R. Scott Raynovich

Gold Is Not in a Bull Market

Gold not in a bull market?

What is he smoking?

Gold: How the Mainstream Gets It So Wrong

It's not an "Arbitrary" time period. I picked the date that we went off the gold standard to prove a point. The point being, that SINCE we went off the gold standard, gold has gone straight up. 40 years of data is a pretty good run

Also, the dollar has declined 90% since we went off the gold standard.

Do you think these data points are arbitrary, or coincidental? Do you really think it's coincidence that when we want off the gold standard, it was price at $35, and now it's priced at $1,050?

Where did all that "extra" money go (the inflation). Does it go into your pocket or the pocket of politicians, lobbyists, and leveraged investment bankers? My guess is the latter three.


On Oct 26 03:32 AM Mr. Ed, Jr. wrote:

> Pick any investment and any starting point at random and there will
> be many better investments for that time period. Timing really is
> everything.
>
> Gold, in particular, seems quite irregular-- even irratic-- in performance
> comparison. But gold really only appears on our radar screens in
> times of more severe financial instability; currency crises, wars,
> "Black Swan" events. When the real or perceived crisis passes, gold
> fades from thoughts and investment portfolios.
>
> The case for gold at this moment in history would seem clear-- the
> world has never seen this kind of financial shakiness. More than
> one nation is perceived as being a bit too close to the brink of
> financial chaos. Indeed, the world's "reserve currency" is thought
> by many to be undergoing a deliberate debasing. Others believe it
> is not so much deliberate as beyond control-- after all, it is backed
> by none other than the biggest debtor nation in history, and that
> debt has reached a percentage of GDP that, if history is our guide,
> suggests the dollar is doomed to eternal rest in the fiat money cemetary.
>
>
> What should rational persons think when the world's greatest debtor
> , after giving away cars and $8k homebuyer gifts, now proposes a
> trillion-dollar health care program rather than cutting back on spending
> ? They must think us to be completely insane. And if we are....what
> about our currency now inspires confidence ?
>
> If people even suspect that the dollar could really be on the way
> to "money heaven", the logical next question is "Then....what ?"
> Well....."Financial chaos and commotion" may be the most common answer,
> and while not particularly helpful, it is illuminative in that it
> leads to the next course of action-- buying gold.
>
> Gold does well during times of financial uncertainty and instability,
> which seems to be the state of things. That makes physical gold both
> an "insurance" policy and a momentum play. It seems unlikely that
> the situation will turn around suddenly. Or soon.

Gold: How the Mainstream Gets It So Wrong

I agree.

But irresponsible monetary policy actually increases reckless behaviour.


On Oct 25 06:16 PM mplaut wrote:

> " From 1880-1935, the United States was locked on to the gold standard
> at a price of $21/ounce. Those were the days of monetary stability,
> fiscal discipline, and sanity."
>
> I am no economic historian, but just a quick search finds that there
> were major Panics in 1884, 1893 and 1907. According to the book "The
> Panic of 1907: Lessons Learned from the Market's Perfect Storm" -
> Stock market crashes and banking panics had surfaced periodically
> in the United States and elsewhere throughout the nineteenth century.
>
>
> Panics and crashes are caused by human character failings including
> excesses of greed and irresponsibility.
>
> Neither the Federal Reserve nor a gold standard are magic bullets.
> We have to get grip on ourselves and improve our moral performance.
> No system will be effective against determined and creative efforts
> to game it.
>
> The fault lies in ourselves and that is where we must turn to correct
> it.

Gold: How the Mainstream Gets It So Wrong

Fair points on dividends. I believe that strong, blue-chip dividend-paying companies need to be held in a portfolio. No doubt about it.
Sure, you should invest in dividend-paying stocks.

The main conclusion I have drawn is that it's essential to hold some gold in your portfolio -- maybe even more than the 10% that some asset managers recommend -- especially egiven the risks of the current monetary climate.

The Dollar as a Reserve Currency

Bob, is the gold really there? How much? As far as I know there is no government transparency here. It hasn't been audited for years. So how do we really know?

