E.D.Hart

Gold: How Long Will the Bull Market Last?

The media constantly cite the $2200 or so that gold may return to on an inflation adjusted basis...but this is using a bogus government supplied cpi index that vastly under reports inflation. Realistically, using constant methodology in inflation calculation, gold will return to 4200 and beyond. I believe that the author may be on to something since prices often over shoot on the down side and the upside.
Long physical gold, and long UXG.

Does Friday's CPI Report Mark an Inflection Point?

In the future there is a real risk that the price of crude will be priced in gold, as well as dollars. There will be those cocuntries that find it too volatile and risky to hold dollars to pay for imports of critical materails, and begin to funnel more of there reserves and trade balances into gold for the sake of trade. This can be done with gold backed derivitives and need not entail direct deleivery of gold.

As a consequence, the dollar runs the risk of plummeting anew. Yes folks, no one knows what the future holds, but surely this is a risk to consider. Then we will be staring at higher rates and higher inflation--stagflation is indeed a real threat.

Richard Russell: Bear Market Remains in Force

Jimbo,
Thanks for responding--as a proud teacher, libertarian, and history/literature buff, I can tell you with absolute confidence gained from experience that sarcasm is a very offensive weapon (both senses of the word intended) .

Mark Twain, Shakespeare, et. al. Sarcasm is great stuff. I fully expect to get way more negative hits than positive, but so what? It actually puts the other person on the defensive---and every so often stimulated more thinking than a straight argument.

So, there you go, I couldn't disagree more. I abhor hypocrisy, and sarcasm seems one way to get people to think about it where they wouldn't otherwise.

No Gold Bubble

I agree with most of what you say, except the part about silver. I expect slver to rally more than gold as economic activity picks up minimally. Silver does indeed have monetary characteristics.

Richard Russell: Bear Market Remains in Force

It is best to keep most political discussion out of economic discussion...but because the current crisis is partly the result of politicians...lets go hunting for people to blame. (also because of some previous posts)

1) Obama the Socialist---this is a good one. Wasnt it the bailout of Wallstreet banks (socialsm) proposed by the other guy that was in that big house for 8 years?

2) Taxes = bad = confiscation= socialism. This is some good critical thinking. So when we fight two wars, one of them unnessary, triple the nations balance sheet debt, and cut taxes, this is smart money management right? Taxes are bad, but debt that drives up taxes in the future is good? Taxes are bad, but massive war spending, medicare spending, and wall street bailout spending is good?

I dont know, but it almost seems like taxes and spending are, like somehow, ahhh, related.....

3) The best course of action would be no taxes--then we could default on our debts, and go back to bartering, hunter gathering, and anarchy---the only real freedom. Ill be happy then because their wont be evil taxes and evil government.

4) Clearly the answers are keep lowering taxes, until you run out of ideas (oops, aready there) keep talking about the F word ()"Freedom" as a patriotic slogan rather than a real idea--so its citizens cant see the wizard behind the curtain reducing our real freedoms--such as the GREAT PAtriotic act, FISA reform, and the necessary and oh so useful wiretapping against our citizens. Clearly there should only be one political party--the Republicans who are the nations vanguards of freedom and democracy.

5) Please do no critical thinking when reading or listening to political ideas, just go with whatever is consistent with the winning ideology and the current zeitgeist. Then we can get back to blaming and self righteousness, instead of all this problem solving that is currently going on, messy though it may be.

Investors Staying Away from Banks; Gold Attempts to Break Downtrend

Wow, Ive seen that chart before Chris, but it is good to be reminded of what can happen--twenty years of flat to falling markets.

Now that weve likely seen the end of (or nearly so) falling interest rates, the next decade or so looks like we may have in store higher rates and higher inflation (after defaltionary hurricane has passed). Currently, by some accounts we have negative interest rates.

Gold does well when interst rates are below or close to inflation, and the threat of you principal being erroded is greater than the reward of the interest paid.

The 1970s were good for gold because inflation was above interest rates much of the time, until Volker broke inflations back.

1980s through 2000 (roughly) interest rates were falling along with inflation. It didnt pay to hold gold as equities did well, and interest bearing bonds did better than inflation.

Going forward this is likely to be reversed --equities and bonds will likely falter and gold will outperform again for ten years or longer.
Just a thought. IMHO.

Is It Time to Buy Gold?

Gold is not an investment? I guess it depends on who you talk to. My gold broker made 4.5 million dollars last year not investing in gold, just buying and selling it as you would stocks. Stocks are not really investments either because they typically are not held for long time periods. (sarcasm intended).

