JD -
If you could see the grin on my face when I type that crap, your opinion of my would raise immeasurably.
Away............topracticespittingovertherailinaladylikemanner
JD -
If you could see the grin on my face when I type that crap, your opinion of my would raise immeasurably.
Away............topracticespittingovertherailinaladylikemanner
Sales Dept: Our first batch of Mounties shipped today. Those who ordered early should have something to show for it before the weeks' up.
Sales Dept: Our first batch of Mounties shipped today. Those who ordered early should have something to show for it before the weeks' up.
Gold will probably fall to 285 or so, then limp on up to 320 - 330 later this year. This prognostication, while quite out of the toilet, is still laying there on the damp bathroom carpet.
Gold has been one of the worst buy and hold investments of the last 20 years. I have argued this point before on this forum and would be pleased to argue it again, as I can do it entirely by reposting my original arguments; which risks little beyond a little carpal tunnel irritation from the cut and paste.
For the stout of heart straining at the gate I caution:
My proof is offered in numbers.
Short of inventing a new branch of mathematics, you will not win.
Its OK, I do this for a living.
Hard Fellow -
Do you make those little quote marks in the air with your fingers when you talk?
Just Wondering. Never Mind.
Gold will probably fall to 285 or so, then limp on up to 320 - 330 later this year. This prognostication, while quite out of the toilet, is still laying there on the damp bathroom carpet.
Gold has been one of the worst buy and hold investments of the last 20 years. I have argued this point before on this forum and would be pleased to argue it again, as I can do it entirely by reposting my original arguments; which risks little beyond a little carpal tunnel irritation from the cut and paste.
For the stout of heart straining at the gate I caution:
My proof is offered in numbers.
Short of inventing a new branch of mathematics, you will not win.
Its OK, I do this for a living.
Hard Fellow -
Do you make those little quote marks in the air with your fingers when you talk?
Just Wondering. Never Mind.
Myrmidon -
Are you sure you want to look this wayward stepchild in the face? Tell you what, post your views concerning the buy and hold value of gold for the last 20 years, back them up with numbers, I'll repost my old stuff.
F guy with the * thingie -
I'm really getting a kick over how worked up you are getting. Was going to watch a movie this eve, but this has been Far* more entertaining. I posted my phone number. You want gold, you call me.
As for vested interest, For the fourth or fortieth time :
I am a metals whore. I will flip my position quicker than Bill Clinton to be on the right side of the market. I could care less where they go. I have several thousand ounces in short gold. I'm on record when I sold it. I would love to loose on those trades, as they are all hedges against long platinum or long silver. Nobody more than I would love to see gold run through the roof, I'll make a fortune, its what I sell. But meanwhile, the world is as it is, and I will play the hand dealt.
Where were you at 380? 350? 300? Repeating your vapid mantra?
I was here, telling folks gold would fall.
Thanks for the repost. You and I are done.
Myrmidon -
Are you sure you want to look this wayward stepchild in the face? Tell you what, post your views concerning the buy and hold value of gold for the last 20 years, back them up with numbers, I'll repost my old stuff.
F guy with the * thingie -
I'm really getting a kick over how worked up you are getting. Was going to watch a movie this eve, but this has been Far* more entertaining. I posted my phone number. You want gold, you call me.
As for vested interest, For the fourth or fortieth time :
I am a metals whore. I will flip my position quicker than Bill Clinton to be on the right side of the market. I could care less where they go. I have several thousand ounces in short gold. I'm on record when I sold it. I would love to loose on those trades, as they are all hedges against long platinum or long silver. Nobody more than I would love to see gold run through the roof, I'll make a fortune, its what I sell. But meanwhile, the world is as it is, and I will play the hand dealt.
Where were you at 380? 350? 300? Repeating your vapid mantra?
I was here, telling folks gold would fall.
Thanks for the repost. You and I are done.
While I was not paying attention .. just noticed
that over the last two weeks .. the price of gold in Rands
crossed over its 30 day, then its 100 day, then its 200
day MA. Check it out .. Rand weakened to 5.01 versus a
strong $. Rand gold price now 1510 almost 10 % up on
January low of 1376. Good for marginals .. Go Harmony
While I was not paying attention .. just noticed
that over the last two weeks .. the price of gold in Rands
crossed over its 30 day, then its 100 day, then its 200
day MA. Check it out .. Rand weakened to 5.01 versus a
strong $. Rand gold price now 1510 almost 10 % up on
January low of 1376. Good for marginals .. Go Harmony
For youse new guys -
Its called bait
You sure do bite
The rest is setting the drag
And playing you out
You take me far more seriously than I take myself. Lighten up.
