Down with Gold (obsession)!
Every couple of weeks I try and find more gold or gold mining companies to short in CAPS.
I see it as a huge capacitor of my CAPS score... charging up more and more and more.. I'm waiting for the discharge to happen - probably in 2010.
I was at an exhibit at Emory University in Atlanta this last weekend, at the Carlos Museum. The collection contains numerous artifacts of Amerindian, Roman, Egyptian, and Middle Eastern origin. There were some really beautiful silver and gold objects - especially gold figures made by Costa Rican indians.
The Amerindians viewed gold as special because it was rare, and didn't tarnish like silver or copper. However, they did mix up to 50% with copper because of the beautiful reddish color of the metal.
The artisans there appreciated gold because of the beauty in the final objects that they made. It served a useful purpose in making art and jewelry.
The same people were confounded by the Spanish, who simply lusted for the gold itself (much like current investors). The Spanish took all the beautiful objects, simply melted them down, turned them into coins or ingots that just stayed locked in a vault.
Present day gold investors are like the Spanish. They are going after this shiny metal, just to have some locked up hidden away. I can understand making gold into beautiful jewelry, a wedding band, or a panel for a church. Lusting after a GLD fund or a krugerand is nuts.
All this gold demand, spurring large-scale mining and ecological destruction to "preserve wealth". F**king idiotic.
I am growing excited about the upcoming bursting of the gold bubble. I think it'll happen about the time the FED first raises interest rates, but I am not sure when it'll begin. All I know is that the higher gold prices go, the greater the crash will be.
Gold for jewelry buying is already crashing in demand. Nowadays, an artisan or jewelry customer doesn't have to choose between gold, silver and copper. There is a modern world of materials. This gold bubble might just drive away customers and change the underlying structure of the gold market this time.
Other materials include: Modern silver alloys that don't tarnish (argentium silver), platinum, palladium, polished stainless steel, bronze/copper, and a whole world of undiscovered modern alloys.
Its the same as any other market. When silicon gets unaffordable for solar cells, companies that make thin film become enormously profitable. When gold gets unaffordable for people.. XX will be started as a new trend.
So, you buy a bunch of krugerands at 5% above spot. Right.
Now, a year has gone by at gold spot is up 15%. You go to sell. Now you have to sell below spot 5%.
Now, the IRS comes in and takes a 30% tax on your profits.
So, your net gain is a measly 3.5%? Wouldn't a CD at a bank be better?