October 11, 2007

Holy crap gold is at $750. Did you know the S&P 500 is down the past five years in gold (instead of depreciating dollars). Still feeling rich?

"It doesn't matter how many dollars you accumulate, it matters what they're worth" - Peter Schiff

89 comments:

Mark in San Diego said...

The denial on Wall Street is amazing - lower profits (check) lower dollar (check) credit subprime problems unresolved (check) housing price collapse (check) car sales down and Ford/GM laying off workers (check). . .hmmmm and market hits 14,100 go figure!

You heard it here first - BNSF railworkers talking to me last weekend, "container traffic is way down, but the railroads don't want anyone to know because the stockholders would bail.". . .

Anonymous said...

Ohio attorney general just on cnbc

he wants to sue wall st. firms for their roll in the recent housing boom/bust

Anonymous said...

GOLD TO DA MOON ALICE!!!!!!!

Anonymous said...

Got Gold??

Anonymous said...

Yeah but the EAFE (international) is up 2.5x in gold.

Anonymous said...

I've been telling everyone I know to buy gold but hardly anyone has done it so far.

It has helped me separate the smart friends and family from the sheeple.

Jymkata

Anonymous said...

Gold will pull back of course, but this is just one of many upward stabs we will be seeing.

When the massive downward manipulation of gold and silver can no longer hold, there will be a real skyward explosion.

Those who know to buy on dips and patiently watch will be rewarded.

Those who don't understand what is happening in the world economy and who think gold is in some artificial bubble will be plowed under, financially.

Today, we see many fools buying at the top. That's fine. This is nothing compared to what will happen when things really start to unravel.

You have been warned.

Anonymous said...

Soon one ounce of gold will buy a house...

Boom2Bust.com said...

Another interesting fact. According to the Wall Street Journal, while the S&P 500 was up almost 8% in dollars from the beginning of the year through September, it was up only a miniscule 1% when denominated in euros...

borkafatty said...

You heard it here first - BNSF railworkers talking to me last weekend, "container traffic is way down.

---------
This is because finally or well hopefully people are waking up and realizing they really do not need any more junk...Besides that, if your in the middle of losing your home I would think you would be getting rid of it not bringing more in.

And as far as the Stock Market goes...Keep rising..cause when it falls and it will, at leaset the number wont look that bad to the average American.

Anonymous said...

Holy crap. House prices are 100% higher today than 5 years ago. Did you know renting was a bonehead move?

Anonymous said...

Holy crap gold is at $750. Did you know the S&P 500 is down the past five years in gold (instead of depreciating dollars). Still feeling rich?

While true - what about the time lines of 10 and 15 years?

Marky Mark

SPECTRE of Deflation said...

Go baby go! LOL! While the sheeple cheer the indexes, we are getting ass kicked by inflation and the Dollar devaluation. The nominal highs are an illusion, but the sheeple seem to eat it up. Meanwhile, I'm exchanging asswipe paper...I mean dollars for assets that have stood the test of time for 5,000 years. The trend is your friend!

IMHO, not advice, Gold and Silver are going to the moon, and this 752 business is a precursor for a huge move in both.

Happy Homedebtor said...

So gold, which isn't really "needed" except in incredibly small quantities, going up over 200% in the last 5 years isn't a bubble, but something like housing, which is where people live, and has a purpose, and is the ultimate symbol of crossing into the adult world, is? ;)

I'm not saying there wasn't a housing bubble, but come on Keith - if it (being anything) rising more than 10% of year, it's out of whack as an investment. :P

But gold is different right? Because people need something to eat?
Errr...because people need to drink something?
Errr...because people gotta live somewhere?

...did you stop for a second to think about that? Your current asset allocation/investment strategy is essentially ignoring crashes, manias, panics, and your own spin-doctor'd advice. :D And what's worse - it's on something that no government in the world would attempt to intervene on behalf of should the price fall precipitously...

Anonymous said...

$750 gold is likely only the beginning. There is still a lot of hostility and ignorance. Lots of additional money has been printed since the 1970s. Not that much additional gold has been mined.

And then there are all those retirement benefits for aging boomers in the US, EU, and Japan to fund through the magic of the printing press.

Anonymous said...

I got a billion mark note in my kitchen drawer that says I'm rich!

I'm a billionaire!

WEEEEE!!!!

Anonymous said...

Dear Ron Paul,
I am a doctor and can help you.
with some medication
you will feel much better.

Andrew from Russia said...

"NOW feeling rich!" - this is the problem with under-the-mattress savers in DCs/LDCs/LLDCs who have no inflationary fears WRT greenback and for many of whom $10k is still a fortune. When this crowd learns the truth (worse than dumping their savings, they'll simply refuse to work for worthless dollar-aligned wages), expect the spiral to take a new turn.

