Gold

[Skol]

Daytr,

"Also do you have a target for the DOW & S&P? "

A figure I have in mind for the DJIA is 19,000 in 2 years time. Stock indices tend to bounce back after periods of lethargy. The 'psychics' who push gold and silver like KWN have hoodwinked millions of suckers into believing that the world economy is at the endgame, which of course is a lot of crap, because human beings have a habit of getting on with things no matter how bad the circumstances, which is why I have no time whatsoever for tossers like Mike Maloney, Peter Schiff, Ron Paul, Glenn Beck and heaps of others who push the Armageddon scenario, scaring a lot of gullible punters who are now losing heaps by the day.

Gold produces nothing, as Warren Buffett says quite correctly, "it has no utility".

[Daytr]

Thanks Skol, so I assume you think they will still be running with QE for the next 2 years to reach your target or do you think stocks can keep moving higher having being weaned off QE? There lies the problem for me I don't think they can as in my view the only reason they are moving higher is due to zero interest rates & QE. But each entitled to their own opinion of course. I am not a fan of KWN & a lot of gold bugs irritate me as quite often their views are founded on ignorance however I am still bullish & even though I agree gold makes no sense in monetary terms, it makes a lot more sense than cash that can just be printed at least there is a cost to its production where as cash there isn't. In my view we think we are a lot more sophisticated than we are in reality & that we can have currencies that reflects value when the very people responsible for I,t the CBs are valuing it at basically zero via interest rates & are printing 85bln of it a month in the US & Europe & Japan are doing the same. Gold's bubble was caused by QE however it was in a 7-8 year bull market before QE was even heard of & many of the reasons for gold's bull market that started back in 2001ish still exist today & once I believe gold consolidates around $1250ish it then rebuilds. Paulsen I don't believe will capitulate otherwise he would have by now & it would take that & gold producers to go back to hedging for gold to go below cost of production & stay there for any period of time. So you are right gold doesn't make a lot of sense, but it hasn't for thousands of year, it just makes a lot more sense to me than currencies that are being printed like they are going out of fashion. Or perhaps they are, going out of fashion that is... All I see is gold being seen as a hedge against devaluing currencies & being bought more & more by the Chinese in the coming years, Central Banks will keep buying & production staying relatively stable. So that is enough for me to think we will see gold move back to much higher levels & I think eventually new highs.

[Skol]

Daytr,
I wish you the best for your fund but I'm afraid you'll be pushing Schiff uphill, because as a long term investment gold is an abject failure. It has its moments like 1980 and 2000-2011, but that's it. I've heard all that stuff you're telling me before from the 'experts', but I'm right and they're wrong, which makes me grateful I never went to university and ended up an academic telling other people how to invest their money. All you have to do is do what the 'experts' say in reverse.lol

Goldbugs are licking their wounds, and will be for a long time to come. Gold will spike upwards from time-to-time whereupon the goldbugs will say 'the bottom's in', as they have said dozens of times before as gold makes it's inexorable way south. The fun hasn't started yet.

""To take an extreme example [of price volatility], while a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents.""

[Pumice]

$1375 another leg down. Not looking for good for gold.

seems to be a story of USD strengh.

[Daytr]

Thanks Skol, as I said each to their own. The world has never seen the money printing on the scale we are seeing now or the levels of sovereign debt. I suppose where our view differs significantly is that you think all is rosy in the world economy & if I had that view I would be bearish gold as well, although I still think the Chinese 'Aunties' will have their say. However I don't think the world economy is anywhere near ok. The ETF position was always going to hurt gold at some point I was never a fan of it as it helped create the bubble in gold and now is hurting gold.

[elZorro]

Hi Daytr, welcome to the thread, I'm on the positive side for gold as well.

I have to agree with you about the reasoning for the floor in the gold price: big miners are not hedging yet, smaller explorers and junior miners are out of the game generally, while bigger companies spend hundreds of millions to get to the mining stage. They'll only do that if they think they'll get a return, so the fact that most sound mining projects are still in process and not on hold, says that those in the know generally have faith in a sensible gold price. Have you seen the strong correlation between the US gold price and the amount of US bonds held by foreigners? Very interesting, and not something BB or Skol will admit is striking. The 'DOW buys Gold' chart is also illuminating.

James Turk (bullion seller) puts forward his thoughts on gold.

Up to date gold/dow ratio and implications for silver etc.

[Daytr]

Thanks elZorro. Interesting interview.

[Skol]

Gold is going to get crushed according to Credit Suisse: Below $1,000

http://www.bloomberg.com/news/2013-0...it-suisse.html

[airedale]

Hi Daytr, you might have the answer to something that I have been thinking about. When governments confiscate the public's gold. Take the US for example. Uncle Sam says ok hand it in for a certain price. Do they rely on people doing what they are told? If you have it under the mattress or in the garden, how do they know about it? Perhaps they just rely on the fact that as there is no market people will sell to the government for the government price.

[Skol]

Hi Daytr, you might have the answer to something that I have been thinking about. When governments confiscate the public's gold. Take the US for example. Uncle Sam says ok hand it in for a certain price. Do they rely on people doing what they are told? If you have it under the mattress or in the garden, how do they know about it? Perhaps they just rely on the fact that as there is no market people will sell to the government for the government price.

A good example of classic goldbug paranoia and downright mischeviousness. Confiscation - don't talk nonsense.