Gold Takes Out Major Support: Next Stop $1,350 [View article]
Your argument about real returns for stocks and bonds being far better than gold over the last two centuries might be more convincing if gold weren't money during about 150 of those years, during which time inflation was zero.
I would normally agree with this statement - "I believe in the big picture you will look back and wish you would have waited a little longer" - but when it actually comes time to buy a house to live in, I think it best to grab an opportunity when it arises (e.g., in our case, a greatly reduced short sale property that was exactly what we were looking for), rather than trying to time the market bottom. Moreover, market bottoms happen in different places in different parts of the country - shortsales and foreclosures are relatively rare in this part of the U.S.
Also, the title has been changed back to the original - this article was never intended to be about timing.
Gold Demand Is Stronger Than You May Have Heard [View article]
Being a trained engineer myself, I think you come to understand the world differently as a result of what you're taught in college and this applies to things like the nature of money. This is in contrast to most U.S. leaders who, by and large, are lawyers.
Thanks for leaving this comment first - it should eliminate a good amount of confusion for other readers who, perhaps, zipped through the chart and text too quickly.
After looking at the data and seeing how ridiculously tiny the current gold run looks compared to what happened in 1979-1980, I couldn't help but have a little fun with this.
German Gold Repatriation And Surging Silver ETF Holdings Drive Precious Metals Higher [View article]
There are lots of stories about silver shortages in recent days, so, this is certainly a story that is worth watching closely.
But, what's important to note about silver coins selling out is that, as was the case back in 2008, this is more of a production shortage than a silver shortage.
The Mint has to order blanks based on expected demand and if they underestimate demand badly, then they sell out - not because there's not enough silver, but because there are not enough silver blanks.
As for SLV, it will be interesting to see how this inventory story develops since, as you say, the fund has long been suspected of being something less than a pure physical holding.
Run-away inflation in 1837? I don't think so. http://bit.ly/13H8a2e Prior to the Fed in 1913, the only time there was run-away inflation in the U.S. was during wars.
An Overwhelmingly Positive Long-Term Outlook For Precious Metals [View article]
You raise a good point, but your cash cost of $600 an ounce is on the low side. A quick check of recent financial reports indicates it's closer to $700 an ounce for most of the big miners, but some companies are reporting costs of $1,000 an ounce or more and that doesn't factor in the rising cost of replacing reserves, which the big miners have been slow to do.
Also, because gold and silver are monetary metals - hence, different from other commodities these days as more and more people around the world are questioning the sustainability of the current monetary system - there is less of a connection between production costs and the prices in futures markets as, to some degree, futures markets are pricing in the possibility of some very serious problems with the current system.
The phrase "housing is not an investment" requires clarification...
Owner occupied residential housing has both an investment component and a utility component and, during the bubble years, it went from its historical mix of somewhere around 50-50 to about 90-10.
Rather than try to explain this, when I say, "housing is not an investment", what I'm really saying is that we've reverted back to the historical norm where housing is much more of utility than something you're going to make money on when and if you sell it in a couple years or a couple decades.
Renewed Euro Crisis, Rising Inflation To Push Precious Metals Higher [View article]
BTW - I failed to mention the developing situation in Cyprus as another possible catalyst from Europe, but, this might prove to be even more important than elections in Italy over the very near-term.
1 Step Closer To The End Of The Correction In Precious Metals [View article]
You said: "That said in an article awhile back you indicated you were mostly invested in gold."
That's not correct. I've always advocated about 20-30 percent which isn't really that far out of the mainstream. If memory serves, CNBC's Jim Cramer recommended 25 percent not long ago.
I'll be out with another article - probably this week - about why this isn't the end of the gold bull market.
Why The Latest Report On Gold Demand Trends Matters [View article]
All markets are manipulated (just look at Libor) - it's just a matter of degree.
To what degree gold and silver markets are manipulated, I don't know, but with each year that goes by there are more and more anomalies that make me think the manipulation is greater than it was the year before.
