Dan Perkins's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/175550/comments http://seekingalpha.com/article/165498/comments?source=feed#comment-709772 709772 Thu, 08 Oct 2009 23:16:35 -0400 http://seekingalpha.com/article/157709/comments?source=feed#comment-646544 646544
If everyone in your neighborhood is financially strapped and you offer to increase their debt, they are going to tell you to take a hike! If you hand them money, they are either going to pay down debt or save it, not go out on a massive buying spree and run up prices! The US is your neighborhood! Oh, and the rest of the world is doing the same thing! They are trying to keep their ship afloat, not going on binge spending sprees!]]> Tue, 25 Aug 2009 22:54:13 -0400
If everyone in your neighborhood is financially strapped and you offer to increase their debt, they are going to tell you to take a hike! If you hand them money, they are either going to pay down debt or save it, not go out on a massive buying spree and run up prices! The US is your neighborhood! Oh, and the rest of the world is doing the same thing! They are trying to keep their ship afloat, not going on binge spending sprees!]]> http://seekingalpha.com/article/157709/comments?source=feed#comment-644208 644208
OK, what happened after every other massive speculative bubble in the history of the country? Deflation, major recession or depression. We already had massive inflation in everything, particularly real estate. The pendulum has got to swing hard the other way, and for a long time! Buffet is screaming inflation because he needs to create it. If it was certain he would not have to promote it!

OK, lets say all the speculators speculate on inflation, then what, commodities etc spike in price, it kills any momentum in the economy and back to depression! It is simple and inevitable - Period!]]> Mon, 24 Aug 2009 17:35:56 -0400
OK, what happened after every other massive speculative bubble in the history of the country? Deflation, major recession or depression. We already had massive inflation in everything, particularly real estate. The pendulum has got to swing hard the other way, and for a long time! Buffet is screaming inflation because he needs to create it. If it was certain he would not have to promote it!

OK, lets say all the speculators speculate on inflation, then what, commodities etc spike in price, it kills any momentum in the economy and back to depression! It is simple and inevitable - Period!]]> http://seekingalpha.com/article/157709/comments?source=feed#comment-644205 644205
OK, what happened after every other massive speculative bubble in the history of the country? Deflation, major recession or depression. We already had massive inflation in everything, particularly real estate. The pendulum has got to swing hard the other way, and for a long time! Buffet is screaming inflation because he needs to create it. If it was certain he would not have to promote it!

OK, lets say all the speculators speculate on inflation, then what, commodities etc spike in price, it kills any momentum in the economy and back to depression! It is simple and inevitable - Period!]]> Mon, 24 Aug 2009 17:35:43 -0400
OK, what happened after every other massive speculative bubble in the history of the country? Deflation, major recession or depression. We already had massive inflation in everything, particularly real estate. The pendulum has got to swing hard the other way, and for a long time! Buffet is screaming inflation because he needs to create it. If it was certain he would not have to promote it!

OK, lets say all the speculators speculate on inflation, then what, commodities etc spike in price, it kills any momentum in the economy and back to depression! It is simple and inevitable - Period!]]> http://seekingalpha.com/article/137950/comments?source=feed#comment-506756 506756 Very nice: You are definitely on to something here, but, tragically, I don't think most people will get it. I have a similar observation about Jimmy Rogers, Marc Faber and many others. I wonder what would possess them to repeatedly jump in front of a camera at un-Godly hours from all over the world and tell us how screwed up everything is - at this point in their lives?

There does not seem to be any connection whatsoever between success, money, talent, and the ability to exist peacefully. You would think it would be blatantly obvious to them as they possess the wealth of kings but are somehow tormented by their own minds, and projecting in on to the world - quite literally!.

And what of these wealthy tycoons that off themselves when the market crashes? Pure emptiness without their money - but then, how did they survive childhood?

For whatever reason, they simply cannot see the world as a metaphor for their own mental projections! Your mind does not define what you perceive "around you", nearly so much as what your mind see's around it, defines your mind!

The tycoon's belief that the world is unbearable without his vast wealth is due entirely to a faulty mind and completely devoid of any objective reality! There is absolutely nothing anywhere on the planet to validate a belief that he has staked his life on! If you believe you are nothing without your money, then that you shall be, but why does the austere monk live in total peace? They are simply thoughts, or habitual patterns of electrons!

