Sweep…a big thanks too. You definitely got the party started.
I’m just messing around. HO was from my post, and I didn’t want to get robbed. Edit: For additional reading on PMs, really all you need to do is scroll through the links on the left hand side of Zero Hedge. Of course, they’re all bullish on PMs and bearish on everything else, so it’s just a little biased…
Yeah, I don’t get credit for HO, but it was an interesting read. Thanks.
equity_analyst: are you saying you think the USD is going to collapse?
Good day to purchase for the gold bugs as it is 5% cheaper than it was yesterday and 10% cheaper than the day before. Anyone buying?
Not ahead of the Fed. I have no idea what Uncle Ben is going to say on Friday, but I’m fairly certain it won’t be well received. If he does announce a substantial (say >$500B) QE3, then silver and gold will go parabolic. No mention of any QE3 and they could really get crushed in the near term.
I’ve been hurt a bit, and regret not acting on my impulse to trim the position a bit, because the latest runup did seem to be unusually rapid, and that’s often a good sign to trim. I think it’s still ok to have gold in a portfolio as long as one doesn’t think of gold as a “safe asset.” It’s in the portfolio not because it’s safe, but because there is a macro driver for it.
bchadwick Wrote: ------------------------------------------------------- > I’ve been hurt a bit, and regret not acting on my > impulse to trim the position a bit, because the > latest runup did seem to be unusually rapid, and > that’s often a good sign to trim. > > I think it’s still ok to have gold in a portfolio > as long as one doesn’t think of gold as a “safe > asset.” It’s in the portfolio not because it’s > safe, but because there is a macro driver for it. As long as global debt / global GDP is going in the wrong direction and we have a central banking cartel that is willing to print and print and print to defend our insolvent banking system, them gold will continue to move higher. At the end of the day though, one should not think of gold as worth x $USD or x $EUR, but in ounces or grams, or tons. Of course, this is only true if you already have a hoard that you are sitting on, and are not actively acquiring any more.
ManMythLegend Wrote: ------------------------------------------------------- > equity_analyst: > > are you saying you think the USD is going to > collapse? That scenario is a follow on to my base case scenario yes, but I put a low probability on it happening in the near term–say the next 12-18 months. I own gold because I understand who’s interests the central banks have in mind when setting monetary policy–one hint, it isn’t you or I. The Fed will do whatever it can to protect the money center banks, this notion about a dual mandate is bullshit, they are there to protect the banks, period. This means they will print, monetize and intervene at all costs to keep this ponzi scheme alive. Our global debt levels are unsustainable, so it is either default, or inflate. My predition is that we inflate–that is how we will deal with the debt. Gold under this scenario will only go higher.
equity_analyst Wrote: ------------------------------------------------------- > Gold under this scenario will only go higher. At what price would gold be fairly valued for your scenario?
Dwight Wrote: ------------------------------------------------------- > equity_analyst Wrote: > -------------------------------------------------- > ----- > > Gold under this scenario will only go higher. > > > At what price would gold be fairly valued for your > scenario? Absolutely no joke, $5,000/oz.
OK was honestly curious not trying to be a jerk (unlike the post I put above that haha).
According to this random article I found there are about 158k tons of gold in the world, or 5,079,817,925 oz. http://www.coinweek.com/bullion-report/how-much-gold-is-there-in-the-world/ So at $5k an oz the total world supply of gold would be worth $25.3 Trillion in today’s dollars if my calculations are correct. World annual GDP is about $62T. The total market capitalization of all the equities in the world is about $48T. The total market capitalization of all the bonds in the world is about $97T. It is interesting to put these things into market cap perspective to see what they mean. Could a shiny yellow metal that would fit into an office building be worth more than half of the global stock market?
You just can’t say whether the price of gold is expensive or cheap relative to it’s intrinsic value. Therefore it is speculation and not investment. A thesis based on macro grounds is speculation at the end of the day - you are trying to guess the future. Trading in gold is done on the voting machine principle rather than the weighing machine principle. As long as you treat it as a speculative trade rather than an investment then fine. From a portfolio point of view, negative correlation properties may not always hold although I understand the rationale why it should versus financial assets. Problem as we have seen is when investments do not behave as they should and you have to explain losses to your investors.
Gold is a great store of value! Just look at the last time everyone was freaked out about inflation. People who were lucky enough to buy Gold in 1980 for over $2,000/oz in inflation adjusted price probably feel great about their investment now… Quiz: If you put $1 into a gold position in 1978 at $200/oz and at the same time invested $1 in the S&P which investment would be worth more today? Spoiler: The S&P investment (assuming reinvested dividends) would be worth approximately $31 today in nominal value. The $1 in gold would be worth just over $9. Yah Gold!
Sweep the Leg Wrote: ------------------------------------------------------- > Dwight Wrote: > -------------------------------------------------- > ----- > > equity_analyst Wrote: > > > -------------------------------------------------- > > > ----- > > > Gold under this scenario will only go higher. > > > > > > At what price would gold be fairly valued for > your > > scenario? > > Absolutely no joke, $5,000/oz. Why $5,000 Sweep? Any particular reason for that figure? Why not $10,000?
newsuper Wrote: ------------------------------------------------------- > Sweep the Leg Wrote: > -------------------------------------------------- > ----- > > Dwight Wrote: > > > -------------------------------------------------- > > > ----- > > > equity_analyst Wrote: > > > > > > -------------------------------------------------- > > > > > > ----- > > > > Gold under this scenario will only go > higher. > > > > > > > > > At what price would gold be fairly valued for > > your > > > scenario? > > > > Absolutely no joke, $5,000/oz. > > > Why $5,000 Sweep? Any particular reason for that > figure? Why not $10,000? He’s just echoing the hedge fund manager Paulson who called for $5,000 Gold.
Down 10% from high, will fall further when uncle Ben goes for QE3 big time. He has to really imo. Gotta stave off the second great global depression.
Equity, you really think the USD will collapse 18 months from now? So you’re predicting Armageddon?
ManMythLegend Wrote: ------------------------------------------------------- > He’s just echoing the hedge fund manager Paulson > who called for $5,000 Gold. No, I actually had no idea he was calling for $5,000 gold. I was too busy laughing at him for buying fake Chinese tree companies. $5,000 is a popular number out there with many gold investors though. That seems to be the lower end of the estimate range in a optimal bullish gold environment, say 3-5 years out. Personally, I feel a little better about $3,000. Edit: And about the significant pullback this week, CME has hiked gold margins twice in as many weeks. 22% last week and 27% yesterday.