Bove rejects Gold cause there isn't enough!!
MilesWaits
Posts: 5,310 ✭✭✭✭✭
Bove calls for a new "safe haven" for investors as both stocks and bonds sell off.
He rejects gold because it "is too illiquid and there is not enough of it," quickly rising Swiss francs because the government will "stop the inflows to that nation to protect its economy," the euro because Europe has the same problems as the U.S. and the dollar because the U.S. "can no longer be counted on to be fiscally or financially responsible."
Good. Not enough Gold, greater demand, higher price which leads to greater demand.........
He rejects gold because it "is too illiquid and there is not enough of it," quickly rising Swiss francs because the government will "stop the inflows to that nation to protect its economy," the euro because Europe has the same problems as the U.S. and the dollar because the U.S. "can no longer be counted on to be fiscally or financially responsible."
Good. Not enough Gold, greater demand, higher price which leads to greater demand.........
Now riding the swell in PM's and surf.
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Let's see....price is determined by the equilibrium between supply and demand. Too much demand results in there not being enough supply. Not enough supply results in unmet demand. Final result: skyrocketing prices!
Sounds to me like he made a short, good argument on why one should be buying gold. What an idiot. I would have thought that even Keynesians learned about Supply, Demand and Market Equilibrium.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I knew it would happen.
<< <i>There's not enough of it?
Let's see....price is determined by the equilibrium between supply and demand. Too much demand results in there not being enough supply. Not enough supply results in unmet demand. Final result: skyrocketing prices!
Sounds to me like he made a short, good argument on why one should be buying gold. What an idiot. I would have thought that even Keynesians learned about Supply, Demand and Market Equilibrium.
I agree, what a moron. ........ (100% US cash... yippee! my worries are over!)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
<< <i>. What an idiot. I would have thought that even Keynesians learned about Supply, Demand and Market Equilibrium.
>>
Now you should know by now that keynesians know absolutely nothing about real world economics.
<< <i>
<< <i>There's not enough of it?
Let's see....price is determined by the equilibrium between supply and demand. Too much demand results in there not being enough supply. Not enough supply results in unmet demand. Final result: skyrocketing prices!
Sounds to me like he made a short, good argument on why one should be buying gold. What an idiot. I would have thought that even Keynesians learned about Supply, Demand and Market Equilibrium.
I agree, what a moron. ........ (100% US cash... yippee! my worries are over!) >>
The US dollar has dropped 41% vs the basket since 2000. No one thinks gold could drop 41%? Silver did just that in about 3 weeks.
Big investors value liquidity over anything else. They want to be able to get their money when they want it. The gold market is very small compared to other assets. There is also a point at which gold will no longer offer value or safety.
Cash is highly liquid and can be put to work with a keystroke. PMs do not afford that convenience.
Knowledge is the enemy of fear
<< <i>
Cash is highly liquid and can be put to work with a keystroke. PMs do not afford that convenience. >>
Agree with the first part. Disagree with the second.
<< <i>The US dollar has dropped 41% vs the basket since 2000. No one thinks gold could drop 41%? Silver did just that in about 3 weeks. >>
I love it when the 'anti-gold' people pick a small and distinct time frame to point out the 41% drop that could happen with gold or silver.
How about since last October, silver is still up 100%?
Or to be more fair, let's take the longer time frame......
Since 2000, US dollar down 41%.
Since 2000, Silver up 800%.
Let's put it another way......
$100,000.00 US cash in 2000 is worth about $60,000.00 cash today.
$100,000.00 US cash in 2000 that you purchased silver with in 2000 is worth about $800,000.00 today.
It's obvious to me what side of the trade I'm taking.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
edited for clarity : )
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>DoubleEagle---I guess what is at issue is how long in the tooth is the run up in gold and silver and at what point does the risk/reward curve on it flatten out and become risk adverse. I'm still long both but for new money coming in the risk part of the risk/reward equation has risen. MJ >>
True, I would hesitate to purchase PM's right now.
Although I truly believe in the next 7 years we will see silver close at $100 an ounce, so why worry if it dips to the $26 to $32 range for awhile?
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
I dont think i've ever been anti-gold. I have been anti-gold bug mentality. You know, the type of thinking where gold goes up forever and is the cure for all ones ills. I am HIGHLY CONFIDENT gold will drop 41%. But I dont know if it drops from this current price or from 3000 or 5000. But it WILL happen. Lets say it goes to 3000 before it drops. After a 40% haircut, it would be 1800, or just about where it is today. So what would have been gained other than a sense of extreme euphoria and crushing disappointment?
