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History Buff 24/7

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  • All Currencies Are Weak Relative to Gold [View article]
    I agree with your thesis, but when you date the Euro's performance from 1978, are you using the predecessor currencies of the Euro since it only came into existence in 1999 (accounting currency) and 2002 (physical currency)?
    Jun 7, 2010. 03:41 PM | 6 Likes Like |Link to Comment
  • The U.S. recovery is going just fine, and potential bad news is discounted in share prices, Abby Joseph Cohen says. Rather than focusing on Greece or the recent jobs report, investors should consider the big picture - the underlying health of the economy and whether GDP growth and job creation will improve.  [View news story]
    Goldman Sachs coming out with another public service announcement to help us all out -- how philanthropic of them.

    Jun 7, 2010. 02:56 PM | 8 Likes Like |Link to Comment
  • Bear Market or Just a Correction? [View article]
    What I think a lot of people are missing here is that, much like the early United States, the creation of the euro zone was not anywhere near a unanimous decision. The euro zone was cobbled together by the governments of the involved countries, some with a clear majority backing it, some with a razor thin majority, and some with a minority of the citizens backing the union. Even when things were looking good, I doubt if a majority of the citizens of those countries actually wanted a unified currency. And in a lot of these places, if you want to start a riot all you have to do is start screaming "unelected bureaucrats in Brussels" from a rooftop and you will have your riot.

    Add to this the following questions:

    Why should Germans who live within their means have to pay to keep Greeks who don't within the euro zone?

    Why should Greek citizens agree to painful measures to bail out French and German banks who were stupid enough to loan their corrupt government money?

    There are a lot of fractures evident. And probably more to come.
    Jun 7, 2010. 02:08 PM | 3 Likes Like |Link to Comment
  • Bear Market or Just a Correction? [View article]
    Which Europeans? The Greeks, the Italians, the Spaniards?

    Oh, I forgot the Irish. At least they did actually implement the austerity measures. Good luck getting the Greeks to do that.
    Jun 7, 2010. 02:02 PM | 2 Likes Like |Link to Comment
  • The End of the Gold Story [View article]
    Absolutely right, Sidinsd. If you see the price action in precious metals just before you hit the option expirations that's when you see why you don't want to hold the options -- the banksters naked short the PMs to make sure the call options don't come anywhere near the strike prices and expire worthless. Not to mention the fact that most of the options are on GLD and SLV, which are highly suspect vehicles to begin with. You want to be in something like CEF, GTU or PHYS.
    Jun 7, 2010. 01:45 PM | 5 Likes Like |Link to Comment
  • Gold vs. Real Assets [View article]
    The author does have some good points. Real assets of some kind is going to be where you want to be as developments play out. As an owner of both real estate and gold, there are cases to be made for both investments.

    Real estate can either be a roof over your head or a source of income. But real estate is not for the faint of heart either. Despite the massive props the US government has tried to extend to the housing industry, housing prices are still trading sideways and liable to fall even more over the next two years, as the massive shadow inventory of foreclosed homes and soon to be foreclosed homes puts a cap on the upside and also tends to pressure down prices. And renting properties out is not as easy as the uninitiated think it is.

    Another problem with real estate is the taxes. Since you can't just pick up your property and move it if you feel like it, you are always at the mercy of the taxman. The government can always confiscate your property through taxation if all else fails. This is a real problem in states like New Jersey where the bloated government is putting a crippling burden on local property holders.

    Of course one of the responses to this is "they can always confiscate your gold if they want to". Maybe, maybe not. I don't know what the actual response to Roosevelt's gold confiscation order was but I know a lot of people didn't turn in their gold when asked. Why should they? It was written into the U.S. constitution that gold was money, so what gave Roosevelt the right to take their money and give them worthless paper in return?

    I really wish it was easier to hold and store oil, too, for that matter. But it's not. I played with USO a couple of years ago and as far as I'm concerned it sucks, it's only worthwhile as a trading vehicle. Since it's a basket of futures contracts it only makes money in a fairly rapidly rising market, in a down market it's absolutely horrible.
    Jun 7, 2010. 01:38 PM | 4 Likes Like |Link to Comment
  • Increased Risk Appetite Sees Equities Rise; Yen and Gold Fall [View article]
    "Gold will trade at $1,050 to $1,350 an ounce this year, peaking in the third quarter, HSBC analyst James Steel said at a conference in London (Bloomberg)."