PS -
Every single argument made by Starboy & Hardfellow has been made here before.
Eloquently articulated by far better minds.
And now, here they blather
How about the suit for an ounce-o-gold?
Pardon the yawn
I guess its late
Remember the fish analogy. I'm betting you will miss the point entirely.
For youse new guys -
Its called bait
You sure do bite
The rest is setting the drag
And playing you out
You take me far more seriously than I take myself. Lighten up.
PS -
Every single argument made by Starboy & Hardfellow has been made here before.
Eloquently articulated by far better minds.
And now, here they blather
How about the suit for an ounce-o-gold?
Pardon the yawn
I guess its late
Remember the fish analogy. I'm betting you will miss the point entirely.
Myrmidon -
I apologize, it was not my intention to rub salt in an open wound. Most of my clients own some gold - much at higher prices. Most are confused why this is so and the explanation is a long one. Having traded metals since 1984, there is one identical characteristic of the gold enthusiast: They are VERY enthusiastic about gold. My job is to make my clients money, not to coddle zealots on these pages. What I offer here is what it is, take it for all, or all for naught.
Had a doctor call me a year ago about a five million dollar gold purchase. I told him gold was going down, stay away. He took my advice, to the consternation of his partners, but he had veto power and the deal was killed. That was at 380. By my reckoning, and my client's, I saved him a million dollars. He has since put together a somewhat smaller purchase at below 300. He is very pleased.
I love gold. I own it, I wear it, I sell it, and I speculate in it. I'm in a cocky mood tonight, having sparred a bit with little wits, and the tone spilled into the post I made to you. I believe that gold WILL ultimately rally, albeit not to the heights some here see, meanwhile a steady chorus of buy more, more, more, while the metal is so weak has caused many to follow this folly of gold in our times. The standard response to those that bought at 400 is to say, "it's OK, it'll go back up" Wouldn't it have been nice if someone warned you gold was weak when you made your purchase? You could then wait a year and buy 30% more gold for the same money ( that was probably inflated by about 4% ) . This would seem the kinder course.
I get calls from people who have been talked into putting their LIFE savings into gold because it is so cheap. These people bought it all the way down and they are way overexposed. Some here may be sure that this will pay in the end, but it certainly hasn't in the last 8 or 14 years this or that client has had the gold. These people are hurting, while those around them have reaped returns of hundreds of percents over the decade. The smart ones made their money that way, then put some into gold at these low prices.
Again, I am sensitive to holding an investment that is down. My words were directed at some rabble and not the forum at large.
OK
Myrmidon -
I apologize, it was not my intention to rub salt in an open wound. Most of my clients own some gold - much at higher prices. Most are confused why this is so and the explanation is a long one. Having traded metals since 1984, there is one identical characteristic of the gold enthusiast: They are VERY enthusiastic about gold. My job is to make my clients money, not to coddle zealots on these pages. What I offer here is what it is, take it for all, or all for naught.
Had a doctor call me a year ago about a five million dollar gold purchase. I told him gold was going down, stay away. He took my advice, to the consternation of his partners, but he had veto power and the deal was killed. That was at 380. By my reckoning, and my client's, I saved him a million dollars. He has since put together a somewhat smaller purchase at below 300. He is very pleased.
I love gold. I own it, I wear it, I sell it, and I speculate in it. I'm in a cocky mood tonight, having sparred a bit with little wits, and the tone spilled into the post I made to you. I believe that gold WILL ultimately rally, albeit not to the heights some here see, meanwhile a steady chorus of buy more, more, more, while the metal is so weak has caused many to follow this folly of gold in our times. The standard response to those that bought at 400 is to say, "it's OK, it'll go back up" Wouldn't it have been nice if someone warned you gold was weak when you made your purchase? You could then wait a year and buy 30% more gold for the same money ( that was probably inflated by about 4% ) . This would seem the kinder course.
I get calls from people who have been talked into putting their LIFE savings into gold because it is so cheap. These people bought it all the way down and they are way overexposed. Some here may be sure that this will pay in the end, but it certainly hasn't in the last 8 or 14 years this or that client has had the gold. These people are hurting, while those around them have reaped returns of hundreds of percents over the decade. The smart ones made their money that way, then put some into gold at these low prices.
Again, I am sensitive to holding an investment that is down. My words were directed at some rabble and not the forum at large.
OK
After my obviously misguided speculations about the true identity of Beloved Bernatz, I have one final sleep addled theory.
