GOLD - My Two Cents Worth.......

DoubleEagle59

I've done a lot of research over the past two weeks, reading most PM articles past and present regarding the massive drop in Commodities and I can only come up with one conclusion:

This present time when Gold is at $805/oz/USD and Silver is at $13.08/oz/USD is a HUGE BUYING OPPORTUNITY.

My reasons are as follows.......

1) the main reason, or strong driving trend is that none of the macro economic reasons have changed. The US dollar is still inflating like a clown's helium balloon. US deficit is at record highs. World demand has not abruptly stopped.

2) according to all the PM charts out there, ALL of them are showing gold (and silver) to be strongly over sold and showing a strong buying opportunity.

3) Oil is experiencing a temporary drop in prices and investors are seeing this as a drop in INFLATION (wrong!!) as opposed to just a drop in Oil prices. US gov't are thereby reporting inflation is dead and investors in turn are dumping commodities. This scenario, in my opinion is incorrect and it won't be long, until PM metals start their rise again.

I'm sure there are a few others that will come to mind later but these are the major three.

I'm not trying to guess a bottom in PM prices but one could argue that I have. Either way, I feel that in 2 or 3 years, we'll be looking back at these prices and wished we could have remortgaged the house and put in all into Gold and Silver.

How many times in the past have we experienced these drops in prices and 3 months later the prices are sky high again.

Unfortunately, volotility is one thing that is guaranteed with the PM market.

We just have to trust that this bull cycle will continue its rocky ride to the top.

And when the top arrives the Dow will equal the price of Gold. That's when I'm getting out of PM's and I'll be buying hated Stocks.

jmski52

I don't disagree with anything you said.

If I were in a trading account right now, I would be very twitchy on the potential upside, but also being ready to pull the plug quickly.

Problem is, this kind of market is perfectly designed to get you in, and knock the stuffing out of you, causing panicked selling and locked-in losses, from which recovery is more difficult.

This kind of market is exactly why any committment on the buy side should be done in physical metal, with the intention of holding at least 3 years to see what happens.

secondrepublic

<< <i>I've done a lot of research over the past two weeks, reading most PM articles past and present regarding the massive drop in Commodities and I can only come up with one conclusion:

This present time when Gold is at $805/oz/USD and Silver is at $13.08/oz/USD is a HUGE BUYING OPPORTUNITY.

My reasons are as follows.......

1) the main reason, or strong driving trend is that none of the macro economic reasons have changed. The US dollar is still inflating like a clown's helium balloon. >>



Where do you see inflation? I see the destruction of huge amounts of credit and wealth (i.e., money) that cannot remotely be offset by the alleged "printing" the government is doing. (Little known fact - the vast majority of the money out there is credit created by banks - not physical currency printed by the Treasury.) All of the action by the Fed. to "inflate" is a drop in the huge bucket of credit destruction.

Beyond that, I see wildly falling oil prices and other commodity prices. I see zero increase in people's incomes. I see a worldwide economic slowdown. How on earth does that get you to inflation? If anything, it point to the opposite - deflation.

We've just come out of the biggest orgy of credit creation in our lifetimes. The Gold bugs got that part right, which is why gold went from $300 to $800 in a few short years. But now we're seeing the destruction of a lot of that credit (i.e., money). That's a lot of the reason why air is deflating from the gold bubble.

jmski52

Where do you see inflation? I see the destruction of huge amounts of credit and wealth (i.e., money) that cannot remotely be offset by the alleged "printing" the government is doing. (Little known fact - the vast majority of the money out there is credit created by banks - not physical currency printed by the Treasury.) All of the action by the Fed. to "inflate" is a drop in the huge bucket of credit destruction.

I may not understand it correctly, but my understanding is that Bernake, being a student of the Great Depression stands ready to inflate us out of a deflationary spiral. In my view, that means for every dollar that is destroyed by deflation, Bernake will create a dollar to replace it - otherwise, the banks will refuse to lend credit. Right now, the newly-created dollars keep disappearing down a clockwise rotating black hole. Who knows how much it's ultimately going to take? So, if a $Billion disappears from a CDO who cannot come up with payments, Ben says "voila" - new money for the bank that "created" it in the first place.

That is called "inflation". The imaginary money and credit created in the private sector has disappeared and is being replaced by imaginary money and credit created by the Fed (which incidently, is still a privately-owned corporation, but with powers to create Federal money - wierd, huh?)