Russia: RUR/USD = 31.87 (Feb 2003, note that the USD peaked shortly before the Iraq invasion!) -> 24.92 (official rate for Oct 12th). Annual ruble inflation averaged 11.5%. (1.115^4.5)*(31.87/24.92) = 2.087. So, in Russia today's $10k buys the equivalent of 2003's $4791.03 (USD deposits are not an option as the interest rate is a pitiful 8% and banks occasionally go pop).

Anonymous said...

ha ha ha ha ha

the renters lost out on the housing boom

now they are losing out on the equities boom by keeping their noney under the mattress

man you people are about as stupid as it gets.

Anonymous said...

Gold is not a bubble, it's a reflection of the dollar being destroyed

Anonymous said...

Anonymous said...
Yeah but the EAFE (international) is up 2.5x in gold.

October 11, 2007 4:49 PM

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

Well, stocks SHOULD beat gold (cash) over the long haul. The relevant comparison is between gold and fiat currencies (with reinvested interest).

ACE said...

I believe it... I talked with some of my freight forwarders they tell me the same thing.. shipping freight imports and exports are way down..

MOST OF THE the retail numbers that came in this AM are THRU 8/1/07 ...

Anonymous said...

Anonymous said...
I've been telling everyone I know to buy gold but hardly anyone has done it so far.

It has helped me separate the smart friends and family from the sheeple.

Jymkata

October 11, 2007 4:51 PM

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

I was ridiculed when I made the suggestion back in '04. I should have known that was the "all clear" to back up the truck.

Gold still makes sense, just not as much sense as a few years ago. Can you imagine buying at Brown's Bottom (~$275)?!?!

Anonymous said...

Anonymous said...
Holy crap. House prices are 100% higher today than 5 years ago. Did you know renting was a bonehead move?

October 11, 2007 5:27 PM

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

How's that ARM working out for you Assclown? Using the rearview mirror to make major financial decisions can result in a wreck.

area 51 said...

Amateurs, Amateurs, Amateurs...
tsk, tsk......

That is the reason you invest in individual issues, to beat the S&P. Just like gold is an individual issue.

There are plenty of US stocks whose price tracks gold very nicely, (some even blow gold away) but for one thing:
They pay a dividend!
And some are nowhere near as volatile as gold.

And Euro stocks do even better....

You goldbugs are hopeless.....

SPECTRE of Deflation said...

Happy Homedebtor said...
So gold, which isn't really "needed" except in incredibly small quantities, going up over 200% in the last 5 years isn't a bubble, but something like housing, which is where people live, and has a purpose, and is the ultimate symbol of crossing into the adult world, is? ;)

I'm not saying there wasn't a housing bubble, but come on Keith - if it (being anything) rising more than 10% of year, it's out of whack as an investment. :P

But gold is different right? Because people need something to eat?
Errr...because people need to drink something?
Errr...because people gotta live somewhere?

...did you stop for a second to think about that? Your current asset allocation/investment strategy is essentially ignoring crashes, manias, panics, and your own spin-doctor'd advice. :D And what's worse - it's on something that no government in the world would attempt to intervene on behalf of should the price fall precipitously...

October 11, 2007 6:05 PM

Do you know any history? LOL! No fiat currency, that would be asswipe paper you call dollars, has ever survived. Period and end of story. You think we are the first to over spend and under save?

SPECTRE of Deflation said...

Anonymous said...
ha ha ha ha ha

the renters lost out on the housing boom

now they are losing out on the equities boom by keeping their noney under the mattress

man you people are about as stupid as it gets.

October 11, 2007 7:27 PM

Your boom is now down 64. LOL! You are like a farmer who loses on every sale thinking he will make it up in volume. Morons!

SPECTRE of Deflation said...

area 51 said...
Amateurs, Amateurs, Amateurs...
tsk, tsk......

That is the reason you invest in individual issues, to beat the S&P. Just like gold is an individual issue.

There are plenty of US stocks whose price tracks gold very nicely, (some even blow gold away) but for one thing:
They pay a dividend!
And some are nowhere near as volatile as gold.

And Euro stocks do even better....

You goldbugs are hopeless.....

October 11, 2007 7:59 PM

With every major fiat currency looking at double digit growth [M3], I'm thinking they are all on a road trying to see who can depreciate their respective currency the fastest right off the cliff at the end of the road. Equities should do real well. NOT!

borkafatty said...

Wait stop the presses the Housing Bubble is back!!!!

http://www.heraldtribune.com/article/20071011/NEWS/71010027

Well a housing Boom in foreclosures that is.

