Well, that pushes it all the way to Thursday...nearly a week out. Besides this whole thing is gonna cause a lot of trouble so we ought to just blow it off. So, hey, how's gold doin' today?
Noted that more and more buyers are demanding physical delivery of their comex gold and silver. It is a sign that something is coming, sooner rather than later. If is indeed true that there is not enough silver and gold to cover those paper contracts, someone will be left holding worthless paper. More important than ever to take possession of any physical gold. And that includes these new ETF's where someone else is watching over your gold for you.
Nice power move by gold (back to $530) and gold shares in the past 12 hours. It will be interesting to see if the gold cartel will try to beat this jump back down. They do not like jumps of >$6-8 per day.
Feb crude oil seeing trading at access highs; contract is up 76 cents to $61.84 (range is 60.84 to 61.60); Russia cut natural gas deliveries to Ukraine over the weekend, raising concern that Europe's demand for oil may gain as users look for an alternative to gas. However, some energy contacts we spoke w/ think the issue won't become so much of an issue domestically, b/c attempts are already being taken to resolve the problem. This could be why Feb nat gas is off 44 cents to $10.787mbtu (range is 10.596 to 10.948).
Feb heating oil is called a penny higher to $1.7795/gal (1.7592 to 1.7829); Feb H.O. cracks closed Friday up 82 cents to $13.29; Feb gasoline is called a penny higher to $1.7320 (access range is 1.7214 to 1.7460); March gas cracks continue to see the upside we have been looking for as funds begin to position for Spring driving season; March gas cracks rose 95 cents to $14.24 on Friday.
Feb gold starts the new year off on a positive note; currently trading up $3.90 to $522.90 per troy ounce (519.10 to 526 range); speculation that today's FOMC minutes may hint that the end of raising rates may be near is causing traders to bid up the yellow metal. March silver is up strongly; currently up 19 cents to $9.075 (8.91 to 9.12). Silver prices continue to piggyback moves in gold. Watch related stocks (SIL, PAAS, SLW, HL, SSRI, NEM, GG, RGLD) for possible upside momentum.
LME copper inventories rose 2,650 tons to 92,225 metric tons (the highest since Oct 2004). Copper fell $35 in London to $4,330 a ton and the March contract is off 1.4cents on the COMEX to $2.028 per pound. Nickel inventories on the LME rose 300 tons to 36,042 metric tons, causing prices to fall $75 in London to $13,425.
Yesterday the FED released the minutes of their Dec meeting. Many people read the minutes as saying the FED was near the end of its tightening regime. The financial markets exploded and the dollar tanked.
Apparently the FED thinks inflation is under control. The commodity markets had their biggest upside moves in months. Obviously someone is going to be wrong.
Looks like we are in for another volatile year in financial, debt, currency and commodities markets. Yippee!!!
“Apparently the FED thinks inflation is under control. The commodity markets had their biggest upside moves in months. Obviously someone is going to be wrong.”
Cohodk,
My take is the Fed does not have time anymore to worry about inflation, they know they are creating it.
I think what occupies the minds of the Fed folks these days is simply this, “ what is the cheapest rate we can sell all this debt for”
Like any bankrupt creditor with no hope of re- payment the Fed will do what is necessary. Trying to read the Fed these days is a desperate situation, and if I were a short-term investor, I would be very careful trying to read any of the signals from these guys.
The dollar tanked because worldwide debt buyers want more, they will take it in higher interest rates or they will take it with a cheap dollars.
Gold and Silver both will move up as a safe haven from all this paper.
Cracks in the monetary dam? We have discussed this happening for over a year. It is only a matter of time, and if China goes the rest of Asia, including Japan, will not want to be left holding the U.S. debt bag. Here are some key quotes for these statements.
“We want to ensure that the use of foreign exchange reserves supports a national strategy, an open economy and the macro-economic adjustment."