If Bernake fails to do this, lending by the banks will totally dry up and the economy grinds to a halt, in a hurry. He obviously wants to do as little of this as he can get away with, and he won't readily admit to doing it, but thus far we have - Bear Stearns, Freddie, Fannie, JP Morgan, IndyMac, WaMu - and anybody else that's in trouble - getting extensions on "loans" from the Fed and having their bogus paper traded for T-Bills. That's "inflation".

You're entirely correct - the printing press only accounts for 10% (or less) of the cash outstanding. The bigger issue is - who pays the interest and principal on those T-Bills when they all come due? We both know the answer to that one, don't we?

cohodk

Lobster prices are down 25% over the last year. I feel a road trip to Maine coming on.

OneCent

<< <i>Lobster prices are down 25% over the last year. I feel a road trip to Maine coming on. >>








DoubleEagles59, with all due respect, do you ever NOT see a buying opportunity when it comes to metals?



edit:grammar

RedTiger

So are you buying? If so, what kinds of bullion are you buying? Are you moving back into silver? Are you able to get any decent amount without paying $3 to $4 per ounce premiums like some are?

Or have you been "all in" for months now, riding the bull all the way down, and are now trying to rationalize the position? I remember your silver/gold switch trade (which I hope you paid your taxes on), but I can't recall any activity since then.

silver/gold switch message in Feb 2008

jmski52

So are you buying? If so, what kinds of bullion are you buying? Are you moving back into silver?

I know that you've addressed the question to DoubleEagle, but allow me.

I was in the process of liquidating retirement holdings in order to buy physical metals when this bout of price declines began. My current position in physical metals is already significant, so I've taken some paper losses (after the paper gains of last year).

My funds are ready to deploy, but I see no hurry. I'm letting the market gyrations play out first. Right now, the psychology is working against pms, and there's no point in fighting it.

I won't be picking a bottom. In fact, I'll probably leave some money on the table when it goes back up. If it doesn't go back up, the funds will remain in cash. There's no hurry required. In the end though, I'm getting out of paper. There's simply no reason not to.

DoubleEagle59

<< <i>So are you buying? If so, what kinds of bullion are you buying? Are you moving back into silver? Are you able to get any decent amount without paying $3 to $4 per ounce premiums like some are?

Or have you been "all in" for months now, riding the bull all the way down, and are now trying to rationalize the position? I remember your silver/gold switch trade (which I hope you paid your taxes on), but I can't recall any activity since then.

silver/gold switch message in Feb 2008 >>



Without getting into my personal finances, It's obvious to tell where my heart lies.

Let's just say I'm in it for the long haul and only time will tell if I'm right or wrong.

And don't worry, I'm old enough to realize that it's impossible to time the peak of the market, so I have a well thought out plan of exiting my PM positions.

roadrunner

Where do you see inflation? I see the destruction of huge amounts of credit and wealth (i.e., money) that cannot remotely be offset by the alleged "printing" the government is doing. (Little known fact - the vast majority of the money out there is credit created by banks - not physical currency printed by the Treasury.) All of the action by the Fed. to "inflate" is a drop in the huge bucket of credit destruction.

First of all it takes time...literally years to see the price increases that unbridled monetary inflation brings. So hang in there.

The monetary press printing that so many are used to is not a player in this game. The FED is prepared to pass our loans (at US tax payer risk of course) to continue to cover the Trillions that will be needed to repair the derivatives markets. This is where the inflation will be coming from in the future. That inflation will drive up the prices of hard assets and at the same time drive down the prices of paper or fiat-related assets. When a Trillion here or a trillion there is dropped, the FED will be there to send in loan money to keep their favored son banks and brokers above water. Rinse, lather, repeat through 2012. Look back to the 1970's. There was certainly inflation present in hard assets during a recessionary period when incomes were stagnant or dropping, along with increased unemployment, etc. In today's "well-managed" economies it is almost impossible to have solely inflation or deflation. It is when economies get badly out of control where you can get one or the other (for ex. present day Zimbabwe or Japan in the 90's).

Inflation can pull back for a while, but it is here to stay for some time.
You may not see it for a while as the FED/PPT pull out all the stops to manage the US dollar through November and keep gold away from $1000 for as long as they can.

We've just come out of the biggest orgy of credit creation in our lifetimes.

The 2nd round of orgy credit that will be needed to bail out the banks and their derivative's mess will make the first round seem relatively tame.

roadrunner

RedTiger

<< <i>

<< <i>So are you buying? If so, what kinds of bullion are you buying? Are you moving back into silver? Are you able to get any decent amount without paying $3 to $4 per ounce premiums like some are?