Anonymous said...

Dear Ron Paul,
I am a doctor and can help you.
with some medication
you will feel much better.


___

Hey @$$w|pe, Ron Paul is a doctor, you're not.

Anonymous said...

gold is not even close to a bubble.

bryce in canada(Vcvr&Clgry bubbls) said...

Re:
Happy Homedebtor said...
So gold, which isn't really "needed" except in incredibly small quantities, going up over 200% in the last 5 years isn't a bubble, but something
-----------------------
Yes, gold is a bubble. As always, it is a hedge against inflation. It goes up as the currency gets devalued and stays unprotected. Once the interest rates get cranked up to high levels, then gold will go down.

Just like 1977-1980.

Gold is not something to buy and hold for the long term. It is something to buy and then sell when it spikes.

The gold-enthusiasts here, I believe, are betting on gold shooting to the moon -- at which point I would hope they intend to sell it because it will come back down again rapidly once the currency's health is restored.

If they are planning to buy it and hold it for the long term, they're crazy. In the long term, gold neither appreciates nor depreciates, but, rather, stays remarkably constant. In short-terms, it can make wild profits (during currency/inflation panic) or wild losses (when that fear/panic ends).

If they plan to sell it to a greater fool when gold-mania hits, they're smart.

uniball said...

What about in cattle futures or in iPhones?

Guess what? I buy things with Dollars not some arbitrary metal dug from the ground.

In a broken economy, like after Katrina, how valuable was that gold? Not very, what was considered valuable were things like bottles of water.

Anonymous said...

everyone who says gold is not valuable will not think it is until price peaks :-)

Nate Bird said...

Gold stock s are sucking it up. HMY the 5th largest miner is still sitting at 10 bucks. Gold is at 750 an oz. This thing may become spring loaded...... or gold is not acting as the safe haven it once was. Oh or it could be that HMY is a dawg too.

Anonymous said...

But gold is different right? Because people need something to eat?
Errr...because people need to drink something?
Errr...because people gotta live somewhere?


_____

Gold is completely different from houses, absolutely it is. What you appear to not be grasping is that gold has been seen as THE ONLY REAL MONEY for thousands of years, all over the world.

Gold is very, very liquid, whereas houses are not.

Gold is being manipulated DOWN, yet it continues to rise.

Many have been desperately trying to manipulate housing UP, yet it sinks.

Are you grasping this yet?

Chrysta said...

We've been off the gold standard since August 15, 1971. Our "dollar" is a myth.

Anonymous said...

You goldbugs are hopeless.....

____

No, fool.

"Goldbugs" are among the very few who have real hope.

The stock market is propped up via direct govt intervention and indirectly by a heavily juiced economy.

Gold is being capped via govt intervention, yet still keeps rising.

From the Mogambo Guru yesterday:

"...by the end of 2005, the total real money supply shot to over $10 trillion", and that means that there is "$38,349 in circulation for every ounce of gold in reserve!"

And that probably assumes that all the gold held by the Fed is still there and still owned free-and-clear, which is the preposterous, barefaced lie that the Gold Anti Trust Action Committee is having so much fun exposing. So, if half the gold has been sold or leased out, as they postulate, then there is $76,698 of money supply for every ounce of gold!..."


_______

And today, regarding the fractional reserve banking system we now "enjoy":

"...it looks like about $15.4 trillion in bank assets and liabilities is being backed up by a minuscule $40.2 billion! That's a microscopic 0.0026%. A quarter of 1%! Hahahaha! Fractional reserve banking at its finest! Hahahaha!..."

______

For you mockers of goldbugs, I suggest you set your plows deeper, learn what is really happening in the global economy...but, that would require using your brains and admitting you're wrong, which I'm sure isn't gonna happen any time soon.

Have fun, chumps!

Anonymous said...

I have 2 brown eggs,
looking to trade for either,
a bowl of cereal
or
a cup of cottage cheese

That's it!
I'm done with paper money.

abb said...

What's different about now vs 1980 is global dissemination of the knowledge that fiat is fraud.

A few billion people yet to get on this gold train.

I sold some today though. Will buy back soon.

Anonymous said...

Okay, so our dollar was once backed by gold, but it isn't anymore. What backed the gold?

Noname said...

Happy homedebtor:

" . . . but something like housing, which is where people live, and has a purpose, and is the ultimate symbol of crossing into the adult world, is?"

I admit I do not own a home but, I would never think of owning or not owning as a way to determine whether someone is an adult. There are bigger challenges in life that make one an adult.

I think this was the scariest thing anyone has ever said here.

Anonymous said...

uniball said...
What about in cattle futures or in iPhones?

