oldgoldbug

Is the Stage Being Set for a Multi-Month Rally?

Looks to me like a good shakeout is due in the PMs. Will set up talk of a double top in gold and be the final straw on the backs of "disillusioned" investors. Ensuing rally in PMs may be unfathomable because longer term (in a month or two??) I have to think the Fed will be the buyer of last resort of the $1.5 Trillion in new Treasury debt to be issued this year and as the money gets circulated, prices of just about everything including beaten down equities, houses and (used Volvos) are likely to respond. Of course, savers get screwed again but there seems to be no reluctance to do that. Besides, bond holders have done well over the last 10 years so it makes sense they are about to get theirs.
How high can gold go? Who knows? How much money is going to be made up out of thin air? Pick a price.
BTW, at the local coin shop a few days ago and not a lot of action. In fact, old school guy like myself selling some walking Liberty halves at $14+ spot. I don't think even the smallest fraction of the public has any idea what might be coming in the future or what to do about it.
It seems to me the only way out is a big inflation, but I've sure been wrong before.
Good luck all.


On Mar 04 11:40 AM paultaut wrote:

> Kelm: I do not believe that it is just a matter of aversion to risk,
> I think a lot of the aversion lies in not knowing what and where
> the risks actually are.
>
> Everyday something new seems to surface, if its not some sort of
> Bailout then its another Crook(Madeoff, Blaggo, Daschell, Sanford)
> in politics and out.
>
> I mean, I have difficulties and I have been at it for over 3 decades.
>
>
> I hope and pray that Gold pans out. Otherwise investors will be totally
> disillusioned for decades. IMO

Strange Action in Gold ETF Chart

The gold market is just like any other market - it will go up with as few on board as possible and sink with all hands. Those thinking gold will go up $300 in one day out of the blue are likely correct. With all the new money being created around the world, it won't take much to move the market substantially. In the meantime, gold will likely shake out as many as possible with a neat little correction. Nothing like getting in at $950 and getting hammered to $800 to make one swear off the barbarous relic.
The double top is so clear and counts so far down that it is hard to trust. If it turns out to be a consolidation then watch out above - all those crazy numbers -$2000, $5000 per oz will make a lot of sense.

Priceline: Can William Shatner Be Wrong?

yo geranz - I think he was making a joke!

Economy Watch: What if Stocks Were Priced in Gold?

As far as I know, gold has traded at a 1:1 ratio to the Dow twice - when the Dow collapsed 90% during the Great Depression and gold was increased by about 75% to $35 from (I believe) $20.67 and when gold peaked around $875 in the 80's and the Dow traded about the same.
After the massive move up in the stock market during the 1990's gold sold (roughly) as low as .025. So gold dropped over 97% versus the Dow. The sword cuts both ways.
The concern about the liquidity of gold or any other investment is well taken. Wasn't the Russian stock market closed on and off for weeks at a time fairly recently? I would imagine selling stocks over there to eat would indeed have been a problem. Gold, silver, stocks, bonds etc are not money, they are investments and all have their risks including illiquidity. (Real estate anyone?) I have personally never had any problem liquidating physical gold or silver to get dollars but that doesn't mean it can't happen.
I believe the author makes a good case for thinking outside the box and considering how far "up" or "down" might actually be. If gold goes to $5000, most likely under highly inflationary conditions, which is only about 5.5 times the current price, is it not possible for the Dow Industrials under those same conditions, to drop to 2500? If so, owning some gold might be a great hedge against a mega black swan event and give the holder the opportunity to buy back into the stock market at a great price, much like the sellers of gold at $875 were able to do back in the early 80's. After all, 875 to 14100 surely beats $875 to $300.
It seems to me highly unlikely that gold or stocks or real estate or any other single investment will be profitable under all potential future investment scenarios. We all want to be 100% invested in the next big winner, but it will happen for only a very few. Better to invest across investment categories with the goal that the winners will more than offset the losers. After all, a portfolio that simply kept its dollar value since the end of 2006 or 2007 would have standout relative performance versus most strategies.

