The True Gold Bull Has Yet to Begin

I am a bit busy this week, attending 2 conferences which I will cover later. One concerned "Covering the Crisis" and the other one is about "Ways to a new financial order" organized by the Vienna Institute for International Dialogue and Cooperation.

In order to reassure you that we are not even in the early stage of the gold bull market, probably still years away before we will see a gold hype or bubble, I recommend you watch this 6-minute video by Resistance where a guy tries to sell a 1 ounce Canadian Maple Leaf gold coin, current value $1,117, for $50 - and finds no takers.

Gold may see a correction, but this video makes me accept a price above $2,000 within 18 months and those non-buyers will probably scramble in 2012 to buy such an ounce for more than $3,500 as their paper investments will have all turned further south by then. This crisis/recession is far from over and we will not see a bottom before 2011 that may be the last stage of a 'W'-shaped recovery.

It is interesting to watch gold zooming in parallel with the stock market these days, another paradigm shift that indicates gold will break out to new highs in all currencies soon. This will attract momentum traders into the gold play, pushing it the next 10%.

Yes, there will be sharp corrections, so buy on all dips that are certain to come. A bull always likes to travel with as little baggage as possible while scaring those sitting on its back. Stay in the saddle.

Comments

[jrainspe:]

First off, I'm making money in gold right now. However, I will always maintain that gold is no better than a piece of paper as far as intrinsic value. Neither have much going for them, but you can use gold for jewelry. However, as a means of exchange, it is totally dependent on the perspective of one or both of the exchange participants. If one or both has no perceived value for the gold, it becomes worthless in that particular exchange. It is only the human perspective that puts a value as an exchange medium on gold. This video illustrates that well.

Nov 13 05:24 AM

[Aspiring He...:]

This was certainly an interesting video, and I do agree with the poster that should we encounter chronic inflation in the US, 'gold bug' might set in the general public (once they start to panic about their cash savings) and drive gold to a much higher high than the current one.

However, the way the video is presented is biased; learned behaviour is to be skeptical of strangers offering goods or trades to you, it is nature to suspect that they know something that you don't which puts you at a disadvantage in the trade.

Furthermore, there's no way to verify the quality of the gold; or if it's gold at all. In such a high risk trade, it's not surprising that so many people reject it.

I'd say 95-98% of adults in the general public in the developed world don't know most commodities prices/exchange rates... it's just general ignorance as they don't know how such understanding could benefit them.

It's ironic that some people work so harder to earn something they understand so little (i.e. fiat money). I'd rather have my money work hard for me than work hard for my money.

Nov 13 06:47 AM

[cove3:]

It's not a high risk trade if the price is $5. He even offered it for a starbucks coffee. With a camera shooting it, and the guy obviously from a station working a story, all those people were dumb as rocks for not taking the offer.

Ron

Nov 13 09:00 AM

[ussmls7:]

It's interesting to read that the very rich are buying gold & selling hedge funds, you can read all about it, GATA.org.

Nov 13 10:28 AM

[winnersdon'...:]

It's simply demonstrates one of life's realities,...
Most people, are not willing to assume risk.
This basically brainless mentality permeating society today, is what creates limitless opportunities around us.

"One man's gold, is another man's garbage".

Nov 13 10:44 AM

[auto44:]

Exchange is always about prespective, preception right or wrong is truth at the time. Almost everything falls in and out of favor or style. It really all depends on the time frame in which you are operating and the circumstamces within that time frame. If someone tried to sell me a gold coin for fifty dollars I would precieve it to be either phony or stolen and I would turn him down too. This can be a serious problem for the physical gold only crowd.

On Nov 13 05:24 AM jrainspe wrote:

> First off, I'm making money in gold right now. However, I will always
> maintain that gold is no better than a piece of paper as far as intrinsic
> value. Neither have much going for them, but you can use gold for
> jewelry. However, as a means of exchange, it is totally dependent
> on the perspective of one or both of the exchange participants. If
> one or both has no perceived value for the gold, it becomes worthless
> in that particular exchange. It is only the human perspective that
> puts a value as an exchange medium on gold. This video illustrates
> that well.

Nov 13 11:43 AM

[auto44:]

You are thinking but, I respectfully suggest that you need to do a whole lot more research on Buffet and BRK and how they operate. Trying to out think Warren Buffet is not easily done. Regards Bob


On Nov 13 11:14 AM PARTICULARMEN wrote:

> Warren Buffett: The financial panic is over (Reuters headline)<br/>
>
> Why Warren Buffett pays $34 billion (market cap) for BNI instead
> max. $24 billion when market DJIA was at 6500?
> Why BRK depends on Goldman Sachs bankers?
> Why Buffett is buying stuff at the peak of the market instead of
> waiting to buy cheaper in a very short time ?
> Does he think DJIA at 10000 is "cheap" ?
> Why he wanna split his highly priced BRK.B shares and make it appeal
> to average John Q. Public investor ?
> He buys BNI at the top to calm the matket panic and "make you buy
> too".
> Why BRK is not selling all their stuff, when W. Buffett knows very
> clear that DJIA will be 5000 soon and will bottom only at 2000 that
> will hit him too?
> Find out in WARREN BUFFET? link
> snipr.com/t7w23

Nov 13 11:47 AM

[GMiki1:]

If you observe fables throughout the ages, as I do, many are based on the idea that gold is of prime value. Therefore, the thought is part of the human mindset, a pool of ideas that are not easy to overcome. If we can overturn the fear of death, the drive to survive as discrete individuals, that's when we will get over the concept of the intrinsic value of gold. Iit's not just an idea, it's quite built into the genetic code, in my opinion. If ANYTHING has value, then gold does.

The gold bull has not yet begun because denial rules. People are being told and would like to believe that we're going to return to a state called "normal." But that's not possible. We crossed the line. We violated certain natural laws and threw a spanner in the works, now will reap what has been sewn. That doesn't mean people can't still lead good lives; i's just that these won't be lives dedicated to consumerism.

Nov 13 11:54 AM

[5142152-337:]

Very nice piece. Thanks!

Nov 14 03:58 PM

[Advill:]

Saving in gold from 1980 to present carried a negative return, a significant one, the "barbarian relic" was a loss in the last 30 years, it could be a good short term shelter value, but no consistent investment portfolio can be sustained in gold....frankly I prefer Kimberly Clark toilet paper business.rgds

Nov 28 09:33 PM