June 25, 2007

Gold - Whadda ya think?


Gold meltdown as investors sell all asset classes in a classic rush to cash and liquidity?

Gold surge as dollar melts down, markets tumble and investors rush to a safe haven?

Gold as electronic currency as baseless world funny-money loses credibility?

Gold as a hedge against inflation as too much money chases too few goods?

What's your take today on gold?

(Note - I don't own the yellow stuff, waiting to buy at my target price, but I do own gold miners)

103 comments:

Roccman said...

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Bought a truckload when silver was $4.25 and gold was $450.00

If you ain't in gold today - you will regret it for YEARs to come.

concerned said...

Gold's time has not come yet........deflation first which will take down gold prices as well).....

I will buy again when I see it at the 400$ mark.....which will be in the next3-4 years.

unomyname said...

I own about a dozen ounces myself - it's a diversification measure, a "hedge against systemic risk", and recognition of what it's meant throughout history, both ancient and less so (Goldfinger). I don't much care if it goes up or down against the dollar or any other paper currency for that matter. I have it for after the main event, whatever shape that takes, which is somewhat presumptuous but there you have it. And I like the look of the stuff.

Anonymous said...

New, more gently upwards sloping trendline, held for both GLD and SLV today (so far anyway). Has had about 4-5 touches so far, looks like a trend to me.
Big story is the $USD. Whats up with that?

goldfinger said...

I read an article that gold was being rationed to driver up the price... so I assume that if the price goes up, they'll release more gold, blah, blah.

Anonymous said...

The manipulation by TPTB is terrible. When Gold should go up it goes down. You just can't compete with the printing press when the supid sheeple think fiat is valuable and gold is a barbious relic (when will sanity return?)

Anonymous said...

2003-2006 gold went up 100%.

HP things housing will crash 50% because of the housing bubble

HP also thinks gold will double again and ignores the fact gold is in its own bubble.

buying gold today is no different than buying a home in Phoenix in
2005

And no this time IT IS NOT DIFFERENT

Ned Zepplin said...

Don't look for gold to be an immediate hedge against disaster - if housing implodes like most of us think, then the first stage we'll see should be panic selling of hard assets by individuals and organizations in order to stay solvent.

Remember, just like in housing, its the most recent sales that determine how much an item is worth - not what we believe it to be worth.

Now, once the first wave of defaults and the ugly reality sets in, that's when I think gold will be the buy of the century, if not the millenium. If you don't own gold right now, the focus on paying down debt. (NOTE - this is not investment advice, do not construe it as such, consult a licensed financial planner for investment advice)

In the interests of full disclosure, I bought a bit of silver back when it was under $4 and one of my short funds has an interest in gold mining stocks.

Mark in San Diego said...

Contrary Investor - I think gold will fall with world markets - US markets down on housing and hedge fund problems - then China, then Euromarkets on slowing world economy. . .disinflation will be largest problem. . .holding cash will likely be a good bet - especially Euro's, Pounds, CHF, and yes, even dollars - actually, think of it this way - if stocks go down 10% then you can buy 10% more - if houses go down 15% then a dollar buys 15% more housing. . I am still strong oil/energy . . .Financial Times has item today about cheap cars for developing world to put millions more behind the wheel!

macs freddie said...

Money supplies world wide are growing at double digit rates. That is the definition of inflation, and IMO inflation is what the future holds. That said, I'm not a big believer in a housing crash because the banks and politicians will use inflation to "rescue" all of these fools now in over their head with debt. Gold will do what it has always done, store value. An ounce of gold in 2025 will buy the same amount of goods and services it purchased in 1925.

Anonymous said...

Who is going to buy this stuff if it goes as bad as all you renters keep talking about. Buy land you can live off of and lots of guns get together with friends or family and hold the line.

Anonymous said...

Gold Bull Says Rally's Done

http://tinyurl.com/29xvck

Anonymous said...

Sitting on a gigantic pile o' silver, and lots o' gold mining stocks. Ready to buy more if we correct down to possible Fibanacci retracement to 546 in Nov. timeframe. After that, there's no looking back, and that may be the last chance to load up.

With all the events taking place, we could also just do a moonshot fairly soon. I'm hoping lots of idiots just sell for awhile so I can finish buying at a lower price.

Bud Fox was a wimp said...

Gold's up and down cycles are just to far and wide to make it a primary investment. Its basically traded in a tight band for the past year, after a big run the previous year.

I believe it should be 5 to 10% of your portfolio, at the most. Even during the worst of times.

You can make more money shorting the equities markets during bear markets than what you would gain from the price of gold during those periods.

5% of my portfolio is invested in streetTRACKS Gold Shares (GLD). I have some exposure to gold miners in a natural resources fund in my 401K as well, but makes up a small portion of that fund.

Right now, I would be heavy on energy and international areas like south-east asia and latin america. India is over priced right now. Stay away from there.

Oil isn't going down big anytime soon.

new gold bug said...

My bubbdy was out buying the stuff a few years back. I thought he was nutz. Lately, I was doing some reading and it seems like a good hedge to a portfolio. I'm not a nut, but I do believe that the US is in dire financial straights. Gold MIGHT be a good thing to have.

I have bought a little mostly fractional oz's. I also have bought some silver. I buy bullion, offical goin coins from certain countries. Most of mine is US eagles, bec I'm here. But I am shifting into Canadian Maple Leaves.

I just buy a little every pay check. I'm trying to save for a house (one day) and don't want to get side tracted.

I fully understand that you can take a coin to a grocery store and walk out with food, yet. But, I believe that the future will be unknown and things change.

It's nice to have some thing of real value.