Friday's Labor Report Could Have An Unexpected Impact On Risk Assets [View article]
I wanted to mention that, but kind of forgot. It really is pretty messed up - bad economic news makes markets go up because traders think more money printing is on the way and good news makes them go down.
iShares Silver Trust ETF's Silver Stockpile Not Keeping Pace With Gains [View article]
The number of tonnes versus the number of shares is a constant - it's one ounce per share +/- a percent or two since the inception of the fund. Look at the data yourself at us.ishares.com/product....
The number of tonnes is being used as a proxy for the number of shares issued and hence, investor demand for SLV. The point of the article is that SLV demand has virtually nothing to do with the rising silver price.
Why Gold Won't Protect You From Inflation: What History Tells Us [View article]
Gold is highly correlated (inversely) to real interest rates (e.g., Fed funds rate minus inflation), so, they are really a function of how policy makers respond to inflation rather than inflation itself.
Gold Takes Out Major Support: Next Stop $1,350 [View article]
That's kind of an important part of the story.
Why We Just Bought a Home [View article]
Also, the title has been changed back to the original - this article was never intended to be about timing.
Gold Demand Is Stronger Than You May Have Heard [View article]
The Gold Bull Market Is Over [View article]
After looking at the data and seeing how ridiculously tiny the current gold run looks compared to what happened in 1979-1980, I couldn't help but have a little fun with this.
German Gold Repatriation And Surging Silver ETF Holdings Drive Precious Metals Higher [View article]
But, what's important to note about silver coins selling out is that, as was the case back in 2008, this is more of a production shortage than a silver shortage.
The Mint has to order blanks based on expected demand and if they underestimate demand badly, then they sell out - not because there's not enough silver, but because there are not enough silver blanks.
As for SLV, it will be interesting to see how this inventory story develops since, as you say, the fund has long been suspected of being something less than a pure physical holding.
Gold: Why Bill Gross Is Wrong [View article]
http://bit.ly/13H8a2e
Prior to the Fed in 1913, the only time there was run-away inflation in the U.S. was during wars.
An Overwhelmingly Positive Long-Term Outlook For Precious Metals [View article]
Also, because gold and silver are monetary metals - hence, different from other commodities these days as more and more people around the world are questioning the sustainability of the current monetary system - there is less of a connection between production costs and the prices in futures markets as, to some degree, futures markets are pricing in the possibility of some very serious problems with the current system.
Why We Just Bought a Home [View article]
Owner occupied residential housing has both an investment component and a utility component and, during the bubble years, it went from its historical mix of somewhere around 50-50 to about 90-10.
Rather than try to explain this, when I say, "housing is not an investment", what I'm really saying is that we've reverted back to the historical norm where housing is much more of utility than something you're going to make money on when and if you sell it in a couple years or a couple decades.
Renewed Euro Crisis, Rising Inflation To Push Precious Metals Higher [View article]
1 Step Closer To The End Of The Correction In Precious Metals [View article]
That's not correct. I've always advocated about 20-30 percent which isn't really that far out of the mainstream. If memory serves, CNBC's Jim Cramer recommended 25 percent not long ago.
I'll be out with another article - probably this week - about why this isn't the end of the gold bull market.
Why The Latest Report On Gold Demand Trends Matters [View article]
To what degree gold and silver markets are manipulated, I don't know, but with each year that goes by there are more and more anomalies that make me think the manipulation is greater than it was the year before.
Gold: Why Bill Gross Is Wrong [View article]
Friday's Labor Report Could Have An Unexpected Impact On Risk Assets [View article]
iShares Silver Trust ETF's Silver Stockpile Not Keeping Pace With Gains [View article]
The number of tonnes is being used as a proxy for the number of shares issued and hence, investor demand for SLV. The point of the article is that SLV demand has virtually nothing to do with the rising silver price.
Why Gold Won't Protect You From Inflation: What History Tells Us [View article]