JD & Hep are the same guy! NO! Better yet, the same girl! Just severely schizophrenic. One is not aware the other exists. Saw this on the Twilight Zone once. You see this guy got zapped with some damn zap gun thingie and he.................
After my obviously misguided speculations about the true identity of Beloved Bernatz, I have one final sleep addled theory.
JD & Hep are the same guy! NO! Better yet, the same girl! Just severely schizophrenic. One is not aware the other exists. Saw this on the Twilight Zone once. You see this guy got zapped with some damn zap gun thingie and he.................
Its all so clear now.......................
Its all so clear now.......................
NAV is 13.45 Rand as of today and it trades at less
than 7 Rands.
Nav build up is Rangold resources 52 % trades
london
6 % Crown trades here
9 % DDeeps
7 % Harmony
balance Unlisted assets ... value used based Rangold
company statements.
So valuing unlisted at Zero NAV is .74 *13.44 = 10
rands .. Thus buying rangold gives you resources plus
crown plus deeps plus harmony at 70 % of what you
would have to pay for them if bought at the market.
NAV is 13.45 Rand as of today and it trades at less
than 7 Rands.
Nav build up is Rangold resources 52 % trades
london
6 % Crown trades here
9 % DDeeps
7 % Harmony
balance Unlisted assets ... value used based Rangold
company statements.
So valuing unlisted at Zero NAV is .74 *13.44 = 10
rands .. Thus buying rangold gives you resources plus
crown plus deeps plus harmony at 70 % of what you
would have to pay for them if bought at the market.
On March 18, the Belgian Central Bank said it sold 299 tonnes of gold last week. This sale/purchase was ongoing, completed and announced during the time frame of my post ( of Date: Mon. Mat 09, 1998, 07:55 ) .
This purchase was completed by the BIS for its account and held in five CBs. It was made at appx $305us. As this transaction was made public within the 5 to 10 day time frame, did that mean gold would move to its new range of $320/$260 in that time also? No. What it does show, is that the BIS has made a decision to no longer support the LBMA gold paper with CB gold!
The central underlying questions from the beginning of these Thoughts, was always, will the CBs become the primary gold suppliers in the continued support of low oil prices and will the oil producers accept a world gold market that supplies only non-mined gold? In the process of traveling to this point in time, the world governments found this new oil/gold arrangement, so successful for paper asset prices
( Dow Jones? ) , that they allowed the markets to supply any and all gold paper possible! Now, with the world awash in US dollars and gold paper, a new asset is being formed to draw the oil producers closer to Europe! The offer is the exact opposite of the US dollar agreement, this new offer will drive gold to a value that will allow it to become the world oil asset and currency if the producers use the Euro as the oil trading currency! In this process the Euro will become as solid as the reserves that back it.
Gold in $320 to $360, will be a time of much concern for any and all US dollar and US dollar asset holders. At some point, oil may say yes to the EURO, even before it is official, and gold will break to into the thousands with no hold back by CBs. Oil prices in US dollars will explode, even as prices plunge for Euro based currencies, and the US
economy will implode. The world US dollar based economy is about to change, and America will find no point for warships in the Gulf. I ask you now, who will defend Arabia?
Many metal traders see gold as a lost value from the past and a poor investment for simple persons! I say, these traders have no experience with this new market of gold, as it is as none before! Many will find this asset was worth the time of waiting.
Thank you
On March 18, the Belgian Central Bank said it sold 299 tonnes of gold last week. This sale/purchase was ongoing, completed and announced during the time frame of my post ( of Date: Mon. Mat 09, 1998, 07:55 ) .
This purchase was completed by the BIS for its account and held in five CBs. It was made at appx $305us. As this transaction was made public within the 5 to 10 day time frame, did that mean gold would move to its new range of $320/$260 in that time also? No. What it does show, is that the BIS has made a decision to no longer support the LBMA gold paper with CB gold!
The central underlying questions from the beginning of these Thoughts, was always, will the CBs become the primary gold suppliers in the continued support of low oil prices and will the oil producers accept a world gold market that supplies only non-mined gold? In the process of traveling to this point in time, the world governments found this new oil/gold arrangement, so successful for paper asset prices
( Dow Jones? ) , that they allowed the markets to supply any and all gold paper possible! Now, with the world awash in US dollars and gold paper, a new asset is being formed to draw the oil producers closer to Europe! The offer is the exact opposite of the US dollar agreement, this new offer will drive gold to a value that will allow it to become the world oil asset and currency if the producers use the Euro as the oil trading currency! In this process the Euro will become as solid as the reserves that back it.
