oldgoldbug

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81 Comments

    • Tue Oct 28th 10:03 AM | Rating: 0 0
      Commented on:
      Ignore the Hype - Gold as Currency is Dead
      I actually clicked away from your post thinking you had everything figured out and there really was not much I could add. Then it occurred to me that by Jove, you are right, gold is not a currency. Gold is a form of savings. Gold always has value. It may not be the value you want but you can always sell some and use the cash to pay a bill, get out of the country etc., etc. That is why people buy gold and hang onto it. In fact, I think of gold as a core savings which evidently is what your countrymen think of it also. Paper money comes and goes, but gold tends to stick. People know when they are selling their gold times are pretty tough.
      When the price of gold is low, the "paper markets", i.e. stocks, bonds, usually are doing pretty well. When the price of gold goes up, it indicates a distrust of those same markets. Gold is just another part of a well diversified portfolio for money you can't afford to lose.
      Interestingly, I just read an article about a bride in India that could not afford to buy the traditional gold wedding set because the price of gold in rupees had hit an all time high and she couldn't afford it. So gold drops 30%+/- in dollars but goes to a new high in rupees. I would say it acted pretty well as a store of value, especially since so many of us aren't sophisticated enough to call moves in the currency markets, stock markets on five continents etc. Now, she wasn't selling mom's or grandma's bridal sets, but she was going to buy silver because it was so much cheaper.
      I think investing in gold makes a large amount of sense because none of us know what the future will bring.
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    • Sat Oct 25th 10:14 AM | Rating: 0 0
      Commented on:
      Is This the Last Great Bubble?
      Intuitively I believe the author is right. Too many riders packing the cars on the get out of town express.
      Bonds getting blasted everywhere. Treasuries could well be next.
      The market(s) (all of them) try to hurt as many people as possible. What could be better than sinking the Treasury market?
      The flip side of this trade is probably gold with way too many digits. Especially with the wicked correction from $1030 to $700 and perhaps further.
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    • Wed Oct 15th 11:54 AM | Rating: 0 0
      Commented on:
      The Paulson Plan: Compelling Banks to Lend at Bazooka Point
      Why wouldn't the banks lend to those just foreclosed upon? We have a Secretary of the Treasury who skipped town just before what he helped set up hit the fan. I would say both are adept at taking the money and running.
      But it bothers me that he didn't blow the whistle some time much earlier. Perhaps as long as his buds were getting the big bonuses everything was fine. I can't imagine that he has a conflict of interest. Its also surprising that the one bank that made a squawk about forced government intrusion is one of those flaky West Coast banks and not a part of the NY East Coast sophisticated elite.
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    • Wed Oct 15th 10:49 AM | Rating: 0 0
      Commented on:
      Countdown of Manipulated Gold Price Running Out
      Gold here at $840+/- is under massive selling pressure as the only real source of funds for investors besides Treasuries. That gold has held up so well is truly remarkable. Even the mining stocks have taken terrific beatings. This looks like a normal correction in a bull market. Perhaps it goes to $650-$700, perhaps not. The risks of not owning gold far outweigh the risks of it falling another 15-20%. Besides, investors holding a diversified portfolio will be doing pretty well in their other investments if their gold drops. Right now holding gold looks pretty good compared to the performance of other investments.
      The performance of the mining stocks and futures markets reminds us that nothing substitutes for owning physical gold.
      Given the massive movement into gold, it is clear many investors are considering an integral part of their portfolio. As a bit of a curmudgeon, I wonder if we won't see a nice plunge just to test the "cojones" of new converts.
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    • Wed Oct 15th 02:04 AM | Rating: 0 0
      Commented on:
      Julian Robertson: Some Buying, but Bearish on the Economy
      The VP ran HAL, perhaps one of the most corrupt companies ever. The extent of this debacle is almost incomprehensible. Would not the country have been far better off with McCain in 2000? Didn't the Republicans hold the White House and the Congress for the first term of W? They couldn't have investigated everything that was going on without the Dems? Sure they could have but cash is king and they all got theirs. Maybe the system is just broken. BTW, enrico caruso, I have got to believe the selling in this market is by really big boys who know their way around a market. They are just absolutely astounded by the magnitude of the carnage.
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    • Wed Oct 15th 01:29 AM | Rating: 0 0
      Commented on:
      Decades of Negative Returns: A Long-Term Look at the Dow
      This is a great situation: guys on Wall St. grease politicians' palms with all kinds of cash so regulators will look the other way, get to make billions upon billions of dollars then get bailed out when the other side of the leverage/marktomarket sword starts slicing them in half. Much like Sgt Schultz "I know nothing".... about CDS, subprime, Alt-A, naked shorting, etc etc etc. And Paulson didn't want to restrict compensation - I wonder where the Wall Street superstars will go now that he grudgingly has agreed. I guess they are not athletic enough to play pro ball nor handsome/beautiful enough to be movie stars - where will they go to earn that kind of cash. I know - become lobbyists or politicians!
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    • Wed Oct 15th 01:16 AM | Rating: 0 0
      Commented on:
      Bond Markets: Volatile and Weak
      This kind of information is why you are in my watchlist. Thanks for keeping an eye on what really counts and bringing it to our attention.
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    • Sun Oct 12th 04:05 AM | Rating: 0 0
      Commented on:
      Is Gold A Sucker's Bet?
      Reader851, you got me on the economics major comment. Isn't that why Bennie B is running the FED? Because he is a professor (advanced economics major) who studied the Depression in depth? Don't worry, he'll know what to do, he studied it! OMG!!
      I think I better go to bed before I am to afraid to sleep.
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    • Sun Oct 12th 03:59 AM | Rating: 0 0
      Commented on:
      Is Gold A Sucker's Bet?
      I think Brewtul has got it pretty close to right.