We are in a unique period of history--this global crisis is occurring everywhere and governments everywhere are responding the same--increasing moeny supply, and decreasing rates.

Nothing is certain in this life. There is no doubt we are headed for some deflation. But throguout history goverments have used inflation to monetize debt and keep their hold on power.

A bet on long term, sustained deflation is a bet that governments will act in ways that don't serve their interests.

First Fuel, Now Metals - Forecasts Lowered

Consider the phrase "redistribution of wealth". What does it mean?

Here in Alaska, the GOP is the predominant party. Something like 70% voted Bush lin 2004. Also heavy libertarian base. You'd think that those ideals would manifest themselves in being against "redistribution of wealth". Well we are and we are not. We are in theory, and in ideology, and whenever our taxes go to someone elses project. Such as when we resent the poor, the unemployed, the uneducated....these people should not get our wealth, that much is clear. Why should they? They didnt work for it, and it encourages them to be lazy. So, we are aghast at our taxes used to reditribute wealth to the undeserving.

But, our new rock star govenor, Sarah "Marerick" Palin has sucessfully stood up to oil companies (translation: she raised taxes on them) and she successfully increased this years dividend to include a supplemental $1200 dividend, in addition to the regular $2000 dividend (amounts are rounded).

Its not just hypocrisy, its pandering, buying votes, dishonesty, and utter nonsense to say that the GOP is against the redistribtution of wealth. (at least in Alaska).



True story, I am not making this up as Dave Barry says: My family received $9600 from the state of Alaska this year just for being a resident. Money was redistributed from the oil compnaies to the residents, no matter what the need.

Palin is a fine socialist.

What they should say in the Lower 48, if they were honest is that: "we are agaisnt the redistribution of wealth to those we decide are not politically to our advantage to reward." Or, we are against the redistribution of wealth to those we decide don't vote heavily for our canidates" or "we are against redistribution of wealth for those we decide are undeserving, and for redistirbution of wealth to those we believe are deserving."

Oh, and by the way, those who are deserving are those who need a bailout--those job creating and upstanding bankers who currently are a little short. We can redistribute some wealth to them, thats ok, because they are deserving.

See?

And please dont respond that it isn't a bailout of taxpyers dollars because the governement will be paid back, and probably make a profit to boot. (as a Barrons editorial has recently claimed ). After all is said and done the best economists are predicting a 1.5 trillion price tag--for all costs from the current crisis. Some of that costs will be recouped, but not all...

and thats redistribution baby.

Post-Bailout Investing: The Big Picture

Thanks Chris, great stuff.

Gold May Not Be Just Another Commodity Anymore

Lets compare those who held cash from 1980 to those who held gold from then on to today.

Gold outperformed the US dollar.

Thats not religious thinking, thats two types of money--with gold performing better than the fiat currency.

Risk Management in Trending Markets

I wish all SA writers were as lucid and straightforward. Excellent article.

If This Comes True, You'll Be Glad You Own Gold & Silver

The British were the greatest Empire the world had ever seen up to that point, with unassailable naval power, and the greatest economic power to boot.

Hence the saying, "the Sun never sets on the British Empire".

It was common knowledge of all, and nearly universally believed that the British Pound Sterling would reign supreme over the new millennium of the 20th Century, as it had in the 19th Century.

It was simply inconceivable to the Brits and their trading partners that the Sterling wouldn't be the reserve currency of the world for at least another 1000 years.

Until, the dollar came along and replaced it.

Oops, never mind.

Those who hold their wealth in dollars are at risk of repeating this awful history.

Why not diversify your currency exposure?

Getting Out of Leveraged Gold

Gold is the only currency to survive the millenia...I spent an hour reading several financial magazines, and newspapers at the airport today...they all made essentially the same old arguments against gold...because its been a poor investment over the last 25 years.

Wow...how about looking at economically relevant periods in history...like the last 7 years? Or look at periods in time when gold did very well and compare economic conditions then to now...and compare?

All the media gets the gold story wrong, telling people its risky, time to take profits at $400, er $500, er $600, er I mean $700, ummm at 800$ per ounce, oops I mean at $900,... oh never mind.

Gold may be lousy in certain types of economic environments, but that is not an argument against gold..bonds are lousy in certain econmic environments also, but we dont hear the press eschewing bonds, (for the most part) ...]

Real estate may be a lousy investment for nest ten years, so where are the experts calling for people to get out of their risky real estate and minimizing its place in your portfolio to 5%?