Expect a Short-Lived Dollar Rebound

I don't understand Prechter. He seems to be grasping at straws with his Elliot Wave HOcus-Pocus


On Oct 10 04:32 PM Albertarocks wrote:

> Bob Prechter is also forecasting a rebound in the dollar, but a rebound
> lasting much longer than Scott is foreseeing. If you listen to Prechter's
> logic, it makes a lot of sense. I have to admit though, as an amateur
> student of Elliott Wave theory (for more years than I care to think
> about), I can't quite see the bottom in the dollar that he's talking
> about. The wave count could be there right now, but I could make
> a case that it isn't quite there yet. In any event, what I think
> is irrelevant and I'm in no position to second guess Bob Prechter.
> If what he says turns out to be accurate, we're in for a nasty drop
> in the markets along with a strong surge in the dollar, both events
> running for at least a year, perhaps two. Only after that would we
> see the hyperinflation scenario unfold with a vengeance.

Expect a Short-Lived Dollar Rebound

Today I'm out of the dollar/long gold short that's for sure. Gold is exhibiting too much strength. It appears to me to be broacasting further monetary chaos. I am playing miners like long PAAS and RGLD for now.

New Trends for 2009: Are Commodities and Gold Regaining Strength?

duly observed. I meant to say 2H 1008. I guess March was so far back I forgot about it

In calendar terms, it was only about 10 months ago. In financial era, it was a long while ago...


On Jan 27 10:48 AM silverwood wrote:

> Scott, I mostly agree with your article. You need to correct this
> statement...
>
> "I believe the only reason that gold has not made new highs in 2008
> in U.S. Dollar terms is because of the artificial flight-to-quality
> into the US Dollar, which is most likely a short-term phenomenon."
>
>
> Gold made new highs in March 08.
>
> With the new administration coming in, and their commitment to do
> something to fix the current crisis, it will be their actions which
> will drive the gold market to new highs. These people now in charge
> are following the Keynesian school of thought. One principle of that
> school of thought that will be played out in 09 is; when the consumer
> stops spending the government must step in and be the spender of
> last resort. The economic ground is now furtile for this to occur.
> People are crying out for the government to DO SOMETHING! and spend
> they will. Monetative easing to the rescue in full force as foreign
> lenders will be harder to come by. Gold is beginning to look forward
> to these events, in the face of all the deflationary talk.

Will the Deflationist vs. Inflationist Debate End Soon?

I thini Pre-Clinton stats were more accurate because they didn't include hedonics which are more subjective.

I guess it comes down to whether you think there is more inflaiton or less inflation than the government reports. I believe the government consistently under-reports inflation.


On Jan 21 09:24 AM JPDD wrote:

> [Because he is counting inflation by the Pre-Clinton era measurements
> before the government started manipulating CPI with "hedonics," which
> pretty much allows them to say inflation rate is anything they want.]
>
>
> I realize that. Perhaps I should have asked it like this: Why do
> you think that the pre-Clinton stats were any less manipulated or
> politicized? Do you think that the Reagan and Bush 41 administrations
> were above manipulating those statistics?
>
> As near as I can tell, shadowstats is perpetuating a different set
> of manipulations.

Will the Deflationist vs. Inflationist Debate End Soon?

I am not, in fact, whistling.


On Jan 20 08:45 AM CLH wrote:

> It appears you are whistling as you pass the grave yard. Trillions
> of dollars have disappeared as debt is eliminated. This will take
> years to repair. The govts. spending is only nickles and dimes.

Will the Deflationist vs. Inflationist Debate End Soon?

Yes, but...

* Deflationists assume that we "let the banks go" and all of the credit is destroyed.

but...

* WE don't appear to be doing that. We appear to be running the printing presses overtime in a useless effort to save banks

* What happens when the government ends up having the buy all the crummy/toxic/bad assets from the bad banks that fail

* They will then be forced to monetize these assets... somehow.

Given what's happening in banker-ville today, it may have to happen sooner rather than later.

I believe, ultimately what will happen is either an informal (stealth) or formal massive devaluation of the dollar. It especially makes sense if you read your history books on FDR and you realize that Obama and Bernanke are both students of FDR.


On Jan 20 09:54 AM Kip Largo wrote:

> I am of the belief that money created through credit must hit rock
> bottom before any recovery can happen. That means trillions of dollars
> has to disappear so that pretty much what is left is the Fed generated
> money (rather than the money created out of loans). When this has
> happened, we'll be ready for growth as we will have proper reserves
> for any credit expansion, but if we try to keep massive amounts of
> credit alive by printing out money, we will only push us farther
> into bad times.