Gold in $320 to $360, will be a time of much concern for any and all US dollar and US dollar asset holders. At some point, oil may say yes to the EURO, even before it is official, and gold will break to into the thousands with no hold back by CBs. Oil prices in US dollars will explode, even as prices plunge for Euro based currencies, and the US
economy will implode. The world US dollar based economy is about to change, and America will find no point for warships in the Gulf. I ask you now, who will defend Arabia?
Many metal traders see gold as a lost value from the past and a poor investment for simple persons! I say, these traders have no experience with this new market of gold, as it is as none before! Many will find this asset was worth the time of waiting.
Thank you
http://www.kitco.com/gold.live.html
Updated regularly
Now, will other goldbugs give our new friend some help with what he seeks? A little help will be good. DOES ANYONE HAVE ANY GOOD URL"S??????
Or will it be more of the same......US economy sucks, dollar will dive, gold will soar, DOW will tank, Bill Clinton is a womanizer, etc. etc. etc., blah, blah, blah....I always come here when I need a strong dose of pessimism... ( not to be confused with reality ) ...uh uh.
away... to the grind
http://www.kitco.com/gold.live.html
Updated regularly
Now, will other goldbugs give our new friend some help with what he seeks? A little help will be good. DOES ANYONE HAVE ANY GOOD URL"S??????
Or will it be more of the same......US economy sucks, dollar will dive, gold will soar, DOW will tank, Bill Clinton is a womanizer, etc. etc. etc., blah, blah, blah....I always come here when I need a strong dose of pessimism... ( not to be confused with reality ) ...uh uh.
away... to the grind
I DON'T CARE . . . I'M BUYING MORE!
I DON'T CARE . . . I'M BUYING MORE!
I DON'T CARE . . . I'M BUYING MORE!
Respectfully, dj
I DON'T CARE . . . I'M BUYING MORE!
I DON'T CARE . . . I'M BUYING MORE!
I DON'T CARE . . . I'M BUYING MORE!
Respectfully, dj
which is FREE..a very good price....at www.ferretsoft.com
Allows searching multiple engines, reading summaries, saving the results
for later use, etc... They have commercial versions too, but the free
one works very well...And by the by, I appreciate all of you
who post here...It takes a lot of ingredients to make a good stew or
forge a good idea....
which is FREE..a very good price....at www.ferretsoft.com
Allows searching multiple engines, reading summaries, saving the results
for later use, etc... They have commercial versions too, but the free
one works very well...And by the by, I appreciate all of you
who post here...It takes a lot of ingredients to make a good stew or
forge a good idea....
IMHO.
The core ongoing debate here at Kitco is really no debate at all; it's two languages, two mentalities -- 1 ) sitting long; 2 ) in and out trading. Could even boil down farther -- 1 ) physical; 2 ) paper. Position #1, sitting long on the physical, is the position eliciting the IDCIBM chant; it's the position of ANOTHER; it's the position backed by long history, and, my guess, the position you take -- cleverly too, through savvy in the second position.
When at war, if battle cannot be avoided, the wise one seeks to use his opponent's own strength against his opponent. IMHO.
Respectfully, dj ( et al )
IMHO.
The core ongoing debate here at Kitco is really no debate at all; it's two languages, two mentalities -- 1 ) sitting long; 2 ) in and out trading. Could even boil down farther -- 1 ) physical; 2 ) paper. Position #1, sitting long on the physical, is the position eliciting the IDCIBM chant; it's the position of ANOTHER; it's the position backed by long history, and, my guess, the position you take -- cleverly too, through savvy in the second position.
When at war, if battle cannot be avoided, the wise one seeks to use his opponent's own strength against his opponent. IMHO.
Respectfully, dj ( et al )
It is claimed by those who follow the history of the BIS that it is a competitor of the IMF and was never fully supportive of Bretton Woods and the implicit American economic hegomony. One ( potentially too simplistic ) way of looking at things is that the BIS is backing the Euro as a means of breaking away from the american empire...
What ANOTHER may be saying is that there may be Arabian support for the Euro provided that their security issues are also dealt with.
Security can also be seen as the subtext of the current plunge in prices which the Saudis have more or less explicitly targeted Vensuela who is making every effort to become the major supplier to the US, superceeding the Saudis. If this happens, and the Saudis become irrelevant to US energy security where does this leave Saudi national security??
ANOTHER may be talking less about the price of gold and talking more about Geopolitical Economics and the potientially imminent decline of the American Empire ( tm ) .
