Why is Gold still getting Arse rapped?

[Basil]

Re: Why is Gold still getting Arse rapped?

Not divorced yet, luckily. Had to lay down the law a couple of times (unilateral investment decisions that were unpopular at the time with a certain significant other).

I would say my wife is similar.

I would sum it up by saying she partially understands what I think I know, but she doesn't comprehend the depth of what she doesn't understand.
She seems to want to have a say in the decision making part of investing and thinks that it should be a consensus decision with out understanding that A LACK of understanding the dynamics at play makes her inputs limiting at best and harmful at worst. That's the frustrating part.

Your wife should talk to my wife so they could comiserate about their husbands that don't take their inputs on finanancial matters seriously enough.

My wife has really been amazing. I laid out the entire Itulip thesis and her response was, "Well then why don't we just put all of our money in PMs?" I explained diversification, safety, etc.. Her response was, "Yeah, so if the whole paradigm is shifting then why not just buy gold. It's real, most other things are not." Perhaps she should be making the investments. This message has been approved by my wife.

[LargoWinch]

Re: Why is Gold still getting Arse rapped?

My wife has really been amazing. I laid out the entire Itulip thesis and her response was, "Well then why don't we just put all of our money in PMs?" I explained diversification, safety, etc.. Her response was, "Yeah, so if the whole paradigm is shifting then why not just buy gold. It's real, most other things are not." Perhaps she should be making the investments. This message has been approved by my wife.

Since I tend to lose money investing: I NEVER tell my wife (just that I drank it).

[metalman]

Re: Why isn't Gold still getting Arse rapped?

Ed, this chart tells me that crude is a better investment at this point.

The rule of thumb is the "10 to 1" ratio, hence crude says now that gold should be $420/oz (USD).

I don't believe gold is cheap; far from it.

But I do believe crude is greatly attractive at this point.

a privative investing mind takes this one step further and says, 'tbills were the best of all! look at the price now!'

gold is perfect. after all of this bullshit, tbills are a bubble the gov't MUST pop ala fdr 1933 and oil must get cheaper to cut the energy tax on the usa to keep the economy from going 1933. gold must hang in the balance.

[LargoWinch]

Re: Why isn't Gold still getting Arse rapped?

a privative investing mind takes this one step further and says, 'tbills were the best of all! look at the price now!'

gold is perfect. after all of this bullshit, tbills are a bubble the gov't MUST pop ala fdr 1933 and oil must get cheaper to cut the energy tax on the usa to keep the economy from going 1933. gold must hang in the balance.

Hmmm you got me thinking there metal. Fortunately for me (see my allocation under Jim's thread), you make a lot of sense.

I just cannot imagine they will do this...again: almost 100 years later.

[GRG55]

Re: Why is Gold still getting Arse rapped?

Clever.

Let's not forget that cash has maintained it's value as well.

Depended a lot on which currency your cash was in, however... or

[jtabeb]

Re: Why is Gold still getting Arse rapped?

My wife has really been amazing. I laid out the entire Itulip thesis and her response was, "Well then why don't we just put all of our money in PMs?" I explained diversification, safety, etc.. Her response was, "Yeah, so if the whole paradigm is shifting then why not just buy gold. It's real, most other things are not." Perhaps she should be making the investments. This message has been approved by my wife.

It's not easy to Find an INTP female, where'd you find her?

[audrey_girl]

Re: Why is Gold still getting Arse rapped?

R.E. "I've stopped feeling doubt about the eventual outcome "

Got to that point around mid 2005. I had to sit my wife down and tell her everything that I thought was going to happen. I had to have a witness so that I could prove to myself that I wasn't being delusiaonal. I've been going on for three years like this ( at least a thousand hours of reading and research).

As you know, you bump into a buddy all the time in the military. I keep running into guys from assignments three years ago and it is DOWNRIGHT strange when the walk up to point-blank and the very first thing they say is, "man, you called it dude, wished I'd listened to you back then".

R.E. "-- now I will have to supply by intellectual rigor the doubt that I had previously felt subjectively. It is a very strange (and probably dangerous) thing to feel a lack of doubt, where finance is concerned."

I got out of that rut about a year ago, it will pass in phase three

R.E. "Perhaps this means I have now been subjected to so many pro-gold arguments that the sheer volume has overcome my critical faculty."

This is phase 2.5 of Goldbug fever. I call this phase "false doubt".

Phase three comes next when you realize that the false doubts you created in phase 2.5 were merely intelluctual constructs to fill a void due to total absence of ANY countervailing arguments. It's when you consciously (vs unconsciencely earlier) accept the validity of your conclusions.

I will admit I am open to the possiblity of being wrong, but so far I have not seen a single convincing argument as to why the conclusion I've drawn is incorrect.

I know that sounds REALLY pompous, but that's honestly where I'm at.

Welcome to wonderland ASH. It's a strange magical place that keeps getting curiouser and curiouser.

