AuGod!

A Gold Putdown?

hmmmm .. both would seem to be ultimately long gold.

Potential COMEX Gold Fail

There is no substitute for taking real delivery of the metal and your bank's bullion desk, if they have one, is a good place to do it. If they don't have one, then there's always KITCO .. and find a better bank.

5 Reasons to Avoid the Gold Rush

Who ever said sell "everything" you own and buy gold? That doesn't make sense. What does make sense is to take a position in gold bullion as a risk management tool and hope you never need it. Think of it as creating your own personal central bank. Oh and if everyone wanted to sell their gold who would buy it is, I suppose, a fair question theoretically but deserving of ridicule in a real world scenario.

The Dollar Ain't Picture Perfect, But What's Better?

Any notion of the American dollar being a store of value in terms of practical Main Street applications is pure lunacy. As for its macro-use to facilitate international trade, it is still the tallest midget in the room. Going forward, if international trade is to continue, which it will, accomodations will be found. A sophisticated barter system is in the works among BRIC, nothing more; international liquidity still hinges on the USD. Now when push comes to shove (read deflation comes to inflation) those monetary phenomona, now in a dance of sorts, will come to roost squarely on the shoulders of the consumer. That is the fate of ALL fiat. Gold is gold.

Strange Inconsistencies in the $134.5 Billion Bearer Bond Mystery

It is what it is and on its face a preposterous scam probably perpetrated by some old fart con artist who sold "at discount" or paid a debt to a dum daisy-chain entity with the bonds and then tipped off the authorities so he/she/it could then claim force majeur. hahaha too funny!

Russia Makes the First Call for the Monetization of Gold

With all that has been monetized and will soon be monetized, gold seems a no-brainer. But I think the "market" monetized gold 5000+ years ago. The blip in between is more a declaration of policy, a leadership aberration, where once upon a time a "Through the Looking Glass" of sorts took place and only debt was thought worthy. Now to monetize something of value with no counterparty risk??!! Gad, the mountains will shake and rivers boil and all the Keynesian economic geeks will break out with roids.

Why the Bottom Is Near for Gold and Silver

On Jun 17 05:35 AM HardToLove wrote:If you are "institutionalized", must you also take medications or is therapy sufficient? >8-O

HardToLove

> On Jun 17 03:05 AM AuGod! wrote: Glad you got the inference. I think many are taking their medicine now. Their spouses and children are probably all in therapy.

Why the Bottom Is Near for Gold and Silver

Depending on whether or not you are an individual and not an institutionalized trader, currently have gold , are long or short and interested in the metal, ignore the daily SPOT and wait, buy, hold or sell. So much for that. In the end, Jastram was probably right. Roubini figures some froth to be blown off and that "barbarous relic" will be part of it, but nothing happens in a straight line. Graphs, though dated, contained in Jastram's "The Gold Standard" shows that. Even Keynesians are, like paranoids, correct some of the time. Oh come on! inflation and deflation are monetarist phenomena! Now look at the S&P 500 and DJI since 1999 and the buying power of the US$ if you want a straight line. Enjoy your evening with your loved ones. They are precious. Gold and all assets are only risk management tools.

How Rising Stocks Lift the Economy

However unpopular in financial circles, we are probably looking at negative PE ratios in the next year. How is that relevant? Keeping it simple, think of your local coffey-shop with 35% fewer customers than last year and looking at a further 35% fewer next year than this year. A Wall Streeter might argue that the actual numbers of the drop may be slowing but the direction is clear to most of us and while statistically relevant, the Wall Streeter's take is laughable on many levels. To quote: "Mathematically, there are only two ways for a ratio of this form to have a negative value: 1.The numerator falls below zero 2.The denominator falls below zero. In the case of the P/E ratio, it is impossible for the numerator to fall below zero because this represents the price of the asset. However, the denominator, which is equal to the earnings of the company, can become negative. EPS values below zero mean that the company is losing money and is the reason why it is possible to have a negative P/E ratio."
Negative PEs, reported or not, mean that the supply of goods and/or services of those firms, exceeds demand thus my conclusion that present share values of those firms within the general markets are not supportable. Considering the condition of our economy, I will leave it to you to pick and choose but overall, I can easily imagine a further 35% correction before bottom. In the end it could be likened to shaking fleas off the dog except that in this case, once done, it will show that they can neither fly nor walk. But they can always crawl for a bail-out I suppose.

Will a 'Silver Bullet' Finally Kill the Metal Manipulators?