“The regulator also said it would end quotas on the amount of foreign currency Chinese companies can acquire to invest in overseas assets, a decision that removes a bureaucratic hurdle facing companies that plan to make international acquisitions.”
“It is a subtle but clear signal that they are interested in moving away from the US dollar into other currencies, and are interested in setting up some kind of strategic commodity fund, maybe just for oil, but maybe for other commodities,”
What this looks like is not only a reduction in buying U.S. debt but allowing Chinese companies to start on a corporate buying spree using U.S. debt to buy up other companies.
<< <i>What this looks like is not only a reduction in buying U.S. debt but allowing Chinese companies to start on a corporate buying spree using U.S. debt to buy up other companies. >>
So the dollar falls and stocks go through the roof?
Mark Piersall Random Collector www.marksmedals.com
<< <i>What this looks like is not only a reduction in buying U.S. debt but allowing Chinese companies to start on a corporate buying spree using U.S. debt to buy up other companies. >>
So the dollar falls and stocks go through the roof? >>
Sure seems that way. One market timing guru predicted Dow 13,000-14,000 for 2006.
Maybe for the short term stocks will continue up. But they typically ride up on the back of a strong dollar. The US dollar index collapsing to under 0.8 will not be good for stocks. Stocks go up when the dollar is stronger, and also up when the dollar gets weaker? Don't think so.
Gold pulled a fast turnaround today after the it was pushed down to $522. Now touching $540. The fun at the FUN show resumes! From what I hear MS65 Saints are wholesaling at $1350. Smaller gold in MS64 to MS65 is nearly non-existant at bid levels. A friend of mine was trying to buy some and all the offers were 5-10% over bid.
I still believe we are going to see a dip in PM's within the next month. I also believe that once CAFTA kicks into gear the dollar is going to have a rally. The Feds are banking on it (no pun intended). At that point I believe PM's are going to be at a buying point for me. However, we have a new Fed Reserve chief coming aboard and an M3 report going away. I have always used the dollar to determine the price of PM's as a key indicator but, with no more M3, I don't know how economists will determine buy and sell markers for PM's among other things. It still scares me to see PM's climbing at this rate. Too much pressure too fast and the steam has to release.
"So the dollar falls and stocks go through the roof?"
NO
Perhaps I am wrong but I don’t think the Chinese will want to get sucked in by the slick CEO’s that run most American companies, and pay themselves mega salaries even when the company may make no profit.
I think what they will be looking for are WHOLE companies to buy. They might take some large positions at first with the idea of buyouts later.
I am still waiting for an announcement that the Chinese want to buy large mining companies. Why buy Gold at $500 plus? MINE IT!
Gold off to a quick spurt tonight overseas, +6$ to $544. Expect some fireworks this week. At least the odds seem to favor it.
The paper bulls should try to force the market down in NY in the am as is typical. I would think that they don't want to let $550 come too easily. But the trend the past few months has been to take more delivery of PM's. This takes a lot of wind out of the sails of the manipulators who try to force gold down on paper contract selling. I think it is becoming clear to many that there is not enough physical gold or silver to handle the outstanding contracts.
JD, it looks like the gold cartel will be saving their ammo for $575-580 and some anti-gold news spin to anchor to. $580 is supposedly the next pivot point.
Defense/terrorism is a multi-billion dollar (annual) organization, when the supply is low, you must find demand to use it. In the Govt. if you do not utilize the funds allotted to you, you will lose it next year. Now this is not to say there is no terrorism in the world, however, we are running out of reasons for being in Iraq. To change track a bit, IMO, keep an eye on foreign countries (buying gold), oil prices (going up) as well as the dollar (going down), I find this reason enough to diversify into gold.
Yes, the US currently has a policy of defeathism. First we try to defeat terrorism in Afghanstan, then in Iraq, and Iran to possibly follow. We will defeat whoever it takes to control the oil. With Iran soon to open up the Iran Oil Exchange (trading with Euros), you can be sure that US traders and the govt will be very unhappy.
