Allen Fuller

Ignore the Hype - Gold as Currency is Dead

Don't ignore gold's value as one bucket in your diversification strategy. Months ago, a lot of people were screaming about how we were headed to hyperinflation. I was skeptical, being convinced more by the arguments of a few that we were headed for deflation instead. So I kept most of my IRA in cash, with a bit in a few stocks and a bit in precious metals. So far that has not been too bad; gold has done better than the stocks but the dollar has done the best of course. However, hyperinflation still has a chance to appear, after the deleveraging process finishes (which is what is destroying the money supply and causing deflation now) and the government realizes the cheapest way out of the national debt is inflation... No one has a crystal ball, so it is best to be diversified, and gold has a part in that.

Roger Wiegand: 'Severe Bull Market' Ahead for Gold

I agree with Toeser. No one knows, and no one can convince me 100%, that we will have either deflation or inflation. I read a VERY interesting website called generationaldynamics.c... which has been extremely prescient with this whole credit crunch. They are predicting severe deflation and a second Great Depression. But I'm not 100% convinced. Other websites and analysts I highly respect are predicting hyperinflation, because that is the only lever left to the government. I'm not 100% convinced by their arguments either; it may be out of the government's hand. Right now I'm leaning 60% toward the deflationary position. I hold about 1/2 of my IRA in cash, with about 1/4 of it in precious metals and 1/4 in a handful of stocks I think are very speculative but have a huge upside potential if they succeed (that's my "playing around" money). Whatever happens now, it seems I'm destined to lose some money, but this way at least it shouldn't be all of it.

The Chickens Come Home to Roost, But Have We Really Learned from Our Mistakes?

notsosmart has a point. At least some of your "emergency fund" should be in actual physical goods that you could use. Not just tuna, but other canned goods and food that you can eat if all else is lost. I'm not saying it's the end of the world, but let's say you lose your job and can't get a new one for 6 months. Wouldn't you feel better having a 6-month supply of the basics, than a 6-month supply of money which might get inflated at any time?

Obviously you can't store it up for retirement, but a food storage plan should be part of anyone's hedging against the risk of inflation, job loss, and so on.

The New Normalcy

Bush is to blame for everything, even the cold you caught last year. I'm no fan of Bush but this is just ridiculous.

Actually, it is the Democrats who kept pushing for the mortgage industry to make all these sub-prime loans. I know life is hard for people at the bottom and I sympathize for their situation, but the solution is NOT to give them loans that they cannot repay! It just makes their lives more difficult later on as well as eventually putting the entire system at risk as we have seen.

Buying Gold for Oil Like George Soros

Following a ratio is just one reason to buy gold. Inflation and the bear market in general are several other good reasons.

Oil is a fossil fuel, both literally and figuratively. It is going the way of the dinosaurs. It will become increasingly expensive until the pain is so bad we will flee to alternatives, or our economy collapses enough to reduce demand. Its recent drop in value was just a small correction on the overall larger (multi-year) upward trend. We will probably see oil prices stagnating around this level for the next few months or even a year or two, but in the long term, if the prices haven't destroyed demand sufficiently already, they will head back up again.

We need to stop looking at the daily and weekly view and take a good hard look at the bigger picture.