APH -
Good luck on the 6.30s. I too am encouraged by the close today, but one day does not a breakout make, and I choose inaction here. D.A. put forth the most likely scenario for the next month. We will hear WB bought more, and he will take delivery. The stohs are looking high and silver is still vulnerable for a quick stab down to $6 or lower.
Regarding Syntax -
Some mention has been made of foreigners and style and syntax. As any linguist knows, mistakes in syntax are common and consistent. Mistakes made once, will be made again in much the same way. Our friend's posts have had contradictory syntax errors within the space of one or two sentences, let alone from post to post.
Arabic is a Semitic language with a very simple structure. All words come from a three consonant root that evolves into a myriad of conjugations depending on the use and placement of vowels, prefixes, and suffixes. The language can be maddeningly hard to read, as it is always written in script, from right to left ( numbers still read left to right ) , and often the short vowels are simply left out entirely. One's familiarity with the language and context is the key to reading the correct vowel. It is also a gender specific language with different conjugations for male and female. English is one of the few languages that is, for the most part, gender neutral. This is why foreigners often have a hard time with He's and She's.
The structure of this other fellows posts to not follow the Semitic pattern. Now this whole argument falls apart if he is Iranian, which is and Indo-European language more closely related to the romantic languages the Semitic.
The followers of this guy call him obviously well bred and educated. Sometimes he write with great clarity, others with glaring errors in syntax. One does not change the way one speaks or writes a language over the course of days, yet this kind gentleman does. The real kicker was when he took the bait on the whole. "yes?" thingie. Seemed he stopped using that idiosyncrasy immediately. He is too eager to please as he is well pleased with his reception.
ANOTHER has found a home.
God bless this happy home.
OK
As far as claiming that there is only one correct way to play this market ( the way "I" do it ) is total nonsense. You have people who play with small amount of money, people who play big, people who can buy physical and people who cant ( due to some restriction put on their available money - e.g., 401K ) so they play just stocks or mutual funds. Some people can trade daily some have limits how frequently they can get in/out. Due to this variation what works for you doesnt work for somebody else! Yet, everybody can play and make money if they play it smart.
There is no reason for attacking the person for using the strategy which does not support your thinking and way of investing. BTW, this also goes for all posts saying "people investing in gold have lost a bundle comparing to people investing in DOW." Yeah, that would be true if they put the money in and watched it declining for a bunch of years. I doubt that you can find too many of such investors. You can not play this market the way you could play the stock market through mutual funds for the last ten years "just put it in into any fund and forget about it". Gold market needs much closer attention to get in and out at the right time. I think that may be the main reason why the average investor is not into Gold. However, after you learn, you may be one of the few who will enjoy the big spikes and profits ( if you are disciplined enough to control your greed and get out before you loose most of your gains on the way down ;- )
Rather than read between the lines, I will take you post at face value, and respond in kind.
No knowledge of Indo-European languages. Spent a year in Monterey at the Defense Language Institute learning Arabic. Six class hours per day, five days a week, for 48 weeks of nothing but Arabic. Sad thing is most of it is gone. Foreign languages aren't really my thing, I have enough trouble with English.
The "yes?" seems a transparent affectation, borne of watching too many movies.
As for the precious metals. Haven't you heard?.I don't have a clue..
OK
The princple reason for gold as money, as has been said many times before, is that no one can be trusted with the 'creation' of money. Thus, we need something that is rare, but not so rare as to be usless as a medium of exchange, and cannot be created by humans. It's the 'honesty problem', you know. :- ) )
So, when the paper currencies take the rightfull place in history, again, something old will be needed to restore faith and confidence so the game can start anew.
Vronsky -
You speak, what? Five, six languages? How do you do it? Damn foreigners have a different word for everything.
Been spending some time listening to the collected speeches, interviews, and asides of Winston Churchill, probably the master orator of the 20th Century. Although I have read these words many times, it is only in hearing the spoken word that one can complete the picture. I never truly understood Hunter Thompson, who I consider the finest writer of this generation, until I heard him speak. That whiskey addled Kentucky mumbling, more tangent that substance, gave me insight into how his words ended up on paper.
There is a cadence. A staccato rhythm which accompanies speech, that only the finest writers have ever put upon paper. Think of the Bard. Were his words ever so alive as when spoken by Sir Olivier?
I think many misunderstandings, many hurts, would be unvisited here, were we all in the same room talking. Either that, or we would all quickly come to blows. Seems a reflective microcosm, yes?
You are too modest.