The above link offers some interesting stats towards the bottom part of the article.
- With $120 BILLION one can either buy up all the shares in Google, or buy EVERY legitimate gold mining company on the financial boards. Capitalizations are the same. Hmm, that's a tough choice.
-The money stock (M3) growth rates around the world are indicative of consumer price inflation to come everywhere if not already present. The US has delayed theirs somewhat due to the availability of cheap foreign-made goods and our ability to cook the CPI. This will not last. The US in the past few months has jacked up the M3 growth rate to the point of being almost non-sensical. Guess they want to catch up to everyone else and start monetizing our debt. First one to 20% wins. Note that eventually, all monetary inflation usually leads to equivalent price inflation. Just takes time...sometimes years. But it eventually shows up.
Richard Russell had an interesting point this week about $550 being the exact half way point of the drop in gold from 1980 to 2001. Once over this 50% retracement point, he sees nothing else stopping a return to the previous high. He suspects many hedgers are now trying to unravel their bets before they lose everything. Hence the wild action in gold going up and down $15 at a time over the past few months. Each time the cartel tries to beat the price back down, the previous shorts are buying right back on the dip to unwind their short positions. Today's action in NY was no different. Maybe this 50% point is far more significant than first thought. Link below.
M3 increases around the world. The USA is actually the modicum of financial restraint with this group (lol). At least for now. But....Holy Denmark Batman.
Australia- 9.8% UK - 11.2% Canada - 9.8% Denmark - 16.3% USA - 7.3% Euroland - 8.5%
Today's NY gold market resulted in beating down gold from opening bell until around noon. Then rally back right to $550 only to be turned away at the end. Sure feels like there is a lot of pent up demand looking to buy gold on every $6-15 dip. The market has altered its shape quite a bit since September.
Can you imagine the pain of some of the gold hedgers and miners that sold their production down at the $300 range and now are looking at what it could cost them to finally pay it back? Ouch.
The news that the ECB was not going to raise rates helped the dollar to rally. This pushed gold a bit lower. The Europeans are in a difficult spot. Their economies are a bit sick and they cant lower rates to stimulate them. They also cant raise rates to combat inflationary pressures.
If the US had returned to the gold standard in the 1980's as Mr. Reagan had suggeted,
1. What would the price of gold be today?
2. What would the state of the US economy be?
3. What would we be using as currency today after all of our gold had been exported?
Calgold, if we returned to our pre-1971 gold standard there would likely be no gold left today. The US saw 50% of it's reserves sold by 1971 when Nixon called it quits. Now if we had a hard gold standard where all currency was backed, that would have limited inflation and the fleeing of our gold overseas. While we wouldn't have near as many "paper millionaires" today, I have to think that the economy would be far sounder. It's hard to duplicate the massive credit we heaped upon the world in the 70's, 80's and 90's. Until there is some considerable repercussion post-2005, most would say the experiment of a non-gold standard was a raving success for 20% of the population. The average American and esp the lower half of the middle class is no better off than in the 70's. We've exported much our manufacturing base overseas and now require 2 bread winners from most families to prosper. Workdays are longer and time off is less. It's not all gravy . Only time will tell however how this experiment, started in 1971 ultimately ends.
Even if we had sold off all our gold in the past 10 years to help supress the pog I don't think the US economy would be any different. That much gold could have still kept the price of gold to down around the $300 level and extended the low reached in 2001 by a few years. But even so, the reigns would have been unleased and we'd just be 2 years behind where we are today ($550 gold).
I suppose we'd be using Foxwoods Mashantucket Pequot chips as currency today if we had no gold. Eventually, casino chips will be the only currency left.
Given the global wealth/debt imbalances and (especially) the alarming US debt/GDP ratio, I can't believe that things are as rosy as the stock brokers want us to believe.
For those of you who believe in an "insurance policy" consisting of PM's, what % of your savings (excluding savings "locked away" in 401k/equivalent employer plans) should be (are) in PM's?
