BrunoT

Faber Peddling Gloom, Doom, Inflation, and Gold

Let's see how you did with this one:

1. completely misquoted the man in the column.
2. compared a short term forecast by the fed on inflation over the next few years with a prediction of eventual hyperinflation in which no time frame was given. I am sure you are going to die. Is that the same as saying you're going to die in 3 years? Think it's fair comparison?
3. You failed to back up your assertions with anything remotely resembling proof or a coherent argument except for quoting the fed's "target rate". And of course everyone knows the Fed never lies or is completely wrong! Does it occur to you that this mess was caused by the same federal reserve you're putting your faith in? Thankfully everyone knows that using terms like "ludicrous/extreme/sen... is considered a legitimate substitute for facts when you're making an argument.
4. You refer to a man giving an interview to legitimate news sources as "peddling" inflation. I'm guessing you wanted us to infer he's up to something nefarious with the use of that word, like he's peddling fake Rolex watches on a street corner. Meanwhile you're here trying to drum up clients by writing columns and prominently listing your Company's services. So, would you also refer to yourself as "peddling" something? Or do you give your research away for free? Nice try though.

Unfortunately, I gotta give this one a big FAIL! Try writing a well researched, fair piece differing with the guy. You might gain more credibility with that approach.

How to Fix Our Economy: Stop Obama’s Recklessness

should read "in a deflation" about gold.


On May 06 10:21 AM BrunoT wrote:

> Gold's within about $10 of where it was 3 months ago and has been
> pretty static. Since when is that "but the fact gold is going down"
> ?
>
> You show a complete lack of understanding of money and economics.
> Gold "goes down" in an inflation in what? Automobiles? No. Homes?
> No. Only DOLLARS. Who gives a flying fudge if the price of gold in
> DOLLARS goes down if your gold buys you more oil, homes, cars, food,
> or whatever else than before?
>
> You could buy much more house, oil, or car with an oz of gold this
> past winter than you could the summer before, even though the price
> of gold "fell".
>
> THAT is one reason why gold is superior to dollars. It's thought
> of not in numerical terms but in terms of what real things it will
> buy.
>
> Get a proper economic education before you start pontificating to
> others about how to invest. You FIRE economy types killed the economic
> futures of millions of trusting citizens who didn't know you were
> nearly as clueless as they were. Please avoid another round of losses
> for your clients and get an decent economic education. And no, technical
> knowledge of options and futures doesn't count.
>
> Your 4% home mortgage solution is laughable. What happens great wizard
> when this subsidy ends? Do you think when mortgage rates are allowed
> to return to market levels (sky high because of your silly "print
> money" scheme destroying the currency) home prices will remain stable?
> Would YOU pay more for a home with a 12% mortgage than one with a
> 4% mortgage? No, you'll simply postpone things and we'll suffer yet
> another crash then.
>
> The fact that you guys mix in this drivel and ignorance with actual
> good criticisms of the Obama "plan" only adds insult to injury, as
> you've in one swoop also managed to discredit anyone justifiably
> critical of his "recklessness" by associating your bad ideas with
> them.
>
>
>
>
>
>
>

How to Fix Our Economy: Stop Obama’s Recklessness

Gold's within about $10 of where it was 3 months ago and has been pretty static. Since when is that "but the fact gold is going down" ?

You show a complete lack of understanding of money and economics. Gold "goes down" in an inflation in what? Automobiles? No. Homes? No. Only DOLLARS. Who gives a flying fudge if the price of gold in DOLLARS goes down if your gold buys you more oil, homes, cars, food, or whatever else than before?

You could buy much more house, oil, or car with an oz of gold this past winter than you could the summer before, even though the price of gold "fell".

THAT is one reason why gold is superior to dollars. It's thought of not in numerical terms but in terms of what real things it will buy.

Get a proper economic education before you start pontificating to others about how to invest. You FIRE economy types killed the economic futures of millions of trusting citizens who didn't know you were nearly as clueless as they were. Please avoid another round of losses for your clients and get an decent economic education. And no, technical knowledge of options and futures doesn't count.

Your 4% home mortgage solution is laughable. What happens great wizard when this subsidy ends? Do you think when mortgage rates are allowed to return to market levels (sky high because of your silly "print money" scheme destroying the currency) home prices will remain stable? Would YOU pay more for a home with a 12% mortgage than one with a 4% mortgage? No, you'll simply postpone things and we'll suffer yet another crash then.

