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Gold As An Investment?


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we didn't really learn the lesson from this experience. yeah, consumers got their shit together because they were pretty much forced to stop borrowing, but from a government perspective, it's pretty obvious that no one's serious about deficit reduction, or even attempting to make the right policy decision if it happens to be on the opposite side of the aisle. we need another strong slap in the face, apparently.so, maybe in 10-20 years, whenever the next major recession/depression happens, gold will go nuts when the world starts dumping dollars for whatever successor currency. might be the renminbi, though right now it'd be a much worse choice than the euro or the yen.

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we didn't really learn the lesson from this experience. yeah, consumers got their shit together because they were pretty much forced to stop borrowing, but from a government perspective, it's pretty obvious that no one's serious about deficit reduction, or even attempting to make the right policy decision if it happens to be on the opposite side of the aisle. we need another strong slap in the face, apparently.so, maybe in 10-20 years, whenever the next major recession/depression happens, gold will go nuts when the world starts dumping dollars for whatever successor currency. might be the renminbi, though right now it'd be a much worse choice than the euro or the yen.
It will likely be less than 10 years, the US$ has no real way out of it's long term problems. It doesn't matter who wins the white house this year, nothing will change.I can't imagine that the renminbi will be worth much either as there has to be a democratic or other type of revolution in China at some point. All other fiat currencies have the fundamental flaw that they are controlled by politicians that have to buy votes from the masses with hand outs and all parties promise more than is sustainable.
There is none. The price of gold is completely irrational. Basically you are trying to read mind's of other people to figure out exactly how irrational they actually are. Good luck.
It's not irrational, volatile yes, but not any more irrational than a currency controlled by vote buying politicians.
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POG has taken a drop to $1593, about $50 below the 30 day average.Down on European news but fiscal disorder may be a possitve for gold in the longer run.GS calling for $1840 POG calling it the currency of last resort.http://business.financialpost.com/2012/05/10/goldman-sachs-says-gold-is-the-currency-of-last-resort-and-its-going-to-1840/

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greece is only relevant in a scenario where a disorderly default could threaten a bunch of banks. everyone has had sufficient time to insulate against that. I really can't explain why they're in the headlines anymore, other than the media has to talk about something.

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greece is only relevant in a scenario where a disorderly default could threaten a bunch of banks. everyone has had sufficient time to insulate against that. I really can't explain why they're in the headlines anymore, other than the media has to talk about something.
With the socialists winning both France and Greece it opens the door again to breaking up the euro, might as well get it over with and move on.
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With the socialists winning both France and Greece it opens the door again to breaking up the euro, might as well get it over with and move on.
go look up greece's GDP in relation to the other euro countries, and then have a peek at their debt, and research the cuts they have to make to be able to make payments. there actually isn't any uncertainty there at all: they're going to default at some point, and everyone with significant exposure has fully prepared for it. I ask again: why is this in the news?I personally think it just makes for sexy-looking headlines, stirs up the goldbugs, etc. I didn't mention france in my post, so I don't know where that's coming from.
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http://business.financialpost.com/2012/06/04/sprott-perfect-environment-for-gold/ ‘Perfect environment for gold’Jonathan Ratner Jun 4, 2012 – 9:00 AM ET | Last Updated: Jun 4, 2012 10:45 AM ETThe elevated stress levels emerging as a result of the euro zone debt crisis and further evidence that the U.S. economy may be running out of steam has many investors looking to gold for some summer insurance for their portfolios.Friday’s disappointing U.S. payrolls report helped drive the metal up more than 4%, its biggest one-day rally in more than three years. The weak data prompted speculation that the Federal Reserve could pursue a new round of quantitative easing, providing further support for gold above the US$1,600 per ounce mark.Eric Sprott, CEO of Sprott Asset Management, said the recent surge in gold is overdue given the unsustainable leverage among financial institutions and the severe bank run Spain is facing.“It’s the perfect environment for gold,” he said in an interview. “It’s is the ultimate place to be if you don’t want to worry that your currency may be devalued or somebody pulls out of the EU.”Mr. Sprott also noted that Friday’s job numbers helped convince those fooled by good weather earlier in the year that the U.S. economy is not recovering.“There is no growth going on in the United States,” he said, pointing to both weak consumer sentiment and wages, and little activity in financial markets. “The 99% is suffering and now the 1% is suffering.”While Mr. Sprott is bullish on gold itself, he is even more optimistic about gold stocks, noting they have twice the leverage to the metal price.“We have financial chaos, so much so that we all have to assume QE3 is coming, which is just printing money,” he said. “We’re in a very chaotic state and there is really only one safe place to be, and that is precious metals.”
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after this week, I have to wonder what scary monsters are left to keep gold retail going.