Is the 401K a good way to accumilate gold? I understand you can't take physical posession of the gold which makes me a little nervous.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I have an IRA that contains nothing but Gold American Eagles.
I can touch them but the penalty is nasty. If gold blows through the roof, I'd do more than touch them, I'd sell them.
I figure I have them anyway and I can shield up to 20% of my income from taxation. So I may as well use them for that.
I don't know much about 401Ks. A significant portion of my income comes from contract and that allows me to put together a SEP IRA.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
I tend to buy gold stocks more than the metal. Much less Buy/Sell spread. Very often I read someone recommend up to 5% of the portfolio be "diversified" into precious metals. For me, that is ridiculous. If a 5% investment triples in just one year, it still doesn't make enough difference at the portfolio level. When I invest, I invest enough to make a difference.
Fishcooker, I have to agree. For my own case I couldn't see anything less than 15%. And once I got there I still thought it was not enough. Currently I prefer to preach 25-35% in pm's or pm related items...such as numismatic gold. I don't think bullion has the leverage that numismatic coins carry. I have very little bullion but am slowly trying to add to it. That's more calamity insurance. $20 Saints, Libs as well as smaller sized generic gold offers another way to diversify into gold-like holdings.
Caution: I've been wrong more times than right in the past. It would be nice to even up those odds by one more "right" call. And I'm a late-comer to gold...just since Sept 2002 when things hit me right between the eyes to wake me up. Wouldn't affect my sleep one bit if I were 100% into PM's and commodities at this time. Having physical possession of your PM's to me is critical. My 401K does allow 50% to be invested outside the fund, so of course much of that is into PM funds. If things hit the fan, all those ETF's and other contract holders will be looking to find their product....and there won't be enough to go around (i.e. let's get physical, physical, physical.....let's get into physical.....ONJ).
A normal 35 year old guy, with kids, no family money and a $10,000 IRA balance, has no business putting only 5% into anything. A 35 year old guy with $5 million plus an inheritance coming someday, would be different.
I tend to buy gold stocks more than the metal. Much less Buy/Sell spread. Very often I read someone recommend up to 5% of the portfolio be "diversified" into precious metals. For me, that is ridiculous. If a 5% investment triples in just one year, it still doesn't make enough difference at the portfolio level. When I invest, I invest enough to make a difference. >>
Younger people need a core of "savings" to capitalize on compound interest. In the old days this was a sure way to wealth. It probably still is but you need to redefine savings to include a wider array of cash-like instruments like inflation adjusted bonds, foreign cur- rency (stocks), and gold/ silver. Speculating with the rest of your money is great since you are looking for the big wins but you will hit some big losses as well. Most of us won't have the time, income or inclination to start from scratch numerous times.
Comments
Tom
roadrunner
Not to be opened by the "faint of heart"
try to beat this jump back down. They do not like jumps of >$6-8 per day.
This should give a nice kick-off to the FUN show.
roadrunner
Feb heating oil is called a penny higher to $1.7795/gal (1.7592 to 1.7829); Feb H.O. cracks closed Friday up 82 cents to $13.29; Feb gasoline is called a penny higher to $1.7320 (access range is 1.7214 to 1.7460); March gas cracks continue to see the upside we have been looking for as funds begin to position for Spring driving season; March gas cracks rose 95 cents to $14.24 on Friday.
Feb gold starts the new year off on a positive note; currently trading up $3.90 to $522.90 per troy ounce (519.10 to 526 range); speculation that today's FOMC minutes may hint that the end of raising rates may be near is causing traders to bid up the yellow metal. March silver is up strongly; currently up 19 cents to $9.075 (8.91 to 9.12). Silver prices continue to piggyback moves in gold. Watch related stocks (SIL, PAAS, SLW, HL, SSRI, NEM, GG, RGLD) for possible upside momentum.
