Celcius

Prepare for a Lower Dow to Gold Ratio

User, Gold has the potential to fall in the short-term, but it depends on investor sentiment toward US treasuries. As Alt-A, Option Arm, and Commercial Real Estate loans devastate US banks balance sheets, equity investors may flee to the safety of gold bullion, causing a gold demand spike, vs. US treasuries despite massive deflation in the money supply. Or they flee to US treasuries and the price of gold drops due to the deflationary pressure on the money supply.

There is certainly a tipping point where investors will lose confidence in the ability of the US government to replay debt, especially during high rates of deflation, and opt for an alternative medium of exchange vs. the dollar. In the next few years IMO gold will fill this void until the world economy recovers and a risk averse fiat currency appears.

Disclosure: 10% gold bullion position & 1% gold equity position

August Buying Time for Gold

Because in times of war paper currencies are worthless. IMO Russia and China are stocking up on gold as an insurance policy against a US default. Which is inevitable unless eliminate Social Security, Medicare, Medicaid, and all the industrial subsidies.

The gold reserves will provide them with the financial means to sustain military operations. They are also stockpiling mineral commodities which would allow them to continue military production without having to initially control strategic waterways for oils supplies.

On Aug 11 10:27 AM market_movement78 wrote:

> yeah, China does keep on increasing it's reserves...not sure why

What to Do About 'What-If' Gold?

I would like to see the data set used in your forecasting. If this is government provided data then the odds are that it is junk. Unless you can validate the quality of the data your forecasting is pure speculation.

Why Isn't the Dollar Falling?

My understanding is that our federal debt is only around 25% of our total debt. So, the first chart above distorts the actual debt burden by nation by not including State, City, and personal debt. Especially, when you consider that the French and German's save on average over 10% of their income.

I would love to see a chart that displays total debt, total equity, and total income so that solvency and ability to repay debt could be assessed.

On Jul 19 09:16 PM damienhaas wrote:

> Agree with you on the leveraging, The bank leverage is higher in
> Europe than US but the consumer and other personal leverage are higher
> in US than Europe.

Fool's Gold (Part 2)

"i am the only expert qualified and committed to speaking the truth." Wow... What arrogance! No wonder no one will let you play with them.... : (

I can understand why your book doesn't sell. You are just a bitter person!


On Jul 12 09:51 PM Mike Stathis wrote:

> You kids should note that CNBC has specifically sent an invitation
> to all SA contributors to appear on their show. The reason is simple.
> CNBC realizes SA is read primarily by sheep. They also realize that
> 99% of the contributors are either clueless or they're sheepherders.
>
>
> As a caveat, you might want to ask Jim Cramer, Larry Kudlow, Pete
> Najarian, CNBC producers (all had my book) and the rest of the crooks
> why they refused to interview me in 2007 and thereafter. I was trying
> to warn everyone about this depression. My book (published in 2006)
> predicted Dow 6000 as well.
>
> The reason is because my conclusions were too painful for the financial
> sponsors of CNBC (Wall Street) to accept. You people are being lied
> to by the financial media and i am the only expert qualified and
> committed to speaking the truth. This is why the media has black-balled
> me. You've all been fooled. The financial media and Wall Street
> did it to you again, just like they did during the dotcom collapse.
>
>
> The sheep don't know about me or my books but the best performing
> hedge funds do.
>
>

Fool's Gold (Part 2)

Long-term charting of gold in the reserve currency is of no analytical value. However, as the USD has been decoupling as a reserve currency, and loosing global economic prominence, gold has been performing very well.

If Gold Bugs' Fantasies Came True

Awesome! I don't think anyone could have said it better. : )


On May 15 11:32 PM altaman wrote:

> Of course the prudent gold bug also owns one or more guns just in
> case the dream gets a little too wet.

Is Gold A Sucker's Bet?

istartedi Gold is a store of value and there is plenty of it to back a currency. It worked well for decades. The only reason we left the Gold standard is because the Nixon administration printed excess dollars to finance the Vietnam war, and foreign governments redeemed these dollars for gold drawing down our gold reserve rapidly. Wars are highly inflationary just like now. The Bush administration with the Fed and the banking industry used low interest rates to create an artificial economic boom. This boom, an inflationary asset bubble, is trying to correct itself. However, we are now applying the same Keynesian methods that created the inflationary asset bubble to stabilize the economy via flooding liquidity into the banking system. We are creating another bubble. We need a gold standard, a fixed store of value, to prevent these asset bubbles that are purely speculative. If we don't have a depression from this economic meltdown then we will definitely have one from the massive bubble we are going to create with the 1.6+ trillion dollars that will be injected into the economy. We keep over steering the money supply like a car skidding on ice, and with each over steer we loose more control.

I don't see gold as an investment just a store of wealth. A personal gold reserve just like central banks. Gold is also a store of labor. The labor cost to print a $1 bill and a $1000 dollar bill is the same, but the labor to produce 100 ounces of gold vs. 1 ounce is significant. And, that is the main problem with fiat currencies, they are so easy to debase.

If this economic crisis causes the world to abandon the USD as the reserve currency then we should expect hyperinflation. And your printed money will be worthless.

Is Gold A Sucker's Bet?

If gold isn't of value then why after the Great Depression did the US government pass the Gold Reserve Act on Jan. 30, 1934. It prohibited personal gold ownership and pegged the US currency to gold. Alan must have studied Keynesian economics. Our major economic meltdowns should be a clear indication that Keynes was wrong! And, you seem to have neglected to note that in 1932 and 1966 1 ounce of gold had a 1 to 1 ratio in value with the DOW. Hold your dollars, and I will laugh as your wealth disappears over the coming months and years.