      If we put all our eggs in one basket we are speculating. That is fine as long as we realize none of us knows what the future will bring. When I was doing "what if models", I never really made the assumption that gold and bonds would be strong at the same time. But owning both gold and bonds in a portfolio seems to have worked out OK. Now, bonds and gold may be in the process of diverging, but they have done their job. If ever there was a doubt that gold must be part of a diversified portfolio recent events should have shown its value. Wouldn't some stock guys sitting on 40% losses be pretty happy selling some gold that has more or less held its value and those boring bonds and buying some "undervalued"... stocks? Probably.

      Not owning gold is like skipping the fire insurance - it saves you a few dollars per month at the risk of losing everything. I wonder if anybody is getting it yet.

      I do believe the central banks will do anything they can including unprecedented inflation, to avoid the end result of the massive deflation we are experiencing, i.e. the breaking of the system. They have show they will do whatever is needed. In a time of "firsts" and "biggests" and "worsts", a massive inflation beyond our comprehension may be what is needed to stave off disaster. I think "disaster" to us means standing in bread lines and losing our homes. I think "disaster" to the FED and the government is losing their power over us. If eliminating that possibility of "disaster" means gold goes to $5000 or $10000 or wherever then fine, the bankers could care less. Countries are no longer on the gold standard, it is a "barbarous relic" and its price is not meaningful except to those quaint enough to think that savings should maintain some semblance of their buying power. So sure, the Dow goes to 20000, gold is at $10000, a loaf of bread is $25, and gas is $12 a gallon. Are we going to be ahead? I doubt it.

      Perhaps one of the reasons the savings rate is so low is because the populace realizes that money saved today will be worth less, perhaps far less, at some point in the future. Besides, lots of people have to spend whatever they have to eat and put gas in their cars. The Great Society ain't so great anymore.
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    • Fri Oct 10th 13:09 PM | Rating: 0 0
      Commented on:
      Reading the S&P 500's Crashing Waves
      Very interesting and helpful.
      As far as declaring the bull market in gold, Prechter may yet be proven right. There is still an awful lot of deflation that may occur. The other commodities as well as mining shares are not confirming the current gold bull move. It also makes me a bit nervous to hear anecdotal evidence of physical gold unavailable to long lines of customers. There's your camping out for condos equivalent. Not that the guy in the street is always wrong - he's not. When silver hit $35 back in the day, there were enormous lines to sell the family sterling. Those folks were absolutely right. Go figure.
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    • Thu Oct 9th 15:08 PM | Rating: 0 0
      Commented on:
      Is Oil Demand Falling Off a Cliff?
      That chart doesn't look so good.
      View article »
    • Mon Oct 6th 11:44 AM | Rating: 0 0
      Commented on:
      Analysts: Expecting a 30% Rally Over the Next 12 Months?
      Thank you ido :" trust me, you and everyone else doesnt KNOW a thing".
      It is all speculation, yet it is said with such conviction and certainty. I would like to hear someone say "Sorry, we blew it" but the buy recommendations keep coming as if one has an unlimited source of funds. It all has to be taken with a shaker, not a grain of salt.
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    • Sat Oct 4th 10:10 AM | Rating: 0 0
      Commented on:
      How Banks Hedge Counterparty Risk
      Right on copperbaron. Now the gigantic leverage employed makes sense. I guess in my simple mind it is like buying a stock, selling a call and buying a put. Theoretically you are all hedged up against loss and if you can put this position on with even a small positive return you just keep doing it, because leverage isn't seen as a danger. Especially if you are a GS, LEH(MQ) etc and can do everything really cheap. However if the stock plunges (lets just use MOS because it seemed so unlikely based on the fundamentals) and the seller of the put goes under and can't buy from you at a much higher price, your hedge just went bye, bye. Now you have to mark to the market, meet the margin call, end up long and hope for the best or sell the stock and owe your brokerage firm lots of money. Ouch.
      Gets a lot worse if you can't sell the stock or more calls, kind of like the "seized up" credit markets. Then you are stuck and hope Uncle Henry can bail you out. I think I am starting to have an inkling of what is going on.
      Ah, I love the smell of deregulation in the morning.
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    • Sat Oct 4th 09:43 AM | Rating: 0 0
      Commented on:
      Trying to Defend Mosaic
      So many scams - Baldwin United deferred annuities yielding 14% guaranteed for 3 years when long govs were 10%; Petro Lewis buying offshore drilling platforms instead of stripper wells, real estate investment LP's that cost Paine Webber alone $500 Million and now the hedge funds. There is always going to be somebody like GS ahead of the curve and then letting the other players pick up the pieces. Much like Mr. Paulson has done: help create the problem, make $500 million ++++ tax free, and then be part of the clean up. BTW, I wonder how much he will command in the free market after the regime change in January? $100 million a year? $300 million? More? I love this country!
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    • Fri Oct 3rd 16:29 PM | Rating: 0 0
      Commented on:
      What the Hedge Funds' Bad September Could Mean for Markets
      Explains some of the relentless selling - everybody in the same stocks and no one to take the other side. Really do wonder how much more selling needs to occur to satisfy redemptions.
      View article »
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