If you believe the world is screwed up, then in your mind, it is! Goerge knows not what it is he so desperately seeks, nor do most people, but until they cease chasing, they never will. ]]> Sat, 16 May 2009 21:56:17 -0400 Very nice: You are definitely on to something here, but, tragically, I don't think most people will get it. I have a similar observation about Jimmy Rogers, Marc Faber and many others. I wonder what would possess them to repeatedly jump in front of a camera at un-Godly hours from all over the world and tell us how screwed up everything is - at this point in their lives?

There does not seem to be any connection whatsoever between success, money, talent, and the ability to exist peacefully. You would think it would be blatantly obvious to them as they possess the wealth of kings but are somehow tormented by their own minds, and projecting in on to the world - quite literally!.

And what of these wealthy tycoons that off themselves when the market crashes? Pure emptiness without their money - but then, how did they survive childhood?

For whatever reason, they simply cannot see the world as a metaphor for their own mental projections! Your mind does not define what you perceive "around you", nearly so much as what your mind see's around it, defines your mind!

The tycoon's belief that the world is unbearable without his vast wealth is due entirely to a faulty mind and completely devoid of any objective reality! There is absolutely nothing anywhere on the planet to validate a belief that he has staked his life on! If you believe you are nothing without your money, then that you shall be, but why does the austere monk live in total peace? They are simply thoughts, or habitual patterns of electrons!

If you believe the world is screwed up, then in your mind, it is! Goerge knows not what it is he so desperately seeks, nor do most people, but until they cease chasing, they never will. ]]> http://seekingalpha.com/article/125250/comments?source=feed#comment-422419 422419
When you get true capitulation, you may very well have been sucked into the vortex as well. Capitulation comes when you and everyone else are truly convinced that all the trouble has passed about three times in a row, only to get pummeled again: Dow 5K, then Dow 4K, then Dow 3K.

On the third time, you and everyone truly believe the world is coming unglued, just say, "to hell with it, I give up - that's capitulation.

The whole thing is rather paradoxical and very difficult to remain separated from! It is not as though you will be sitting back and watching all the foolish capitulators!]]> Wed, 11 Mar 2009 19:53:52 -0400
When you get true capitulation, you may very well have been sucked into the vortex as well. Capitulation comes when you and everyone else are truly convinced that all the trouble has passed about three times in a row, only to get pummeled again: Dow 5K, then Dow 4K, then Dow 3K.

On the third time, you and everyone truly believe the world is coming unglued, just say, "to hell with it, I give up - that's capitulation.

The whole thing is rather paradoxical and very difficult to remain separated from! It is not as though you will be sitting back and watching all the foolish capitulators!]]> http://seekingalpha.com/article/122222/comments?source=feed#comment-402291 402291 Tue, 24 Feb 2009 22:27:53 -0500 http://seekingalpha.com/article/106220/comments?source=feed#comment-308383 308383 Mon, 17 Nov 2008 18:34:55 -0500 http://seekingalpha.com/article/106220/comments?source=feed#comment-308381 308381 We just deleveraged trillions in debt and are just getting started The new money being printed will replace a small fraction of the total leveraged debt being destroyed. Nothing is going back to where it was because we cannot reproduce that debt/leverage/bubble again. ]]> Mon, 17 Nov 2008 18:32:43 -0500 We just deleveraged trillions in debt and are just getting started The new money being printed will replace a small fraction of the total leveraged debt being destroyed. Nothing is going back to where it was because we cannot reproduce that debt/leverage/bubble again. ]]> http://seekingalpha.com/article/105928/comments?source=feed#comment-305714 305714 Thu, 13 Nov 2008 22:42:23 -0500 http://seekingalpha.com/article/105291/comments?source=feed#comment-302841 302841
This really is not that difficult: Every asset class on the planet is getting significantly cheaper by the day. Global economies are dying on the vine. Unless the fed simply starts pumping a trillion a week directly into US households, there is absolutely no way on earth to grow any aspect of any economy faster than wealth is being destroyed. All the money the fed and treasury are pumping out is just shoring up balance sheets, it is not going into the economy as growth or cash directly to the citizenry and driving up prices. It is sitting in banks awaiting doomsday!

How on earth do you deleverage and decrease the value of the dollar at the same time! Will we get inflation when we hit rock bottom? Perhaps but at a very slow rate - concidental with the very slow rate of growth of the economy as it eases out of this mess!