Guess what? I buy things with Dollars not some arbitrary metal dug from the ground.

In a broken economy, like after Katrina, how valuable was that gold? Not very, what was considered valuable were things like bottles of water.

October 11, 2007 9:30 PM

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


I would've enjoyed watching you exchange your bottled water for cash after katrina, they would've mobbed you, taken all your water and gut you like a pig.

Anonymous said...

"Okay, so our dollar was once backed by gold, but it isn't anymore. What backed the gold?"

This is why economic arguments on the internet don't work too well. Everyone is just soooooooo clever.

Anonymous said...

Anonymous said...
Okay, so our dollar was once backed by gold, but it isn't anymore. What backed the gold?

October 11, 2007 10:25 PM

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

Supernovae.

Anonymous said...

"What backed the gold?"

trust
gold can't be created out of nothing
gold doesn't react to most elements
it's highly divisible

all the things necessary for a lasting currency.

Anonymous said...

Noname said...
Happy homedebtor:

" . . . but something like housing, which is where people live, and has a purpose, and is the ultimate symbol of crossing into the adult world, is?"

I admit I do not own a home but, I would never think of owning or not owning as a way to determine whether someone is an adult. There are bigger challenges in life that make one an adult.

I think this was the scariest thing anyone has ever said here.

October 11, 2007 10:27 PM

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

Soon-to-be UNhappy Homedebtor is just trying to rationalize his own bad decision. Buying an overpriced crapshack makes one an adult? How about making rational economic decisions? If it's cheaper to rent than "own" - which it is in any of the bubble areas, even before taking falling home values into account - then the "adult" thing to do is to rent, invest the (substantial) difference, and watch prices return to (or below) fundamental value. Then buy in 5-10 years after the assclowns who thought buying would make them "adults" and impress people have been foreclosed upon.

Anonymous said...

Anonymous said...

Gold is not a bubble, it's a reflection of the dollar being destroyed

October 11, 2007 7:36 PM

================================

Right you are. And you know they aren't making any more land either.

Amazing how people on a HOUSING *****BUBBLE***** blog can't see that gold is in an even bigger bubble.

Your money, do what you will with it.

Anonymous said...

Happy homey makes sense and he pisses you renters off like nobody else because you know he's right. He is the thinking man's Blowfly/Dopes. You can beat up on Blowfly/Dopes because they are idiots. Happy Homey on the other hand has cogent, well thought out arguments that you can't refute without resorting to name calling. That's how I know he's right.

Anonymous said...

"Amazing how people on a HOUSING *****BUBBLE***** blog can't see that gold is in an even bigger bubble."

With housing we had many fundamentals that we could point to that showed housing was a bubble.

what are the fundamentals and metrics that lead you to believe that gold is a bubble? It is certainly not valuation, gold is a long ways away from it's 1980 inflation-adjusted high.

Anonymous said...

Bubbles, at their peak, have large public participation. Gold does not. It is not a bubble and is nowhere near a peak on any timeframe longer than weeks.

The same people who say gold is in a bubble now will say it's in a bubble at $800, at $900, at $1000, and much higher. I hope a lot of people listen to them because it will take even longer for this to reach the parabolic phase and it will go even higher.

Why can't a single troll respond to the fact that every fiat currency ends it life spent up and wasted in a ditch? The dollar will be no different. The only question is when.

But I'm glad we have a strong dollar policy. That's good. And it's been wonderful for gold these past few years. Keep it up, Hank.

Anonymous said...

Anonymous said...
Happy homey makes sense and he pisses you renters off like nobody else because you know he's right. He is the thinking man's Blowfly/Dopes. You can beat up on Blowfly/Dopes because they are idiots. Happy Homey on the other hand has cogent, well thought out arguments that you can't refute without resorting to name calling. That's how I know he's right.

October 11, 2007 11:23 PM

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

You mean like the thing about buying a home to "prove" you're an "adult"? Yeah, that's really well thought out. Taking on more debt than you can hope to repay, to buy an overpriced home you can't afford, to impress people you don't know. Really well thought out, Dopey.

Anonymous said...

Anonymous said...
'Dear Ron Paul,
I am a doctor and can help you.
with some medication
you will feel much better.'

'Hey @$$w|pe, Ron Paul is a doctor, you're not.'

Yeah, good come-back…

Illegals Everywhere said...

"Okay, so our dollar was once backed by gold, but it isn't anymore. What backed the gold?"

Ah! 5000 year history of being a real currency..

Mike F said...

Vonnegut wrote a story in which, after you died, God criticized you for all of the financial opportunities you failed to take in your lifetime. Blessed with omniscience, of course, investing would be easy.

