Gold GOING to get Killed!!!!

[thriftyandboringinohio]

Re: Gold GOING to get Killed!!!!

The problem is that our grasp of the issues at hand is going mainstream. That indicates to me that we have officially entered phase II of the gold bull market, past the early adopter stage and into the smart money stage.

I agree the we're looking at the beginning of Stage 2. When Donald Luskin writes things like below, I see stage 2 , smarter money buying in, just learning the things early adopters have know for years. A few violent corrections won't change my view. At $700/oz I'll buy like crazy, and not consider selling until below $500.

http://www.smartmoney.com/investing/...ning/?page=all

[strittmatter]

Re: Gold GOING to get Killed!!!!

I have had a grand total of two people who have listened to me over the years and bought gold or GTU. Many, many more have heard the speech. Not one of the disbelievers has come to ask me how to buy yet. When they do, it will be a change in market psychology for me. I have had a few people mention the price though which is new.

Funny how everybody's scenario is similar here:

I have a total of one aquaintence, a fellow business owner, who would always go back and research what I would tell him so he could disprove me, then back in January he finally decided it was time to get physical.

My immediate family members have remained a bit of a disappointment. Yesterday I brought it up again (for the last time) to one of them, told him there is still plenty of time.........yet it appears that they still see it as some sort of an Amway pitch. They can't see past the fact that it's really not about gold or some kind of "quick play" scheme, and that there is a much larger picture behind it, and the day will surely come when it will be time to jump over onto a different log to keep floating...........

I'm not a doctor so I don't play one, and I'm not trying to play financial pro either - just trying to offer an informed opinion to the people I care about. But enough with trying to do their homework for them, as ignorance was bliss for me too back when I still didn't know that I didn't know.

[loweyecue]

Re: Gold GOING to get Killed!!!!

It's chicken littl time, the end is neah! :eek:
http://money.cnn.com/2009/11/23/pf/d...tune/index.htm

[xela]

Re: Gold GOING to get Killed!!!!

Do you recall what happened to the gold price after the collapse of Bear Stearns? It went down about $100 for a week or two after that. In a post I made, that was subsequently removed from this site, A wall street insider speculated about a large gold position that needed to be unwound.

I've read that too (Bear Stearns). Then later, Lehman's longs in gold where liquidated, too, it was said.
But I'd hope that was not the reason your post was removed.

[Verdred]

Re: Gold GOING to get Killed!!!!

First time i tried to open the link the page crashed and all i was left with was the fox business news logo in shining blazing even gaudy gold color. yep, gold is dead... (((long live gold))).

[stanley2008]

Re: Gold GOING to get Killed!!!!

And...we've been reading this same argument for the last five years, but can you find one stock that has outperformed gold in the last five years? I don't think so. Not even one.

Easy - AAPL - Apple

Even if you compare 5 years ago up to Feb 2009, AAPL did better - so there!

http://finance.yahoo.com/echarts?s=G...urce=undefined


http://finance.yahoo.com/echarts?s=GLD#chart1:symbol=gld;range=5y;compare=a apl;indicator=volume;charttype=line;crosshair=on;o hlcvalues=0;logscale=on;source=undefined

[Starving Steve]

Re: Gold GOING to get Killed!!!!

http://www.foxbusiness.com/story/mar...+-+Business%29

Mike

And wouldn't that be a surprise, Mega, to have gold finish 2010 in the low $800s! The remote possibility of a stronger U.S. dollar, as a bull-trap for those in the commodity bubbles would be a huge surprise and a shock; and this could emerge as a result of short-covering in the dollar carry-trade, along with the first bumps up in interest rates. It is a scary thought, and it may be exactly what Bernanke and his bunch are planning.

I would give this strong dollar (surprise) scenario a 20% chance of happening. I would deem it to be a fake-reversal--- if it occurs--- and a long-term dollar-selling opportunity.

[raja]

Re: Gold GOING to get Killed!!!!

the people that are buying gold are not buying it as a "hedge against inflation". That is moronic. Gold is NOT a hedge against inflation. It is a hedge against systemic meltdown and/or currency failures/sovereign defaults.

Mr. Moron, here (me). . . .

I bought gold as a hedge against inflation.
I thought, "If the dollar is devalued, people will look to gold as something "real" which will hold its value while the dollar falls.
I think many people who now buy gold are buying it because they fear inflation, whether or not there will be a "systemic meltdown".

As I understand it, a "hedge" is something you buy, expecting that when another thing goes down, the hedge will go up.
Well, the dollar is going down and gold is going up. So whatever the motivations for buying, gold is acting as a hedge against inflation. Perhaps there is no mechanistic causality at work here, but there is psychological causality which is just as real.

Am I missing something?

[Jay]

Re: Gold GOING to get Killed!!!!

Funny how everybody's scenario is similar here:

I have a total of one aquaintence, a fellow business owner, who would always go back and research what I would tell him so he could disprove me, then back in January he finally decided it was time to get physical.

My immediate family members have remained a bit of a disappointment. Yesterday I brought it up again (for the last time) to one of them, told him there is still plenty of time.........yet it appears that they still see it as some sort of an Amway pitch. They can't see past the fact that it's really not about gold or some kind of "quick play" scheme, and that there is a much larger picture behind it, and the day will surely come when it will be time to jump over onto a different log to keep floating...........

I'm not a doctor so I don't play one, and I'm not trying to play financial pro either - just trying to offer an informed opinion to the people I care about. But enough with trying to do their homework for them, as ignorance was bliss for me too back when I still didn't know that I didn't know.