V/R

JT

Intellectually - I was convinced about gold and what is happening (economic collapse) several years ago (probably 2003) and started investing accordingly. Each time I felt any doubt all I had to do was to turn on the tv and see Bush, Cheney, Kerry, Reid, Frank, etc. and realized I was right. That this govt run by these fools were going to destroy the economy and this great country in the process.

Still in my heart - I hoped against hope that I was wrong, that someone sometime soon would come and right the ship. I maxed out my $ contribution to Dr. Paul and spent every weekend for many weekends working for Dr. Paul - but in retrospect he didn't have a chance.

Last month, I pretty much gave up hope.

Funny - I used to laugh at these clowns and thieves running Congress and the Fed. Now I just get more and more depressed.

Sorry for the long post

[jtabeb]

Re: Why is Gold still getting Arse rapped?

http://www.kitco.com/scripts/hist_ch...rly_graphs.plx


I am posting to give a contrasting view to this predominantly bullish consensus and to generate a little debate.

I post this chart to show the history of gold pricing since Nixon took us off the gold standard. As you can plainly see gold has a history of being a terrible investment (unless you are excellent market timer). It seems to me that gold like all commodities enters a period of high volatility in an approximate 30 year cycle. This seems to correlate with periods of high inflation. I know gold bugs are convinced that gold is going to skyrocket when the dollar collapses and that time is imminent. I don't think that is a 100% certainty. Clearly Eric was able to call the bottom in 2000. I think his recommendation now is Hold. If you have a good basis at $450 which means an entry point of 2005 more or less you have lost 56% of your profit. And you are up not 122% but 67%. I am conservative with my investing and like to protect profits. Gold is clearly in a downtrend at this time. So the way it looks to me is you have many more risks at this time then any other. The game changer is Deflation. We are obviously in a credit induced deflation. As a matter of fact we are close to a total seizure of credit markets. It is nearly impossible to get any type of loan. With out leverage you take away demand for assets of all types. You then get a lot of people who need Cash (predominantly US Dollars and Yen since they are the most lent currencies) these people will sell every asset when they need to meet ongoing obligations including gold. You also eliminate speculator demand. Physical demand will also wane as people stop spending on jewelry due to the generally depressed retail market globally. Gold coin hording is just a fear of monetary collapse which I think is misplaced at this time.
:p
There is a real cost of money today. I know you look at headline interest rates on t-bills and think money is cheap. But the true cost of money has skyrocketed. By this I mean the amount of money businesses and consumers can borrow at today. That rate is currently 10-20% for corporations depending on who you are. It is close to 30% if you are a consumer using a revolving line. Look at Goldman and GE (AAA rated) paid 10% for money. This is the same situation as in 1980 when Volker crushed inflation by making it worth investing in dollars by giving a great return. Would you rather make a loan at 10% secured by physical assets in a rising currency or hold a commodity that is in a downtrend. I think a lot of big players much rather hold a loan at 10% plus then risk buying the commodity. This will also lead to less demand.
:p
Inflation is dead for a few years. The downside to gold (or the cap on its growth) remains for a few years. I’m not saying sell your gold or PM’s but just understand the risks. Don’t be indoctrinated by a few bullish websites pushing their own book.
:p
If you want to see how sharply commodity inventories can rise in a short period of time go to this link http://www.kitcometals.com/ look at Copper, Aluminum, Nickel, Zinc and Lead. Go to the LSE warehouse supply charts and compare the dramatic rise in inventories to the catastrophic declines in prices. Gold is a commodity and for the most part behaves like a commodity. It is considered the 4^th currency but would you want to be in Sterling:p, Euro, Looney, Kiwi or Aussie Dollar either?
:p
Once the credit market starts moving again and commercial borrowing rates come down (specifically the spread between corporate and treasuries) I would consider accumulating PM’s. Till then treat it like you would any other investment by utilizing stop losses. If you like the saftey and sleep better having a few gold coins in your possesion fine but that is not an investment it is insurance and as you know you may never need to cash in your policy.

Anecdotaly, I'm still getting $20K-$50K+ preapproved credit card offers in the mail at rates below 6% for the term of balance transfer or less or 0% for 12 months inital rate followed by Prime plus 1-2%.

I'm not so sure the consumer lending market is as dead as you claim it is. (and I work for the gubment)

But maybe that's just my experience.

[jiimbergin]

Re: Why is Gold still getting Arse rapped?

I don't know why gold is down, but I am glad it is now. I am just now buying gold again. I first bought it back in 1978-81 (along with junk silver). Funny, I had the conversation with my first wife (she died in 2006) back when I was first buying PM, much like some of your conversations. My wife thought I gone over the edge. But we did get through that time. Well, I have never sold my gold or silver , but am finally buying again. I hope is goes lower yet! My current wife sort of understands but relies on me to keep us OK!

[Basil]

Re: Why is Gold still getting Arse rapped?

It's not easy to Find an INTP female, where'd you find her?

She found me.;)

[Down Under]

Re: Why is Gold still getting Arse rapped?