You have a keen eye, and a businesslike approach I admire.You will not loose on your longs, and you have greater courage than I in shorting silver in the first place. Thanks for the posts. You have improved this forum with your presence.
OK
I try to be silent, but my thoughts are like knifes, as I listen to the ramblings of educated idiots.
Gold today reminds me of "The Parrot Sketch" from Monty Python,
Its just restin'.
Or maybe stunned.
Or maybe just nailed to the perch.
Prometheus -
It is an unpleasant parrot, with a foul and limited vocabulary. Best left nailed to the perch for now.
Eldo -
You. are being clever..
EJ -
When worlds collide, gold will run in the streets. Count on it.
It is OBVIOUS that the words of ANOTHER have been stroked through the keyboard by various hands. It is OBVIOUS that different interpreters have imposed their different tones. And it is OBVIOUS that they have all recorded the thoughts of a single speaker. Re-read the guy's stuff! He's been SAYING the same thing the same way since the beginning. You're all smart guys here. You can discern a person's style of thinking, no?
Now be done with this trivial bunk, please!
Respectfully, dj
The following posts were met at first by outrage and finally by a chorus of deafening silence:
RJ Kitco posts June 1997
Arden - I, unlike many others here, have very little emotional investment in gold. Free of this reason clouding attachment, my assessment golds merits and shortfalls rests in facts not supposition. By no means am I trying to say that your arguments are biased in this way, but some that I have read are. Let me answer your main points:
Distribution of gold reserves; name a continent in which gold cannot be found? Regarding the central banks, they have a very real interest in the price of gold; precisely never too far above $400. As for the banks trying to convince us that gold has no value, since when? Central banks are the largest holders of gold on earth, and as such have a more vested interest in gold than any other can claim. Since when do CBs want gold to be worthless? Their goal is a stable price of gold, as this gives the appearance of stable currency. Note I said "appearance, I do understand the game. Why else would one CB or another step in and cap off any significant rally over $400. Last time it was Belgium with over 200 metric tons.
To answer all offers of proof as to golds value in times of crisis or for refugees. I agree completely This agreement carries the proviso that there must be a place for one to go where gold is valued above the goods and commodities it may be traded for. Were I a third world citizen, all my wealth would be in gold, but the global collapse that some here envision will make all men equal. I say again, if the western world falls, the entire world falls. I for one do not believe in the decline of the western world, which I will discuss in depth later, so please dont blast me with the arguments now until you read what I have to say.
The main focus of my argument is that gold, as an investment vehicle, store of wealth, and preserver of value, has performed dismally in the last 20 years. Let me turn the numbers around. Average price of gold for the last 20 years: $327. Purchasing power of $327 ( 1977 dollars adjusted at 4% per anum ) : $716. Where did the other $389 go? This seems like a very expensive store of wealth. I again ask anyone to refute the numbers. Is my calculator part of the Alan G & the CBs conspiracy? More likely, it is a sleeper in the Japanese takeover, it is a Casio after all.
OK Following are US Government CPI statistics. I think we can all agree that, if anything, the government understates these statistics. Also included are high and low gold prices for each of the last 20 years - provided by the Future Source, you read their FWN reports on the Kitco link. Note these numbers include $825 gold as well as $127 gold, hardly cherry picking my numbers.
I have added up the lows and highs and divided by 20. Who thinks this is a more accurate way to arrive at an average? Front, if you want to get snippy, Ill let you be wrong at the top of your voice. My post to your carried none of the hostility contained in yours. But I guess this one does. I have also taken the low and high for the year and used the somewhat simplistic "frontage method" and then averaged those.
As all can see, I was being extremely generous assuming a 4% per year for the last 20 years. The actual average for the last 46 years is 4.1%! As can be seen, the last twenty years have averaged no less than 5.2%. I had no figures for 1995 and 1996 so followed the 2.7% trend of the two prior years, I expect no objections to that.
OK, lets move on, one 1950 dollar is today worth 15 cents, or, conversely one 1950 dollar had the same purchasing power that $6.62 does today. What was gold in 1950? According to the Kitco history of London fixes, $34.72. OK lets call it $35, Im not picky. What is 35 x 6.62? Lets call it $232. Gold is now $344 or thereabouts. 232 / 344 = 67.4 % return on a FORTY SIX YEAR INVESTMENT! Remember, 7% compounded doubles in 10 years.