If you are worried about China or Japan selling dollars; don't - the dollar is gaining value - as happens with deflation!
]]> Tue, 11 Nov 2008 09:06:59 -0500
This really is not that difficult: Every asset class on the planet is getting significantly cheaper by the day. Global economies are dying on the vine. Unless the fed simply starts pumping a trillion a week directly into US households, there is absolutely no way on earth to grow any aspect of any economy faster than wealth is being destroyed. All the money the fed and treasury are pumping out is just shoring up balance sheets, it is not going into the economy as growth or cash directly to the citizenry and driving up prices. It is sitting in banks awaiting doomsday!

How on earth do you deleverage and decrease the value of the dollar at the same time! Will we get inflation when we hit rock bottom? Perhaps but at a very slow rate - concidental with the very slow rate of growth of the economy as it eases out of this mess!

If you are worried about China or Japan selling dollars; don't - the dollar is gaining value - as happens with deflation!
]]> http://seekingalpha.com/article/103271/comments?source=feed#comment-297578 297578
If Clue 1, where Joe Foster admits that he doesnt' get it isn't enough, see Clue 2:

Clue 2: "First we'll go through a weak economy and deflationary scare, which will be favorable for gold." Then he say's we get inflation which will be good for gold. IE: Joe got burned because he does not get it!

This comment completely discounts the authors credibility and/or honesty. Joe Foster is either clueless, lying or both. You cannot have it both ways. Yea, right Joe, inflation and deflation are good for gold!

Gold is almost purely a luxury item. It looks nice so people want to wear it. But they need money to throw around, Joe and right now, that is a problem!

Buying gold right now is like investing in mink in 1929. When everyone is broke, luxury items go down in price not up! There is no magic, no secret formula, nothing to figure out!

Gold hit $850 an ounce in the mid 80's and $200 an ounce in the early 2000. There is no correlation between gold and inflation. When things get scary, the snake oil salesman start peddling gold and then sell theirs at the top while sucker are buying. The dealers got had this time expecting a $3000 top and bought high. The only way for one fool to get out is for another fool to get in.

Even if there were a correlation, it would not matter. We are in deflationary spiral, which will continue for years to come!
]]> Mon, 03 Nov 2008 16:33:22 -0500
If Clue 1, where Joe Foster admits that he doesnt' get it isn't enough, see Clue 2:

Clue 2: "First we'll go through a weak economy and deflationary scare, which will be favorable for gold." Then he say's we get inflation which will be good for gold. IE: Joe got burned because he does not get it!

This comment completely discounts the authors credibility and/or honesty. Joe Foster is either clueless, lying or both. You cannot have it both ways. Yea, right Joe, inflation and deflation are good for gold!

Gold is almost purely a luxury item. It looks nice so people want to wear it. But they need money to throw around, Joe and right now, that is a problem!

Buying gold right now is like investing in mink in 1929. When everyone is broke, luxury items go down in price not up! There is no magic, no secret formula, nothing to figure out!

Gold hit $850 an ounce in the mid 80's and $200 an ounce in the early 2000. There is no correlation between gold and inflation. When things get scary, the snake oil salesman start peddling gold and then sell theirs at the top while sucker are buying. The dealers got had this time expecting a $3000 top and bought high. The only way for one fool to get out is for another fool to get in.

Even if there were a correlation, it would not matter. We are in deflationary spiral, which will continue for years to come!
]]> http://seekingalpha.com/article/103514/comments?source=feed#comment-297555 297555 Mon, 03 Nov 2008 15:52:10 -0500 http://seekingalpha.com/article/101720/comments?source=feed#comment-290401 290401
Ludwig often used the following analogy to describe it:

"Imagine someone jumping from a plane at 15,000 feet without a parachute, the ensuing whistling noise as he plummets towards earth and finally, the ensuing S-P-L-A-T."

He frequently cautioned against becoming distracted by the whistling and to accept only the SPLAT as your cue!
]]> Sat, 25 Oct 2008 17:21:40 -0400
Ludwig often used the following analogy to describe it:

"Imagine someone jumping from a plane at 15,000 feet without a parachute, the ensuing whistling noise as he plummets towards earth and finally, the ensuing S-P-L-A-T."

He frequently cautioned against becoming distracted by the whistling and to accept only the SPLAT as your cue!
]]> http://seekingalpha.com/article/101720/comments?source=feed#comment-290395 290395
"There is no means of avoiding the final collapse of a boom brought about by credit expansion.” Ludwig von Mises – 1949

Wouldn't you know it, Greenspan missed the lecture!


