Why I'm Starting to Build Gold Now

Includes: DGP, GLD
by: TraderMark

There are two ways to play the U.S. Banana Republic - short the dollar or long the gold. Since the world is still awash in fear, they are running into dollars (how perverse). So that will be the long-term way to play this; in the short run I am going to finally start building a gold position - I am using the double long ETN (for gold) to get some pop - but it's basically just a straight gold play instead of messing with miners.

GLD is the underlying ETF; I am using [[DGP]] - starting a 3% stake in the low $20s. I'd go bigger but I have to see what the reaction is tomorrow after people have a night to think about things. My belief is sometime in the next week market participants are going to wake up and look over at who they just brought into bed..... and scream "we did what??". But first the drunken revelry (now).

Since DGP is a double ETF, it's like having a 6% stake, effectively.

These are kick-the-can policies that define the US for past 30 years at its best; address the fire in front of you but create a larger one for someone else to clean up later. Another day of feeling sad about the long term future. While everyone else is cheering, to me this smacks of urgent desperation by the central bank.

Disclosure: Long DGP in fund and personal account