gold equity investors: tossed in the towel yet?

[jimmygu3]

Re: gold equity investors: tossed in the towel yet?

Toast; I would call that short to medium term.

You seem very bullish on PMs like alot of iTulipers and for good reasons. One advice: I would hold my bullion for much longer. Who cares if it goes down 25% today? In the end, we are looking at $2,000+ gold (conservative estimate here).

I think at this stage less than 0.1% of the populace thinks of gold as an investment. Can you imagine if only 5% of the world decide to buy gold as an investment? Or god forbid, Central Banks start buying gold?

I think gold will really shine over the next 5-15 years; once its takes off Oprah will be talking about it.

I have been waiting for the public to jump in, too. Gold more than doubled in the 30 months from Sep '05 - Mar '08. Where was Oprah? Why should we expect her to get all psyched up about gold doubling over the next 5-15 years?

I think it will take stocks truly crashing for most people to wake up and smell the hard assets. The big draining of 401(k)s has only just begun. My new prediction: In the near future you will need to put up your retirement account as additional collateral when buying a home. Some will opt to cash out their 401k and purchase a home for cash. Either way it's bad for stocks.

Jimmy

[tsikRNA]

Re: gold equity investors: tossed in the towel yet?

Just keep in mind if gold does hit $2000+, everything else dollar denominated you own will have been trashed by a proportionate amount.

This is why I am still unconvinced of gold as the best investment - because you don't gain more than the dollar loses.

Unless you put all your net worth into gold, you're still just losing less than your fellow Americans.

That's worth something, but not ideal.

Correct. Gold is a store of value. Gold does not change. The dollar does. One ounce of gold is always one ounce of gold. It can not be fiat (unless your ETF). And gold is priced in dollars. So is everything you have to buy. Gold is not meant to be consumed either. It's purpose is to be accumulated or traded. Until you can pay for gas and groceries with PM, it's a wash. The only way you can gain is to buy low and sell high. But the amount you make on margin will probably be lost due to a drop in the dollar. So unless that money you just made is going into the next appreciating item before it peaks, you probably gained little if anything. That's the problem with fiat currency. It totally disquises what is going on; which is theft. I fully believe, the best investment is in yourself. It's hard for anyone to take that away. If your productive, that is.

[Guest]

Re: gold equity investors: tossed in the towel yet?

tsikRNA -

Actually I wonder if even this is accurate. It's unreasonable to expect the price of gold to not ever fluctuate, as though it were set at some mechanically rigid "par" purchasing power at all times. Especially since demonetization, it's in fact a sharply fluctuating price on the spot market, and so can easily be subject to notable upward and downward purchasing power vs. a basket of goods, and the currencies, as it bobs around just like the fiat currencies bob around in relative value.

So suggest gold is "fixed and immutable" in value is a synthetic construct. It has years when the irrational public's bid on it is frantic, and other year's when it's shunned. Therefore it's in fact highly likely that it's value on a short term basis fluctuates every bit as much as the currencies, and indeed probably more, as it's far more volatile than any currency on a weekly basis. Your assertion in fact seems invalid even in any annualized trading considerations.

Gold's "price" is only a constant relative to fiat currencies when you dial the sampling window out to many years. Even using a window of seven years, as in this bull market, gold can by no means be described as having remained "constant in price" relative to any basket of goods. It's wheeling around in very large degrees relative to purchasing power even on monthly bases. We should beware of getting entranced by the "gold is immutable" homages which so many gold friendly pundits confer upon it.

Having said that, you can definitely count me among the fans here who believe that it really is the yardstick against which any paper money is moving! It's just a bit paradoxical that in shorter time frames that's in fact not the case.

Correct. Gold is a store of value. Gold does not change. The dollar does. One ounce of gold is always one ounce of gold. It can not be fiat (unless your ETF). And gold is priced in dollars. So is everything you have to buy. Gold is not meant to be consumed either. It's purpose is to be accumulated or traded. Until you can pay for gas and groceries with PM, it's a wash. The only way you can gain is to buy low and sell high. But the amount you make on margin will probably be lost due to a drop in the dollar. So unless that money you just made is going into the next appreciating item before it peaks, you probably gained little if anything. That's the problem with fiat currency. It totally disquises what is going on; which is theft. I fully believe, the best investment is in yourself. It's hard for anyone to take that away. If your productive, that is.