]]> Sat, 25 Oct 2008 17:00:05 -0400
"There is no means of avoiding the final collapse of a boom brought about by credit expansion.” Ludwig von Mises – 1949

Wouldn't you know it, Greenspan missed the lecture!


]]> http://seekingalpha.com/article/101720/comments?source=feed#comment-289861 289861
Who the heck is going to borrow all this money and what are they going to produce with it and profit when the world is broke?

I keep hearing Jimmy Rogers and even Warren Buffet saying that the FED/Treasury moves are inflationary, but I have not heard a single explanation that makes any sense at all and no one asks them about it.

HELP!]]> Fri, 24 Oct 2008 16:01:37 -0400
Who the heck is going to borrow all this money and what are they going to produce with it and profit when the world is broke?

I keep hearing Jimmy Rogers and even Warren Buffet saying that the FED/Treasury moves are inflationary, but I have not heard a single explanation that makes any sense at all and no one asks them about it.

HELP!]]> http://seekingalpha.com/article/100642/comments?source=feed#comment-287462 287462 Tue, 21 Oct 2008 19:49:27 -0400 http://seekingalpha.com/article/100642/comments?source=feed#comment-287459 287459
OK, whichever one of you TURDS from NUWIRE that wrote this article made one intentionally HUGE OMISSION: We are deleveraging - MONEY IS BEING DESTROYED FASTER THAN IS IT BEING PRINTED - READ DEFLATION. The price of everything is going down - people are holding dollars. GOLD IS THE ABSOLUTE LAST PLACE TO BE IN DEFLATION.

In your next article explain how money being destroyed faster than it can be printed or loaned out creates inflation? Why did Japan have the same situation 19 years ago with the NEIKEI was at 40K and is now at 9000? They dumped more money into their economy than we ever will and they got ummmm, uhhhhh, let's see, well, UH............Scratch my head.............uh...... freakin years of deflation!]]> Tue, 21 Oct 2008 19:42:52 -0400
OK, whichever one of you TURDS from NUWIRE that wrote this article made one intentionally HUGE OMISSION: We are deleveraging - MONEY IS BEING DESTROYED FASTER THAN IS IT BEING PRINTED - READ DEFLATION. The price of everything is going down - people are holding dollars. GOLD IS THE ABSOLUTE LAST PLACE TO BE IN DEFLATION.

In your next article explain how money being destroyed faster than it can be printed or loaned out creates inflation? Why did Japan have the same situation 19 years ago with the NEIKEI was at 40K and is now at 9000? They dumped more money into their economy than we ever will and they got ummmm, uhhhhh, let's see, well, UH............Scratch my head.............uh...... freakin years of deflation!]]> http://seekingalpha.com/article/99451/comments?source=feed#comment-280120 280120
I listen to a lot of these guys and piece my own view together. However, I am coming to the same conclusion as BxCap above: A lot of these so called experts are getting had lately. Boone has lost all credibility on recent calls. Jim Cramer called a bottom a few weeks back and then went on last week and told folks to sell if their time horizon was less than five years.

I am starting to trust my own instincts more and more and generally distrustful of the short term!]]> Sat, 11 Oct 2008 19:51:43 -0400
I listen to a lot of these guys and piece my own view together. However, I am coming to the same conclusion as BxCap above: A lot of these so called experts are getting had lately. Boone has lost all credibility on recent calls. Jim Cramer called a bottom a few weeks back and then went on last week and told folks to sell if their time horizon was less than five years.

I am starting to trust my own instincts more and more and generally distrustful of the short term!]]> http://seekingalpha.com/article/77216/comments?source=feed#comment-167520 167520 Granted, the federal govt just handed every tax payer a couple hundred bucks, but that cannot be the norm and the fed is watching money be destroyed by deleveraging much faster than they are creating it. Holding gold during deflation spells broke!]]> Wed, 14 May 2008 13:02:02 -0400 Granted, the federal govt just handed every tax payer a couple hundred bucks, but that cannot be the norm and the fed is watching money be destroyed by deleveraging much faster than they are creating it. Holding gold during deflation spells broke!]]> http://seekingalpha.com/article/73797/comments?source=feed#comment-155907 155907 Thu, 24 Apr 2008 11:04:32 -0400 http://seekingalpha.com/article/72466/comments?source=feed#comment-152194 152194 Thu, 17 Apr 2008 10:39:19 -0400 http://seekingalpha.com/article/72182/comments?source=feed#comment-150786 150786 Publishing on here, provides a real education with the great variety of responses from some really smart folks. I enjoy and learn from the negative replies as much as those who tend to agree. Remarkably, they have all been very good spirited about it. I hope you all get rich and live happily!!

