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jesusfreakinco (28.92)

Is Alstry correct - all hell breaking loose? Bankrupt states and Gold soaring...

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9

January 31, 2009 – Comments (8) | RELATED TICKERS: TRX , GLD

This article may be a bit overdramatic, but it should scare the heck out of you:

http://freedomarizona.wordpress.com/2009/01/30/46-of-50-states-could-file-bankruptcy-in-2009-2010/

Gold is rising above major support and strong technically.  Even Sinchy added DGP on Friday.  No doubt the Fre will be back in the fight soon, but the gold bulls appear to have the upper hand.

Good set of charts just posted on www.jsmineset.com.  Gold is at or above new highs (some all time highs) in several currencies.

Good stuff at jsmineset.com even for those of you (Alstry) that think gold has no value other than as an emotional play.

JFC

 

8 Comments – Post Your Own

#1) On February 01, 2009 at 12:49 AM, XMFSinchiruna (27.49) wrote:

For sure all hell is breaking loose. :) How long do you think Californians are going to keep quiet while the state govt holds onto their welfare checks and tax returns? I view civil unrest throughout the country as a likely scenario in the relatively near future. As bad as things are now, they are about to get a whole lot worse.

For the record, though. I actually ended my DGP pick on Friday rather than starting it. At this stage of the game, ETFs and ETNs based on derivatives have no secrity whatsoever. In real life, I haven't touched any of those, and have been out of the GLD and SLV-type instruments for some time. Anyone with SLV should take a careful look at the prospectus... I find no assurances in there that if Barclay's were to fold, those assets would remain viable. 

You remember when Paulson went to Capitol Hill to bully Congress into pasing TARP by warning them of martial law and spelling out other horrendous scenarios if TARP were not passed? Well, guess what? TARP, aside from being the wrong strategy entirely, was a complete failure and a totally unsubstantial sum relative to the scope of the problem... with the predictable result that everything Paulson warned them about in that closed-door session is/will actually come to pass.

I wish us all well in the months ahead... it's going to get ugly. Be kind to your neighbors.

Here's an excerpt from my blog in December 2007:

My Christmas wish?:  that Americans will spend their Christmas budgets on food, water, and other emergency supplies to care for their families when distribution networks are disrupted by the economic tsunami ahead; that they will shift to much greater proportions of energy and precious metals equities within their investment portfolios, and that they will each purchase a small amount of physical gold to hold for all time.  And my New Years' wish?:  that we will all remember to be kind to each other when the chips are down.  I think we will all encounter challenges like we've never before faced (as individuals and as a nation), and I sincerely hope that we can all find that deepest well of humanity within us, and work together as brethren and countrymen through the crisis.  May peace and prosperity abound, but failing that, may humanity and liberty endure forever!

Alstry and I agree on this... prepare!

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#2) On February 01, 2009 at 4:09 PM, jesusfreakinco (28.92) wrote:

Sinchy,

Sorry for the wrong read on DGP.  I guess you are sensing that JS isn't too far off on his analysis that Comex could (or will soon) be broken.  If that happens, as he say, we'll see gold at $1500 very soon.  Time to add to are re-allocate towards gold shares as extra protection.

It will be interesting to see the Asian markets on the strength in the US market on Friday.  If I had to guess, Asian and European markets will be strong and the Fed will try to hammer the market coming into the US market.  However, I think they have lost control and their battle will only be temporary.

Keeping my fingers crossed.  It has been a painful year being long (and heavily long) gold shares in real life, but I believe are day isn't far off.

Regards,

JFC

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#3) On February 01, 2009 at 9:45 PM, Jimmy2008 (< 20) wrote:

Sinchiruna,

Thank you so much for sharing your insightful thoughts! I always enjoy your blogs very much! I regret so much that I hadn't visited this wonderful website until 2 months ago.

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#4) On February 01, 2009 at 10:11 PM, kamuirei (< 20) wrote:

"I find no assurances in there that if Barclay's were to fold, those assets would remain viable."

As I recall Lehman's commodity ETNs went to zero... 

(see RAW, EOH)

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#5) On February 01, 2009 at 10:44 PM, Jimmy2008 (< 20) wrote:

At this stage of the game, ETFs and ETNs based on derivatives have no security whatsoever. In real life, I haven't touched any of those, and have been out of the GLD and SLV-type instruments for some time. Anyone with SLV should take a careful look at the prospectus... I find no assurances in there that if Barclay's were to fold, those assets would remain viable. 

I sold my RJA for the same reason. Problem is that we, not financial professional, don't know much about credit risk related to ETFs. I posted something on credit and counterparty risk with ETFs and ETNs here a few days ago. I read somewhere else that There is no credit risk with USO. Is it true?

 

 

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#6) On February 03, 2009 at 7:22 PM, jesusfreakinco (28.92) wrote:

Jimmy,

Any thoughts on the likelihood of BCS folding?  I'd say nationalization looks like a probability for those who are patient on the short side...

JFC

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#7) On February 07, 2009 at 5:18 PM, rofgile (99.32) wrote:

On Friday, I actually ended my real gold/silver position in CEF.  I am hesitant to be in it now - as so many people are bullish.  Even Alstry is becoming more bullish on gold - that suggests that it might be time for a correction to me.  I like to buy gold now when it is $700-800, and think the top is around $900.

Treasury auctions are sucking the money out of all other assets.  At some point people will move on and the treasury bubble will end.  At that point a lot of things will benefit, including gold, but also stocks.

 The way I see it now, it doesn't make sense to hold paper gold.  You can't even see what you own - it is all virtual and paper.  And there is a lot of risk.  Gold could easily go to 700-800 again, or it could go to 1000-1100.  However, there are so many beat up stocks that can't go any lower and could go many multiples higher.

 I don't think it makes sense to invest in gold/silver now, unless you physically own it and it is something nice to have anyways.  Jewelry, silverware, etc is at least nice to have anyways no matter what.  You can also get sterling silver flatware, etc for close to spot price by weight sometimes off of ebay right now. 

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#8) On February 12, 2009 at 8:22 AM, brwn8484 (89.58) wrote:

Just who is going to be buying all this gold at $1500/ounce when our dollar is worthless and everyone is pennyless?

Be carefull who (or what) you put your trust in?

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