Anonymous said...

The problem with gold, especially for individuals, is that people with lead can always take it away from you. If you think you would be able to take small bits of it to the pawn shop to sell for cash to buy food with, then plan on obtaining heavy personal security, once you become known as a gold owner. Lead beats gold everytime.

Anonymous said...

Well for one, e-gold (and such) need to grow in use and then, gold will be the ultimate currency.

For now, it's a stagflationary, deflationary (as in dollar based asset downturn, not ordinary CPI deflation), or systemic meltdown hedge. So from the pov of an investor, only a certain percent of one's portfolio (~25%) should be in PMs. The other should be in some actively traded currency funds, CDs, or AAA govt bonds.

Anonymous said...

buy gold and silver, take physical possession of it, bury it and forget it...one day when you are old, you will be happy because you did this....

The Thinker said...

What is gold now, $640 an ounce?

Gold is complicated, so volatile. It is obvious that gold no longer plays a major role in international trade. Today gold is little more than a commodity, and as such, it remains to be seen if its value will significantly rise when there are inflationary fears or global uncertainty.

In fact, because gold is commonly traded in U.S. dollars, gold may very well go down in value (in real terms) as the value of the U.S. dollar falls.

Bottom line, many of the fundamentals that historically played into the price of gold have changed, and the new fundamentals are not well understood (by me). Obviously, gold is important to jewelery and many industrial purposes. As the price of gold goes up though, I have seen many U.S. jewelery shops trying to sell other interesting metals. For example, I have seen titanium jewelry and other jewelry made out of comparatively worthless (but cool sounding) materials.

However, in India, gold jewelry is highly coveted, and as India emerges into a mature market, there will no doubt be a sharp rise in demand for gold jewelry, but that may be 50 years off as most Indians are still deprived of many essentials.

But gold mining technology is improving and we will develop new ways to improve mining efficiency. New gold will always come available, and every year, like fiat currency, the value of gold is diluted by new gold landing on the market. Also, federal banks are in the process of slowly unloading their gold supplies, either by outright sale or through lending.

In the end, gold obviously has value and will for quite some time to come. I think it would be prudent for every investor to have some percentage of their portfolio devoted to gold. However, I think right now, gold is a little high for my tastes.

Now that gold is more of a luxury to be purchased when times are good and less of a store of value during tough times, I would say that the coming liquidity crunch will do more to lower the value of gold than to raise it. However, in a few years, I could see buying it at $400 an ounce or so.

Anonymous said...

umm Gold?

umm....No

Anonymous said...

Gold will be a great investment for long term holders. In the short term , I believe gold will be held back by the PPT-- the current priorities are holding up the dollar ( futile over the medium-long term) and helping out US bonds ( again futile in the medium to long term.) The powers that be will do everything possible to achieve these goals ( re : dollar and bonds) and gold tends to get in the way if it increase in value. So , frankly , don't expect any sharp upward moves anytime in the near future....the crap will have to hit the fan , gold and silver will get hammered along with everything else..... but at some point thereafter , it will be worth it's weigh in gold !

Anonymous said...

I was in gold but took my profits last week. I am concerned investors will be forced to liquidate over the next 2 to 3 months to cover margin and other investment losses. I will buy back in when I feal we have a bottom. For now I'm on the sidelines.

I like the idea of shorting Indymac.

Roccman said...

I wish all these ANONs would get handles so that when gold is $5000/oz I can rub their noses in it.

Here's the math for the dim wits...

oil depletes = gold rises

Peak Oil was December 2005

C folks - your crystal balls need to include oil depletion...

THIS TIME IT WILL BE DIFFERENT [.]

I'll still rub it is your noses anyway.

keith said...

good comments on gold, shows that even amongst hp'ers we don't have consensus on this one. I myself am confused about gold. I see asset deflation and a rush to cash and liquidity, at the same time I see goods and services inflation, and trouble for the US$

on stocks, remember our little troll mocking shorting the homebuilders?

here's my fall '07 puts:

HOV: +130%
WCI: +100%
KBH: +16%

homebuilders are doing great (for shorters). On lenders, Indymac is still defying gravity, hasn't gotten killed yet as they're doing all they can to keep the bad news out of the public eye (can you say enron and jail time?). They're holding onto their alt-a cancer as they don't want to firesale it, yet they won't mark it down and admit the true market price

I'm also thinking of puts on FED, they're in a similar boat as IndyMac, recognizing income on option-ARM loans that will never get paid back. But they haven't admitted what's truly happening with their cancer loans, and earnings are good as they take this fake income to the bottom line, income that in reality doesn't exist.

Meanwhile, on gold, I would like to own some, not just miners, and am waiting for $630. Then maybe 5% or so of the portfolio into GLD, or maybe physical via bullionvault

thoughts?

bigdaddybig said...

Gold...down Houses....down. Stocks.....down Diamonds....down. Bonds....down. Sports cards, beanie babies, pet rocks.....down.


Now. Food....up Oil....up. Water..up Gas....up. Health care....up


If you really need it to live.....up. If it has no tangible value or use...........DOWN DOWN DOWN

Roccman said...

"at the same time I see goods and services inflation, and trouble for the US$"

Hmmmmmmmmmmmmmmmmm...wonder what could cause REAL inflation across all boards??

Maybe oil...

As the price of oil rises (because more want what is less available)...then EVERYTHING increase in price.

Ya think??

Schools out kiddos...run home now and tell mommy all about what the boggie man had to say about gold.

Anonymous said...

NAHB's homebuilders survey for June fell to a depressing 28.0, the lowest since 1991!!!

keith said...