R, Dan Perkins]]> Mon, 14 Apr 2008 21:59:09 -0400 Publishing on here, provides a real education with the great variety of responses from some really smart folks. I enjoy and learn from the negative replies as much as those who tend to agree. Remarkably, they have all been very good spirited about it. I hope you all get rich and live happily!!

R, Dan Perkins]]> http://seekingalpha.com/article/71805/comments?source=feed#comment-148645 148645 Thu, 10 Apr 2008 21:15:42 -0400 http://seekingalpha.com/article/71805/comments?source=feed#comment-148529 148529 One glaring flaw in your truth though is that gold would might become a medium of exchange: Doubtful, with the minimal amount of "circulating" gold. Anything might, and has historically become that medium. If at the end of the day, as the pendulum begins to swing and food becomes the critical element, why not fill a room of the house with dry goods, canned goods and peanut butter etc, then once the new currency becomes known, trade for it, with the added benefit of having plenty to eat, and thereby eliminating all uncertainty?
Sounds ridiculous doesn't it? Well, that is exactly what is happening with rice in Asia at the moment. My point is that if the trend continues exponentially and people are starving, the guy with the most rice would be best positioned to buy gold and not the other way around, particularly as gold would be relatively worthless!]]> Thu, 10 Apr 2008 16:41:20 -0400 One glaring flaw in your truth though is that gold would might become a medium of exchange: Doubtful, with the minimal amount of "circulating" gold. Anything might, and has historically become that medium. If at the end of the day, as the pendulum begins to swing and food becomes the critical element, why not fill a room of the house with dry goods, canned goods and peanut butter etc, then once the new currency becomes known, trade for it, with the added benefit of having plenty to eat, and thereby eliminating all uncertainty?
Sounds ridiculous doesn't it? Well, that is exactly what is happening with rice in Asia at the moment. My point is that if the trend continues exponentially and people are starving, the guy with the most rice would be best positioned to buy gold and not the other way around, particularly as gold would be relatively worthless!]]> http://seekingalpha.com/article/71805/comments?source=feed#comment-148365 148365 Gold is typically a scarce metal versus jewelry demand and has relatively limited industrial uses. At the height of the internet boom when we were creating a millionaire a minute (think jewelry purchasers) and what small uses gold has industrially (think conductants), gold was selling from $250-$450 an ounce. Somewhere therein is where gold's combined value as jewelry and industrial uses were perceived then.
Occasionally, as now, gold is viewed as a hedge against inflation or a hedge against uncertainty: On inflation, Gold is up about 42% per year since 2001 with US inflation somewhere between 5 and 9%, making gold light years ahead itself as an inflation hedge. If one is buying gold as a hedge against inflation, then one is buying an asset that has appreciated 300% since 2001 to hedge against 5-9% inflation annually. Strictly odds wise, it would appear better to buy the dollar as a hedge against gold price deflation.
Per gold as a hedge against uncertainty, if things get really bad, gold is virtually useless. Both Hyper-inflation and Hyper-deflation suggest major economic turmoil. In both events, jewelry just does not spring to the forefront. Hard assets in hyper inflation, yes, gold no! Hard assets in times of deflation spells broke.
Additionally, what if, at the moment, real estate, stocks, commodities and soon bond prices (as rates must rise) are falling. Oh, wait a minute, they are! Assume for a moment that food prices are rising at a micro level, but that is simply a lag effect of past increases in the money supply. What if at the macro level they are falling, which will filter down as all commodoties continue to drop, as world economies slow dramatically. What if we have already had inflation and things are now deflating. Perhaps wealth is and will will be destroyed faster than money is created. Relatively speaking, who is left to borrow following years of free money turbo charged by derivatives?
What if Gold mania like tulip mania is all imaginary and fueled by collective energies. After all, gold has no real use! It is simply ornamental because we have collectively agreed that it either looks cool or implies status. Gold mania, plain and simply, feeds upon itself. Folks jump on the gold train as it begins to move and more more folks pile in until it can no longer budge. The problem is that nobody really knows how much steam the engine has because the steam is all in out heads. The steam is pure illusion making gold's movements even more transparent than with most other investments. However, the known entity at the moment is that the track got real steep and/or the train got real heavy at around the 1000 foot mark, in the face of massive incertainty (Bear Stearns potentially taking down the entire global financial system), and is now around the 900 foot mark, metaphorically speaking. It looks to me at least that something around $1000 an ounce is the max folks were willing to pay as a risk premium for virtually unlimited uncertainty. Knowing that, folks are now jumping off the train, with a few of you trying to persuade them to stay aboard. Curiously, the IMF is evidently npw considering selling vast quantities of gold.