Most of us don't have that, just the ability to research and make a prediction.

If my investments have done better than yours over the last year, do I win? Should I treat you with derision? Or is making any (well thought out) investing decision better than not making one at all?

My net worth in US dollars has gone up massively this year. I'm not a financial genius, I just live in Australia. (Mind you, it's also gone up quite a bit in A$ as well.)

Speculating on exchange rates, commodity prices, or short term moves in the stock market isn't for me (too stressful) but you go ahead. I'll stick with longer term investing strategies.

Mike F

Anonymous said...

I've Fallen and I can't get up!!

Regards,

The Dollar

Happy Homedebtor said...

October 11, 2007 10:27 PM

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

Soon-to-be UNhappy Homedebtor is just trying to rationalize his own bad decision. Buying an overpriced crapshack makes one an adult? How about making rational economic decisions? If it's cheaper to rent than "own" - which it is in any of the bubble areas, even before taking falling home values into account - then the "adult" thing to do is to rent, invest the (substantial) difference, and watch prices return to (or below) fundamental value. Then buy in 5-10 years after the assclowns who thought buying would make them "adults" and impress people have been foreclosed upon.

October 11, 2007 11:03 PM
--------------------------
WOOHOO! Baseless name calling! (flex)

1. My crapshack is 60% larger than the house we rented, and my heating/cooling bills are about 10% more than the house we rented, after a what...40% increase in utility costs in the DC area this year? So yeah...that's a pretty crappy place...

2. Being an adult is not thinking like a kid anymore - looking at the bigger picture. You see just $ and cents, and you try to beat the markets - you may succeed, but odds are against you. In the big picture, you buy a home to live in when the time is right in your life. You buy a home as an investment property when the #s are right. I have my investments elsewhere - when I invest in real estate, it won't be buying a house. That's a fool's game.

3. Everyone talks about taking and saving every dime they would've spent on owning and investing it at x%, blah blah blah. If you had that kind of discipline, you'd have bought before the bubble, or you'd be able to write a check for the house. Despite the common knowledge that everyone on the internet is a rich genius hung to the knee, I call bullshit. :)

4. I won't even bother elaborating on my life to you as it stands now at 30, you'd never believe me. If I proved it to you, you'd probably commit suicide - all of you. And what's great is it's just starting.

You can all imagine you're in the top-1% and are going to somehow luckily become rich when gold shoots to $50,000/oz. In the meantime, I'll just continue working my way up from the top 5-10% into the top 2% or so over the next 5 years. You may or may not get lucky and have your wildest, most bitter fantasies come true - but I /will/ achieve my goal, because I control it.

Never underestimate the herd mentality or the stupidity of Americans as a group - you will be disappointed every time. That was my mistake - my mortgage would be about $200K less if I hadn't miscalculated there. But, you'll only learn by doing. :D

bryce in canada(Vcvr&Clgry bubbls) said...

Here's what I think about gold and Gold Bubbles:

Gold was overvalued in 1979 and 1980. That was a Gold Bubble.

Gold was valued about-even for most of the 1980s.

Gold was undervalued for most of the 1990s.

Gold has been valued about-even for the last few years.

Gold will be overvalued, like 1979-80, sometime between now and, say, 2013 or so. This will be another Gold Bubble. (I'm guessing at the date - it could happen in 2008 or it might not happen until later than 2016; I ain't got a crystal ball).

So we're in the preliminary stages of a developing Gold Bubble.

Then, after the bursting someday of this developing Gold Bubble, like in the 1980s, it will go down to being valued about-even..... again.

Then it will go down further to being undervalued..... again.

And so on.


An ounce of gold today buys you pretty much the same value as it did 100 years ago (evenly-valued). In the 1990s, it bought you 1/3 to half as much as 100 yrs ago (undervalued). In 1979-80, it bought you about four or five times as much as 100 yrs ago(overvalued).

Gold IS bubble-y. It does this every time there is either (i) a currency crisis or (ii) a perceived currency crisis. Then it goes to sleep until the next one.

Anonymous said...

fiat currency is the new black helicopter

got paranoid?

Anonymous said...

Anonymous said...
Anonymous said...
Happy homey makes sense and he pisses you renters off like nobody else because you know he's right. He is the thinking man's Blowfly/Dopes. You can beat up on Blowfly/Dopes because they are idiots. Happy Homey on the other hand has cogent, well thought out arguments that you can't refute without resorting to name calling. That's how I know he's right.

October 11, 2007 11:23 PM

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

You mean like the thing about buying a home to "prove" you're an "adult"? Yeah, that's really well thought out. Taking on more debt than you can hope to repay, to buy an overpriced home you can't afford, to impress people you don't know. Really well thought out, Dopey.