LME copper inventories rose 2,650 tons to 92,225 metric tons (the highest since Oct 2004). Copper fell $35 in London to $4,330 a ton and the March contract is off 1.4cents on the COMEX to $2.028 per pound. Nickel inventories on the LME rose 300 tons to 36,042 metric tons, causing prices to fall $75 in London to $13,425.
Knowledge is the enemy of fear
Apparently the FED thinks inflation is under control. The commodity markets had their biggest upside moves in months. Obviously someone is going to be wrong.
Looks like we are in for another volatile year in financial, debt, currency and commodities markets. Yippee!!!
Knowledge is the enemy of fear
Cohodk,
My take is the Fed does not have time anymore to worry about inflation, they know they are creating it.
I think what occupies the minds of the Fed folks these days is simply this, “ what is the cheapest rate we can sell all this debt for”
Like any bankrupt creditor with no hope of re- payment the Fed will do what is necessary. Trying to read the Fed these days is a desperate situation, and if I were a short-term investor, I would be very careful trying to read any of the signals from these guys.
The dollar tanked because worldwide debt buyers want more, they will take it in higher interest rates or they will take it with a cheap dollars.
Gold and Silver both will move up as a safe haven from all this paper.
coynclecter
Great quotes !!!!
<< <i>http://www.fame.org/NotableQuotes.asp >>
Looks like talk of our demise has occured for centuries.
Knowledge is the enemy of fear
Knowledge is the enemy of fear
The inevitable was bound to happen.
China signals switch in reserves away from dollar - Financial Times
Cracks in the monetary dam? We have discussed this happening for over a year. It is only a matter of time, and if China goes the rest of Asia, including Japan, will not want to be left holding the U.S. debt bag. Here are some key quotes for these statements.
“We want to ensure that the use of foreign exchange reserves supports a national strategy, an open economy and the macro-economic adjustment."
“The regulator also said it would end quotas on the amount of foreign currency Chinese companies can acquire to invest in overseas assets, a decision that removes a bureaucratic hurdle facing companies that plan to make international acquisitions.”
“It is a subtle but clear signal that they are interested in moving away from the US dollar into other currencies, and are interested in setting up some kind of strategic commodity fund, maybe just for oil, but maybe for other commodities,”
What this looks like is not only a reduction in buying U.S. debt but allowing Chinese companies to start on a corporate buying spree using U.S. debt to buy up other companies.
<< <i>What this looks like is not only a reduction in buying U.S. debt but allowing Chinese companies to start on a corporate buying spree using U.S. debt to buy up other companies. >>
So the dollar falls and stocks go through the roof?
Random Collector
www.marksmedals.com
<< <i>The inevitable was bound to happen.
China signals switch in reserves away from dollar - Financial Times >>
The dollar is close to falling through the 200-day moving average as I type this.
<< <i>
<< <i>What this looks like is not only a reduction in buying U.S. debt but allowing Chinese companies to start on a corporate buying spree using U.S. debt to buy up other companies. >>
So the dollar falls and stocks go through the roof? >>
Sure seems that way. One market timing guru predicted Dow 13,000-14,000 for 2006.
index collapsing to under 0.8 will not be good for stocks. Stocks go up when the dollar is stronger, and also up when the dollar
gets weaker? Don't think so.
Gold pulled a fast turnaround today after the it was pushed down to $522. Now touching $540. The fun at the FUN show resumes!
From what I hear MS65 Saints are wholesaling at $1350. Smaller gold in MS64 to MS65 is nearly non-existant at bid levels. A friend of
mine was trying to buy some and all the offers were 5-10% over bid.
roadrunner
Tom
NO
Perhaps I am wrong but I don’t think the Chinese will want to get sucked in by the slick CEO’s that run most American companies, and pay themselves mega salaries even when the company may make no profit.
I think what they will be looking for are WHOLE companies to buy. They might take some large positions at first with the idea of buyouts later.
