Short Gold

[Narcotized]

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Go ahead, I dare you!!

Long term target price of Gold in US toilet paper dollars: Infinity

We have 4 choices: Massive spending cuts (no political will for even minimal spending cuts), Default (no political will), Skyrocketing interest rates (our debt payments could never afford that), or the final option (run that printer baby!!)

QE3 followed by QE4 followed by QE5..........

Dollar gone down... Gold go up... It's a currency, not an investment.

 

[IlDestriero]

I think the september surprise will be announcing the cutting of the long term debt by 2 trillion dollars over 12 months, by printing 2 trillion dollars over 12 months!👍
Just writing 2 trillion dollars is ridiculous. Weren't we over budget by almost that much last year alone? These bastards are so dumb and shortsighted it's painful. Hey! Here's an opportunity to start making the hard choices, we can blame it on the debt ceiling crisis, etc. What do they do?😴 😴 ...
Still waiting... :eek Hey we've been downgraded, let's get the ball rolling... ... 😴
Oh well, the weather's nice in Sydney. Maybe the US will be the example the other westernized counties need to watch to get their act together. Not exactly the shining city Reagan envisioned.

 

[pgg]

Maybe the US will be the example the other westernized counties need to watch to get their act together.

I was hoping Europe would be the example that THIS western country would take note of and get its act together.

 

[deleted185747]

I think gold will go down and that shorting it is a good idea. If the USD becomes worthless there will be another fiat note created in its place: something like a global currency.

see this from cnbc which compares gold vs stocks:


The price of gold hit a fresh all time high of $1,900 an ounce on Tuesday as investors continued to fret over the sovereign debt crisis in the euro zone and its impact on the global banking industry.

Anthony Bradshaw | Getty Images​

Having risen by a third since the beginning of 2011 and nearly fivefold since 2004, one analyst believes the precious metal is now in bubble territory and an "absurdity".

"Gold is not money and has no investment yield and in fact incurs carrying/storage costs. With the 10 year US treasury rate at 2 percent and storage cost of 1-1.5 percent this implies an annual opportunity cost of 3-3.5 percent,” said John Wadle, the head of regional banks research at Mirae Asset in Hong Kong in a research note sent to CNBC on Tuesday.

With global gold reserves now worth over $9 trillion and the 30 stocks that make up the Dow Jones Industrial Index worth nearly a third of that level combined, Wadle believes gold is now a “bubble compared to US blue chip stocks”.

“For those pundits that believe gold will keep rising to $2,500 an ounce, let's do some simple math: the current reservoir would be valued at $12 trillion and the next 20 years of production would produce gold worth $3.8 trillion, bringing the total value to $15.8 trillion” said Wadle.

“Even assuming earnings for the Dow stocks rise by only 2 percent (Japanese deflation scenario) over the next 20 years and the market only trades on a P/E of 10x an investor would still make 130 percent over this period,” he said.

To match this return gold would need to top $4,400 an ounce according to Wadle.

 

[urge]

“Even assuming earnings for the Dow stocks rise by only 2 percent (Japanese deflation scenario) over the next 20 years and the market only trades on a P/E of 10x an investor would still make 130 percent over this period,” he said.

To match this return gold would need to top $4,400 an ounce according to Wadle.

In 20 years, I don't see why not.

College will be like 200k/year by then.

 

[deleted126335]

The right way to use gold in an investment portfolio:

http://www.efficientfrontier.com/ef/0adhoc/harry.htm


Narco, excellent call in shorting gold by the way. 🙂

 

[RussianJoo]

Go ahead, I dare you!!

Long term target price of Gold in US toilet paper dollars: Infinity

We have 4 choices: Massive spending cuts (no political will for even minimal spending cuts), Default (no political will), Skyrocketing interest rates (our debt payments could never afford that), or the final option (run that printer baby!!)

QE3 followed by QE4 followed by QE5..........

Dollar gone down... Gold go up... Ain't friggin rocket science. It's a currency, not an investment.

Not looking good. But at least Obama will save us with the Super Secret September Surprise! Can hardly wait for this one.

Where do you buy your gold from? Do you actually buy Gold or just a paper saying you own $50K in gold or whatever?

I have some money I wouldn't mind investing into something long term and safe.

thanks.

 

[Narcotized]

The right way to use gold in an investment portfolio:

http://www.efficientfrontier.com/ef/0adhoc/harry.htm


Narco, excellent call in shorting gold by the way. 🙂

Yup, you got me..... this time.

Massive pullback is inevitable. But taking 30 years to match that high will not occur again. Nothing about today is like 1980. Good day for gold shorters, but kinda the broken clock phenomenon; you're right sooner or later.