One of the best threads I have seen here. The quality as measured by knowledge and its imaginative interpretation by Jeff the author and follow-up posters. The situation is quite simple for me as well. I want a store of value and have yet to see what, if I cash in my bullion, will be my alternative. Yes there are opportunities but for a Mainstreeter, there is unprecedented counter-party risk. With gold bullion there is none. Yes it can be stolen and lost in fire and flood but knowing that is the first step to protecting your stash. It is true also that, as many say, cash may be the greater of those risks given buying power loss over the past 9 years. Given that an open mind is better that its alternative we are left with the unthinkable or an eonomic restructuring of sorts. Audits and defaults are probably a sign that there is still a perceived value and/or demonstrated lack of value in that hairball somewhere. For myself I am in the process of creating a personal micro central bank with some gold bullion. As for silver, even though the numbers don't lie about its rise, it is too heavy to store in sufficient quantity to make much difference at this time. I may buy and stash a few bags of coin after I reread this article a few more times. Happy Sunday and don't forget yesterday - the first day of the Invasion of Normandy (D-Day). .... Operation Neptune began on D-Day ( June 6, 1944) and ended on June 30,1944 .

Three Must-Read Market Articles

Nice article with some good meaty stuff to consider. As for gold bullion, if the US$ strengthens, gold bullion now held will, as spot is marked to the US$, appreciate relative to other currencies. Demand may suffer, especially jewellery and in India. If and when the US$ weakens, the metal will climb that wall of worry and demand will increase especially jewellery and in India. If the US$ weakens and the metal weakens with it, vis all fiat, then expect the end of the universe as we know it. If the US$ strengthens and gold bullion strengthens with it, then we will likely be back to something approaching what we used to refer to as "normal" albeit only in terms of a US dollar which has lost much of its purchasing power since 2000 and most of it since 1913. On an individual basis how much can be expected on the spread likely depends on where you are geographically. Is the expected price inflation within the next few years a universal thing or more focused on a specific nation or economic region like North America or Europe as opposed to Asia? Will Canada suffer as much as the United States, England more than France etc., when inflation takes hold? Is Princeton University correct that "inflation where and when everything gets more valuable except money"? Investment decisions and economics have an imprecise relationship and depend on how far in the future one is with their respective probabilities. Some things are clear. Though shrinking, we, in June 2009, have a world GDP around 50 trillion, a US GDP of around 13 trillion and a world-wide derivative position of more than a thousand trillion which will eventually need to be unwound, a probable commercial real-estate mess including additonal ARMs (variable-rate mortgages) CDOs coming up by May 2010. Aside from glooming and dooming it, buying a farm, getting off the grid and locking and loading, I have to believe that being long the general market is a recipe for personal financial disaster. Your money health in any economy depends on where you sit within it. You can't eat gold bullion, it is heavy and inconvenient to store and has no real value other than that placed on it by demand and the corresponding fiat or commodity (read bread) value of the other side of a trade. In that spirit I will venture that vestiges of ancient economies remain with us, even as barbarous relics. One of them is gold metal, so I will continue to buy on dips and stay long. I hope I never need to sell it or barter it for food. But the concept of "unprecedented times" is a bit like "innocent people" and as Catwoman said to Batman, "no one is truly innocent." Keep the faith and stay strong but buying and holding gold bullion has a certain appeal to those who want to pass on more than debt to our grandchildren. They deserve it and in the circumstances we can only do our personal best ... and they are truly innocent.

Will Gold Revisit Highs This Week?

