petersl

Gold Stocks vs. Gold: Who's Winning?

Excellent article. I now can divine the metrics behind my decision to own AEM, KGC and IAG as major players in my portfolio. I sold off all GLD, SLV and CEF just prior to reading this article and added more IAG.

No Summer Doldrums for Gold Prices

This article and the comment by cameroni sums up the current consensus opinion among those who follow precious metals and are by nature bullish on gold prices. The question, as generally is the case, is one of timing. I believe that purchasing gold related assets (and silver as well) on any price retreats during the summer months, will be rewarded appropriately as the government stimulus efforts are highly inflationary. The only question appears to be when will this inflation show up.

The Dollar's Tipping Point

The problematical T note auction of last week may be an early harbinger of the Fed's problems in selling new paper to the public. The second auction that followed was more successful,so the jury is still out. This is where the rubber meets the road, if the Fed has problems convincing the public to buy bonds (including the Chinese, Asia in general, and investors worldwide), then, the thrust of the author's article is well aimed. If not, then, we will "muddle through" but inflation is the long term trend, so gold and silver stocks and metal are a relatively safe bet. It will be very interesting to see what happens in May, this year.

Headwinds for Gold?

Ah yes, your thesis is absolutely correct, that gold prices are in large part dependent on the world fiat currency picture i.e., that if all currencies are strengthened by governmental policies (raising short term rates, reducing money supply), and weakened by the opposite. However, to what extent do you believe that the central banks of this world will use that lever in the face of a declining employment picture? The numbers released in the job report on Friday understate the case, see John Mauldin's piece dated June 6, 2008, entitled, "When Bubbles Collide."

Time to Buy Gold

Ditto. It is interesting to note the bubblevision "gurus" and "money honies" on CNBC that tout financials and forecast the impending doom that they almost uniformly predict will befall the commodities markets. Their alleged fondness for scraps of financial legerdemain known as derivatives and those that purvey them (Bear Stearns, Countrywide, Citigroup, Lehman Bros., you know the rest), is legendary. These "gurus" would have you dump your stocks that have a connection to reality (tangible assets, commodity based), and acquire in phalanx fashion, rube "fools gold" in the form of their overpriced, understated danger laden, paper. Well, you can fool some of the people all of the time, but not all of the people all of the time.