Back up the truck, the time to buy Gold is NOW (banks are selling but we're buying!); Guaranteed - Gold is the ULTIMATE long term investment (we can't give you the same guarantee for stocks)
Tweet Topic Started: 11 Oct 2013, 04:29 PM (3,439 Views)
US stocks were up 2% this morning. See, we told you not to panic. We hope you took our advice and used the past few days of pullback to buy stocks.
But we’re not looking at stocks today. Instead we’re looking at something we’ve neglected for far too long.
Winston Churchill once said of Russia that ‘it is a riddle wrapped in a mystery inside an enigma.‘
In other words, the boozing old philanderer didn’t know what to make of Russia. That probably explains why the mass murdering Josef Stalin had the better of Churchill during the Second World War.
But if Russia is a riddle wrapped in a mystery inside an enigma, then gold is all of those things, with the added complexity of being locked in a box.
Certainly US Federal Reserve chairman Dr Ben S Bernanke doesn’t understand gold. He admitted as much to the US Congress in July. So if one of the world’s most important moneymen doesn’t get gold, what chance does anyone else have?
Fortunately, it’s not that difficult. Dr Bernanke just isn’t trying…or doesn’t want to try to understand it…
As Bloomberg reported this week:
‘Bernanke, who holds economics degrees from Harvard College and the Massachusetts Institute of Technology and led the Federal Reserve through the biggest financial disaster since the Great Depression, told the Senate Banking Committee in July that “nobody really understands gold prices and I don’t pretend to really understand them either.”‘
You’re not dumb if you hold degrees from Harvard and MIT. That’s for smart people. So why doesn’t Dr Bernanke understand gold and the gold price?
There’s a simple answer for that. It’s not that he doesn’t understand it, it’s that he can’t admit to understanding it. To admit to understanding the gold price would mean admitting that printing money devalues the money already in circulation and causes the price of assets such as gold to rise.
There’s no way in the world Dr Bernanke would ever admit to that.
Big Banks Lining Up to Sell Gold
But right now Dr Bernanke isn’t the only one to give gold the cold shoulder. With all the volatility in stock prices and interest rates, and political instability in the US and Europe, investors just can’t tell what’s bullish and bearish for any asset class.
Is the US government shutdown good or bad for stocks? Is it good or bad for gold? Will a positive resolution be good or bad for either asset? And likewise for no resolution?
Really, it’s anyone’s guess. In fact, it’s probably fair to say that investors will only decide the answer to those questions when the resolution (or non-resolution) arrives.
The market’s reaction could come down to whether most traders got out of bed on the wrong side or whether they had a good journey into the office.
And we’re not kidding either. It’s why on two different days you can see the same excuse given to explain why the market went up one day and down the other.
But whatever the reality, it seems the big investment banks aren’t about to risk too much of their money on gold. As Bloomberg reported yesterday:
‘Gold will extend losses into 2014 amid expectations the Federal Reserve will pare stimulus as the U.S. recovers, according to Morgan Stanley, adding to bearish calls from Goldman Sachs Group Inc. and Credit Suisse Group AG.
‘“We recommend staying away from gold at this point in the cycle,” Melbourne-based analyst Joel Crane said in a video report received today. Bullion will average $1,313 an ounce in 2014, down from the $1,420 forecast for this year, Morgan Stanley said in its quarterly metals report on Oct. 7.‘
Don’t underestimate the power of JP Morgan, Goldman Sachs and Credit Suisse. These guys have a lot of influence on asset prices. They can put a whole lot of money to work quickly to affect the price of stocks, interest rates and gold.
But that doesn’t mean they always get it right.
So Much for the Harvard Education
The big banks have talked down gold for most of the past 10 years, although even they jumped on board as the commodities boom flourished through to the end of 2007.
Now it’s the opposite. It’s hard to find anyone prepared to bet on a rising gold price. That’s not surprising. As we wrote to you yesterday, a big part of investing is psychology.
Seeing as the gold price has trended downwards since peaking in 2011, and is down 20% in Aussie dollar terms in the past year, it’s only natural that many investors have had enough. That’s the same with any asset. If you hold a stock that’s done nothing but sink lower and lower, eventually you’ll give up on it.
That’s one reason why gold could go lower, even though logically with the torrent of cash unleashed by central banks, gold should go higher. But that’s the psychology of the moment.
Even so (and call us mad if you like), whatever happens to the gold price, there is zero chance we will sell even one single ounce of our gold holding. In fact there’s a greater chance that we’ll top up our holding.
