Use access key #2 to skip to page content.

inthemoneystock (< 20)

The Simple Ways Gold Told You Of Coming Collapse

Recs

4

February 15, 2013 – Comments (90) | RELATED TICKERS: GLD

Gold continues to collapse lower. The metal is trading at $1,606.50, -29.00 (-1.77%). Many retail investors have been shocked by the massive sell in gold but I called it out in multiple articles weeks and months ago.


The key to recognizing the sell off in gold was simply to compare how many retail investors had bought into gold in the last few years on pumps from the media and analysts. Just like the market in 2007, the media pumped like crazy and the average investor bought, hook line and sinker. The markets dropped more than 50% off those levels. When the average investor is all in, the top is in and a collapse will ensue. The bottom will only be reached when the average investor throws in the towel and sells for a major loss.

Word to the wise: When one out of every four commercials on news radio stations says to buy gold in your 401K, avoid like the plague.

The supports on gold are as follows. First the $1,500 level. This level is a major point. Should it continue to collapse, $1,200 is the next stop.

Gareth Soloway
InTheMoneyStocks

90 Comments – Post Your Own

#1) On February 15, 2013 at 1:53 PM, whereaminow (42.34) wrote:

The key to recognizing the sell off in gold was simply to compare how many retail investors had bought into gold in the last few years on pumps from the media and analysts.'

Well, let's see the comparison. Do you have any numbers for this?

David in Liberty

Report this comment
#2) On February 15, 2013 at 2:24 PM, outoffocus (23.71) wrote:

Oh yea! It had NOTHING to do with the CTFC changing the margin rules.  It had EVERYTHING to do with Martha down the street buying gold bars.  Then everything crashed after that.  So much so that gold is back down to pre-crisis levels. Right.../endsarcasm

Report this comment
#3) On February 15, 2013 at 7:35 PM, ajm101 (32.21) wrote:

This should be great, I'll get my popcorn.  You should know the first rule here, which is gold can do no wrong.  If gold goes down, it is overregulation/margin/central banks selling/conspiracy/market makers/etc.   If it goes up, it is because of the fundamental righteousness of the people that are long gold, as well as a testament to the failure of Keynesian economics and fractional reserve banking.

Report this comment
#4) On February 15, 2013 at 7:42 PM, ajm101 (32.21) wrote:

Apologies to the gold bulls to whom my previous comment does not apply.

Report this comment
#5) On February 15, 2013 at 8:08 PM, whereaminow (42.34) wrote:

ajm, 

Its all about perspective. Anyone who thinks $1600 is a collapse needs to have their head examined.

But what is really perking my curiosity is this completely un-scientific conspiracy theory that little old ladies are the reason for gold's historic bull market. And not massive Fed balance sheet expansion

Just asking for evidence. Any evidence....

David in Liberty 

Report this comment
#6) On February 15, 2013 at 10:49 PM, ajm101 (32.21) wrote:

David, historical trends aside, I'm unaware of why gold has to maintain a constant value against the US dollar, as opposed to any other mined commodity that's price is correlated with the marginal cost of production.   I'm not betting against it, but I can think of multiple assets I'd rather have than gold to hedge against monetary inflation.

Report this comment
#7) On February 15, 2013 at 11:14 PM, awallejr (82.99) wrote:

David I take Gareth's arguments with a grain of salt.  He just posts and doesn't defend his arguments. At least you and I argue away. He also argued that the reason why we had light volume this week and that the market will collapse is because of those same average retailers.

Yes let's blame it all on them.  Gold will crash, the market will crash.  Why?  Because of those pesky old ladies. He has his agenda and I suspect it has nothing to do with being sincere with the website community.

I suspect he is shorting and is just trying to drum up fear.

As I told him elsewhere the average retailer left the market years ago. They aren't coming back.  They are in bonds and will die holding them.

I am no goldbug but I am a proponent of holding some precious metals in one's portfolio.  I own coins (I really do love morgan silver dollars and have become addicted to ebay) and mining stocks. We have a currency debasing war it seems, people in India still love the jewelry, and I suspect we will get hit with a black swan or two this year (either self inflicted by Congress or from Iran's nuclear activity).

Gareth throwing out a 1200 number for gold reminds me of the pundits (Alstry included) throwing out DOW 2000 numbers back in 2009.

Report this comment
#8) On February 15, 2013 at 11:19 PM, whereaminow (42.34) wrote:

I'm unaware of why gold has to maintain a constant value against the US dollar

Neither am I. Or anyone. There is probably not a single human being on this planet that predicted "flat" for the last 12 months or so.