As MJ mentions, and I tried to convey, there is a price for gold at which it no longer offers "security" or a store of value. There will be MANY people who will/have buy into gold thinking their life savings will be secured, only to realize one day that the Leprechaun stole the pot.
Expectations play a much larger role in asset prices than do fundamentals. Be watchful for the time when the balance shifts.
And I didnt try to pick a "small and distinct" timeframe. The dollar did in fact lose 41% vs the basket over the last 10 years and coincidentally silver lost that amount in about a month. The point I was trying to make is that the dollar is unlikely to lose 40% in a month, while it is possible PMs could. And just like the mutuals show in their disclaimers, past results may not be indicative of future results.
Knowledge is the enemy of fear
<< <i>
<< <i>DoubleEagle---I guess what is at issue is how long in the tooth is the run up in gold and silver and at what point does the risk/reward curve on it flatten out and become risk adverse. I'm still long both but for new money coming in the risk part of the risk/reward equation has risen. MJ >>
True, I would hesitate to purchase PM's right now.
Although I truly believe in the next 7 years we will see silver close at $100 an ounce, so why worry if it dips to the $26 to $32 range for awhile? >>
Silver is at $40 now, so if it drops to 30 you just lost 25%. Wouldnt it have been better to hold dollars? I think that is Bove's thinking.
But what if silver sits at 30 for the next 6 years? Will you wait for the 7th year?
Knowledge is the enemy of fear
<< <i> Silver is at $40 now, so if it drops to 30 you just lost 25%. Wouldnt it have been better to hold dollars? I think that is Bove's thinking.
But what if silver sits at 30 for the next 6 years? Will you wait for the 7th year? >>
If silver sits at $30 for six years (which is something I'm sure will not happen and will be more than happy to make a $200 bet with anyone) then I will not wait for $100 in the 7th year.
In the past ten years, there's only been 2 or 3 times (and each time only lasted a few weeks/months) that holding cash was better than holding PM's.
That is MY point and is why I strongly disagree with Bove's thinking.
In regards to calling cohodk 'anti-gold', if I'm mistaken, then I apologise.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
PMs have done very well this decade, just as stocks did the decade before. And I heard in the late 90s, the EXACT same comments from the equity guys. " Stocks have been up almost every year for 100's of %, and I dont see that changing". They also made very compelling fundamental arguements just as the PMs guys do today.
It just make me nervous when I hear people say prices will always go up. And its not just PMs guys. The equity guys say the same. As do the real estate brokers. And thats why I cant shake from my mind the very real possibility that major price declines could affect all asset classes. I guess im just more cautious than most.
Knowledge is the enemy of fear
but, but, but.... "this time it's different"
Liberty: Parent of Science & Industry
<< <i>Wasn't there an article the other day about just how little what happens in the US actually affects the real world/physical PM prices. US is like 9% or so and isn't even the top tailwagger. >>
**
The Julian article I linked above is what I was thinking of. North America is only 8% of global demand by his statement.
<< <i>It just make me nervous when I hear people say prices will always go up. And its not just PMs guys. The equity guys say the same. As do the real estate brokers. And thats why I cant shake from my mind the very real possibility that major price declines could affect all asset classes. I guess im just more cautious than most.
but, but, but.... "this time it's different"
In a significant way, it IS different. I believe we're witnessing the popping of the fiat currency/debt bubble. And as is typical of most (all?) markets, I believe it will over-correct causing a gold/silver bubble years down the road. By that time the issuers of fiat currencies should hopefully have cleaned up their act and start issuing currency in appropriate amounts.
<< <i>Good. Not enough Gold, greater demand, higher price which leads to greater demand......... >>
Glad I have my stash.
<< <i>DoubleEagle---I guess what is at issue is how long in the tooth is the run up in gold and silver and at what point does the risk/reward curve on it flatten out and become reward adverse. I'm still long both but for new money coming in the risk part of the risk/reward equation has risen. MJ
edited for clarity : ) >>
I don't understand where the risk is. A strong dollar? That'd be a temporary run in my opinion. The risk is really being long dollars and out of silver or gold. That's the risk, to me.
FDR issued his gold confiscation order one day, and then devalued the dollar 40% overnight.
But, it's different this time - isn't it?
I knew it would happen.