In this sense, trying to convince folks to remain on board a train heading down the mountain in hopes of eventually getting them to the top, when the very real threat of an implosion of the entire world financial system could not get it above the $1000 mark would not seem logical.
Furthermore, assume someone rings your doorbell today and offers to sell you a one ounce gold nugget the size of a gumball for a thousand dollars, would write the check?
Just points to ponder, I could be wrong! ]]> Thu, 10 Apr 2008 12:58:26 -0400 Gold is typically a scarce metal versus jewelry demand and has relatively limited industrial uses. At the height of the internet boom when we were creating a millionaire a minute (think jewelry purchasers) and what small uses gold has industrially (think conductants), gold was selling from $250-$450 an ounce. Somewhere therein is where gold's combined value as jewelry and industrial uses were perceived then.
Occasionally, as now, gold is viewed as a hedge against inflation or a hedge against uncertainty: On inflation, Gold is up about 42% per year since 2001 with US inflation somewhere between 5 and 9%, making gold light years ahead itself as an inflation hedge. If one is buying gold as a hedge against inflation, then one is buying an asset that has appreciated 300% since 2001 to hedge against 5-9% inflation annually. Strictly odds wise, it would appear better to buy the dollar as a hedge against gold price deflation.
Per gold as a hedge against uncertainty, if things get really bad, gold is virtually useless. Both Hyper-inflation and Hyper-deflation suggest major economic turmoil. In both events, jewelry just does not spring to the forefront. Hard assets in hyper inflation, yes, gold no! Hard assets in times of deflation spells broke.
Additionally, what if, at the moment, real estate, stocks, commodities and soon bond prices (as rates must rise) are falling. Oh, wait a minute, they are! Assume for a moment that food prices are rising at a micro level, but that is simply a lag effect of past increases in the money supply. What if at the macro level they are falling, which will filter down as all commodoties continue to drop, as world economies slow dramatically. What if we have already had inflation and things are now deflating. Perhaps wealth is and will will be destroyed faster than money is created. Relatively speaking, who is left to borrow following years of free money turbo charged by derivatives?
What if Gold mania like tulip mania is all imaginary and fueled by collective energies. After all, gold has no real use! It is simply ornamental because we have collectively agreed that it either looks cool or implies status. Gold mania, plain and simply, feeds upon itself. Folks jump on the gold train as it begins to move and more more folks pile in until it can no longer budge. The problem is that nobody really knows how much steam the engine has because the steam is all in out heads. The steam is pure illusion making gold's movements even more transparent than with most other investments. However, the known entity at the moment is that the track got real steep and/or the train got real heavy at around the 1000 foot mark, in the face of massive incertainty (Bear Stearns potentially taking down the entire global financial system), and is now around the 900 foot mark, metaphorically speaking. It looks to me at least that something around $1000 an ounce is the max folks were willing to pay as a risk premium for virtually unlimited uncertainty. Knowing that, folks are now jumping off the train, with a few of you trying to persuade them to stay aboard. Curiously, the IMF is evidently npw considering selling vast quantities of gold.
In this sense, trying to convince folks to remain on board a train heading down the mountain in hopes of eventually getting them to the top, when the very real threat of an implosion of the entire world financial system could not get it above the $1000 mark would not seem logical.
Furthermore, assume someone rings your doorbell today and offers to sell you a one ounce gold nugget the size of a gumball for a thousand dollars, would write the check?
Just points to ponder, I could be wrong! ]]> http://seekingalpha.com/article/71805/comments?source=feed#comment-148364 148364 Gold is typically a scarce metal versus jewelry demand and has relatively limited industrial uses. At the height of the internet boom when we were creating a millionaire a minute (think jewelry purchasers) and what small uses gold has industrially (think conductants), gold was selling from $250-$450 an ounce. Somewhere therein is where gold's combined value as jewelry and industrial uses were perceived then.
Occasionally, as now, gold is viewed as a hedge against inflation or a hedge against uncertainty: On inflation, Gold is up about 42% per year since 2001 with US inflation somewhere between 5 and 9%, making gold light years ahead itself as an inflation hedge. If one is buying gold as a hedge against inflation, then one is buying an asset that has appreciated 300% since 2001 to hedge against 5-9% inflation annually. Strictly odds wise, it would appear better to buy the dollar as a hedge against gold price deflation.