The fact that you guys mix in this drivel and ignorance with actual good criticisms of the Obama "plan" only adds insult to injury, as you've in one swoop also managed to discredit anyone justifiably critical of his "recklessness" by associating your bad ideas with them.

Where Does the Gold ETF Get Its Gold?

I own some gld and other forms of gold as well, but I do have to say, the folks there at GLD sure seem a little lackluster in their attempts to assuage us of our worries. They leave a lot of loose ends in the language. I just get the impression they aren't that worried about people trusting them. But should they be? I think they could do more to calm fears and the fact they don't makes me wonder why in the back of my mind.

Gold Against Stocks Over the Decades: Not as Impressive

This sort of logical fallicy is what is going to make a lot of people very poor (and others contrarian to it, very rich) in the coming years.

Just because something "was" for a period of time when conditions were different, doesn't mean it will always be in the future. You adjust your investments to the conditions.

The fact is, most "investor" class participants are young enough that they came of age in a 25 year bull market in stocks. Anyone under about 60 never had enough to invest to even know there were actually bad times to be in stocks. If they had languished from '68 to '82 in stocks as gold soared while developing their world view they may have garnered an appreciation that stocks don't always rise, just as recently their non-thinking classmates learned the lesson that real estate doesn't always rise in value.

The problem is some want to avoid a deeper understanding of economics by using silly rules of thumb and historical precedents as a short cut vs the hard work and time it takes to obtain a true understanding. They want something they can obtain at the water cooler in 5 minutes.

Resurgent Dollar Leaves Gold in the Dust

On Aug 5, 2008 Sean Maher wrote:

"it's now a good bet that on a 12m view, inflation concerns will have abated, the dollar will be in a surprisingly strong uptrend, and US equities will be materially higher from here."

Beware of those dispensing readings of the future for money. They're not much more reliable than palm readers. And like psychics, they never seem as proud of crowing about their abject failures as they do about the twice a day the stuck clock is correct.

Does about half sound like being "materially higher" to you?

Resurgent Dollar Leaves Gold in the Dust

This is like fleeing upstairs in a highrise fire rather than risking the heat by running downstairs to true safety. Yeah, you're safer NOW than on the burning floors, and you've avoided getting singed, but you're eventually going to die if they can't put the fire out, because you took the easy way out.

Far from putting out the fire, the govn't seems to be feedign it dollar bills by the Trillion.

Gold: The Only Remaining Bubble?

"institutional clients" ? You mean like those in whose interest it might be to have you talk gold down and talk stocks up?

I'm sure you WISH we were in a deflation. You probably even believe it, poor thing. Go check last quarters food prices. Up at a 5% annualized rate. How is that deflation? Wanna bet gas prices are lower this summer than now? ASSET prices are dropping as we all get poorer, that's all. It's not the same as deflation.

And the proper term is "libel", not "slander". You might want to brush up on that kind of thing before your big institutional clients figure out you don't know something that basic.

Finally, you might want to rethink that whole "I'll insult people to make a point" tactic. Calling them cultists and implying that they are so stupid they've become your best contrarian indicators isn't likely to win you any following. Because it sure sounds like you can't take it when they toss your own monkey poo back in your direction.

Gold: The Only Remaining Bubble?

So anyone who disagrees with you on gold is a "cultist"? Well then I have decided that anyone who thinks we're going to have deflation is a "douche". How about them apples?

Please provide us with a list of your assets that have risen in the last year. Did you notice that gold has?

BTW my double long gold is up 69% since I bought it around the time you were trumpeting your call on how bad gold was. Guys like you were MY contrarian signal to buy more. Thank you, as you guys have made it possible to accumulate gold at relatively cheap prices for years as you've brayed about how it's no good.

I could sit in bank CD's for the next decade and still beat the stock market from here on out.

PS. learn the definition of "bubble" before you cast it around.

The U.S. Dollar: Waiting to Tank Gold's Run?

blahblahblah....see my pretty chart...blahblahblah

Too bad they didn't teach common sense at Harvard.

Thank heavens I was heavy into gold and not stocks. My gains were protected.

Every asset class has its time and place. Squiqqly lines to the contrary.

Now go tell those of us who bought DGP 3 months ago instead of treasuries how badly we're mistaken..lol!