If you own gold, in what form do you own it?

gld - etf's
bullionvault
physical bars
jewelry
coins
other?

keith said...

look at the picture of gold top of this thread

sure is purty, ain't it?

frankie said...

NNnice, HOV -3.5% and falling, leading the charge down on a day when the DOW was intraday 100+ pts. This, so far, is the most successful option play for me to date. The school of fish are finally starting to come around to the correct way of thinking.

The Homebuilders are dropping in Echelon formation with HOV, MTH,and BZH leading the charge followed closely buy PHM, KBH,etc. Just Like Dominos, and the Retailers Point & Figure charts like JCP (J.C. Penny) starting to look like the HomeBuilders did at the start of their drops.
http://tinyurl.com/29uqrc

Holding HOV Jan08 $20 Puts that I bought when Hovnanian was at $34 (I like to use the Point & Figure Charts for Entry because they just show Price action and I can see what's going on better.
http://tinyurl.com/yvgtch

I now try to buy my Put Options on a contrarian day when the VIX (Volotility Index) is lower, so I can get the Put Options at a discount. I’ve learned that the entry is critical.
http://tinyurl.com/22xmqm

What's the best way to set the trailing stop? I havn't a refined exit starategy for winners, since I so rarely find myself in this position :)

Having more success now (thanks in no small part to this Blog) and definitely don't want to give back any of my 5 Bagger. I thought about using the 50 Day Parabolic Indicator as a way to lock in profits, but still allow it room to run if it wants to drop some more.
http://tinyurl.com/2y92cg

Thoughts/Suggestions?

Howard said...

Anyone looked into the Perth Mint Certificate (way of owning gold backed by the Austrailian government) as an alternative or in addition to physical holdings?

rcochran said...

HP also thinks gold will double again and ignores the fact gold is in its own bubble.

buying gold today is no different than buying a home in Phoenix in
2005


______

You are a retard.

Only so much gold exists.

More and more US dollars are being created out of thin air.

A big number over a small number is a BIG NUMBER.

Dollars over ounces......get it?

We will see an explosion in gold prices.

rcochran said...

If you own gold, in what form do you own it?

______

Kitco pool account. Very nice way to do it.

Howard said...

Hey Keith:
How about soliciting comments on how people are buying a basket of currencies to diversify away from the US dollar? I think that thread would be just a valuable as a gold thread discussion and won't be a duplicative.

Anonymous said...

gold hoarder here..
i am very long gold. all fundamentals point to a LONG ways to go for gold; the trouble is the short term manipulation by various banking interests that just can't allow it to rise.

on that note, i just buy whenever i can, and make sure to buy physical. this way if i truly want to liquidate my position, i need to go through the hassle of actually mailing it in and having bank wires and such, not just a click of the mouse.
own about 10% in kilo bars, about 30% 1oz bars, and the rest in kruggerands..

Anonymous said...

BUY GOLD AND SILVER COINS AND STOCKS

Anonymous said...

You are a retard.

Only so much gold exists.

More and more US dollars are being created out of thin air.

A big number over a small number is a BIG NUMBER.

Dollars over ounces......get it?

We will see an explosion in gold prices.

June 25, 2007 9:12 PM



---------------------------------

Uhm you mean like they can't make any more land? You goldbug morons make the exact sane arguents realtors make and amazingly are too stupid to see it.

You sir are a mental midget.

Anonymous said...

me like shiny things, me buy gold me smart

Anonymous said...

The Thinker said...

..."But gold mining technology is improving and we will develop new ways to improve mining efficiency. New gold will always come available, and every year, like fiat currency, the value of gold is diluted by new gold landing on the market."...

June 25, 2007 8:14 PM

---------------

Hmm... gold dilution of ~2% per year vs. fiat dilution of ~12% per year. I think I'll take the gold.

Anonymous said...

Buying gold is parking money in a non-productive asset. You will never see the growth or dividends that stocks can offer. IMO gold should only be a small fraction of a portfolio

TexStock

The Thinker said...

Roccman has a good point about oil. After all, it takes a lot of fossil fuels to get gold out of the ground. When the oil pumps run dry, the mines will be boarded up.

There will eventually be a replacement to oil, and oil wont be exhausted anytime soon, however, it is starting to look as if the age of CHEAP energy is ending. In the environment of EXPENSIVE energy, gold will definitely spike.

But this may be 20 years out.

Anonymous said...

As mentioned above, GLD and SLV holding new trend lines nicely. Great entry, since stops can be placed ~2% off from entry. If SLV holds above 127, keep it. Otherwise, sell. How freaking hard is that?

Anonymous said...

a real collapse would look something like what happened to the South in the film Cold Mountain. gold won't save you, as pointed out by anon, people with arms can take it away. living off the land and being able to defend yourself are what matter in a real collapse.

agree with several anons and bigdaddybig, gold has no real use in a collapse and it's heavily manipulated.

Anonymous said...

To all you gold buyers!

ROFL

Anonymous said...

I don't think of gold as an investment - I consider it to be a form of insurance. The worse things get the more it will be worth. It's useful to have something that will (hopefully) change in the inverse direction to other investments.

BTW I think it would be wise to beware of many ETFs. The gold is usually not "allocated". They may not even possess the amount they say – holding only futures options and rights etc. In a meltdown these may just end up being paper. Even if they do hold it, the gold is the property of the fund – not you. If the operator bank gets in financial trouble creditors can seize the most saleable assets (ie the gold). This leaves unallocated investors in the position of being an unsecured creditor of the fund. Kind of like a bank account but without the deposit insurance. There is a reason why you pay way more for allocated gold than unallocated. Think about it – if those Bear Stearns funds actually owned a couple tons of gold do you really think it wouldn’t have been sold off by now.