It's really frustrating when people you care about don't want to understand something you hold so dear. I thought about the word "dear" and had initially changed it to vital, but thinking about all of the social, moral and political ramifications of what we are really talking about I thought dear was more appropriate. The media horn is loud. I might be insane without the members of forum at this point.

[ASH]

Re: Gold GOING to get Killed!!!!

Mr. Moron, here (me). . . .

I bought gold as a hedge against inflation.
I thought, "If the dollar is devalued, people will look to gold as something "real" which will hold its value while the dollar falls.
I think many people who now buy gold are buying it because they fear inflation, whether or not there will be a "systemic meltdown".

As I understand it, a "hedge" is something you buy, expecting that when another thing goes down, the hedge will go up.
Well, the dollar is going down and gold is going up. So whatever the motivations for buying, gold is acting as a hedge against inflation. Perhaps there is no mechanistic causality at work here, but there is psychological causality which is just as real.

Am I missing something?

In my opinion, the people who say that gold isn't a hedge against inflation are over-stating their case. Possibly they are focussed on the fact that in addition to hedging inflation (which can be done with a wide variety of other assets), gold is insurance against a sudden currency collapse, due to its historical role as money. Maybe the point is that although gold has tended to do well during times of high inflation, the investment demand for gold has had more to do with coincident concerns about the national currency, rather than the general price inflation itself. Thus, gold could shoot up faster than other commodities during a period of modest inflation if the inflation was accompanied by concerns over the national currency; gold could subsequently lose that premium if faith in the currency was restored, even if no change in inflation occured. The poor correlation to inflation -- and the fact that gold responds drammatically to variables other than inflation -- may be why folks object to speaking of it as an inflation hedge. After all, I guess you'd want your hedge to behave predictably, and correlate only to inflation.

[Jay]

Re: Gold GOING to get Killed!!!!

And wouldn't that be a surprise, Mega, to have gold finish 2010 in the low $800s! The remote possibility of a stronger U.S. dollar, as a bull-trap for those in the commodity bubbles would be a huge surprise and a shock; and this could emerge as a result of short-covering in the dollar carry-trade, along with the first bumps up in interest rates. It is a scary thought, and it may be exactly what Bernanke and his bunch are planning.

I would give this strong dollar (surprise) scenario a 20% chance of happening. I would deem it to be a fake-reversal--- if it occurs--- and a long-term dollar-selling opportunity.

That would be Christmas!

[raja]

Re: Gold GOING to get Killed!!!!

Au contrair, mon fraire. Bubbles is the fastest way to make money. The same ol' applies here. Buy low, sell high (before the bubble bursts).

Next bubble = Oil... Looking forward to the iTulip article that explains how to get in early into that eventual bubble. I'm still hoping part 3 will include non-USD investment options, as it makes perfect sense both for US subscribers as well as non-US (i.e. Canucks like moi).

A bubble is when something is valued far beyond its worth, like when a tulip bulb sold for the same price as a home in the 1600s.

If you only consider gold as a commodity, then it might be said to be in a bubble. But gold's value is also as a symbolic storehouse of labor, something that is indispensable for the functioning of human society. Since the dollar is collapsing as a storehouse of value due to government actions, gold is stepping in to fill the role.

In a bubble, things return to "normal" after awhile. But in my opinion we will never see "normal" again. As a result, we won't be able to use the past as a judge of what's to come with gold . . . or with oil.

I'm not saying there won't be some bubblish effects, but the panic buying will reflect a reality, not a pipe dream.

[grapejelly]

Re: Gold GOING to get Killed!!!!

Gold cycles in the very long term against paper.

Gold is a crappy investment when paper is going up.

When paper is falling, gold becomes a very good investment.

That's where we are right now.

Bubbles are rare in normal terms. The ones we've had are recorded in history books.

Only recently have bubbles become more common due to total fiat money everywhere in the world.

I expect this episode of history to be short lived.

Commodity backed money will return, made possible by easy exchanges on the Internet.

Nobody will ever trust fiat again.

Meanwhile, gold won't get killed ;)

[jpatter666]

Re: Gold GOING to get Killed!!!!

A bubble is when something is valued far beyond its worth, like when a tulip bulb sold for the same price as a home in the 1600s.

If you only consider gold as a commodity, then it might be said to be in a bubble. But gold's value is also as a symbolic storehouse of labor, something that is indispensable for the functioning of human society. Since the dollar is collapsing as a storehouse of value due to government actions, gold is stepping in to fill the role.

In a bubble, things return to "normal" after awhile. But in my opinion we will never see "normal" again. As a result, we won't be able to use the past as a judge of what's to come with gold . . . or with oil.

I'm not saying there won't be some bubblish effects, but the panic buying will reflect a reality, not a pipe dream.

I'd be into buying a house with *one* of my gold coins!

[Jay]

Re: Gold GOING to get Killed!!!!

In my opinion, the people who say that gold isn't a hedge against inflation are over-stating their case. Possibly they are focussed on the fact that in addition to hedging inflation (which can be done with a wide variety of other assets), gold is insurance against a sudden currency collapse, due to its historical role as money. Maybe the point is that although gold has tended to do well during times of high inflation, the investment demand for gold has had more to do with coincident concerns about the national currency, rather than the general price inflation itself. Thus, gold could shoot up faster than other commodities during a period of modest inflation if the inflation was accompanied by concerns over the national currency; gold could subsequently lose that premium if faith in the currency was restored, even if no change in inflation occured. The poor correlation to inflation -- and the fact that gold responds drammatically to variables other than inflation -- may be why folks object to speaking of it as an inflation hedge. After all, I guess you'd want your hedge to behave predictably, and correlate only to inflation.

The beauty is that both reasons to own it are in play now and likely won't go away any time soon.