Evidence That Big Inflation Is Coming

I'd be wary of listening to Bill Gross at PIMCO. He is an "interested party" in all this and has his own agenda. I've learned to check the agenda of anyone writing about the economy before accepting what they say.

Amazingly almost everyone (from the treasury sec. to Peter Schiff) has some sort of profit motive tied to what they are saying. I am a Schiff fan, agree with how he sees things, but his call to go into foreign stocks was probably motivated as much by commissions as it was economics. He knew you don't need him to buy gold and treasuries, so he couldn't recommend that 100%...no commissions for his firm if you did that. He HOPED the foreign stocks wouldn't get taken down with us, but they were. At least temporarily. There was certainly no harm in sitting the crash out on the sidelines, but he wanted those commissions rolling in before the crash played out. Long term his holdings will recover, but everyone has an agenda.

As for Mish, that guy is like Hitler. He has a theory and will stick to it till the bitter end, refusing to surrender in his bunker. The idea that we can print up money and hand it out instead of making people and institutions earn it and have it EVER turn out well is about as insane as some of Hitler's ideas. Yet another case of an educated person making valid small points yet missing the big one. Chickens lay eggs. Eggs turn into chickens. Therefore eating an egg is the same as eating a chicken.

Could There Be a Real Breakout in Gold?

DGP is up something like 66% from its low 3 months ago. I figure it was forced selling. The fundamentals seem to scream that gold is headed up. I don't buy the deflation theories, just too much money creation in the pipeline.

De-Leveraging Is Not Deflation

It's very complicated. I can read the arguments back and forth and see merit in both in the micro level.

But I just use common sense. I find it hard to believe that massive printing of money and handing it out to those who didn't earn it, with no end in sight, is a good thing. Therefore, the market will punish this behavior. There is no "something for nothing" in life.

I also believe that living it up now and not worrying about how to pay for it will lead to ruin later. Isn't that just common sense?

It sounds to me like we've punished savings and rewarded indebtedness. Anyone sitting on retirement savings making 2% during a period of 4-8% price inflation could tell you that.

And now we are moving to punishing future generations as well. We're attempting to put off our day of reckoning by moving it to the future generations to deal with since we fear the correction happening on our watch.

My hunch is we won't get far. My other hunch is that those favoring the deflation theories are simply whistling in the graveyard, looking for an excuse as to why this massive money creation to temporarily prop our standard of living up is a good thing.

It would be nice if we could make the money supply all even, "just right", like the 3 bears story. But unfortunately our story won't end happily.

Gold Loses Its Shine

Whose basement is Sean going to live in in a couple of years after he shorts gold? Because if he does it in any meaningful amount he's not only going to be broke he's going to have no income as anyone who found out about it would not hire him.

I'm not a gold "bug", but I don't have time to shoot holes in these weak arguments.

If he'd have bothered to even read a wikipedia article on gold he'd understand more about what makes it different than fiat money.

And it's uninformed at best to think that gold will rise in value ONLY if there is a chaotic breakdown and chaos. Has he checked the price since 2001? Has he compared it to any other asset class? Has he looked at the money supply figures? Has he heard the numbers tossed around in various bailouts?

It would be one thing if a person could even match real inflation with CD's or bonds, but it's not even close. It hasn't been for years. Gold is simply a store of value that periodically one can do even better on as it comes in and out of favor.

But you go ahead and pay 50 times earnings for some tech or retail stock and let us know how that works out for you.

President of Euro Pacific Capital on Gold and the Dollar

Gold is up quite a bit recently, this is an old interview most likely. And since when is "investing" done over a time horizon of less than a year? To say Schiff was "wrong" you'd have to assume that only what happened in the last 4 months or so counts.

Only if one bought gold in March or late summer of '08 and then sold it did one "lose" anything, and even then one lost far less than if he'd owned US stocks.

Foreign stocks are way down along with the world economies, but if you actually READ Schiff's book he says to buy DIVIDEND PAYING stocks that are fundamentally sound so that you keep collecting the dividend during the downturn. Yes, he was surprised like most of us that the dollar rose in value as the world fled to it. But that has already reversed and the outlook is gloomy for it.

If Peter Schiff is wrong everything will be ok and you still have a job. If Mike Norman is wrong you're unemployed and down another 40% on your investments. You choose.