause. that is put back into another hole. there is the cross of a gold standard. there's also some economic concerns that are part of the gold standard. gold standard. one was the effect of the gold standard on the money supply. standard on the money supply. it determines the money supply. there is not much scope for the central bank to use monetary policy. in particular, the gold standard goes up and here it's a strong economic activity. that is the reverse of what the central bank would normally do today. because you had a gold standard would ties the money supply to gold, it there was no flexibility for the central bank to lower interest rates in the to lower interest rates in the some people view that as a benefit of the gold standard. it did have the implication that there was more volatilit

gold in dollars is barely higher. gold in euros is actually lower. gold in british pound sterling is unchanged. it's become a currency trade. it's a currency dross trade. i'm afraid there's more liquid dags. what bothers me is etfs, the gld is increasing in size. >> whey is that problematic? >> that means nobody has li liquidated their position. that usually is not a good sign. >> hey, dennis. i read through the notes and saw you maybe believe qe-3 is off the table. is it possible that a meltdown around the world is off the table? that the end of the world sp off the table? we may still get qe-3. irrespective of these other issues maybe moving to the sidelines. that's not gold's biggest problem right now. the world is safer than it was a couple weeks ago. >> i think you put your finger right on the problem that gold is facing. i think the concerns about a global meltdown are gone. they shouldn't have been on the table in the first place. the world rarely melts down. it'll only do it once and it's a bad bet. i think what we're seeing a global growth s

. >> coming up, if you thought the gold return -- gold rush was over, think again. thousands are flocking to california rivers and streams, hoping to strike it rich. and rain is on the way. >> mike: i'm mike shumann. it was nneka ogwumike, contributing in a way she has only done wise ititititititititip >> alan: a bay area city has been named one of the best cities in the nation retire. walnut creek is one of the top ten cities to retire in according to yahoo finances. it offers a rich variety of entertainment and good medical care even if it may be a bit pricey. other stus include marquette, michigan, santa a the, new mexico, pittsburgh, pennsylvania, and winston-salem, north carolina, at the other end of the scale is stockton. in the past ten years, stockton has been at the top of forbes magazines most miserable cities list. the city with a $15 million deficit is on the verge of bankruptcy. city leaders have gone negotiations with bond holders and credit unions and leaders in an attempt to stay solvent. >>> ideal conditions including weather and water level have pe

barrick gold, the world's largest gold producer, fell more than 4%; kinross gold tumbled more than 6%; and newmont mining slipped 1%. and finally tonight, a look at the biggest loser in the dow. disney shares lost over 1% after it's big-budget film "john carter" bombed in its box office debut. and on that note, that's tonight's "market focus." >> susie: the pressure is on, from the white house to state capitols, to cut college costs. as states slash appropriations, many colleges say trimming the budget is a tough assignment. sylvia hall visits a school system in pennsylvania to see how its handling the cuts. >> reporter: a cafeteria serves meals without trays. new, energy-efficient buildings cut down on heating, cooling and lighting bills, and 50 jobs sit empty. the strategies look different, but at shippensburg university they all serve the same purpose: cutting costs in a time when every penny counts. >> we are at a point where we have to say everything is available to be reduced. >> reporter: this year, shippensburg university and its 13 sister schools face a possible 20% drop in s

left from germany in london but the the chunk of germany's gold is not in germany it is the new york and every time when i asked the new york fed for example or the board of governors of the federal reserve in washington to see if they have swap arrangements with the german spank they never ever taught me anything about it they don't even repeat. never really wrote me something they have been real fast they have a automatic response system and that says every time when i wrote to them we will come back to us soon as possible but there was never any possibility and i think there's a fear in the. in this bank that if they pursued a topic too aggressively they would find out that the us has hypothecated the gold to back up some of these bank bailouts and sold but all doesn't exist anymore in terms of anything that very thing they claims on oct only doesn't think that they're they have that gold actually in their name but getting back to the insider trading around nine eleven and the insider to profit from invest knowledge trading the airline put options the inside information story in t

. >> tom: that optimism had investors cashing out of gold. the yellow metal posted its biggest one-day drop this year. but what about bonds? are they still a safe bet? >> if you own a bond fund and its in long-term bonds, you can lose 10%, 20%, 30%. >> tom: it's "nightly business report" for wednesday, february 29. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: captioning sponsored by wpbt >> susie: good evening everyone. ben bernanke said today the u.s. economy is doing better, but higher gasoline prices could temporarily reduce consumer spending. the chairman of the federal reserve was on capitol hill speaking to congress, updating lawmakers on the state of the economy. in a word, tom, he sees "modest" growth. >> tom: susie, bernanke's comments came shortly after the government reported that the nation's economy grew by 3% in the last three months of last year-- higher than previously thought. also today? the central bank's survey of regional economies-- the beige book-- ha