One 1977 dollar is now worth 37 cents. One 1977 dollar buys $2.72 today. Using the low of 1977, and again, I am trying to be kind, higher numbers only make it worse, $127 / .37 = $343.24. Isnt that just slightly lower than todays close? Break even in 20 years? When those dollars have depreciated by almost two thirds? I leave the numbers with you. Should anyone like the Excel spreadsheet, e-mail me at rjd@pacbell.net and I will send it to you. Feel free to delve into the formulas to see what mathematical trickery I use. This is the common reference point I mentioned in an earlier post. I have quoted the source of these numbers, if anyone offers different, please do the same.
Auric - ( 01:30 ) - Ah But you have called my bluff. No way would I take that wager, charity notwithstanding. How about my goal of "$335 half a dozen times before $400 once? I do believe all the metals are due for a substantial move in the next two years. Gold may go for the ride, but silver and the PGMs will lead the way. I am basically bearish on gold in the next few months, to the tune of 1.8 million short @ $348 & 350. I Did 5000 oz from $348 to $338.5 a couple months ago. Wished I had taken $339.5 last week, but my mind was on the PGMs and it happened so quick. There hasnt been enough of a rally to re-short, so I guess Im happy I stayed in. I think it was Eldorado who thought I might be trying to convince members of the group to short. I am making no trade recommendations. I am only describing my views. Besides, if we all ganged up, sold the houses and the kids, and put every penny we had into short gold, we wouldnt make a ripple in the market. Thats why the PGMs are so fun, the market is thin enough to move. Even silver can be bounced around for a few tens of millions, Not gold, the market is too massive. Only the CBs have the power to move the market significantly. Correction, 40 or 50 million American citizens with a like amount of Asian and European nationals could push gold through the roof.
It is precisely these great unwashed masses that are missing from this market. The equities have stolen their hearts and the romance has a ways to go yet. I, with the rest, called for a true correction in the equities when the Dow was 5000, and then 6000. A 10% drop from 7000 and strong recovery has made me a believer. Please dont take that statement to mean that I will buy into it. These lofty heights make my nose bleed. Hell, I felt more comfortable buying palladium at $204 than I would buying the Dow, NASDAQ, or S & P, at these levels. But, although self contradictory, I too believe the Dow will go to 8K, perhaps even 10K in the next 18 months. We are in the era of irrational exuberance and the sodomites will not come up for air.
The mutual fund market is more than 3 trillion strong, 2 of which came into the market since 1990. How many funds are there now? 7000, 8000? Ive given up trying to keep track. The funds managers are so flush with cash, and more in pouring in every month. I viewed the 4 - 5 billion per week rise in money markets a year or so ago as a sign that people were getting nervous, converting to cash. Dividend ratios had dipped below 3%, normally a strong signal of a turnaround. What happened next? The Dow broke through 6K. Was that only last October? Its seems an eternity.
I now wonder if there is a great sell off, where will the cash go? Historically some has always gone to the metals and particularly gold, but gold has lost its allure for the 90s American investor. These people fancy themselves savvy investors for making 30% last year. Believe me, I take calls from these people. They are congratulating themselves on the astute analysis when a blind lemur with dirt on his nose could have pointed out 30% on any financial page. Just invest in the smudges. The refrain of "Im in it for the long term, if it drops Ill just buy more", can be heard in a great chorus across this land. Will it continue? I think so. Now, we are seeing increased interest in US equities, primarily from Europe, and Hong Kong. The reasons for this have already been addressed by others here, so I will defer.
The Question begs to be asked Where will this money go? Where can it go? There is simply to much $ and not enough investment vehicles. I never thought I would write anything like this. Were I to read these words 5 years ago I would have given a derisive snort and sent the writer away to wipe the hope off those rose colored glasses. Have we reached the day when 70 to 80 times prices to earning is considered normal, healthy? Is this irrational exuberance, or have we moved to a new era? I simply dont know, we are in uncharted seas. All this weighs heavily on gold, and saps its funding. The longer this exuberance lasts, the more distant the primal tug of gold on the spirits of those that touted its virtues only a decade ago
. We now must speak of the psychology of gold. What is the feeling? Outside of this particular peer group, I mean. I receive calls every day from people who want to buy gold. The first question I ask is always, why? This is not meant to be a challenge, I truly want to know the belief system that compels their call. Apart from the occasional NRA, Republic of Texas ( yes I have sold to even them ) , apocalyptic doomsayers, I hear almost no clear cut or deeply held belief in gold. "Oh, Ive always wanted some, and I thought I might find out about it." Or, "well, my dad always believed in gold, and I have some extra cash, so I thought I would buy some." Or, "I thought Id get some gold in case the stock market drops". Are you worried about a drop, I ask. "no, but it cant hurt to have some." I will sell gold for delivery to these and others.
