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Latest Comments64 Comments
NBER Eggheads Finally Proclaim a Recession
Don't Give Up on Gold Just Yet
The YTD return shown for GLD at yahoo.com was positive 3.17% until yesterday's drop off.
Then compare that to how much oil an ounce of gold will buy you. Nearly twice as much! By that metric gold is way way up.
Then compare an oz of gold to the dow. The ratio went from something like 15-1 to 10-1. So again, way way up. The Dow is down over 40%. Gold isn't.
An oz of gold also buys more house, more pickup truck, and even more agricultural commodities than it did a year ago.
Sounds to me like it's serving its role as a true store of value. Unless one went "all in" at $1,000/oz it wasn't a bad year at all.
Gold: War of Attrition
I wonder if in 2 years you will admit how wrong you were with the same pomposity as you laid out your current theory.
$60 Trillion in unfunded obligations, annual $1-2 Trillion fiscal deficits, and and rolling waves of multi-billion "bailouts" in our future (of states, of banks, of homeowners with mortgages, etc) tell anyone who can do basic math that massive inflation will result.
Where'd you take economics 101? University of Zimbabwe?
Expecting Epic Gains in Gold Miners
Do you think buying at the highest high of a market is typical? Do you think $650-$700/oz is the higest gold has been or will be?
And do you really think the author is saying "buy and never ever ever sell ever" ? He's saying buy it soon, hold it a few years, then sell it when appropriate. NOT buy it, hold it till it rises and don't sell, then hold it till it drops to where you've lost money, and THEN sell! As the economic conditions change, the value of holding gold will as well.
The author points out in his later comments that gold has done better than most other asset classes even as it "burst". (quiz: Which is better, losing 25% in gold for a few months (assuming you bought at the high) or losing 40% in the stock market?) Go check the market's performance inflation-adjusted for the last 8 years. It looks about the same as if you bought gold in 1982!
I happen to agree that it will rise since we have $60T of future govn't obligations that could not be met even if we taxed all personal income 100%. So this "deflation" of a few trillion dollars will seem like a drop in the bucket soon as the printing presses pour money into the system like never before.
We haven't even seen the dip in tax revenues from a recession yet. We'll be lucky not to hit $2 Trillion a year on-budget deficits within a couple of years. But hey, the dollar has strengthened 20% for a few months, so gold is obviously a barbaric relic, I'm selling! Nothing's stronger for the dollar than deficit spending, right?
Gold in a Credit Crisis
Go check your own records Mr. Commodities expert. There have been huge (around 50%) corrections in oil, wheat, soybeans, corn, etc while all marched steadily up in price.
My guess is you're a FORMER employee for a reason.
Gold, Silver and Deflation
Does nobody recognize that if gold goes down in a "deflation" when priced in dollars that those dollars will buy you more stuff? Yet if we see inflation and you're in gold it will probably also go up and mirror that? I didn't get the impression from the comments that this was understood. Gotta stop thinking just in terms of dollars.
How much house or car or clothing or food will an oz of gold buy you? That is the important question. That is the beauty of it in a crisis. If things turn out to be good, you keep most of your investment and your job. But if things hit the fan, you are protected.
Oil Heading for $150 a Barrel, Gold for $1500 an Ounce - Merrill
Moral Hazard: The Real Culprit of the Financial Crisis
Think we're not a nation that tolerates dishonesty? Go flip on the radio and listen to just about any advertisement, be it for weight loss powder or get rich quick schemes. We know this dishonesty and unprincipled behavior goes on constantly in almost every phase of life, but we tolerated it. We tolerated it because we thought if it made or saved us a little extra money it would be ok. And now it's not ok.
The Time to Buy Commodities Is Near
I stick to the macro picture and let the traders gamble on the short term moves. Oil is a needed product and available relatively "cheap" today. It will move up with inflation, so it has some inflation hedge properties built in. I wouldn't own most stocks today though. Not a ton of upside.
The Time to Buy Commodities Is Near
The fact that Mike Norman seems to agree with what my theory is (short term price falls and volatility followed by a long term move up in commodities as inflation hits) scary, though. He's been wrong for years now.
Gold ETFs: What Went Wrong With Conventional Wisdom?
Also, please note that just because other countries are printing money like crazy, that doesn't "strengthen" the dollar against anything except those currencies. Go check how many oz of gold things cost today vs before. Be it a house, a gallon of gas, food, you name it.
Thinking in nominal terms of dollars and in the very short term only is how one finds himself poor in retirement.
Gold has several factors temporarily holding down its value, but my bet is that they are only temporary. For starters, the economy has to adjust to a lower standard of living, which means selling cars, homes, and other non-essentials at fire-sale prices, which dampens inflation numbers. If we could simply print $1,000,000 into every American's pocket to solve our problems we'd have already done it. But at some point this money creation will show up in price inflation. EVEN homes. But by the time that happens a loaf of bread will be $10.
The hard part is knowing exactly when this will occur. That's why I bought in at $675-$910 and am holding my gold.
Jim Rogers pointed out in an inteview how commodities have seen several vicious corrections on the way up for years now, but the trend has always been up.
Is Gold A Sucker's Bet?
Real Price of Gold Soars
It is interesting how the prism one views the world through can distort one's conclusions. Those predicting massive inflation would point to the fact that money will be printed to replace any lost as credit and that the entire US population will soon be on the dole. We could see quarterly "stimulous checks"
meanwhile, gas costs more than a year ago. So does bread. And gold. And personal services that are required (not luxuries and fluff). Go build a home. It costs more than a year ago despite the bad market. Go buy a car that isn't a large SUV or truck. It will cost you more. Go obtain healthcare or insurance on it. Costs more.
Asset prices can rise and fall based on MARKET CONDITIONS. It's the money supply that is inflation/deflation.
If you're in the market for buying a home and have cash to pick up cheap stocks and commodity ETFs, then you can claim deflation. For the rest of folks, it's inflation.
Analyst: Oil Prices Inflated by 50%
Even a blind squirrel sometimes finds an acorn. Oil has fallen some since this.
Bailout Cost, per Taxpayer, by Income
Interesting point. But did you stop to realize that aggregate GDP is not spread uniformly? What if most of the gains/benefits accrue to the top 5% (those who own stocks of these companies and others) yet the bonds are repaid by a broader spectrum? (those who consume most of their income)
And more things come to mind that should be considered. What of the costs of inflation caused by injecting dollars into the economy, which is born more heavily by "working class" people, as the costs of necessities is a higher percentage of their income. And what of the intangible costs of the moral hazard created? Put a value on that one! And from what I'm reading $700B is not the end of it. What happens when CDS and credit card and auto loans are added to bailouts? Where does it end? And once we're in for $700B, there would be severe pressure to "protect our investment" with further cash outlays.
I think the calculations required here are beyond any one page column.