I am still waiting for an announcement that the Chinese want to buy large mining companies. Why buy Gold at $500 plus? MINE IT!
Silver 9.08 +0.31
GOT SILVER ?
They are making offers to purchase these companies and energy companies in America and Canada.
The paper bulls should try to force the market down in NY in the am as is typical. I would think that they don't want to let $550 come too easily. But the trend the past few months has been to take more delivery of PM's. This takes a lot of wind out of the sails of the manipulators who try to force gold down on paper contract selling.
I think it is becoming clear to many that there is not enough physical gold or silver to handle the outstanding contracts.
roadrunner
<< <i>I would think that they don't want to let $550 come too easily. >>
There we are - $550.50...
Robert A. Heinlein
the next pivot point.
roadrunner
You will have new leadership in Isreal, that is sure to be tested by the Muslims and Cheney in the hospital. Gold loves uncertaintity.
Knowledge is the enemy of fear
The world continues to get more uncertain.
Knowledge is the enemy of fear
“ The wires have been humming since before the New Year with reports that the Bush administration is planning an attack on Iran.”
I do not think there is any way Bush would attack Iran, but Israel may be another story, I can see them doing just that before the year is out.
Tom
Another fine example of defeatism.
Richard Daughty link
The above link offers some interesting stats towards the bottom part of the article.
- With $120 BILLION one can either buy up all the shares in Google, or buy EVERY legitimate gold mining company on the financial boards. Capitalizations are the same. Hmm, that's a tough choice.
-The money stock (M3) growth rates around the world are indicative of consumer price inflation to come everywhere if not already present. The US has delayed theirs somewhat due to the availability of cheap foreign-made goods and our ability to cook the CPI. This will not last. The US in the past few months has jacked up the M3 growth rate to the point of being almost non-sensical. Guess they want to catch up to everyone else and start monetizing our debt. First one to 20% wins. Note that eventually, all monetary inflation usually leads to equivalent price inflation. Just takes time...sometimes years. But it eventually shows up.
Richard Russell had an interesting point this week about $550 being the exact half way point of the drop in gold from 1980 to 2001. Once over this 50% retracement point, he sees nothing else stopping a return to the previous high. He suspects many hedgers are now trying to unravel their bets before they lose everything. Hence the wild action in gold going up and down $15 at a time over the past few months. Each time the cartel tries to beat the price back down, the previous shorts are buying right back on the dip to unwind their short positions. Today's action in NY was no different.
Maybe this 50% point is far more significant than first thought. Link below.
M3 increases around the world. The USA is actually the modicum of
financial restraint with this group (lol). At least for now. But....Holy Denmark Batman.
Australia- 9.8%
UK - 11.2%
Canada - 9.8%
Denmark - 16.3%
USA - 7.3%
Euroland - 8.5%
roadrunner
Richard Russell - the 50% point
<< <i>Attack on Iran? Another good reason to own gold.
Another fine example of defeatism. >>
Another fine example of blind optimism.
Can you imagine the pain of some of the gold hedgers and miners that sold their production down at the $300 range and now are looking at what it could cost them to finally pay it back? Ouch.
roadrunner
Knowledge is the enemy of fear
1. What would the price of gold be today?
2. What would the state of the US economy be?
3. What would we be using as currency today after all of our gold had been exported?
CG
I'll take a shot at this. Maybe this would explain why we have a $50 dollar gold ounce, $25, $10, $5 dollar gold. It's a guess.
Freak
Another fine example of defeatism. >>
Another fine example of blind optimism.
Hey, you never know, something bad could happen.
1. What would the price of gold be today?
2. What would the state of the US economy be?
3. What would we be using as currency today after all of our gold had been exported?
Calgold, if we returned to our pre-1971 gold standard there would likely be no gold left today. The US saw 50% of it's reserves sold by 1971 when Nixon called it quits. Now if we had a hard gold standard where all currency was backed, that would have limited inflation and the fleeing of our gold overseas. While we wouldn't have near as many "paper millionaires" today, I have to think that the economy would be far sounder. It's hard to duplicate the massive credit we heaped upon the world in the 70's, 80's and 90's.