Per gold as a hedge against uncertainty, if things get really bad, gold is virtually useless. Both Hyper-inflation and Hyper-deflation suggest major economic turmoil. In both events, jewelry just does not spring to the forefront. Hard assets in hyper inflation, yes, gold no! Hard assets in times of deflation spells broke.
Additionally, what if, at the moment, real estate, stocks, commodities and soon bond prices (as rates must rise) are falling. Oh, wait a minute, they are! Assume for a moment that food prices are rising at a micro level, but that is simply a lag effect of past increases in the money supply. What if at the macro level they are falling, which will filter down as all commodoties continue to drop, as world economies slow dramatically. What if we have already had inflation and assets are now deflating. Perhaps wealth is and will will be destroyed faster than money is created. Relatively speaking, who is left to borrow following years of free money turbo charged by derivatives?
What if Gold mania like tulip mania is all imaginary and fueled by collective energies. After all, gold has no real use! It is simply ornamental because we have collectively agreed that it either looks cool or implies status. Gold mania, plain and simply, feeds upon itself. Folks jump on the gold train as it begins to move and more more folks pile in until it can no longer budge. The problem is that nobody really knows how much steam the engine has because the steam is all in our heads. The steam is pure illusion making gold's movements even more transparent than with most other investments. However, the known entity at the moment is that the track got real steep and/or the train got real heavy at around the 1000 foot mark, in the face of massive incertainty (Bear Stearns potentially taking down the entire global financial system), and is now around the 900 foot mark, metaphorically speaking. It looks to me at least that something around $1000 an ounce is the max folks were willing to pay as a risk premium for virtually unlimited uncertainty. Knowing that, folks are now jumping off the train, with a few of you trying to persuade them to stay aboard. Curiously, the IMF is evidently npw considering selling vast quantities of gold.
In this sense, trying to convince folks to remain on board a train heading down the mountain in hopes of eventually getting them to the top, when the very real threat of an implosion of the entire world financial system could not get it above the $1000 mark would not seem logical.
Furthermore, assume someone rings your doorbell today and offers to sell you a one ounce gold nugget the size of a gumball for a thousand dollars, would write the check?
Just points to ponder, I could be wrong! ]]> Thu, 10 Apr 2008 12:56:31 -0400 Gold is typically a scarce metal versus jewelry demand and has relatively limited industrial uses. At the height of the internet boom when we were creating a millionaire a minute (think jewelry purchasers) and what small uses gold has industrially (think conductants), gold was selling from $250-$450 an ounce. Somewhere therein is where gold's combined value as jewelry and industrial uses were perceived then.
Occasionally, as now, gold is viewed as a hedge against inflation or a hedge against uncertainty: On inflation, Gold is up about 42% per year since 2001 with US inflation somewhere between 5 and 9%, making gold light years ahead itself as an inflation hedge. If one is buying gold as a hedge against inflation, then one is buying an asset that has appreciated 300% since 2001 to hedge against 5-9% inflation annually. Strictly odds wise, it would appear better to buy the dollar as a hedge against gold price deflation.
Per gold as a hedge against uncertainty, if things get really bad, gold is virtually useless. Both Hyper-inflation and Hyper-deflation suggest major economic turmoil. In both events, jewelry just does not spring to the forefront. Hard assets in hyper inflation, yes, gold no! Hard assets in times of deflation spells broke.
Additionally, what if, at the moment, real estate, stocks, commodities and soon bond prices (as rates must rise) are falling. Oh, wait a minute, they are! Assume for a moment that food prices are rising at a micro level, but that is simply a lag effect of past increases in the money supply. What if at the macro level they are falling, which will filter down as all commodoties continue to drop, as world economies slow dramatically. What if we have already had inflation and assets are now deflating. Perhaps wealth is and will will be destroyed faster than money is created. Relatively speaking, who is left to borrow following years of free money turbo charged by derivatives?