Serious question, what path do you see us going to get out of this debt dollar-devaluation spiral? If you terminate money printing, do you see the political will for MASSIVE cuts to SS, Medicare, etc? Otherwise interest of the debt buries us as rates have to rise significantly.

Cherish the victory, but I don't see an end to the steady devaluation of the US dollar.

 

[pgg]

The right way to use gold in an investment portfolio:

http://www.efficientfrontier.com/ef/0adhoc/harry.htm

I love the irony there - people are piling into that investment strategy now, buying gold. And they're buying it from from the earlier adopters of that same plan, who have been diligently following it for a long time, and are now selling gold to rebalance.

 

[pgg]

Where do you buy your gold from? Do you actually buy Gold or just a paper saying you own $50K in gold or whatever?

I have some money I wouldn't mind investing into something long term and safe.

thanks.

I wouldn't buy paper PMs unless I was hoping to profit from volatility.

apmex.com is a good place to buy smallish quantities of physical PMs. I've purchased from them in the past, though it's been almost a year since my last order.

 

[deleted126335]

I love the irony there - people are piling into that investment strategy now, buying gold. And they're buying it from from the earlier adopters of that same plan, who have been diligently following it for a long time, and are now selling gold to rebalance.

That is exactly the way that the overwhelming majority of investors usually behave. Whether it was tech stocks in the 90s, real estate in the mid 2000s, Gold or Long Treasury Bonds today.

 

[deleted126335]

Yup, you got me..... this time.

Massive pullback is inevitable. But taking 30 years to match that high will not occur again. Nothing about today is like 1980. Good day for gold shorters, but kinda the broken clock phenomenon; you're right sooner or later.

Serious question, what path do you see us going to get out of this debt dollar-devaluation spiral? If you terminate money printing, do you see the political will for MASSIVE cuts to SS, Medicare, etc? Otherwise interest of the debt buries us as rates have to rise significantly.

Cherish the victory, but I don't see an end to the steady devaluation of the US dollar.

I really don't know how the end game will play out. Every central bank is trying to kill its currency. That is why gold has been skyrocketing. For the record I do think that is different this time because of the specter of sovereign defaults. The risks in financial markets are higher than they have been in my lifetime.

The Bond Market predicts deflation. The stock market and Gold call for inflation. Kind of like Schrodinger's cat - simultaneously alive and dead. Either way, I am not a student of economics, but I am student of financial markets and what has worked in investing. For those who choose to own gold, the above link is the right way IMO. I consider it a very valid and reasonable way to do so. Just be prepared to hold on for a long time as 2 of the 4 elements of the portfolio have had a great run.

 

[IlDestriero]

Where do you buy your gold from? Do you actually buy Gold or just a paper saying you own $50K in gold or whatever?

I have some money I wouldn't mind investing into something long term and safe.

thanks.

 

[proman]

I'm guessing that's about $43,000 in the hand.

 

[IlDestriero]

I'm guessing that's about $43,000 in the hand.

$43,000 in the hand beats $86,000 in the bush.
Bernie's investors had lots of fancy certificates and spreadsheets.
I'm not so sure I'd want to deal with 100+ pounds of siver though.

 

[proman]

$43,000 in the hand beats $86,000 in the bush.
Bernie's investors had lots of fancy certificates and spreadsheets.
I'm not so sure I'd want to deal with 100+ pounds of siver though.

To think I was living in South Africa in 1986-88 when gold was $400 an ounce and no one could buy Krugerrands because of international sanctions. Did my Dad buy a single one? Nooooo We got a VW Passat wagon instead.

 

[cfdavid]

The name of the game is volatility. Personally, I have very little faith in long term, traditional, investing. "Markets" are trading on news headlines.

So, IMHO, a good way to "invest" is to not really invest at all, but rather to trade. This mandates one to be "dialed" into certain trends, both long and for sure short.

Many will say that you can't predict the top or the bottom of any particular asset class. I'd agree. But, you can begin seeing little trends, even in terms of how one asset class "behaves" w/r/t the headlines that so very much determine where markets go from day to day.

It is possible to, say, choose a particular asset class whether it be a large cap index, oil, precious metals, and really get to know how they respond in this volatile climate. Clearly you need to focus and this will be at the expense of other asset classes etc. But, it is one way to succeed in the markets.

RJ, some of the other guys have advocated physical possession of gold or other pm's. Not sure about that. You can "play" short term trends with leveraged ETF's in PM's.

Anyway, there's more than one way to skin a cat and different strokes for different folks. I just feel that there's so much uncertainty (thus volatility) and that we've been a long time without sound fundamentals driving asset prices that I'm just not going to buy and hold onto too much, including gold. But, I will play short term "trends".