Until there is some considerable repercussion post-2005, most would say the experiment of a non-gold standard was a raving success for 20% of the population. The average American and esp the lower half of the middle class is no better off than in the 70's. We've exported much our manufacturing base overseas and now require 2 bread winners from most families to prosper. Workdays are longer and time off is less. It's not all gravy . Only time will tell however how this experiment, started in 1971 ultimately ends.
Even if we had sold off all our gold in the past 10 years to help supress the pog I don't think the US economy would be any different. That much gold could have still kept the price of gold to down around the $300 level and extended the low reached in 2001 by a few years. But even so, the reigns would have been unleased and we'd just be 2 years behind where we are today ($550 gold).
I suppose we'd be using Foxwoods Mashantucket Pequot chips as currency today if we had no gold. Eventually, casino chips will be the only currency left.
roadrunner
<< <i>I suppose we'd be using Foxwoods Mashantucket Pequot chips as currency today >>
Isn't Jack Abramoff working on that?
CG
For those of you who believe in an "insurance policy" consisting of PM's, what % of your savings (excluding savings "locked away" in 401k/equivalent employer plans) should be (are) in PM's?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I can touch them but the penalty is nasty. If gold blows through the roof, I'd do more than touch them, I'd sell them.
I figure I have them anyway and I can shield up to 20% of my income from taxation. So I may as well use them for that.
I don't know much about 401Ks. A significant portion of my income comes from contract and that allows me to put together a SEP IRA.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
I tend to buy gold stocks more than the metal. Much less Buy/Sell spread. Very often I read someone recommend up to 5% of the portfolio be "diversified" into precious metals. For me, that is ridiculous. If a 5% investment triples in just one year, it still doesn't make enough difference at the portfolio level. When I invest, I invest enough to make a difference.
Now your talkin'. Diversification is a great way to achieve AVERAGE returns. Smoe people are happy with that....not me!!!
Knowledge is the enemy of fear
Caution: I've been wrong more times than right in the past. It would be nice to even up those odds by one more "right" call.
And I'm a late-comer to gold...just since Sept 2002 when things hit me right between the eyes to wake me up. Wouldn't affect my sleep one bit if I were 100% into PM's and commodities at this time.
Having physical possession of your PM's to me is critical. My 401K does allow 50% to be invested outside the fund, so of course much of that is into PM funds. If things hit the fan, all those ETF's and other contract holders will be looking to find their product....and there won't be enough to go around (i.e. let's get physical, physical, physical.....let's get into physical.....ONJ).
roadrunner
I think it depends on
A) your account balance
and
C) where you have been
A normal 35 year old guy, with kids, no family money and a $10,000 IRA balance, has no business putting only 5% into anything. A 35 year old guy with $5 million plus an inheritance coming someday, would be different.
<< <i>what % of your savings
I tend to buy gold stocks more than the metal. Much less Buy/Sell spread. Very often I read someone recommend up to 5% of the portfolio be "diversified" into precious metals. For me, that is ridiculous. If a 5% investment triples in just one year, it still doesn't make enough difference at the portfolio level. When I invest, I invest enough to make a difference. >>
Younger people need a core of "savings" to capitalize on compound interest. In the old
days this was a sure way to wealth. It probably still is but you need to redefine savings
to include a wider array of cash-like instruments like inflation adjusted bonds, foreign cur-
rency (stocks), and gold/ silver. Speculating with the rest of your money is great since you
are looking for the big wins but you will hit some big losses as well. Most of us won't have
the time, income or inclination to start from scratch numerous times.
When my mother was 55, she put her entire retirement and savings portfolio into a single stock. All $7000 of it.
It made no difference if all was lost.
Robert A. Heinlein