Or have you been "all in" for months now, riding the bull all the way down, and are now trying to rationalize the position? I remember your silver/gold switch trade (which I hope you paid your taxes on), but I can't recall any activity since then.

silver/gold switch message in Feb 2008 >>



Without getting into my personal finances, It's obvious to tell where my heart lies.

Let's just say I'm in it for the long haul and only time will tell if I'm right or wrong.

And don't worry, I'm old enough to realize that it's impossible to time the peak of the market, so I have a well thought out plan of exiting my PM positions. >>



I credit you with switching to gold from silver at a decent time in February and give the link to that good call. Other active posters can be seen on that thread saying silver at $18 had a lot more upside (and given what happened, a lot more downside). Given that good call, I am sure readers are curious if you switched back to silver when the silver/gold ratio moved back to 56, like last time. If not, are you switching now that the ratio is 62. If you are, how are you finding quantity at a reasonable price, when other folks are having a hard time doing so.

Back in February, when you were reporting a winner, you were happy to tell us details such as how many ounces and where you were buying and selling. Now, not even general questions such as percentage allocations to silver vs. gold, are being addressed. What gives? Rah, rah posts are fine. However, readers have seen so much more in the past. Now that the market has turned down, the answer above seems thin. If you have been "long and wrong" since gold $1000 in March, readers should know that, because it lessens the credibility of the "HUGE BUYING OPPORTUNITY," mentioned in the original post.

As to what I am doing it is the same as it has always been during my time on the forum. When I find good deals, I continue to accumulate physical silver and gold, in the form of coins, and have no plans to sell. The allocation is a relatively small percentage of net worth. From time to time, I may take short term trading positions using the SLV and GLD ETFs or options, but have not done so in a long time.

DoubleEagle59

<< <i>

<< <i>

<< <i>So are you buying? If so, what kinds of bullion are you buying? Are you moving back into silver? Are you able to get any decent amount without paying $3 to $4 per ounce premiums like some are?

Or have you been "all in" for months now, riding the bull all the way down, and are now trying to rationalize the position? I remember your silver/gold switch trade (which I hope you paid your taxes on), but I can't recall any activity since then.

silver/gold switch message in Feb 2008 >>



Without getting into my personal finances, It's obvious to tell where my heart lies.

Let's just say I'm in it for the long haul and only time will tell if I'm right or wrong.

And don't worry, I'm old enough to realize that it's impossible to time the peak of the market, so I have a well thought out plan of exiting my PM positions. >>



I credit you with switching to gold from silver at a decent time in February and give the link to that good call. Other active posters can be seen on that thread saying silver at $18 had a lot more upside (and given what happened, a lot more downside). Given that good call, I am sure readers are curious if you switched back to silver when the silver/gold ratio moved back to 56, like last time. If not, are you switching now that the ratio is 62. If you are, how are you finding quantity at a reasonable price, when other folks are having a hard time doing so.

Back in February, when you were reporting a winner, you were happy to tell us details such as how many ounces and where you were buying and selling. Now, not even general questions such as percentage allocations to silver vs. gold, are being addressed. What gives? Rah, rah posts are fine. However, readers have seen so much more in the past. Now that the market has turned down, the answer above seems thin. If you have been "long and wrong" since gold $1000 in March, readers should know that, because it lessens the credibility of the "HUGE BUYING OPPORTUNITY," mentioned in the original post.

As to what I am doing it is the same as it has always been during my time on the forum. When I find good deals, I continue to accumulate physical silver and gold, in the form of coins, and have no plans to sell. The allocation is a relatively small percentage of net worth. From time to time, I may take short term trading positions using the SLV and GLD ETFs or options, but have not done so in a long time. >>



I've explained myself in the past.

I feel no need to further emphasize my strategies.

57loaded

i for one do not think this is at this moment a huge buying opportunity, unless you have been in for a few years...which i think you have! :-)



hold your horses....i think it wil go lower for a few weeks

mackdriver

<< <i>i for one do not think this is at this moment a huge buying opportunity, unless you have been in for a few years...which i think you have! :-)



>>hold your horses....i think it wil go lower for a few weeks >>

<<

I wouldn't hold those horses too long,at this writing,gold is up over $13.

OPA

<< <i>

<< <i>i for one do not think this is at this moment a huge buying opportunity, unless you have been in for a few years...which i think you have! :-)



>>hold your horses....i think it wil go lower for a few weeks >>

<<

I wouldn't hold those horses too long,at this writing,gold is up over $13. >>



It's "heading south" again....down below $800 at this moment.
(-$2)