After all, gold is the ultimate long term investment. Unlike a stock portfolio, we know gold will still be around in 40 or 50 years – 100% guaranteed.
But we can’t put the same guarantee on stocks, even the bluest of blue-chip stocks. There’s no guarantee they’ll still be around in their current form 50 years from now. And that’s coming from someone who’s as bullish as you can get when it comes to stocks.
Gold is for the long term. We’ll always own it. It’s an absolute certainty that the US Federal Reserve will keep rates low for the foreseeable future and print more money.
It’s only a matter of time before investors wake up and rediscover that the reason for buying gold – the reason Dr Bernanke won’t admit to understanding – is to protect your wealth from the constant and persistent devaluation of paper money.
It’s so simple we just can’t believe a Harvard man like Dr Bernanke doesn’t get it.
Even so (and call us mad if you like), whatever happens to the gold price, there is zero chance we will sell even one single ounce of our gold holding. In fact there’s a greater chance that we’ll top up our holding.
you're beyond mad Kris - that ship has sailed. In all seriousness can i ask what you have to gain from writing articles like this?
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
When an average person says that they understand something that an educated and smart person says they do not understand. almost inevitably, it's because the average person has made a mistake and deluded themselves.
This is the case here, and now Kris is trying to drag others into his mistake, perhaps to bail himself out of it, perhaps to convince others later, that "everyone thought it was going up".
Property speculation is a type of gambling... But everyone knows that in gambling, the house always wins in the end.
Even so (and call us mad if you like), whatever happens to the gold price, there is zero chance we will sell even one single ounce of our gold holding. In fact there’s a greater chance that we’ll top up our holding.
you're beyond mad Kris - that ship has sailed. In all seriousness can i ask what you have to gain from writing articles like this?
You don't understand gold mel so pretending you do. Gold was under $800 australian prior to the GFC and now is $1350. The fact that it ran up to $1850 means that it overshot, nothing more. When the next phase of the great global debt unwind falls upon us gold will no doubt move higher again but for us that bought near the gfc it really doesn't matter if it does.
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
This oh shit oh shit person usually posts & runs, does he ever answer queries????
I'm thoroughly not confident with gold & it's just using my common sense to what I've been reading.
You haven't got me backing up the truck. I think I'll stick to what I know best (which is property ) & do a burn out from gold .
There's not many people singing it's praises.
I'm still open to learning but.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$ It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do. Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
You don't understand gold mel so pretending you do. Gold was under $800 australian prior to the GFC and now is $1350. The fact that it ran up to $1850 means that it overshot, nothing more. When the next phase of the great global debt unwind falls upon us gold will no doubt move higher again but for us that bought near the gfc it really doesn't matter if it does.
i know friday night is drink night Goldie but ffs keep it together man
yes im aware of the price history and support levels which don't actually mean anything and I know you bought when it was cheap but please know that when / if you take a bath on it your attitiude may shift slightly.
apart from gold being shiny (though not as shiny as other man made materials) it doesn't have much more intrinsic value than a worthless Tally stick in 2013.
There is too much above ground to warrant any talk about industrial use and you still haven't answered my question, which is:
"in a hypothetical doom scenario, why would all the available fiat dollars chase gold over food, water and shelter or energy?" (this is the 4th time im asking the question)
pizza's here. Have a great weekend = )
Blondie girl
11 Oct 2013, 08:34 PM
This oh shit oh shit person usually posts & runs, does he ever answer queries????
he never has as far as im aware Blondie (even on his own blog)
he had no problem deleting comments made by others which made more sense than his own drivel though
apart from gold being shiny (though not as shiny as other man made materials) it doesn't have much more intrinsic value than a worthless Tally stick in 2013.
Do you ever wonder why the mainstreem media perspective on gold that you parrot so well is diametrically apposed to the behavior of the world's central banks, that have been filling their vaults with the shiny stuff for the last 6 years? Who do you think knows more about money and wealth, pimply faced reporters recycling 35 year old mantras on gold investment, or the world's leading experts on monetary affairs? If you think about it really hard mel you will see how silly your belief is.
The truth is the wealthy people of this world don't want you or the millions like you to be crowding their ski slopes and Aegean islands. They don't want to see you grow wealthy in the future. So they use the media to herd you into investments that will channel your income to them. It's why every generation retires in poverty, be it the old age pension set, the superannuation set, or now the investment property generation.
Think outside the box (the tv box)
Shadow was hopelessly wrong about the Gold Bull Market. What else is he wrong about?
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