What if Gold mania like tulip mania is all imaginary and fueled by collective energies. After all, gold has no real use! It is simply ornamental because we have collectively agreed that it either looks cool or implies status. Gold mania, plain and simply, feeds upon itself. Folks jump on the gold train as it begins to move and more more folks pile in until it can no longer budge. The problem is that nobody really knows how much steam the engine has because the steam is all in our heads. The steam is pure illusion making gold's movements even more transparent than with most other investments. However, the known entity at the moment is that the track got real steep and/or the train got real heavy at around the 1000 foot mark, in the face of massive incertainty (Bear Stearns potentially taking down the entire global financial system), and is now around the 900 foot mark, metaphorically speaking. It looks to me at least that something around $1000 an ounce is the max folks were willing to pay as a risk premium for virtually unlimited uncertainty. Knowing that, folks are now jumping off the train, with a few of you trying to persuade them to stay aboard. Curiously, the IMF is evidently npw considering selling vast quantities of gold.
In this sense, trying to convince folks to remain on board a train heading down the mountain in hopes of eventually getting them to the top, when the very real threat of an implosion of the entire world financial system could not get it above the $1000 mark would not seem logical.
Furthermore, assume someone rings your doorbell today and offers to sell you a one ounce gold nugget the size of a gumball for a thousand dollars, would write the check?
Just points to ponder, I could be wrong! ]]> http://seekingalpha.com/article/71693/comments?source=feed#comment-147623 147623 Gold has no fundamentals and practical no industrial use. So, gold is either one of two things; a hedge against inflation or a hedge against uncertainty: On inflation, Gold is up about 42% per year since 2001 with US inflation somewhere between 5 and 9%, so gold is light years ahead itself in this respect. Historically though, gold has not been a sound inflation hedge.
As a hedge against uncertainty, if things get really bad, gold is virtually useless. One certainly cannot eat gold and jewelry is probably not going to be foremost in most folks minds, except to sell!
Gold mania like tulip mania is all perception and hype and fueled by articles like yours. Gold mania, plain and simply, feeds upon itself. Folks jump on the gold train as it begins to move and more more folks pile in until runs out of steam. The problem is that nobody really knows where the gold train is going. It's all imaginary. The train starts up the hill until it runs out of steam and then rolls back down. The steam is purely imagination based, making gold's movements even more transparent than with most other investments. However, the known entity at the moment is that the gold train never made it much past the 1000 foot mark in the face of massive incertainty (Bear Stearns potentially taking down the entire global financial system), and is now around the 900 foot mark, metaphorically speaking. It looks to me at least that something around $1000 an ounce is the max folks were willing to pay as a risk premium for virtually unlimited uncertainty. Knowing that, folks are now jumping off the train, with a few of you trying to persuade them to stay aboard.
In this sense, you are trying to convince folks to remain on board a train heading down the mountain in hopes of eventually getting them to the top, when the very real threat of an implosion of the entire world financial system could not get it above the $1000 mark. The question then becomes, what will?]]> Wed, 09 Apr 2008 10:31:37 -0400 Gold has no fundamentals and practical no industrial use. So, gold is either one of two things; a hedge against inflation or a hedge against uncertainty: On inflation, Gold is up about 42% per year since 2001 with US inflation somewhere between 5 and 9%, so gold is light years ahead itself in this respect. Historically though, gold has not been a sound inflation hedge.
As a hedge against uncertainty, if things get really bad, gold is virtually useless. One certainly cannot eat gold and jewelry is probably not going to be foremost in most folks minds, except to sell!
Gold mania like tulip mania is all perception and hype and fueled by articles like yours. Gold mania, plain and simply, feeds upon itself. Folks jump on the gold train as it begins to move and more more folks pile in until runs out of steam. The problem is that nobody really knows where the gold train is going. It's all imaginary. The train starts up the hill until it runs out of steam and then rolls back down. The steam is purely imagination based, making gold's movements even more transparent than with most other investments. However, the known entity at the moment is that the gold train never made it much past the 1000 foot mark in the face of massive incertainty (Bear Stearns potentially taking down the entire global financial system), and is now around the 900 foot mark, metaphorically speaking. It looks to me at least that something around $1000 an ounce is the max folks were willing to pay as a risk premium for virtually unlimited uncertainty. Knowing that, folks are now jumping off the train, with a few of you trying to persuade them to stay aboard.
In this sense, you are trying to convince folks to remain on board a train heading down the mountain in hopes of eventually getting them to the top, when the very real threat of an implosion of the entire world financial system could not get it above the $1000 mark. The question then becomes, what will?]]>