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  • Why I Upped My Gold Short: My Market Outlook [View article]
    I often think back to that greatest creator of wealth (for himself) of all time -- J.P. Morgan. He famously said "Gold is money, everything else is credit."

    Let's take that at face value. If that is true, then talking about the "price" of gold has no validity. All you're referring to is the value of that gold, at any given point in time, in a given fiat currency. Why does gold earn no interest? Because, if it is, in fact, the only "real" money on the entire planet, then it has no [counter party] "risk", so there is no need to pay interest as an incentive for people to hold it.

    Assume that anything else you hold -- equities, bonds, paper currency, etc. has counter party risk, so you need it to "earn" something to cover that risk. Mismatches in the current price [of any holding] relative to the real risk may create opportunities for investment gains, but they all revert to the mean eventually.

    "Converting" these [other] investments into gold, or buying gold with available discretionary income, merely stores that wealth -- albeit in a form with no risk (forget the wildly fluctuating "values" of gold measured in any of those paper fiat currencies). I like to think of gold as stored energy -- gold's "price" is the value of all the energy it took to find, extract, and refine it out of the ground. As it continuously takes more and more energy to obtain that next incremental ounce of gold, its price (in any fiat currency) will reflect that expenditure of energy -- at current energy prices (in said fiat currency).

    So, I hold gold, as a store of my wealth, but not to speculate with, or even as an "investment". I just prefer it to the Monopoly money in my wallet. . .
    Aug 1 04:52 PM | 2 Likes Like |Link to Comment
  • Why I Upped My Gold Short: My Market Outlook [View article]
    ". . . if your friend Rip Van Winkle fell asleep in 2004 and woke up today, and you said, "Rip, it's 2014 now, let's go shopping," Rip would look at current prices and not think inflation over the last decade had been anything out of the ordinary. Rip would see no evidence in average consumer prices of the massive QE . . ."

    Oh, really? Let's take two items that your friendly government economists cannot manipulate with substitution, hedonics, or outright lying:

    WTI (that's crude oil) -- $40.78 in Jul 04 and $100.97 today. That's a 147% rise in ten years.

    Hamburger -- $2.10 in Jul 04 and $3.88 today. That's an 85% rise in ten years.

    Now answer me this -- has your net paycheck gone up 147% in the past decade? Has it gone up 85%?
    Jul 30 02:39 PM | 5 Likes Like |Link to Comment
  • Maximize Your Gold Exposure: Buy Junior Miners That Trade Like Mispriced Call Options [View article]
    If "buying junior miners that trade like mispriced call options" is a leverage play on the price of gold, why not really crank up the leverage and buy LEAPs on ANV? Yes, I realize this introduces a time risk into the equation, as you now are betting on gold rising within the period of the LEAP, but for the price of ANV (today) I can buy $4 calls for $0.75 and if they expire worthless in Jan 2016, I can do it all over again for less than the price of buying the stock outright . . .
    Jul 30 01:52 PM | Likes Like |Link to Comment
  • Gold, Silver And The Mining Sector: Prepare For A Severe Fall [View article]

    I'm not talking about gold or silver STOCKS. I'm only referring to the physical metals . . .
    Apr 19 02:53 PM | Likes Like |Link to Comment
  • Gold, Silver And The Mining Sector: Prepare For A Severe Fall [View article]
    Think for a moment . . .

    Gold is at $1,300 and the S&P is at 1,865. Even if gold drops to $1,000/oz., that's only about a 25% drop from today's price. What are the odds of the S&P dropping [from today's number] by 25%? I would argue it's appreciably higher than gold's potential plunge. I expect the S&P to drop by 50% before 2020 -- even if that never happens, I do expect gold to protect my wealth from the ravages of inflation . . .
    Apr 18 08:48 PM | 3 Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    So, your "thesis" is that only MEN can understand (and invest in) gold? That "their wives" are in Bernanke's camp, in that they just "don't understand gold" . . .

    They are more interested in what? Shopping and raising the kids? Attending PTA meetings? Having their nails done? Are you a mysogynist, or do you just have a low opinion of women's investment savvy?

    MY wife, is totally in agreement with protecting our assets through a partial investment in gold, and every time the price gets beaten down, she makes sure we buy more. If gold does hit your $770 estimate, she'll be backing up a rental truck to our local bullion dealer, and filling it up . . .

    ps -- I do a lot of the grocery shopping, and I see price inflation every day:

    In 1 year: Trader Joe's mayonnaise > $2.59 > $2.99 > $3.29
    Feb 24 12:03 AM | 5 Likes Like |Link to Comment
  • The Fed Will Remain Gold's Strongest Supporter For Years [View article]
    Eagle, the one fly-in-the-ointment with your theory is that with India hindered from buying gold, they turned to silver -- to the tune of 25% of the world's annual supply (according to Eric Sprott). If, as he implies, India formerly bought about 10% of annual supply, how is it possible for a buyer to grab an additional 15% of annual supply, and prices did not go up? If we had seen gold fall, and silver rise, I'd buy into your argument. With both of them falling, price manipulation is the only logical explanation . . .
    Jan 3 01:27 AM | 1 Like Like |Link to Comment
  • Chicken Little Inflationists [View article]
    "The major flaw in their arguments, of course, is that it never happened. It never even came remotely close to happening. What exactly is the definition of hyperinflation varies; many peg it at the inflation rate reaching 50% in a month."

    You remind me of a hypothetical passenger on the Titanic, mentioning that nothing bad had happened, since there was no sign of trouble [an hour after the collision]. Just because something is not immediately apparent doesn't mean it didn't occur.