Will the Deflationist vs. Inflationist Debate End Soon?

I agree velocity is the thing to watch.

I believe it will increase.


On Jan 20 09:59 AM patio wrote:

> "But the government is desperately trying to "reflate" the economy
> by guaranteeing banks, lowering rates, creating stimulus, and driving
> down interest rates. Inflationists say that these pure monetary actions
> by the government are likely to stoke inflation – possibly hyperinflation."

>
>
> Yet another article missing the point- who is lining up, and qualifies,
> for this new credit? No one, that's who. If the money doesn't get
> past the banks, no increase in velocity.

Will the Deflationist vs. Inflationist Debate End Soon?

Because he is counting inflation by the Pre-Clinton era measurements before the government started manipulating CPI with "hedonics," which pretty much allows them to say inflation rate is anything they want.

CPI has declined recently only because of the price of gasoline and oil, which receive too heavy a weighting in CPI anyway.






On Jan 20 08:29 AM JPDD wrote:

> Why do you consider shadowstats any more calibrated than the gov't
> stats?

The 'Reflation' Top Ten Portfolio

LOL. raytayzmd, how do you really feel? Well, you made the 7% back easy in the last two weeks. I will look at JGG but yield always has its cost. I like Blackrock because they have a government franchise now in the "Bailout Bucks" and are likely to have "very good information." But everybody should do their own due diligence.



On Jan 07 11:44 AM raytayzmd wrote:

> ...BNA????...BNA is a CEF trading at par with its NAV and yielding
> less than 7% with an expense ratio somewhere around 4%...you consider
> that worthy of a top ten list???...compare JGG trading at a discount
> of 11%, yielding 10%, and with an expense ratio of 1% and pretty
> much holding the same stuff as BNA...pardon me if I don't hire you
> as a financial advisor.

The 'Reflation' Top Ten Portfolio

Interesting stuff, thanks. I did not realize double inverse short FXI is actually "double inverse only 120% short FXI."

I can see with these ETFs there is a lot of room with shenanigas. The bid/ask is often very wide, and even intraday, they are not good vehicles to trade because they can be out of whack with the index.

Unfortunately, I can't think of many other ways to advocate shorting treasuries, though. I short the futures, but that requires futures trading skills and you will also lose money on the slippage and the rolling of the futures contract. So is there ever a perfect system? You could also short TLT but my guess is that would take even more capital than TBT and it would be hard to make money.


On Jan 07 12:00 PM Geoffrey Lordi wrote:

> Hello, Rayno,
>
> My point re: ProShares etfs is that they are designed for very short
> term applications and do not definitively track 2:1 or 1:2 over the
> long term, even after accounting for fees. For example, I'm currently
> comparing SSO:SPY. At 11.41AM, SSO is down just shy of 100% more
> than SPY, which makes sense since SSO is an S&P Ultra etf...However,
> because of the options-strategy based manner which motivates SSO,
> if the S&P is up 2.1% this month, I cannot expect that SSO will
> be up 4.2%; similarly, if the S&P is up 6.2% at year end, I cannot
> expect 12.4% gains (even without considering fees) from SSO. Sometimes
> this works out for the better (overshot gain performance), sometimes
> not (vastly undershot performance). A prime case to support the former
> situation is SDS' one month performance: +5.69% vs the S&P's
> +5.05%.
>
> Here are some examples that led folks astray over the last *year*:
>
>
> FXI (China) down 47%, but its double-inverse FXP short down 58%;
>
> EEM (emerging mkts) down 47%, its double-inv EEV down 38%;
> IJR (Russell 2000) down 28.3%, TWM down 22.4%.
>
> But...
> SPY down 35.1% and SDS up 16.4%;
> XLU down 30.5% and SDP up 15%...
>
> There are other examples - some where the ProShares funds have overperformed:
> some where the opposite is true.* And while some folks would gladly
> take unexpected overperformance, we should be wise to realize that
> it *isn't* unexpected. After all, ProShares said it best on their
> website:
>
> "ProShares are designed to meet daily objectives; results over longer
> periods may differ."
>
> * These comparisons valid between 11AM and 12PM on Jan 7.
>
> Don't get me wrong - I enjoyed your article. I just ask that you
> don't expect 2:1 *for sure* on your TBT strategy.
>
> Take care,
> Geoff L
>
>