Gold haters would have said "no way can it lose its momentum and not totally collapse."

Gold lovers would have said "12 months of building support in the 1600-1700 range? Ha, if it's got that much support it'll go through the roof."

No one said, "It ain't going anywhere."

So I don't understand your point.

I'm just here looking for hard evidence of the great Progressive conspiracy that Glenn Beck tricked so many little old ladies that it caused a 1999-2011 gold bull market.

I'm still waiting and I don't think the blog author (nor Paul Krugman, who was among the first dipsh*ts to put this conspiracy forward) has any.

David in Liberty

Report this comment
#9) On February 15, 2013 at 11:21 PM, whereaminow (42.34) wrote:

awallejr,

Agreed 100%

(scary....)

David in Liberty

Report this comment
#10) On February 15, 2013 at 11:48 PM, awallejr (82.99) wrote:

Lol.  Yeah.

Report this comment
#11) On February 16, 2013 at 2:27 AM, Valyooo (99.60) wrote:

I think gold is going to 6000+ within the next 5 years...but currently the technicals are bad.  And yes, when retail investors start buying en-masse, this is a new segment of buyers, which pumps the price up...they are the easiest ones to shake out...those ARE signs of a short term top (like ebay starting a gold store? come on).  But it is not a long term top...no reason to get upset.

 

Also, I don't buy the margin requirement thing...for every long position in gold, there is a corresponding short position...that is how a transaction works...one buyer, one seller. ..why would margin requirements knock down golds price? Why not make it rise as shorts cover? 

Report this comment
#12) On February 16, 2013 at 9:33 AM, outoffocus (23.71) wrote:

Its all about perspective. Anyone who thinks $1600 is a collapse needs to have their head examined.

Thank you! 

Report this comment
#13) On February 16, 2013 at 2:17 PM, awallejr (82.99) wrote:

why would margin requirements knock down golds price? Why not make it rise as shorts cover?

Actually I don't know if people can short physical gold.  If they can it would only rise if there is a substantiial short position being covered.  But with margin many lever up and have to start dumping at a basically unfavorable price as margin calls go out.  Happened a lot in the stock market during the crash,  just ask Aubrey McClendon.

Report this comment
#14) On February 16, 2013 at 3:00 PM, somrh (84.66) wrote:

@ Valyooo

 why would margin requirements knock down golds price?

Debt creates excess demand where it would not have previously existed.

Steve Keens looks at this explicitly with what he calls credit acceleration (the second derivative with respect to time).

See here.

 

Report this comment
#15) On February 16, 2013 at 3:03 PM, somrh (84.66) wrote:

Anyway, as an anecdote, I see my advertisements for selling gold than buying ("bring in your gold jewelry; we're buying"). But I'm pretty good at advoiding advertisements so that may not be the norm.

A good portion of the gold demand isn't coming from the US anyway; it's coming from emerging markets where investments options are restricted (e.g. negative real rates, corrupt local stock markets, overpriced real estate). 

Report this comment
#16) On February 17, 2013 at 7:13 AM, valuemoneygreen (83.90) wrote:

Gold does nothing for anyone. Buy away. I would rather buy a barrel of oil. Some gas. Some food. Some company that produces goods someone needs. I would rather buy silver...at least that has some good industial uses and is WAY WAY cheaper. I would rather buy cotton to make clothes. I would rather buy steel to build a building. I would rather buy a computer to search the net. I would rather buy cable so I can watch tv. I would rather buy tickets to a basketball game for some enjoyment. Well I could go on and on but I am tired of typing. Just to repeat I basically would buy anything BUT gold. Is gold money? If it is I would want to be in ANYTHING but cash. EVEN if it is inflation protected. I want my money to BEAT inflation if I am investing it!!!!!!!!!!

Report this comment
#17) On February 17, 2013 at 7:25 AM, valuemoneygreen (83.90) wrote:

whereaminow one more thing.... tell me the price gold has to hit in your mind to be a collapse? Then if it hits that price will you admit it was a bad investment? I bet no matter what price you won't. Or will you? just asking. Then I would like to know your average buying cost. I want to see what the returns are like. What is fair price for gold in everyones minds. That I would really like to know. $10k an ounce? Or better yet at what price would it be overvalued? all gold believers please comment on that one.

