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germiller

germiller
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  • Gold Prices And Inflation Are Set To Soar [View article]
    If gold were expected to only get to $1,800 by 2017 because of high inflation, it would certainly not be an "investment" worth getting too excited about.

    At $1,800, gold would still be lower than its nominal peak price in 2011. Gold mining company capital management, production cost management and hedging strategies could continue to be so abysmal that the gold mining sector's profitability at $1,800 an ounce could still be very low in comparison to most other industries. So it seems quite possible that a $ held in growth stocks would appreciate more over that same 3 year time.


    How did the BGMI perform during the last great inflationary period in the early 1980s? The BGMI hit a peak in 1980 that would not be broken for roughly 25 years, and it was much lower than that 1980 peak during much of this last great inflationary period. Inflation alone would not convince me to invest a high percentage of my wealth in gold bullion and a portfolio of gold royalty/streaming/mining stocks.
    Jul 22 10:43 AM | Likes Like |Link to Comment
  • Inflation Vs. Deflation [View article]
    You make a good point about the real cost of housing. Residential rent costs did not collapse with housing prices during 2007-2010.

    Referring to this article's key point, that the US is facing the same conditions in debt levels as Japan did in 1989, and that a long period of US deflation is therefore likely - Even a novice who spent 20 minutes researching the demographics, consumer behavior and international trade policies of Japan in comparison to the US would not have come to such a conclusion.
    Jul 18 09:20 AM | 1 Like Like |Link to Comment
  • James Turk: Bursting Money Bubble Could Inflate Gold To $12,000 [View article]
    Exactly - Not much objectivity behind this blog. And while I do expect gold and silver prices to be higher at some point in the future than they are today, as long as the grocery store, gas station, etc. accept my Visa card and paper dollars, they are "money." The "shopkeepers" I know would be confused if I handed them a piece of gold.

    "So when you take your dollars and deposit them in a bank, ...." True, and that is what has created the large banking industry over many hundreds of years. So when Germany took its gold and deposited it in the USA, and the USA did whatever they wanted with it ... and Germany could not get it back when they asked the USA for it - Which is riskier?
    Jul 16 11:05 AM | 5 Likes Like |Link to Comment
  • Why I Bought Arch Coal [View article]
    I held ACI a long time, thinking it was cheap after it dropped from $35 to $15. I got out with my shirt partially intact earlier this year only because I traded the $3.80 to $4.60 swings over the Winter. To keep some exposure to coal, I have a small allocation to NRP and some TCK. I do think ACI will be one of the few survivors. But the regulatory environment for thermal coal is only getting worse and worse, and the thermal coal market has a number of other competitors with cost advantages. So I would only buy ACI again this year at under $3.10 per share - It may well be at that price in the near future.
    Jul 14 09:07 AM | 2 Likes Like |Link to Comment
  • Experts Get The Gold Market Wrong (Again) [View article]
    If you picked any 1-month period in 2012 or 2013, you can easily find the same number of articles expressing similar negative sentiment and outlook on gold prices. A 1-month "track record" is not worth much. The statement in the ETFGuide December 15, 2013 post still applies "Gold has also been a sucker's paradise because people keep buying it at the wrong time and the wrong price, thinking they can make a future profit by being ignorant of the prices they paid."
    Jul 12 09:14 AM | Likes Like |Link to Comment
  • 9 Reasons For Gold This Year [View article]
    Han Jun Low did not experience it from Singapore, but I do believe the USA -2.9% 1st quarter GDP decrease was mostly due to an extremely bad Winter - People could not get to stores to buy things and there were many days of office and even factory closings. That being said, I believe that we are approaching minor stagflation, and when wages start to increase after being depressed since 2008, the USA will have conditions that will help gold prices increase. Could it be like 1979-80? Probably not. But we could surpass $2,000/oz before 2016 is over.
    Jul 5 09:25 AM | 1 Like Like |Link to Comment
  • Week In Review: Gold Ends Up, Despite Jobs Report; Palladium Hits 14-Year High; Oil Correcting; Grains Plummet [View article]
    The thing I cannot understand is why everyone is focused on the unemployment rate's impact on gold, and not seeing the more important trends in stagnant wages, food price increases, the impact of even tiny increases in interest rates on servicing the massive public debt, and the erosion of incentives to work for most all but the highly talented and skilled.