Gold bullion as a risk management tool is always a good bet. As an investment, it can and should glitter in the long term. But preceding that move, short term, there could be a pull-back to 900 or slightly below or even lower. So if you want to buy the metal, do you buy now or wait for the pull-back? Charts and fundamentals are useful but often make conflicting claims or may be interpreted from differing perspectives. Gold and silver stocks can quickly go south with the paper markets. Gold bullion can drop like a stone if folks need to sell in order to cover their losses elsewhere. If one is seeking a numeraire, namely,
"The unit in which prices are measured. This may be a currency, but in real models, such as most trade models, the numeraire is usually one of the goods, whose price is then set at one. The numeraire can also be defined implicitly by, for example, the requirement that prices sum to some constant."
... then gold metal may not be the best choice. My humble conclusion is that, as has been said elsewhere, "the real risk is being out of gold bullion". If one is thinking about taking an initial position, paying more for it today than you might in a month or so is no big deal if you can hold and still take advantage of further dips going forward, certain that the long-term will see 4 figure gold. If you are looking for a fast buck then it may not be wise to do so. I am just a working stiff but will continue to increase my position gradually, say a few ten ounce bars and some coin now and again in August-September and see what happens. I don't think our financial system is going to the dogs entirely so I will forego the bunker and tins of spam. In every jurisdiction, gold is very liquid and has value in local currencies some of which are gaining strength against the US$. So, if those local currencies gain further against the US$, the relative price of spot gold, as marked to that US$, will likely drop. If the US$ advances, then your gold bullion will be worth all the more in one of those currencies. Is there US$2000 gold on the horizon? No, in my view, not soon but when US banks find a way to flush more loans into the system and not hoard funds to support their balance sheets, increased consumer and corporate spending will likely face price inflation - the ultimate wages of a debased currency. Will it be Weimar Republic or Zimbabwe - no in my opinion, but it will be substantial. Can the deflationary forces be tamed and timed to counter inflation? Yes but timing is critical and there could be a year maybe more of misery due to indecision and/or incompetence and/or methodoligical blunder. Remember the old joke about the three econometricians out on a hunting trip? A deer meanders into range and the first econometrician steps up, takes careful aim and misses ten feet to the left. The second econometrician steps up, also takes dead aim and misses the deer ten feet to the right. The third econometrician steps up and doesn't aim or shoot just throws his hands up in the air and gleefully shouts "WE GOT IT!" What are the chances of our governments executing a one-shot-heart-shot? Have a nice day and evening and get some rest. You look tired! jk

Cramer's Stop Trading! The Bears' Big Bluff (4/17/09)

The Banks will do well and buy up other banks. Sure, why not? They aren't lending and need something to do with their "bailout" money after they profit from this rally which they instigated. As for the rally itself, it is a bear rally and smart money will bail in advance of the big sell off, probably in June, leaving the dummies holding the bag. As for Cramer, though factually correct enough here in this instance, he is just a shill. But it is fair to observe that the market will survive although much diminished even from its present lamentable state and banks are integral to our monetary system. Do the math. Take profits. Sleep well.

Using Gold as an Indicator for Market Cycles

Yes I also see the "Bear trap" or "Obama rally" but no "dead cat bounce" because I don't think bottom has been reached. Maybe a bottom as one analyst puts it but not "the" bottom. In any case, holding some physical gold makes sense to me. I don't want this to become a freight train on steroids market just enough to keep troughs and peaks within reasonable balance. Jewellry is proabably out of the market and Inda imports while significant are down y o y and investors are looking at paper gold or gold ETFs when they should buy some bullion. As for equities the smartys will bail soonest leaving the longs holding the bag as usual. Timing is critical as always but those wise enough to manage their own money well, should and will proabably go to cash now. As for the overall economy, again timing the gap between deflation and inflationary spiral is critical for all governments' central banks and I can't see that happening in any concerted way. The Swedish K is the best currency for a reason. The USD may be weaker but as the "biggest midget in the room" still, it has a way to go and where depends on Obamanomics. Housing, both paper and physical is still the central issue so efforts need to be directed to those who have a fighting chance of keeping their homes and pare down the CDOs into something edible. That might remove some pressure from CDS's everyone is up-in-arms about vis foreign counterparties. People who can, will buy new and pre-owned homes. Consumer spending can't get out of hand and probably won't because so many on mainstreet are tapped. Unemployment is rife as can be expected when a revolution (of sorts) takes place, but that should not be allowed to result in disenfranchisement if you want to walk the streets in relative safety. But even (non-TARP)solvent lenders are caught between shareholders and government pressure while the others have yet to fully disclose and are on a cliff edge if not largely owned by central governments. So the fundamentals are bad. Summer markets may be uncharacteristically frenetic, October will have a nasty surprise and then we may begin to see the end of all this. It is really like a big and very bad meal which we all have experienced at one time or another. It has to be expunged from your system and this is the case here with all toxicity with it. Blue skies as we knew them are unlikely in our time, but all ills will pass if we stay focused. Just a few thoughts while Spring manifests its own and most important version of rejouvenation.

Gold Is Losing Its Luster

I bought physical at around 650 settlement price and sold at 930. I also had upside on the currency because my currency and US was at parity at time of purchase. Will buy more physical on the dips as it is my strategy to accumulate more than trade. But still, if this isn't a profit generator then I guess I am an idiot. I will look for gold to retest 750 in the off-season and climb when the boys are back in town. It could climb higher in the interim but I listen to that sage who said about tops and bottoms, - take the 60 in the middle and leave the 20 on either end. You'll sleep better.