    Inflation was exported, so people abroad (especially in emerging markets) are feeling the first effects. That is REALLY bad news for us, because once all those dollars start flowing back to the U.S. (because the rest of the world doesn't want them), there will be no way the Fed or government can mitigate the effect. It will be the financial equivalent of watching the tsunami that hit Japan, sweeping everything before it, with terrifying and relentless force.
    Dec 26 03:57 AM | 2 Likes Like |Link to Comment
  • 6 Lessons I Learned In 2013 [View article]
    There is little question that gold and silver have been manipulated throughout 2013. Nobody dumps $millions at 2:15am, regularly, in a thinly traded market, with the anticipation of getting a "good" price on the sale. Even hedge funds are smarter than that!

    Throughout 2013, as stock prices rose, with every drop in the PMs I sold off more equities and bought physical gold or silver. With each successive drop [in PMs], I converted more equities to PMs.

    Did I have gains in 2013, based on my strategy? Nope. Do I sleep like a baby at night? Yup. The stock market is in a bubble, and PMs and their associated stocks are down the crapper. Yes, the market could go much higher (than it is today), but which do you think holds more promise for gains in 2014? I'm positioned exactly where I want to be . . .
    Dec 26 03:43 AM | Likes Like |Link to Comment
  • Will Gold And Silver Tumble Further? [View article]

    All cogent points, but the trouble with a "Black Swan" event is that if you COULD see it coming, it wouldn't be a Black Swan, would it? (I do like your Falklands premise, however!).

    I always sketch out the 4-segment matrix (Plan - Doesn't Happen/Plan - Happens/ Don't Plan - Happens/Don't Plan - Doesn't Happen). Two of these are neutral (#'s 2 & 4), #1 is basically a "no harm, no foul" event, where you're no worse off for having hedged. That leaves the Big One - "Don't Plan - Happens".

    That results in such a catastrophic outcome for the average investor (Bond Market collapses, Stock Market drops 50-70%, US Dollar loses Reserve Currency Status) that NOT planning (just in case) is like not having insurance on your house, because you don't anticipate a fire . . .

    Sure, it MAY not happen, or it may be years away, but since I can't time the event, I'd rather be prepared now than risk getting caught flat-footed if it happens prematurely, with no warning.
    Nov 29 08:57 PM | Likes Like |Link to Comment
  • Will Gold And Silver Tumble Further? [View article]

    I'm sure your melon is just fine . . . The price of PMs is driven by manipulation, er market sentiment, which can change in an instant. I was sitting in cash when Black Monday occurred in 1987, and I bought MSFT at fire sale prices (it became my only 100-bagger). We cannot know what "Black Swan" event might suddenly appear (Israel bombing Iran?) to change that sentiment, but panic on the street can invert the playing field faster than you can finish your morning coffee. Whenever it happens, if you're not already in, it will be too late to get in . . .
    Nov 28 03:16 PM | Likes Like |Link to Comment
  • Will Gold And Silver Tumble Further? [View article]
    Awaiting a further drop in gold or silver is a fool's game. O.K., maybe you get in at a 10-20% discount off today's price -- or, PM's take off tomorrow, and you watch the price go hyperbolic before you can get in. IT'S NOT ABOUT PRICE! It's whether or not you are holding it when "the market" realizes that's where to be.

    Many people who have been in the PM game much longer than I keep reiterating that prices can move [upward] so fast, that you will never have the opportunity to jump in at anywhere near the laughable price they are selling for today. Being contrarian is not easy with the prices doing what they are currently doing, but those are the people [that are "in" now] who realize the huge gains.

    If prices fall, and I'm in a "loss" position, it's not about today's price -- it's about how many ounces you have in your possession. I will still sleep like a baby if gold drops to $800 per ounce (of course, when I'm not sleeping, I will be buying like crazy!) . . .
    Nov 27 03:01 PM | 1 Like Like |Link to Comment
  • Buy Silver, Not Gold [View article]
    There are several historical reasons to prefer silver at this point. The historical ratio throughout history is about 20 to 1, not the 60+ to 1 price ratio we see today. If "reversion to the mean" is still valid, either gold has to fall or silver has to rise at some point.

    The minerality in the earth's crust is at a ratio of about 9 to 1 silver to gold. 99.9% of all gold ever mined is still in existence, whereas only about 9% of all silver ever mined still exists.

    Finally, whereas GLD has shed (sold off) almost 30% of its gold during the 2013 meltdown, SLV has held on to substantially all of its metal.
    Jul 12 06:14 PM | 1 Like Like |Link to Comment
  • Gold: Time To Short [View article]
    If gold is truly just "another commodity", why does the ECB want Cyprus to turn over their central bank gold holdings?

    And when the Arab Spring occurred, and the president of Tunisia was forced to flee the country, why did the one thing his wife took with her was the contents of the Tunisian Central Bank -- two tons of gold?

    Gold, throughout history, has been used as money. The fact that for a brief period (the past 42 years) gold has not held that position does not mean it will not do so in the future. EVERY fiat currency in the entire history of the world has eventually reverted to ZERO value. Are we so presumptuous as to think we will be the first government ever to survive the 24/7 running of the printing presses?

    When I head for Singapore, as the U.S. economy implodes, I won't be carrying my collection of comic books and Pokemon cards . . .
    Jun 12 03:51 PM | 4 Likes Like |Link to Comment
  • Gold: Time To Short [View article]
    Hmmmm, think on this:

    In Roman times, one ounce of gold bought a nice toga, a fine leather belt, and a nice pair of sandals.
    Today, an ounce of gold will buy you a nice suit, a fine leather belt, and a nice pair of shoes.

    In 1933, you could fill up your gasoline tank for two silver dollars.
    Today, you can almost fill up your gas tank for [the melt value of] two silver dollars.
    Jun 11 01:57 PM | 7 Likes Like |Link to Comment