Depended a lot on which currency your cash was in, however... or

Exactly. AUD not looking great.

[jtabeb]

Re: Why is Gold still getting Arse rapped?

"Anecdotaly, I'm still getting $20K-$50K+ preapproved credit card offers in the mail at rates below 6% for the term of balance transfer or less or 0% for 12 months inital rate followed by Prime plus 1-2%.

I'm not so sure the consumer lending market is as dead as you claim it is. (and I work for the gubment)

But maybe that's just my experience."

1) Do you have a high credit balance?
2) I assume you have excellent credit.
3) You probably don't need the money.

Please see below posts:

http://www.ajc.com/services/content/...30/ccards.html
http://www.signonsandiego.com/news/b...b16credit.html
http://www.creditcards.com/credit-ca...-rate-1282.php

Yeah but you are making my point for me.

During Asset deflation quality TRUMPS, that is indeed the whole point.


As you aptly point out gold SUCKS during ASSET price inflations,

But as the late 70's very early 80's show, Gold KICKS ASS during asset defaltions.

All of us gold people are expecting and ASSET DEFLATION, and Gold to be the deflator. That's the point I'm not sure you connecting to the rest of the dots. And remember the important distinction of an asset inflation is that it must provide it's gain in REAL not Nominal terms, very important.


BTW, with the noteable exception of the dollar, Gold has done EXACTLY that. (we think the dollar is next to fall)

Think of Exiter's pyramid. Do you know what is at the bottom of it? (it's an inverted pyramid BTW).

We are all bum rushing to the bottom level of the pyramid before everyone else gets a chance to beat us to it. (Physical gold is at the bottom of the pyramid BTW).

Ask me if I'm buying more gold. Answer?

Not unless I get a huge windfall, why?!?!? because I'm FULLY invested. I would have to give up things that I really like to do or have or drink to do that. I don't have any more money left to put in (except for emergency cash reserve, which EVERYONE should have).

So the rest is just funny money at this point to enjoy and buy cool things with. Which I am doing at an increasing rate. You should see the deals out there, it's the shopping trip of a lifetime right now.

I don't expect it to stay that way for very much longer mind you. Which is Why I'm burning through it right now because people are GIVING Things AWAY for dollars. I don't want to have any left when people are giving dollars away for ANYTHING.

Get my drift?

V/R

JT

[jtabeb]

Re: Why is Gold still getting Arse rapped?

I don't know why gold is down, but I am glad it is now. I am just now buying gold again. I first bought it back in 1978-81 (along with junk silver). Funny, I had the conversation with my first wife (she died in 2006) back when I was first buying PM, much like some of your conversations. My wife thought I gone over the edge. But we did get through that time. Well, I have never sold my gold or silver , but am finally buying again. I hope is goes lower yet! My current wife sort of understands but relies on me to keep us OK!

You are doing a fine job of keeping you two okay just buy your investment strategy. Remember that.
And sorry for the loss of your previous spouse. Those wounds never heal completely, but I'm heartened to see that you moved past it.

(I lost my dad when I was 10 and it took me 20 years to move on from that)

[jtabeb]

Re: Why is Gold still getting Arse rapped?

From what I understand the asset deflation of the 70's and 80's (Oil and Commodities Deflated?) was caused by higher interest rates to combat the inflation caused by the guns and butter economics used during the vietnam era. It was not caused by a severe credit contraction. I think it is more likely (and this is just my unresearched opinion) Interest rates were raised causing return on levered invested capital to decline due to the higher debt service required. This caused ROI (Return on Investment) to diminish. The only way to preserve ROI in order to match the riskless higher treasury rates in that enviornment is to buy the asset at a lower price. That is an economic asset deflation or market driven asset deflation.

From what I understand ( I was not in the market then) you could get a loan then for a market rate.

Asset prices are down today because of the inability to lever to the extremes of two years ago. This is a systemic asset deflation.

Just a quick thought. If banks could lend at 30x reserves and multiply that money that would create a great demand for assets. If you now can only lend at 10x reserves you have desroyed 66% of that demand. As demand falls price falls.

Also I did not point out that gold sucks during asset price inflations Gold has done very well and has been highly correlated to the asset price inflation of Oil, Housing, Stocks (both domestic and emerging market), Bonds, Art and Food since 2000. Why should the correlation not hold true on the way down.

Why should gold be the deflator. How is gold demand tied to asset prices or leverage? It is not. People need Dollars and Yen to pay back their margin calls or debt not gold. Therefore I believe the pent up demand short term is for Dollars and Yen not Gold.

Brother, you've got to read this thread, THE ENTIRE THREAD.

http://www.itulip.com/forums/showthr...1139#post61139

Don't confuse today for what will happen next. (And I mean that with every fiber of my being)

VV/R

JT

[Slimprofits]

Re: Why is Gold still getting Arse rapped?

Just compare the volume of a group of individuals chasing a couple of coins with the massive volume on the exchanges.

If there are more sellers than buyers, than there should be quite a few more than "a couple of coins" being chased.