I'm a BullionVault customer and _very_ happy with it. Fully allocated, good delivery bars, held in a Swiss vault as a bailment. If you don't know what those words mean you should read a bit on the Bullion Vault website.

Cheers
UK Pessimist

Anonymous said...

I own physical gold in BullionVault (Zurich) and the IAU ETF, along with silver in SLV, and oil in USO (looking for a better way on oil. Any ideas?)
Bought gold at $667/oz. When it's above again, I'll start moving more from the ETF to BV. That probly won't happen till this fall, i'm guessing.

I thought about the Perth Mint, and I went with Bullionvault instead, as it was much quicker to set up. If you want the Perth Mint you HAVE to go thru EuroPac if you're in US. I plan on using them soon.

I am also confused about what part deflation will play. I'm convinced that hyperinflation will win in the end, and that deflation is a near/medium term phenom. So I'm going to stop buying and just hold foreign currencies until we're further into the ride.
I'm holding Kuwaiti dollars since they have so much black gold, and dropped their Dollar peg last month.
-NinjaAnon

Anonymous said...

Having more than 5% of your portfolio in gold puts you smack dab in the middle of tin foil hat ville.

W.C. Varones said...

I own the GLD ETF and also dollar-cost into BGEIX, basically a gold miner index fund.

UrbanMan said...

Gold... I have been buying and selling mining shares since 2005 only heavily in 2006 I got caught in the May 2006 downdraft so did not book as much profit as one could have..However I have been out of mining shares since March..They have Mostly done squat..I agree with most here that all hard assets will fall and hedge funds and others will be forced to liquidate everything to cover margin calls. That said Gold and mining shares will be the BUY of a lifetime not to trade but to invest for a few years as Gold zooms past its old time highs and well into 4 digits..Id like to buy gold this off season at around $500.00 and maybe even the high to mid 400's..Dont forget gold ran from the 400's to over 730 an ounce in five months in 2006. Gold will keep running and not look back .. Gold and Silver shares will be like nasdaq stocks in 1998-2000...Keith then can start the Gold bubble Blog :)....

Ned Zepplin said...

roccman wrote: I wish all these ANONs would get handles so that when gold is $5000/oz I can rub their noses in it.

Uh, relax. You sound like Casey Serin back when he still thought he was a real estate pimp.

Every investment is susceptible to bubble "thinking".

Most here think there is a good place for some gold in any solid portfolio. That doesn't mean sell the kids down in Rio to buy just one more ounce because "gold HAS to go up".

As for Peak Oil driving up gold prices. Well, that is one possibility.

The other possibility is that Oil spikes to $300/bbl after Ghawar collapses. Economy goes into depression. No one has two nickels to rub against each other at first and gold actually drops in price.

No cheap transportation, no way to liquidate your gold because no one has money. In that kind of scenario, by the time gold gets to $5000/oz. (which, by the way, I think we'll see someday) you are going to have Zimbabwe type hyperinflation and it will be illegal for you to sell that gold, at least for as long as the central government remains viable.

In the mean time, having deployed your working capital among other things of value - skills that hold up in a crashed economy, tools, maybe a stockpile of food, etc. in addition to positions in precious metals - might not be the worst thing in the world...

Deep breaths. It's okay to disagree with investment decisions. Each portfolio is different. Not everyone needs a house and not everyone needs a hundred ounces of gold hidden under the bed.

Batman said...

The problem with the whole damn mess is the liquidity hose has sprayed every damn asset class. Everything is jacked up by that, but on the flip side, if the USD bubble pops GLD could profit - cases for both ways.

I have 5-10% in gold coins. As for the anon envisioning the Mad Max scenario, in that case I could take a roll of maple leafs in each hand and used them to give the mother of all 1-2 punch combos.

Anonymous said...

I can see the deflation argument! Especially with all the bankruptcy out there, and the subprime to prime blow up. When people go bankrupt, especially on comnsumer loans and HELOC's, that money disappears from the economy forever. And why not?
There will be plenty on the homeowners asking "What happened to my million dollar house?" And then the better question, Why should I pay the $900,000 mortgage when it's worth only $400,000?I t was inflated money with no worth just the bubble home equity, which is gone! This will cause the depression, and then "Helicopter Ben" will go out with his helicopter with the $100 bills and drop them all over the nation, and maybe even in Mexico. Then it is time to buy lots and lots of gold. Back up the truck!

Anonymous said...

forget gold

load up on 9mm and canned tuna.

that will be the currency if the SHTF.

Magon said...

I'm roughly 10% metals. The thing that keeps me from higher exposure is Executive Order 6102.
My father was bitter 'til the day he died, 49 years later. Like the good citizen he was he turned in his gold at $20 per ounce, then FDR declared gold to be pegged at $35 per ounce.
They did in once...they can do it again.
Executive Order 6102:
http://tinyurl.com/2aqduy
Wikipedia:
http://tinyurl.com/2bgn4z

Anonymous said...

I've been following gold since it broke through the $400/oz barrier (circa 2003). There are two ways to look at holding gold (in whatever format): the deflation case vs. the inflation case.

When mild deflation sets in, gold is sold to raise cash. In this context, I equate "mild deflation" with a stock market sell off (yes, it's a weak metaphor, but it's useful). Every time the market has corrected since 2003, gold has sold off--safe haven my ass.

In the case of mild inflation (aka right now), gold simply saunters up in price as the dollar saunters down. Lots of charts here.