============

Thanks for proving my point. You have nothing to argue except name calling and vitriol. That's when you know you've lost the argument.

Anonymous said...

Hey Homedebtor,

DC Metro is down 7.2% YOY:

http://www.macromarkets.com

Add in inflation, and you've got a pretty punishing drop... and the pain is just starting.

How's that "adult" thing working for you?

Anonymous said...

HAPPY HOMEY:

I think you are a little harsh on the youngens. They have dreams of $50,000 gold and of Ron Paul predients. That's what 20 year olds think like. I was there. I voted for Perot and thought I was changing the world. I was sure the "man" was out to get me. Then I grew up, graduated, got a job, bought a house (at 24 right after gard school), had a family and 15 years later realize how naive I was.

Anonymous said...

.


Why is it , that the ones who bitch about gold are the ones who probably can't aford it!



.

Anonymous said...

go away happy homedebtor - your Tony Robbins, Giant Within crap doesn't fly around here.

Why don't you control your destiny right the f@ck off a cliff...

pwnd

Happy Homedebtor said...

October 11, 2007 11:23 PM

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

You mean like the thing about buying a home to "prove" you're an "adult"? Yeah, that's really well thought out. Taking on more debt than you can hope to repay, to buy an overpriced home you can't afford, to impress people you don't know. Really well thought out, Dopey.

October 11, 2007 11:57 PM
----------------------------
Ummm...I can repay it easily actually, not my fault your career choice wasn't as lucrative. Can't afford? I bought the house w/ a 5x ratio in March, we're down to 3.3 already, and will be around 3x within a year, and in 3 years...with bad luck, it'll be 2x, with good we can write a check by 2012 for the balance. So who can't afford it? Oh wait, you can't, so clearly noone else can amimrite?

Who am I trying to impress? Nobody - I bought because I turned 30, hit the 10-year mark in my career, got married, and we decided we were staying here another 5-10 years. The market had turned and we had the negotiating power, so we were fine with it. It made sense to us, rather than waiting and following dozens of reports and graphs and trying to time the bottom.

You go ahead and spend every waking minute worrying about timing it - I'll focus on every other thing in life, and we'll see who comes out ahead financially in the end...because I'm guaranteed to tear you up in every other way, so you best pray you at least have more money than me or you failed at life...either way, it still sucks to be you.

Anonymous said...

If the dollar index goes to 50, then gold could easily goto 1400-1600 an ounce.

I suppose all these fed actions lately are really to protect banks and not the consumer. If the bank goes under and there is no fdic coverage ( fdic only has 50b ) then people are really going to be screwed.

Buy your physical gold. As a hedge, buy leap puts on gold mining companies. But the put has massive leverage. With the leverage your only exposure to the broker/bank is the contract premium. Someone else is holding the leverage in the bank and taking bank failure risk for you. Gold goes up you loose your puts on miners but your out of the bank with a small derivative hedge in the bank. Its about being out of the bank but having some insurance coverage too if the trade goes wrong.

Funny that gg or nem is trading below what they were last year when gold was $600 an ounce. Because they are being hedged short. ( and its a dollar denominated short ! )

Anonymous said...

The bush built scheitt sandwich commeth everyone please prepare.

Buy gold, buy silver, hang in there.

nfn.nln said...

Wait. I'm looking at gold now and it hasn't changed much recently... oh wait... I'm pricing in Canadian Dollars. My bad. "Gold to the Moon Alice" or "US Dollar to the Shitter Buddy".

Anonymous said...

What backed the gold?

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

the integrity of our guberment, duh!

Anonymous said...

The same people who say gold is in a bubble now will say it's in a bubble at $800, at $900, at $1000, and much higher.
-------------------------------------

uh, that is exactly how the housing bubble has gone. Some early chicken littles back in 2000 were refusing to buy homes because of the bubble. Gold is in the early bubble stages, though it does have a ways to go. Nowadays it is easier than it ever has been to own physical gold, just a few clicks of a mouse!

Anonymous said...

but I /will/ achieve my goal, because I control it.

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

Sounds like a "the secret" freak.

Shakster said...

Amateurs, Amateurs, Amateurs...
tsk, tsk......

That is the reason you invest in individual issues, to beat the S&P. Just like gold is an individual issue.

There are plenty of US stocks whose price tracks gold very nicely, (some even blow gold away) but for one thing:
They pay a dividend!
And some are nowhere near as volatile as gold.

And Euro stocks do even better....