 

I'm still happy where the price of gold is, why was this week particularly bad, POG is only down $8?

From it's 2012 peak of $1781 gold is down only 8%

 

2013 could be interesting, Even if gold goes down to $1000 I'm good but I can't see gold going below than say $1400 but the market can be irrational.

 

If gold does go down significantly I might consider holding on to some.

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after some more thought, I think gold probably stays put until the fed makes the transition from easy to tight. vast numbers of people bought it assuming the QEs would create instant inflation. look out below if it doesn't happen.

 

I fully expect gold to go down when interest rates go up, but the FED has now said it will keep interest rates down until unemployment drops say in 2 years? Imagine if interest rates were back to a historic norm of 4-5% interest payments on the $16.4 Trillion would explode which has to be a factor in keeping them down as long as they can.

 

The fiscal cliff really looked like a bit like a canard, taxes have to go up and spending down, they have to sort it out and all they got was a modest tax increase and nothing on the expenditure side.

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I've been there a couple times now and do plan on going back.

One thing that DEFINITELY strikes me about the wealthier Indians in India is that they're still operating with significant cultural immaturity as far as how to handle their newfound wealth. You saw this sort of thing in the United States when we entered the Industrial Age and minted new-money millionaires out of people from very humble backgrounds (when a million meant something). They'd drive around in jewel encrusted cars with gold plated hardware, etc... while the rest of the world looked on, shook their heads and chuckled.

 

You see this kind of comically crass displays of wealth among rich Indians pretty regularly, which in a way says a lot about Indians, seeing as the average wage there is something like $2 a day and there's no doubt that if that sonofabitch walked around an impoverished area in this country, all you'd find left of him was the ghetto ribdogs chewing on his fibulae.

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Gold and silver both off about 10% from their 30 day highs to $1601 and $29.30

The slide could continue through the end of the month,

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Gold still falling down $50 today to $1510, Ag off $1 to $26.47

 

Would not want to fight the trend as this downdraft has momentum, but will be watching for an entrance point sometime over the next couple of months.

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thoughts on this Tweet ?


  1.  
     
    Mark Dow@mark_dow 2h
    Gold is a tax on stupidity. Bitcoin is a tax on paranoid stupidity $GLD

 

Respectfully disagree with the generality but, buying anything that shows clear signs of being over bought can be called "stupidity" AAPL at $705 anyone? It's now at $430 down 39%

Gold is now $1488 off 21% from it's 2011 high of $1900.30 and this is the third time it's approached these lows since then so the case could be made that market has been sideways for about 2 years.

 

http://www.kitco.com.../au1825nyb.html

 

Goldman Sacks lowered their outlook for gold earlier this week and Cyprus announced today that things were worse than ever and that reinforced the idea that they might sell their gold.

 

There were a lot of smart people who were declaring that gold was a "Barbaric Relic" when it was sub $300 but fundamentals pointed up because something like 75% of the world's mines were operating at a loss at that time and it was an obvious buy. To jump in with both feet after a run up of 500% should give anyone pause.

 

The trend is down and as they say "a trend is a trend until it isn't" things could get even more ugly,

 

I'm OK unless it drops below $1350 then I'd be looking at becoming a grinder again.

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Gold taking another big drop today even hitting the 1300's

 

Starting to look like capitulation which is always a temptation.

 

Ag and Pt have been dragged down too and may be a more compelling opportunity because they have more high end industrial/technological uses, Pt mines were closing even before this drop, Pt production is concentrated in South Africa and Russia, and governments don't have big stockpiles that can mess up the market.

 

Still some room to go down but I'm thinking of buying more shares in some of the companies I'm involved with at some point soon, as a good entry point and as a show of support because being an insider I have to report my transactions to the securities commission and our investors are watching for this.

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