    Let's see, is this the same HSBC which has a huge apparently naked short position in precious metals?

    In other words, it's going to go down because we're going to naked short it until it does.

    Thieves, liars and scumbags.

    "Short term weakness could be seen again if equity markets come under pressure but the medium and long term fundamentals remain sound."

    Correct on the latter, not so much on the former. Gold is now trading as a safe haven asset and going up when equities come under pressure.

    "El-Erian said. Investors should favor high-quality government bonds as a source of income"

    Is this a joke? If Pimco has any brains they should liquidate their bond funds while the getting is good.

    If there's any lesson we should have learned from the past few months (and years) it's that debt is suspect, and right now government debt is, if anything, more suspect than private debt. I wouldn't touch any bond now that was paying less than 10% interest considering the risks that are out there.
    Jun 4, 2010. 01:18 PM | 4 Likes Like |Link to Comment
  • A New York Fed report says - contrary to ratings agencies who say "We did the best we could with available information" - that 16% of subprime-mortgage bonds in 2007 were misrated even using lenient standards.  [View news story]
    If you want to find out what the rating agencies are about, read The Big Short by Michael Lewis.

    The rating agencies should be put out of business and completely reconstituted. They were guilty of fraud in the runup to the sub-prime crisis, they were gamed, manipulated and out and out bribed by Wall Street. They should have ZERO credibility after what happened.
    May 29, 2010. 02:29 PM | 1 Like Like |Link to Comment
  • The so-so response to this week's U.S. Treasury auctions actually is good news, since investors are becoming more discerning and not rushing to the security of Treasurys at any price. "Demand for Treasurys diminishes as risk aversion eases," one trader says.  [View news story]
    Actually, Europe probably will implode, just not overnight. Why that should have anything to do with the price of treasurys is beyond me. The US house of cards is not all that better than the European one.
    May 27, 2010. 03:38 PM | 2 Likes Like |Link to Comment
  • Will the BP Oil Spill Destroy the Company? [View article]
    Get real! Will this hurt BP? Certainly. Will it sink them? Absolutely not.

    We still need oil to run our economy. As long as we do, companies like BP are still in the drivers seat.

    BP's shareholders already paid for the cleanup when the stock crashed after the spill. From this point on, the people who are paying for it are going to be the people using gasoline (or as the Brits put it, petrol) to fuel their cars. Because uttimately anything that is done to BP to punish them for what happened will just raise the price of everyone's oil.

    We may not like it, but that's reality.
    May 27, 2010. 03:35 PM | 7 Likes Like |Link to Comment
  • The Must-Know Path to Hyperinflation [View article]
    The political will was there in the early 80s to deal with the problem at that time.

    There is no actual political will left in DC anymore. Not one iota.
    May 27, 2010. 02:34 PM | 8 Likes Like |Link to Comment
  • California Muni Bond ETFs Get a Temporary Reprieve [View article]
    It's not helping Meg Whitman any that she used to work for Goldman Sachs and was a beneficiary of some interesting IPO deals that they were working. Not that it matters, it's all a circus sideshow anyway.
    May 27, 2010. 02:26 PM | Likes Like |Link to Comment
  • Sentiment on Gold Deserves Some Tarnish [View article]
    If they are Sovereigns than each coin contains .2354 troy ounces of gold (the coins weigh more than that because, as you pointed out, they are not pure gold, only 22K).
    May 27, 2010. 02:21 PM | 4 Likes Like |Link to Comment
  • Huge Additions to Gold ETF Inventory [View article]
    And where exactly is this gold coming from?
    May 26, 2010. 02:16 PM | 8 Likes Like |Link to Comment
  • This rush to jump on the bearish bandwagon is not typical of what happens at major market tops, Mark Hulbert says; such tops are far more often characterized by a more stubborn bullishness. In any case, it's rare for the advisory consensus to be right about the market's direction.  [View news story]
    Even contrarians are wrong sometimes. Or early. Or late.

    Either way, this market is playing with fire.
    May 25, 2010. 03:59 PM | 2 Likes Like |Link to Comment