You goldbugs are hopeless.....
---------------------------------
Dividends are a valid point,but one must be his own investor,and do his own homework.
The runnup in gold this past 4 years has been very orderly.A few times it has spiked ,and corrected hard.The last mania in gold in the 70s-80s seems to have lent some discipline to this current runnup.
When gold was falling from it's highs in 06,I could sell all I wanted when I wanted.When general equities fall from peaks selling has been stopped on many occasions.Can a Mortgage backed Security be sold in a market moving sharply lower?Try selling a home in a falling Market.Liquidity (Tradability)is one place where gold has the advantage.Gold is easy to trade,I have traded back ,and forth many many times with no problems.Need dollars?Sell gold,need Gold,sell dollars.Want out of your countrywide? Good Luck.Want out of your 401k,yeah right,sure thing.

Xing Dao said...

"But Master, how will I know if there is a bubble in gold? My friends laugh at my investments in this metal and call them foolish"

Grasshopper, all things have their cycle, even "foolish" investments. When Time Magazine has gold bars on the cover, it will be time to sell.

Anonymous said...

Hey "Happy" Homedebtor,

Sounds like you're a real legend in your own mind. The question is, if you're so glorious, don't you have better things to do than trolling a housing bubble blog? You know, like playing golf with the Chimperor or something like that.

ROLFMAO

"You're doing a heckuva job Homie."

P.S.: Funny handle "Happy" Homedebtor. Just whom are you trying to convince?

Problem is, you've got zero credibility.

Budvar said...

"Gold is in a bubble just like housing"


Well I can see that, I mean the sole topic of conversation at any coffee machine or bar is "Hey look what I just bought" then proceeds to unwrap the white silk hanky to reveal a 2oz bar of yellow metal with the word "Heraeus" stamped on it, to which everyone drools and gasps in admiration.

People are queueing up camping out for their chance to buy the odd oz or two, they're taking out non-amortizing loans of 10 times their annual income.

Would housing be in a bubble even at these prices if for the last 60 years they tore down more houses than they built? This is the situation with silver, and at a price of $14 an oz, it's in a bubble!!

If all the gold ever mined since the dawn of time was divided out amongst the world population, there'd be less than an oz to go around, but "They're digging gold out the ground all the time" I hear you say, Thing is the population of the world is increasing faster than gold oz's are being dug out the ground so the share per person is actually decreasing.

"Gold, you can't eat it, live in it or drink it",

I suppose having a fistful of dollars, euros, shares in CFC or pumpstick enterprises in your 401k do though?

World central banks are dumping tons of gold on the world market, someone's buying it, are coin shops and jewellers stocked to the gills with the stuff offering 50% discounts just to shift the stuff? I don't think so.

Anonymous said...

Owning gold is suicide. There's a rumour that ownership and trade in precious metals by individuals will be outlawed (again) so as to not undermine the new NAU currency being created. US dollars will be convertible to the new currency, but gold may only be convertible at the governments price : (

LauraVella said...

What's interesting about gold...

During gold's last bull market, gold jewelry and coin sales exploded... if you're old enough to remember the 70's - it was extremely fashionable to wear lots of gold and collect coins... wearing gold, coin jewelry, and gold nugget jewelry gave the impression of being rich successful. (even if it wasnt true) Gold's time is coming once again... EVERYONE will want to own some form of gold and silver...

The credit crunch is here - out with McMansions, stainless steel, granite and PotteryBarn... the remnants of a frenzied boom always end rejected by the masses.

When there is a saturation of coin shops buying and selling scrap gold, and lots of retail jewelry stores - like in the 70's, that's the sign gold has peaked....

Look around at all of the home remodeling places selling kitchen & bath supplies, granite & stone warehouses and contractors, and all the other misc. retail space catering to interior decorating /furniture and home accessories. Everything is all about houses.

My dream is, in the next three to five years my huband and I can pay cash for a house, by selling our gold stocks...he doesnt think it's possible, especially here in the bay area, but you just never know...

Last year, my father told me a story about a couple he knew back in the 1970's who had bought gold their entire life, and sold it all at the peak of the market in late 1979, then turned around and bought a cocktail lounge in Oakland, CA.

Purchasing a bar isnt my dream, it's the principle about it that counts.

Budvar said...

"Owning gold is suicide. There's a rumour that ownership and trade in precious metals by individuals will be outlawed (again) so as to not undermine the new NAU currency being created. US dollars will be convertible to the new currency, but gold may only be convertible at the governments price : ("


Urban myth No1, Ownership of gold has never been outlawed in the USA.

Do a little research, bullion and bullion certificates were confiscated, in 1933, but each and every person was allowed $100 of bullion (about 5oz each),
No women had their gold wedding rings, necklaces or tiaras taken, gold jewelery was openly on sale during this time.