What we don't know is what happens in the case of severe deflation or hyperinflation. I really don't want to find out. The old timers say that gold did well during the depression, particularly the miners.

My thoughts are that the Iraq war will continue to drain the US treasury and that one day inflation will simply overtake the best efforts of the US government to sweep it under the rug. When the government freely acknowledges that inflation is running at 8% per year, gold will no longer "saunter" higher--it will vault higher.

If owning the metal seems like a crap shoot, buy a gold-oriented mutual fund and let someone else sweat the details. I own TGLDX.

JBR said...

Hey Keith:
How about soliciting comments on how people are buying a basket of currencies to diversify away from the US dollar? I think that thread would be just a valuable as a gold thread discussion and won't be a duplicative.


I second this, as a flight to cash might all be for nought if the US Dollar turns to shit like it should.

Dollar cost averaging into silver and gold. Trying to keep a 25:1 ratio. Taking physical delivery.

Invested in Pb too with military class delivery vehicle :-)

tony said...

I have about 5k in gold (which come to think of it, isn't really all that much).

A few 1 ounce gold eagles, and the rest in pre 1933 British Soveriegns and French Napoleans in an attempt to avoid another gold confiscation.

Cause you know if things get >that< bad, the government is going to take anything of value not nailed down and pay you with worthless Fed notes.

-t

cool hand luke said...

Disinflation, deflation, so volatile, Gold is in its own bubble???

I think some of you could use some true Mogambo enlightenment (TME) right now.

“Thus, the world is creating new money at about a rate nearly 100 times faster than the world's value of new gold."

Let’s stop right there. One hundred freaking times! Not twice or three times as fast but 100X as fast as in we are all freaking doomed…and they said Gold is the bubble? Get a fringing grip people!

Mr. Mogambo continues…

“But Gold is so alien to most people that even when you are screaming in their faces about how stupid they are, they still don't go out and buy any! Weird!”

Anonymous said...

Anon said:"I was in gold but took my profits last week. I am concerned investors will be forced to liquidate over the next 2 to 3 months to cover margin and other investment losses. I will buy back in when I feal we have a bottom. For now I'm on the sidelines".

Laura Vella said:"I agree, and sold all my gold shares recently too. I'll wait till the market stablizes then buy them back after the correction".

Daphne64 said...

Gold is good, but silver is better.

Silver is consumed for industrial uses, and more industrial uses are being found all the time.

Most estimates are that more silver is being consumed than mined these days, with government sales making up the shortfall. Supposedly the US government is done selling, as it is all out.

Also, silver is being manipulated to the downside. For details see Ted Butler's commentaries at investmentrarities.com. When these big short traders get caught, prices could explode (remember the industries HAVE to use silver).

I have about $40k in junk silver, about 2k shares of CEF and am long about 5k units at oanda.com.

I wish we had jumped in earlier. We only started buying 3 years ago when silver was 6.50 and ounce.

All this and our net worth is only around 150K.

I may be proved a fool, but...the pro arguments seem a lot more compelling than the cons. The only catch is that you have to be able to stomach some pretty big drops in prices and be able to jump in and buy on the dips.

g said...

Own some SLV, and invest in BEARX that is long metals and miners.

However starting to think that the massive amount of risk in the financial system as a whole might make owning some physical gold prudent.

Anonymous said...

All my gold / silver is in CEF. I'm up about 40 percent over the last several years.

Go back to the last time we were in a similar situation - recession, oil skyrocketting, housing tanking - oh yeah, the 70's - and what happened to gold then ?

To the moon Alice.

kochevnik

SPECTRE of Deflation said...

It's gonna leave a mark:

SEC Investigates Bear Fund
From Business Week



Bear Stearns (BSC) may have a lot of explaining to do about a big restatement of losses at one of its troubled hedge funds—and not just to its investors. BusinessWeek has learned that the Securities & Exchange Commission recently opened a preliminary inquiry into the near-collapse of Bear Stearns' High-Grade Structured Credit Strategies Enhanced Leveraged Fund. People familiar with the inquiry say regulators are interested in learning how the Wall Street investment firm came to dramatically restate the April losses for the 10-month-old fund, which invested heavily in securities backed by subprime mortgages, or home loans to consumers with shaky credit histories.

[Excerpt]

Anonymous said...

Gold will double, triple, quadruple going forward. The sky is the limit here. When Gold is $5,000/ ounce, OH YEH! I didn't cause this situation in the world, but I'm certainly going to make the best of it for my family!

SimiSteve said...

I am with you Keith. I don't quite understand gold. From what I understand 70% of gold is consumed in the jewelry biz and most of that consumption in Asia/India. What happens when they stop consuming and industrial use wanes?
My best guess is a $200-250 bottom while the world/US recover and ALL currencies return to basics? And that assumes no confiscation or prison time for non compliance. Just don't know..... Sure wish I did !

Karl said...

After a nice long read of shadowstats.com (and just the free stuff), I don't think I'm going to be selling gold any time soon. The US govt is morally and financially bankrupt.

Al said...

Keith, you mentioned a target price that you are waiting for to buy gold...

dont know how to break it to you, but it is the opinion of many far smarter than me that it is going up quite a bit from this price point. even the mainstream morons are looking for 850. Jim Sinclair at jsminset.com is looking for 1625. Jim was the broker for the HUNTS in the last gold boom.

to all of you who are considering buying gold, 2 years from now you wont be able to touch it.

do your homework. dont take my word for it. but dont wait.