i went longer on gold and added to my positions. i bought a couple of tech companies, most significantly synopsis, in the chill supply side of the world. >> why longer on gold? when things are settled at least over in greece and the economy improves incrementally vis-a-vis job market. >> i'm a glass full type of gal. i believe inflation believe it or not is the issue in the next year or two. this is a longer-term position, and it's one we'll hold up to 2200 or higher in gold. >> dr. j, anything new today? >> the miners looked they were tossed out with the bath water. we talked about that with you and pete on tuesday. that indeed has played out because those were down 10% or 14%. if it was the junior miners, they were down 14%. look at the moves those have made, judge. it plays into patty's trade as well that many of the miners are feeling a little lift from what has gone on it this week. then i point to the birthing pains on tuesday. in other words, right up until the actual event, you do have some spits and starts where people are

star largest population in germany concerned at all that the sixty sixty five percent of their gold appears to be messing you know. their own basically what you have also with all my movement you have. people are not really at. you created financially so why should they care if they don't know what the value of gold really is among central banks in politics into for example why i keep that way i have a focus on the surface because i think that. oil and other commodities will be paid in the future with gold but tell this to the average person on the street it will not understand why there might be a connection between gold and oil and such things and this is why i am concerned about this but the general population here in germany know and why should they and they have heard now about this from a rag a real rag good sides and so bad said lloyds and they will not fight tooth and nail that germany will get the gold back no you can forget about this and it would be totally naive to think that germany would get its go back if it exists at all and i doubt the us alright well certainly it's

that the gold to back up some of these bank bailouts and so the gold doesn't exist anymore in terms of anything that germany can lay claims on hope demi doesn't think that they're they have that gold actually in their name but getting back to the insider trading around nine eleven and the insiders who profited from investor knowledge trading the airline put options the inside information story in the u.s. of course congress is allowed to trade on inside information so potentially budget krongard are you mentioned and other congresspeople and insiders in the intelligence industry potentially profiting from trading on these costs and many of the millions of dollars were never collected at alex brown deutsche bank from the profiteering that went on from this it's an inside information is legal so you know maybe maybe they should take more pride in their prowess as traders and step forward and let people know that they're such good traders if they're going to have insider trading lars like can people be more braggadocio about their success trading on inside information your thoughts well i

oil and other commodities will be paid in the future with gold but tell this to the average person on the street it will not understand why there might be a connection between gold and oil and such things and this is why i am concerned about this but the general population here in germany know and why should they they have heard now about this from a rag a real racket both sides and it's a bad temper lloyds and they will not fight tooth and nail that germany will get the gold back no you can forget about this and it would be totally naive to think that germany would get its gold back if it exists at all and i doubt this all right well certainly it's a story that is worth keeping an eye on. thanks much for being on the kaiser report thank you for having me all right that's going to do it for this edition of the kaiser report me nice guys or as they say are brought out i guess a large shawl if i say me now please this are kaiser report r.t. t.v. that are you it's like. home.

when you say gold corp., they're so challenged to find gold.rite off gold because the supply side is really bad. really bad. they can't find it, carl. >> we're going to get a lot of data this week. among them, numbers, retail sales tomorrow and i know you're watching a couple. >> jp morgan says macy's is good. macy's has been the barometer. it's a multi-year pathway. carl, i got to tell you that's been a fantastic stock. maybe it continues. 52-week high. >> unbelievable. >> going to keep an eye on thanchts let's check out the latest moves in energy and metals. sharon epperson is at the nymex. >> a lot of hedge funds are cutting their bullish bets on commodities. that couple with what you were just talking about in terms of in news out of china is definitely weighing on wti oil futures. looking at brent crude down as well this morning. keep in mind though we saw, in fact, the cftc's commitment traders report so i that forthfirst time in five weeks we saw money managers cutting it. not so though in brent crude and definitely not so in gasoline. g

ted, what's your call on gold? >> i'm afraid i don't have a great call on gold. sorry. >> mandy, i would add -- >> okay, so, i mean, gold is obviously moving down at the moment because fear seems to be lessening and peopwhat does tha mean in terms of an investment strategy, ted? >> again, i mean, we're a large cap value stock fund. we're focused on the fundamentals of the companies that we own. we don't happen to own any gold miners now if that helps answer your question. >> i think on the gold side, with no qe coming forward anytime soon, you have seen the first element of pressure on gold price. you've had that for a couple of days but you've not seen too much. second, if you have the dollar strengthening much further than it has and if the market goes the way i anticipate and the euro goes from 130 to 125 to 120 -- >> in which time frame? >> oh, 125 i have for middle of the year 2012. >> right. >> and 120 for year end 2012. both of which are very bearish for gold. >> yes. >> so, i would say if the dollar go -- if the u.s. dollar does so well, i think it's not