Although past performance is no guarantee of future ones, but if any government ever tried to confiscate all gold, grannies wedding ring, niggaz grylls etc, good luck with that!!

America is also not the rest of the world, what would stop anyone from telling the gov to go f*ck themselves and sell their gold north or south of the border or anywhere else for that matter?
2007 is not like 1933 where a trip across the atlantic was a 3 week trip on a boat, London or Frankfurt is only a 5 hour $200 flight away.

If ever the US gov ever go down the gold confiscation route, the gov taking your gold will be the least of your worries.

russdog said...

Won't Gold go down if there is another major discovery of deposits or if another sunken treasure (SS Central America) is found? And counldn't bubbles exist in Gold prices just like housing or tulips?

Anybody know if all that gold has hit the market yet? Also does anybody have knowledge the las time gold ownership was banned by the US govt. Was it WWII? I wouldn't put it past GW. He has run every one of his businesses into the ground (except the minority roles like Texas rangers where he didn't have that much control). Who knows what that desperate Cokehead will do.

HAPPY HOMEDEBTOR aska the exact question I was thinking about gold bubbles.

Anonymous said...

.



I guess your right, Gold is worthless in this current economy.

That's why so many companies lifeblood is spent on finding mining and processing it!


I feel so stupid!


I'm gonna sell all I have


.

Anonymous said...

Gee, I would love to buy some gold coins but the US Mint stopped selling them a month ago...

"Due to the increasing market value of gold, the American Eagle Gold Uncirculated Coins are temporarily unavailable while pricing for this option can be adjusted; therefore, no orders can be taken at this time."

Coincidence or conspiracy?

Anonymous said...

Owning gold is suicide. There's a rumour that ownership and trade in precious metals by individuals will be outlawed (again) so as to not undermine the new NAU currency being created. US dollars will be convertible to the new currency, but gold may only be convertible at the governments price : (

The only way we go to another currency is to destroy the current one. That appears to be underway. How much faith will there be in the new fiat currency??? I'll keep my gold for now thank you. Awesome post Budvar.

Budvar said...

Cheers anon, to all those who fear government confiscation of gold, 2007 is not 1933 in more ways than one.

Picture the scene, Treasury officials turn up in Compton, and say "Hey Mr drive by shooting gangster rapper, would you be so kind as to deposit all your bling and your gryllz in this bag, as the president has declared it illegal for you to have it, as the economy is in a bit of a bind, thank you for your time".

Well it could happen, once maybe!!

Another thing, both drugs and assault weapons are also outlawed, don't think there's much of a supply problem of either of these, and once the government outlaw anything, look what happens to the price.

LauraVella said...

Precious Metals-VGPMX up 39% so far this year. Check out the 3 yr chart.

https://personal.vanguard.com/VGApp/hnw/funds/snapshot?FundId=0053&FundIntExt=INT

burn baby burn said...

I wonder if the feds have been changing the paper money so much recently to get the people used to the idea of the money changing. So that when they change the money when the devalue the currency it will be a much easier transition.

The wicked Witch of the West said...

Anon said:"I was ridiculed when I made the suggestion back in '04. I should have known that was the "all clear" to back up the truck".

Me too! I was speaking with a good friend of mine and her husband balked when I mentioned gold again- however his 40 yr old German wife agrees on the value of gold vs the dollar ( I wonder why?!). Also a good friend of mine who is 75 years old is now specifically looking for silver coins or anything sterling at estate sales. She is starting to fear a deep recession here in the bay area.

Anonymous said...

Luckily, I don't want to buy gold with my dollars, so it doesn't matter how much gold is worth.

Happy Homedebtor said...

Anonymous on October 12, 2007 8:21 AM said...
---------------------

1. I am a legend in my own mind - as is everyone else alive.

2. I don't know how to play golf yet - I have to learn though in '09 so I don't look like an idiot once I have my MBA.

3. D00d - it's called harnessing your ADHD - I write this crap between doing 19 other things, usually while at work. Rather than medicate my illness and make excuses, I just abuse it and do my work, school work, and random personal crap simultaneously.

4. I don't have to convince anybody - life right now is absolutely fantabulous, and gets better every month!

5. Credibility? You must be joking - this is the internet. You all flock to Keith and hang on his every word - $50 says the guy has no formal training or education in financials whatsoever, and probably doesn't work in the field at all. You could be Bill Gross for all I know, and I could be Warren friggin' Buffett - it's the internet, it's anonymous - you can be whoever and whatever you want.

Credibility only exists for those with established real-world credentials and identities - of which noone here, including Keith, has. Seriously - go to my "web page" - you could use some of that (either side of the house) in your life apparently.

Anonymous said...

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Wha?






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