    6.1% unemployment may not reflect the true weakness in the labor market when you look at just one month's number. Those who do not have hot skills and who had money in the USA stock market over the past 5 years have good reason to have given up looking for a job. And, of course, hundreds of thousands of Americas have held out glad hands to capture as much Obama administration welfare state largess as they could grab - The result of never-ending unemployment benefits and very low standards (disability, etc.) to gain handout benefits mean that the incentives for blue collar and drudge white collar Americans to work are steadily decreasing.
    Jul 4 05:04 PM | 2 Likes Like |Link to Comment
  • Chinese Gold Demand Is Twice As Big As World Gold Council Tells You [View article]
    First a few of the world’s largest gold mining companies drop their WGC memberships, stating that they were not able to justify the cost of membership. Now bloggers are saying that the WGC’s China market analysis is off by 100%. Maybe the WGC estimating is flawed and China's demand for gold is over 2,000 tonnes per year. But the supply numbers are just as important (as they always are in every economic marketplace), and I suspect that much more than 2,900 tonnes of gold are being produced annually, largely because mining production in China and Russia is under-reported.
    Jul 4 04:40 PM | 1 Like Like |Link to Comment
  • No, Gold Is Not A Hedge Against A Financial Crisis [View article]
    Saying that the financial crisis ended in June 2009 invalidates the analysis. There were several stages to the financial crisis between August 2007 (sub-prime) and August 2011 (US credit downgrade), and the last stage is the one that matters the most in considering Gold's role as a hedge against financial crises.
    Jul 2 02:06 PM | 1 Like Like |Link to Comment
  • All Hail The Gold Bull [View article]
    Listening for changes in what the widely published financial markets media has to say about sentiment is a waste of time. Those making their living off of a journalism salary generally have insufficient investable funds to impact the market. And the entities with market changing capability do not make decisions based on the sentiment of the popular financial media. My heuristic technique is to do the opposite of what the popular financial media suggests, and it often works, though less so for metals than for cyclical equities.
    Jun 29 11:23 AM | 2 Likes Like |Link to Comment
  • GLD: Maybe It's Time To Go Long? [View article]
    There is no question that sentiment matters, and it matters more in the pricing of Gold and gold mining equities than in virtually all other large markets. I am not hesitant to admit having made wrong guesses about the direction of gold prices over the past 9 months. I think that sentiment is shifting in a way that will lead gold prices to new nominal highs within the next 15 months.
    Jun 23 01:31 PM | Likes Like |Link to Comment
  • Is There An Imminent Bear Market? Don't Ask [View article]
    If we were in a similar bubble. We are not. The high valuations in 1999 were concentrated in a narrow sector, and the overall S&P 500 P/E ratios (e.g., Shiller CAPE, P/E 10) were much higher than they are now.
    Jun 20 09:44 AM | Likes Like |Link to Comment
  • How Much Longer Will The Dollar Remain The Reserve Currency Of The World? [View article]
    IMF Special Drawing Rights? Or a reconstituted SDR basket that included Yuan and possibly other currencies? Is it necessary that a single sovereign nation's currency be the world's reserve currency?
    Jun 11 11:32 AM | 2 Likes Like |Link to Comment
  • The Most Important Takeaway From The ECB Meeting For Gold Investors: The ECB Won't Fail Like This Again [View article]
    I do not think that the ECB's action, which I thought they would take last year, will have much of a positive impact on gold prices. If the Fed takes action to force banks to lend their vast excess reserves, versus sitting on all of the extra money supply created by QE and earning a small return on the Fed Funds rate, that would probably drive gold prices higher.
    Jun 8 10:16 PM | Likes Like |Link to Comment
  • Seasonal Gold Moves: Is This The Catalyst That Gold Needs To Break Out Of Its Trading Range? [View article]
    Well, gold broke out of its trading range today in a big way, dropping like a kilo bar falling through thin air. The seasonal patterns are interesting, but I would not call seasonality in gold prices a "catalyst" - After all they are a "pattern" and the variance around those monthly averages is large in a statistical sense. A big change in wage inflation rates, Western central banks buying gold, and or shocking new news about government debt loads and the threat of insolvency - Those would be catalysts.
    May 27 08:36 PM | Likes Like |Link to Comment
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