Al said...

for those who think gold is in a bubble.....

the price would have to reach about $2200 to reach the same inflation adjusted value as its high of $850 in 1980.


as of right now, its $651.00 per ounce or about 30% of its inflation adjusted peak. its still 70% below its peak. its been in a 20 year depression. (FROM 1980 to about 2000) its only been going up for 5 years or so. GOLD in a bubble??!! Hardly. most people dont even think about it. 99% of the people dont have any in their portfolio. the market cap of GE is larger than all the gold stocks put together.

most people still think tech will make a comeback. well.....you go buy some CISCO and GOOGLE. I am going for the gold gusto.

again do your own research. check that everything I say is true. then go buy some gold. the real stuff.

Anonymous said...

Question for you gold bugs, gold bears, gold traders etc.


Could it be possible that in the future "paper gold"/"E-gold" will be percieved as having a lower intrinsic value than true bullion?

My thoughts on the subject is that the way to own gold would be physical bullion from credible sources and with assay certification such as Pamp Suisse bars.

Why?

No corrupt CEO/Accountants/etc or funky ways of "fractionalizing" gold.

Thoughts?

Because if it does go down like you guys say I wouldn't mind getting some also. A friend was telling me to buy back in 2003 and this was when we were disculling the whole ARM loan concept. Miners, Physical and ETFs.

I wish I had the money to buy it then. I think it may be in a bubble also but after it's initial deflation that I could see happening as every FB liquidates their "bling" at melt value there will be a ton on the market causing a glut.

Then the Paul Allens, Bill Gates and Angelo Mozillos of the world will buy it all up.

BTW Keith, have you noticed how Angelo has increased the pace of excercising his options lately?

uknowwhoiyam said...

Now's the time for gold.

Yes, I'm serious.

Anonymous said...

Those of you who are bearish on gold but bullish on oil are foolish. Haven't you heard of demand destruction? If the bottom continues to fall out of the housing market, and thus the US economy, people will drive less and spend less on oil.

Unless there is another major war in the Middle East, oil will be $40/b before it's ever $80/b.

Gold is just a hedge against inflation. The bull run is over, but it's still a good investment. Just don't expect to double your money.

Shakster said...

It's the only plating I use on my TIN Hat.I like it for a number of reasons.
#1 Liquid-Ranks first among any of the commodities,investments,and currencies.
#2 Non Taxable,Ranks First here too.
#3 Potential for great profit,Ranks second next to silver,but both do have a potential for loss that is as great.Be Careful.
#4 It's the number one Noble Metal in nature.It's catalytic,and electrical action is awesome,Newton called it magic.
#5 Just as with Housing,One can use their brains ,and buy below spot,or when prices are low,and sell if needed before the peaks.
#6 You can sell after the peak too,and No Broker needed,or Realtor.
#7 The potential for loss is great,as one can act like an FB,and hang on all the way to the bottom,but that is the sellers choice.With housing your pretty much screwed until the market turns,or you go to drastic price cuts ,and fees.
#8 I just like the stuff.

Anonymous said...

"Anonymous said...
2003-2006 gold went up 100%.

HP things housing will crash 50% because of the housing bubble

HP also thinks gold will double again and ignores the fact gold is in its own bubble.

buying gold today is no different than buying a home in Phoenix in
2005

And no this time IT IS NOT DIFFERENT

June 25, 2007 7:18 PM "


OH HELL IT IS DIFFERENT...

The derivative market had its first bust with the Bear Sterns hedge fund problem. Levered at 20 to 1. There's alot more out there, meaning a lot more than the $3.2 billion Bear Sterns ponied up for 1 problem will be needed. Where will the backup money come from? Will the government let banks fail? Not likely. That means a massive bailout which will really devalue the dollar.

deepcgi said...

Short term rough sailing as long as investors remain in denial about the credit bubble and that vast amounts of wealth are soon to disappear. In about one year, up she goes.

g said...

"dont know how to break it to you, but it is the opinion of many far smarter than me that it is going up quite a bit from this price point."

Likely in the long term, but in the short term, central banks are manipulating the price to keep it down. See Bank of Swizzerland stating they will be selling 250 tons in the next year...

So I think if you are looking for a lower price entry in the near term you have a better chance than not of getting it. Just my opinion...

Anonymous said...

gold sold by the central banks never hits the market. most of it was leased a long time ago, and now they are closing the books on it.

by the way, who IS buying all that gold?

Anonymous said...

i buy kruggerands in small amounts with cash and silver eagles same.
have more lead and lead launchers than i need as well. if TSHTF i am positioned to increase my holdings.
if not, i like the way they feel in my hands-both.

Anonymous said...

I own physical gold in BullionVault (Zurich) and the IAU ETF, along with silver in SLV, and oil in USO (looking for a better way on oil. Any ideas?)

In terms of the ETF's, I believe the Deutsche Bank Powershares ETFs are better than the more common ones.

In particular, USO and OIL have been absolutely horrible compared to what you should be getting from oil.

The problem is that there is a huge contango especially in NYMEX futures. Contango means short term oil is less expensive than long term oil (peak oil anyone?).

Since USO trades by an algorithm and is fixed to the short term months it loses money on each roll---the commodity traders know about the USO (and other commodity index) algorithm and completely game it.

The alternative is 'DBO' from Powershares. DBO does not have to stick to only the front month and may avoid some of the contango problems.

Similarly, I suggest the DGL ETF for gold over GLD. GLD is a fractional share of gold minus expenses.

DGL is long gold futures like DBO is long oil futures.

The money deposited as margin earns T-bill interest which is non-trivial these days. Furthermore tax treatment is going to be like owning futures--- 60% long term rates and 40% short term in the US (regardless of holding period, and marked to market every year. yes, it's a loophole.)