A Simple Post on Gold

chisltetoe - I have been thinking the same thing: way too many dollars, lots more coming, FED beginning to buy all kinds of bond assets with newly created money, 2.5 Trillion of debt sales in 2009 to finance the big mess, government "saving" the economy,- making value judgments as to who stays and who goes - it just goes on and on.
The upper price of gold is unknowable at this point - your calculation is as good as anyone's. The markets are sure acting like no impediment stands in the way of higher prices. Silver and oil may be the real sleepers as there is just not enough liquidity in the gold market should any significant amount of the cash on the sidelines decide to pile in.
The recent action of the Treasury market certainly gives one reason for pause. One thing we can guess - with TARP and coming children of TARP, the banks will certainly want to "help" the government meet its debt challenges. It looks like they will do it with newly created FED dollars. Yikes!

10 Banks 'Guaranteed' to Survive and Prosper

Bear Stearns declared bankruptcy? Did I miss that? I thought JPM gobbled them up.
Gotta agree with Lilliana - COF really stinks and HBC is right there with them.
Chartwise, I wonder if BAC (10.61) and C (5.91) are going to make it - they look like they are on life support. The amount of stock being unloaded is remarkable - some pretty big players are spooked.

Cramer's Lightning Round - The Ultimate Obama Play (1/8/09)

re:zug - I agree -- Knew about SHLD but AIG? Ouch. He seems to be a little more modest these days, prefacing comments with "I've been wrong....."

Intuitive Surgical Becomes a Sorry Story Stock, Red Flag

I, for one, am more than grateful to hear from someone who was bearish at the highs, wrote about it and published it so it could be documented, and then has the class to apologize for "offending" someone. I would also at least listen to this person's future analyses as he or she might actually be right again. Thus Don Johnson goes on my watchlist.

One would think big boys and girls doing something as serious as investing their money would be ruthlessly honest with themselves and others so as not to repeat their mistakes. Calling people names really doesn't do much for our opinion of you either User 278265.

U.S. Stock Market Returns: What's In Store?

Some good research that is much appreciated. One of the takeaways is that there is indeed a time to sell and that the buy and hold "forever" approach might not work for all investors.

The Coming Dollar Deflation

The market is always right. Fight it at your peril.
The strength of gold vs these other commodities is remarkable.
Gold's trend depends on your time horizon. I would disagree that gold is in a long term (since 2002) bear trend. But that is what makes markets and horse races.

Augusta Resources Focuses on Advancing Copper Rich Deposit in Arizona

Jakester is correct; neighborhood meetings are standing room only and significantly anti-mine. The area around the mind is very attractive including some scenic recreation areas (Madera Canyon). There is an old gypsum mine not too far away and major open pit operations to the west. The mine dumps to the west are real eyesores although a large community (Green Valley) has grown in their shadow so it doesn't bother some people.
Having said all that, the company seems to be forging ahead.

Last Thursday Was the Bottom - It's Time to Get Back in

It takes guts to call a bottom, especially when things look so grim.
The point about not reacting to bad news is well taken.
Only time will tell.

Eddie Lampert's Troubles: It's Not Just Sears

My experiences with Sears as a customer and an employee have not been good. From the mid 80's on it acted like a company with no ethics (although how many actually are ethical?) Now it tough times, the loyalty just isn't there anymore.

Too bad the authors didn't publish this list 6 months ago - it is an impeccable short list.

Can You See Apple Under $60?

rd4sndk - really well reasoned fundamental analysis - thank you. But the author's point is "its going down". Its hard to believe that the investors/traders in AAPL don't know these numbers so either they are "irrational", the numbers aren't going to happen or massive external forces are pushing this stock down. In any event, the selling has to stop before the fundamentals can reassert themselves. As for the author keeping his negative opinions to himself, I for one am grateful to hear them as well as your own, as the continued pummeling of this stock has got me puzzled.

AmEx Taps the TARP; Not the Same AmEx Buffett Bought

I think I remember having a chat with the "Salad Oil King" in Pennsylvania around 1969 or 1970. He commented how hard a life of crime was and how he realized he had a hole in his shoe as he was scamming AXP out of millions.
I believe he worked his scam in the early 60's and Warren picked up a bunch of AXP in 1964 or so.
Whatever AXP is trying to do, the chart doesn't look so good.