[grapejelly]

Re: gold equity investors: tossed in the towel yet?

gold's value fluctuates wildly. In the short term due to technical factors, intervention perhaps (or not), and so forth.

Over the longer haul, gold's value depends upon expectations for future inflation.

There is a ton of money to be made in gold, though, because when people start expecting inflation, they panic and flee into gold and you get these huge bull market highs that will make 1980 look like child's play. At least that's my story and I'm sticking to it. Can't find anything else good enough to invest in besides some uranium, gas and gold stocks.

Course that means my portfolio is highly correlated and hasn't been much fun lately

[Guest]

Re: gold equity investors: tossed in the towel yet?

Course that means my portfolio is highly correlated and hasn't been much fun lately

I long ago concluded you had the stomach for it Grapejelly. When in doubt, check in with EJ. Seems like you still see eye to eye with him on this count. Not exactly the world's most "prolific traders", the pair o' yez. :p Meanwhile the inflation thesis is baked into the pie. I listened in on a Jim Puplava newshour this past weekend, and someone commented on a thesis I hold, but which seems to have few explicit takers around here. As the oil crunch begins to bite this will be highly inflationary. Nevermind the mechanics of who or what is "permitting" that inflation.

The oil gets scarce for easy supply and the real price goes up. Presto! Cost push inflation, and to hell with the economic orthodoxies.

So you've got one source of inflation that is like a pit bull that just grabbed hold of the world's ankle. Five to eight years from now that ankle will be shredded and the world will be waking up to a world o' pain. The pit bull will be working his way up to the torso. Anyone who does not see inflation printed all over that event is just outright foggy in the head, in my opinion. The inflationary input is . g . e . o . l . o . g . i . c . a . l . You can parse how it translates into massive further fiat currency abuse any way you want, but what you won't be able to do is evade it.

So the global inflation this time far supercedes the localized dollar abuse inflation of the 1970's. It may not be the overriding input today, but it sure as hell will be at $300 oil. Commerce has to keep running even after the world has a couple of heart attacks. That commerce will need to keep using a financial medium of exchange. Now imagine how well the paper currencies will be holding up to that. Are you smiling yet? If not, you are one stubborn old sourpuss.

One other question - Why did you have to give Paul Tustain such a headache, eh?

[santafe2]

Re: gold equity investors: tossed in the towel yet?

Correct. Gold is a store of value. Gold does not change. The dollar does.

As Grapejelly noted, this is incorrect. I'm sure you're not ready to defend gold as a mirror of the US$. Gold is not a store of value at all times. It is sometimes and awful investment.

[santafe2]

Re: gold equity investors: tossed in the towel yet?

Just keep in mind if gold does hit $2000+, everything else dollar denominated you own will have been trashed by a proportionate amount.

This is why I am still unconvinced of gold as the best investment - because you don't gain more than the dollar loses.

Unless you put all your net worth into gold, you're still just losing less than your fellow Americans.

That's worth something, but not ideal.

C1ue, like most other aspects of life, assets, stuff, move in big waves. It took me several years into the "metals" bull market to realize I was just riding a commodities wave. I had focused on metals and was confident I had a winning investment but it took me several years to see that many other commodities were moving ahead faster than PM.

I point this out as a reminder that when gold goes up, not everything else goes down. Gold and silver are simply investments, they are not the holy grail of finance. They are not the arbiter of all things financial.

I don't agree with your logic but I do agree with your conclusion, I'm also unconvinced that gold is the best investment in 2008. If I had to guess at the best investment for the next 10-20 years, it would be real estate. Especially land with water rights. Two-three years from now, when real estate is nothing more than a cautionary tale, investors will be buying anything of real value they can afford at a quarter of it's real value. Looks like commodities in 2001 to me.

[Guest]

Re: gold equity investors: tossed in the towel yet?

This just in from Mr. Tom Szabo of SILVERAXIS. Whatever he is, Mr. Szabo is NOT a tout or a bug-head when it comes to reporting silver shortages. He's been arguing against the "pope of silver shortages" Ted Butler for years now saying all the reports of silver shortages were MYTHICAL. So what are we to make of him suddenly reporting this? ( have the funny impression we saw some similar episodes back in March of this year at the silver prices peak? Now it's happening AGAIN at the Silver prices nadir?). All I can say is to read Tom Szabo talking about silver shortages is about as improbable as it might be to hear Warren Buffett extolling internet stocks. This is highly unusual talk for Mr. Szabo!
_____________

AUGUST 13 2008 8:05PM - Confirmed: As of this afternoon CNI is sold out of all silver but the 90% bags. Thanks LC! If anybody knows of a source that still has inventory, please let me know. Tulving is now sold out of everything as well except for 90% bags of Half Dollars (less than 10 left) at 20 cents over spot and they also have in quantity the 2008 silver Philharmonics, which is the first true bullion coin in silver with a face value in Euros.