If you had GLD (and maybe IAU) you wouldn't get any t-bill interest, plus I believe GLD is taxed at short term rates (aka collectibles) no matter how long you hold, like physical gold.

I.e. if you want oil (or oil + natural gas + gasoline), I suggest DBO and DBE.

And for gold, DGL and there's one for silver too.

Downside is much less liquidity and bigger spread.

TM said...

I think that aren't a lot of great places to put my money at the moment, and gold offers similar risks to other assets. There's been a flood of easy money these past few years, and a lot of it has gone into gold, so yeah I think it's inflated.

But I am really biased against gold for other reasons, so take my opinion with a grain of salt (as if you didn't already).

Budvar said...

"
Uhm you mean like they can't make any more land? You goldbug morons make the exact sane arguents realtors make and amazingly are too stupid to see it."

Where this argument falls down is there's a glut of housing already, and they're still building more.
There's about 5 billion oz of gold on the earth, that includes grannys wedding ring, Tutenkamuns coffin, and grillz for the niggaz etc. The world population is 6 billion, therefore there's less than 1oz of gold per person on the planet.
You do the maths.

Budvar said...

"agree with several anons and bigdaddybig, gold has no real use in a collapse".

Is that a fact?
Tell that to the lucky ones who escaped with their assets from places like Germany in the 30s or Cambodia in the 70s.
They didn't bring out pocket fulls of Reich marks or dong or wang or whatever their local piece of shit currency was at the time.

At todays gold price, you could carry $1million worth of gold in a suitcase. If TSHTF and the dollar crashed, do you see the rich and shameless sitting and riding it out, or do you see them jumping on the 1st flight out of there?

The ultimate in asset liquidity is gold and uncut diamonds, always has been, always will be.

The US has unfunded liabilities of $1.75million for every man woman and child in the country, the interest payment alone @5% is $87500 per person per year (thats per person not per worker) There's 5 in my family, I don't know about you, but I cant earn let alone pay off $437500 a year in interest (thats just to fund the interest not pay off loan).

The only way this is going to be paid off is through hyper inflation, hello Weimar Germany, hello $37trillion loaves of bread.

The fed is printing $2billion a day, everyday. The dollar is only about 5% in printed cash, the rest is in electronic on a bank balance sheet somewhere.

Here's something to think about.
http://youtube.com/watch?v=1w0LOtWmy_o&mode=related&search=
take a look.

Anonymous said...

Cause you know if things get >that< bad, the government is going to take anything of value not nailed down and pay you with worthless Fed notes.

Is confiscation a real threat??? When this was done in 1933, we had a gold standard, today we do not. The citizens, er rather subjects that voluntarily gave up their gold had no precedent for this. There is no paper trail to "prove" I have gold. And faith in the government to grab everything is giving way too much credit to a bunch of incompetent boobs.

Anonymous said...

Gold belongs in your portfolio, but The essence of effective portfolio construction is the use of a large number of poorly correlated assets.

Most will never understand that simple concept....Most people see one assett class going up and they react (Real Estate...and before that the .com)

Anonymous said...

>>>The problem with gold, especially for individuals, is that people with lead can always take it away from you. If you think you would be able to take small bits of it to the pawn shop to sell for cash to buy food with, then plan on obtaining heavy personal security, once you become known as a gold owner. Lead beats gold everytime.<<<

i have lots of gold and lots of lead. it would be a very serious mistake by anyone and that includes these corportate security guards known as police, to think, that it would be a cake walk to come here and take what they want. that dog don't hunt....and i am not the only one who feels this way either....

Anonymous said...

I agree with a previous anonymous poster. If the proverbial sh*t really does eventually hit the fan, having a pile of gold in your house (rented or otherwise) will not serve you well. Better to load up on the necessities of life (food, water) and make sure you have plenty of ammunition.

Last time I watched the movie "The Road Warrior", I don't recall gold being considered all that valuable.

a new gold bug said...

keith said...
good comments on gold, shows that even amongst hp'ers we don't have consensus on this one. I myself am confused about gold. I see asset deflation and a rush to cash and liquidity, at the same time I see goods and services inflation, and trouble for the US$
---

I do not believe in an across the board asset deflation.

I don't believe JUST BECASUE housing is due for a correction, that everything else is due for a correction.

Housing has far out paced incomes, and it will have to eventually re-align itself. That realignment may have actual ripple effects on other sectors directly involved in the housing boom.

If gold prices drop it will be for a few reasons.

1.) Demand is lowered.
2.) Central Bankers sell more of their stash to cover their crappy economies (ie Spain).
3.) The US Fed turns off the printing presses and the dollar strengthens.

Anonymous said...

No gold here. Preferred to buy a small farm overseas that's rich in natural resources, including fresh water and organic food. Assembling solar and wind power in the next few months to be totally energy independent. How's that bee colony collapse disorder doing?
Why do you think that Bush bought ranches in Paraguay? Perhaps the Secret Society knows something we don't.

Anonymous said...

gold won't save you, as pointed out by anon, people with arms can take it away.



gold or not your should be able to defend yourself. Try and get my sh!t

Anonymous said...

No cheap transportation, no way to liquidate your gold because no one has money.


Cmon, SOMEONE always has money!

Anonymous said...

have Zimbabwe type hyperinflation and it will be illegal for you to sell that gold, at least for as long as the central government remains viable.




ya, like it's illegal to sell weed and heroin, right?

Anonymous said...

Like the good citizen he was he turned in his gold at $20 per ounce, then FDR declared gold to be pegged at $35 per ounce.
------

Different time back then. I don't think there are any "good citizens" anymore... Keep your gold.

Anonymous said...