Often I run into investers who wants to make profits in gold. I usually try to point them towards silver or platinum for profits as they almost invariably out perform gold in a rising market. The potential from profits is greater. As I have stated earlier, unless I am selling for delivery - which, if a person owns no gold, I always encourage - I use gold primarily as a short vehicle. In a falling market its protection is great, and in a rising market, the gold short looses less than the others gain. Gold is my platinum and silver condom. It protects me, It cradles me, it sings in my ear, and strokes my hair. Gold will hear my deepest thoughts and never, ever hold it against me when I sell it short. The way things have been going lately, its nice to get out sometimes.
Make no mistake I will leverage gold long, but only in a moving market. Why wait in gold when there is movement in silver? Besides a dark and ugly cloud seems to be over gold, and until that lifts, I will not fight it, I will use it.
Last year Central Banks sold more than 1700 metric tons of gold. Some was bank to bank but most was on the open market. Expectations of at least 1000 MTs in 1997 are very real. The longer these sales are held off, the more the market dreads the day they are sure will come. Now we are hearing rumblings about "revaluation of gold stores" coming from the Germans and Swiss. If the big four in Europe - Germany - France - Switzerland - Great Britain - sell any gold at all, we will see $320 - $325, possibly $300. The Russians are no longer a threat. I believe their gold is gone long ago to raise hard cash. An interesting aside, received on the COMEX last year; platinum with pictures of the Czar on the bars. 80 - 90 year old platinum. Is this the bottom of the barrel, or simply pillaged platinum from ex party members who have set up their various fiefdoms?
What about Bre-X? A very real expectation of 71 million ounces of gold was just taken off the market! Where is the reaction? That should have been good for $20, short term at least
What about the phenomenal rise of palladium, usually the forecaster of things to come. Look for platinum to follow in 4 - 6 weeks, with gold and silver hot on its heels a month or so later. We have seen many runs begin this way. I thought we were onto one in February but it was very anemic and failed completely. The PGMs in the last eight weeks should have roped gold and, willing or not, dragged it to $375 - $380. What did we get? A great short opportunity at $350. Gold is in a coma.
What about the recent drop in the dollar? Metals are dollar dominated what has happened to all that extra buying power? Where is it. Gold is a redheaded stepchild now and will remain so for the next few months.
I expect gold will test recent lows $336 - $338 in the next 3 - 4 weeks. If a small rally comes and fails again at $350, we will see $325. Thats my take on it. perhaps the only bullish factor, other than big equities correction, or further substantial drop in the dollar, is what I believe to be the start of a really sweet run in platinum. I Called for over $500 platinum within the month at$402. We hit $506 in London, but I didnt get any part of that. Best I did was sell some in the 70s and buy some more in the 50s and 40s. Im out of palladium for good. Let it go to $300 - it has a very good shot at it - it will go without men. My holdings are down to 500 oz and those will be gone at the next $225.
Gold may catch a ride, but in a market like this, Ill take the leaders, silver and platinum. The profits are in these and they dont bite too hard.
I hope this answered some questions for Eldorado. Next: why the western world wont collapse. Maybe next week sometime.
RJD
June 1997
Let me proclaim now from the mountaintop! Hear me in every bazaar! Hush your restless whispers, be still in the pews, and behold: You are all right! Gold is very undervalued now. It is a great buy! It is even better than many of you realize! You will note that my argument to this point has been that gold has proven to be a very poor buy and hold investment. Gold has been a rubber dinghy with a hole in the bottom. The water leaks in faster than you can bail it out. The weight of all this gold can have you chest deep in a folded yellow boat with the water inexorably inching higher. You will drown holding more than what you consider absolutely necessary for times of disaster ( a very different amount for each person ) .
The key is to not buy gold and hold it. The key is to ( and some of you have probably smelled this coming ) buy gold and sell it!!! Buy low, sell high. Then, either sell short, or wait for a dip and buy it again. If you must own gold, use the profits from your trades to buy your gold. Use your gold to acquire gold. Most of all, don't forget the other metals
Steve Puetz - It's not how much the CBs sell, it's when they choose to sell. I have a firm belief that over $400 is too high for CBs. Only a very powerful rally can break through that barrier for long. Remember the equation they want to sell to the world: SG=SC. Stable gold equals stable currency. This is the mantra these self inflated, megalomaniacal demi-gods chant to themselves every morning just after they kick the dog, and just before they lower steel toed boots on their fellow man. There will be little forgiveness for these wretched souls as they are sure to be the first up against the wall when the revolution comes.
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