At a premium to spot of $1.89, the Philharmonic purchased from Tulving with silver more than 2 dollars below its 200 day moving average is a very interesting option.

Heck, if I was buying these days I'd pick up 500 of them to go with 500 Maple Leafs and 500 Eagles. And I'd do that every year. Say, that's not a bad idea. Unfortunately, the U.S. Mint is apparently going out as far as Christmas on dealer allocations of the 2008 silver Eagles, so if you don't have yours yet you might be out of luck (and you might be out of luck even if you did already order but haven't received them). One last thing, many dealers are also out of a number of gold bullion items so this time it's not just silver.

[metalman]

Re: gold equity investors: tossed in the towel yet?

One last thing, many dealers are also out of a number of gold bullion items so this time it's not just silver.

try getting your paws on $20 gold libs. ain't any. odd because we're starting to see some modest price declines in the lower and very high grades...

[Guest]

Re: gold equity investors: tossed in the towel yet?

Toast; I would call that short to medium term.

You seem very bullish on PMs like alot of iTulipers and for good reasons. One advice: I would hold my bullion for much longer. Who cares if it goes down 25% today? In the end, we are looking at $2,000+ gold (conservative estimate here).

I think at this stage less than 0.1% of the populace thinks of gold as an investment. Can you imagine if only 5% of the world decide to buy gold as an investment? Or god forbid, Central Banks start buying gold?

I think gold will really shine over the next 5-15 years; once its takes off Oprah will be talking about it.

Agree. If 90% of the market is wrong on PM the price will be low today. But when a loaf of bread costs $20 will they remain so irrational?

Unless you're selling your gold to live on today the short term market matters not. Unless you're some sort of "trader". And for my knowledge level that would be akin to just letting it all ride on "black" at the roulette wheel.

Americans are being stubbornly optimistic in this market. They have to be. Nobody likes the idea of the party being over. It's like a drunk. They have to hit rock bottom first. Until credit dries up, a few more quarters of bad earnings reports come in, and the price of a loaf of bread hits $5, they will cling stubbornly to their "happy days are here again" mantra every time the dollar ticks up slightly or a barrell of oil goes down.

Who would have thought that $117 oil would be cause for a rally?

[phirang]

Re: gold equity investors: tossed in the towel yet?

Anyone who has experience in the metals markets and has an understanding of the gold investment thesis isn't selling at these prices.

On a non-gold note, Eric Sprott is selling his physical moly from his moly fund and using the proceeds to buy shares in the Sprott Moly fund itself.

[tsikRNA]

Re: gold equity investors: tossed in the towel yet?

AUGUST 13 2008 8:05PM - Confirmed: As of this afternoon CNI is sold out of all silver but the 90% bags.

CNI is always out of everything. They are liars. They will tell you they have the order in stock and then your waiting weeks or months for your shipment to arrive. I've dealt with them multiple times and the previous one will be my last. I'll stick with Northwest Mint.

[Jim Nickerson]

Re: gold equity investors: tossed in the towel yet?

Anyone who has experience in the metals markets and has an understanding of the gold investment thesis isn't selling at these prices.

On a non-gold note, Eric Sprott is selling his physical moly from his moly fund and using the proceeds to buy shares in the Sprott Moly fund itself.

You're right, they sold at 100-175 points up from these levels.

[Shakespear]

Re: gold equity investors: tossed in the towel yet?

Can someone explain how the prices of PM can stay low and potentially head lower when we have all this military tension in Georgia. Have all the traders gone on vacation or perhaps the Olympics?

Smaller events made the stuff head for the sky.

[jk]

Re: gold equity investors: tossed in the towel yet?

Can someone explain how the prices of PM can stay low and potentially head lower when we have all this military tension in Georgia. Have all the traders gone on vacation or perhaps the Olympics?

Smaller events made the stuff head for the sky.

i think the moves here are technical, driven by the unwinding of crowded cross trades like long gold-commodities/short banks-financials. the big funds are being forced to delever and unwinding is the result. thus all these very sharp moves counter to the long-established trends. this, too, will pass.