Cause you know if things get >that< bad, the government is going to take anything of value not nailed down and pay you with worthless Fed notes.
-------------

you can hide gold REALLY easily. Just don't leave paper trails.

a new gold bug said...

A stock can equal zero, gold will never.

Anonymous said...

Go buy gold. Only the gold dealers will make money in the transaction. Then they will buy the gold at a discount from you and charge you another transaction fee. Sorry guys, it still hasn't hit it's all time high hit over 20 years ago.

If you trade the ups and downs, you might make some money. Even then, there are better daytrading alternatives. But if you think gold prices will double or triple in your lifetime, I am now selling the Golden Gate bridge for $5,000. I will only accept money via Western Union wire transfer. Enjoy your bridge.

vegas crash watcher said...

Gold does not pay interest, and if you want to buy something, you have to go to a pawn shop. Ugh. I'll pass and stick to money market for safety. We are getting deflation. This supposed to be a good indicator of it:
http://stockcharts.com/h-sc/ui?s=$crb:$djcbti&p=D&b=5&g=0&id=0

Anonymous said...

As I see it, what's keeping inflation down is the Chinese continuing to buy treasury bonds, giving our dollars back to us as a loan we have to pay back eventually.

I used to think that at some point they would have their own internal consumer engine revved up and could pull the plug on the American consumer but there was a good article over at Charles Hugh Smith's blog:

http://www.oftwominds.com/blog.html

that basically says this: The Chinese are prodigious savers. They are not going to become consumers in the near future, maybe not even within our lifetimes.

Woah. That means this dollar printing can go on for quite a while longer.

The housing market is its own thing. It's going to crash just on insane overvalue but the overall inflation problem isn't such a certainty.

Anonymous said...

i have lots of gold and lots of lead. it would be a very serious mistake by anyone and that includes these corportate security guards known as police, to think, that it would be a cake walk to come here and take what they want. that dog don't hunt....and i am not the only one who feels this way either....

+1

Couple of questions. Can central banks selling gold to keep price down be the equivalent of companies buying back stock, while the CEO secretly (or not so secretly) dumps his shares at increased prices?? Could fed bankers be stocking up while keeping prices low??

Comparing today's prices to the old $850 an ounce of 1980 is not correct. That was basically a two day event, January 18 and 21, 1980. Better would be to compare the average for the month at $675.

IKnowSomethingYouDont said...

>> I have lots of gold and lots of lead. it would be a very serious mistake by anyone and that includes these corportate security guards known as police, to think, that it would be a cake walk to come here and take what they want. that dog don't hunt....and i am not the only one who feels this way either....

Walk in and take what they want is EXACTLY what they will do. Our Government Military Complex possesses weapons that can *instantly* drop every living thing in an entire geographic region - no bombs, no bullets - just a nice scalar blast to literally take your breath away. You won't even know what hit you. One moment you're sitting in your living room, guns in hand, watching over your gold and food, waiting for the jack-booted thugs. Next moment, death comes in an instant - so fast and so utterly complete, that your corpse won't even rot. Ever wonder why ALL of our guns aren't simply confiscated in one fell swoop? No need - too dangerous, too many people, too many guns. It's a lot easier just to kill millions of people *instantly* and then go in and take what you want.

P.S. I'm a contractor for the DOD. Our Government possesses (scalar) WMD's that make nukes look like firecrackers. An entire region, say N. Korea, can be *instantly* leveled - no nukes needed. You have NO idea the danger your government poses. These scalar weapons, if made public, would look like pure magic.

Anonymous said...

Anonymous said...
No gold here. Preferred to buy a small farm overseas that's rich in natural resources, including fresh water and organic food. Assembling solar and wind power in the next few months to be totally energy independent. How's that bee colony collapse disorder doing?
Why do you think that Bush bought ranches in Paraguay? Perhaps the Secret Society knows something we don't.

June 26, 2007 7:09 PM

--------------------

Just want to point out, for the benefit of those who think that those with gold will be robbed by the government (or by common criminals): It's even easier to steal land. You can't put your small farm in your pocket and run for it. You can't effectively hide your small farm, as you can with gold. And what makes anyone think that an overseas government will protect their (overseas) property rights if the SHTF is beyond me. Personally, I like the idea of buying a small farm, but I'd have to think through some of those issues first.

Anonymous said...

I hold silver and gold coins purchased from APMEX.com (American precious metals exchange.) I like holding the metals and the relative lack of liquidity has proved to make it an "out of sight, out of mind" investment relative to my other holdings.

If you want to have some fun try and get an education on the Canadian junior mining companies traded on the TSX-Venture.

Anonymous said...

***************************


Last word,

BUY GOLD!!!!!

Anonymous said...

Wait and see til end of 3rd qtr, gold will triumph!



GOT GOLD?

don oc said...

amazing, what a difference a year makes

Now it's June 2008. Gold is $900 (back from $1000 rally)

I think people who talk about gold in demunitive are just yapping.

By now it's apparent that central banks will inflate their way out of bubbles and debt.

Gold simply measures money supply which is bound to increase.

I know it's hard to predict the future, but predictions of some people that gold will come back to $400, ... laughable

Sure some will talk about plunge in the '80.

Remember though, gold is priced in dollars. And in the '80s, USA was creditor nation, there was no outsourcing, and the rest of the world was going nowhere.

Do I hear reversal?

Now, USA is $50 trillion (yes with a T) in the hole ($100 trillion if you count derivatives), outsourcing is rampant and the rest of the world is accelerating while US is pondering loss of manufacturing and any 'tangible' industries...


I would be curious to find what will someone 4 years from now write about all this.....