Report this comment
#18) On February 17, 2013 at 8:09 AM, valuemoneygreen (83.90) wrote:

O then everyone go to whereaminow caps page and look at the pick related to gold and silver that were made in 2010 and look how they have done compared to the market and ask yourself if that is a collapse compared to the market. He must have thought they were a good deal or could at least beat the market or he wouldn't have picked them. I make mistakes too. I will admit any of my bad picks....go to my valuemoney caps page....I have made a bunch of them and am not afraid to admitt I was wrong on any of my calls. But when my picks get crushed by the market I was wrong. Sure some might go back end up turning out right but at some point just say I was wrong. Dead wrong. I will even use my gold picks as an example. Since 08 they increased 120%. I was wrong at the time and price I picked them. But since then they are up over 120%. Could it be gold got OVERVALUED? that is the point I am trying to make. I hear gold bugs keep arguing it will just keep going higher no matter the price and never give numbers and reasons why.  





 

Report this comment
#19) On February 17, 2013 at 8:38 AM, valuemoneygreen (83.90) wrote:

Gareth throwing out a 1200 number for gold reminds me of the pundits (Alstry included) throwing out DOW 2000 numbers back in 2009

1200 might be a price support idk.... kind of like when I picked NOV on my valuemoney caps page.... I stated buyers stepping in @ $65 and change. As for Alstry's number I have no idea...lol

Kind of like Valyooo throwing out a $6000 number in 5 years!

Report this comment
#20) On February 17, 2013 at 8:41 AM, valuemoneygreen (83.90) wrote:

Is that just as dumb? Valyooo's number? Just asking. @ awallejr

Report this comment
#21) On February 17, 2013 at 9:15 AM, judysway (43.68) wrote:

Whereaminow, Little Red Riding Hood was once fooled by the Big Bad Wolf...she is now the Little Old Lady!  There is a saying, Fool me once, shame on you, fool me twice, shame on me!  Little Old Ladies can spot The Big Bad Wolf from a mile away!  They can play detective like a pro, you would be wise to listen to wisdom when it comes your way.  Gold is not an investment to "Make Money", it is a hedge against disaster...when money fails, real gold will still be an accepted currency and also a  hedge against inflation.  There are many Big Bad Wolves out there right now in Washington and all over the world who are greedily trying to take advantage of America, thus, no one should have all their eggs all in one basket.

Back in the early eighties I invested $6,000 (13 @ $416 an ounce) in gold Kuggerands, my husband said I was a fool and a year later made me sell them to help pay for my daughters college tuition... maybe a fool, but more like a fool to sell them, today my investment would be worth about 25K. Right now, I wish I still had them, if the country does not reduce this debt load very serious inflation is sure to follow.   Real Gold, not stocks, is or should be a consideration for us us all.

Report this comment
#22) On February 17, 2013 at 12:07 PM, awallejr (82.99) wrote:

Is that just as dumb? Valyooo's number? Just asking. @ awallej

Well I took Gareth's number as a possible undefended prediction by him for this year.  Five year's from now is a lot harder to see but personally I don't see gold at 6k then either.  Eventually maybe with all the fiat printing that is going on. But I hope not since that is a lot of inflation having happened.

Report this comment
#23) On February 17, 2013 at 12:47 PM, Valyooo (99.60) wrote:

My 6000 number is not random, it is based off of using the way CPI used to be calculated, and projecting the gold based off the last 1980 top, and accounting for monetary inflation.

 

Maybe one day you will learn English properly, Valuemoney, and then your arguments will make more sense. 

Report this comment
#24) On February 17, 2013 at 12:49 PM, Valyooo (99.60) wrote:

Also, I guess you folks don't trade futures.  For every FUTURES transaction, there is one buyer and one shorter.  Yes you don't short physical gold...but on the FUTURES market, every "seller" is "going short".  It's called open interest.  if I want to buy a gold contract, either somebody else has to close out their existing contract, decreasing open interest, or a new contract is created, in which case their is a short position created.  So for every long there is a short...it is not like the stock market where shorts and longs do not correspond. 

 

So again, if the FUTURES margin is changed, it would not shake out longs, since the FUTURE market has equal longs and shorts. 

Report this comment
#25) On February 17, 2013 at 3:40 PM, valuemoneygreen (83.90) wrote:

Valyooo I don't need spelling or grammar to be understood. Thanks for the personal insults though. My point I am trying to get at....and I didn't say your prediction would be wrong either. Some of the stuff you are saying makes perfect sense. My point is your prediction of 6000 my be correct also the prediction of 1200 could be correct also. Gold investments are based on IRRATIONAL behavior. If one wants to try and make money off it....good for them. Valyooo stop by my valuemoneygreen caps page and you might learn something about investing. Unless you are going to make rude personal attacts on me or anyone else there.

Report this comment
#26) On February 17, 2013 at 3:51 PM, valuemoneygreen (83.90) wrote:

And Valyooo I still want to know your source of this ........

#5) On February 16, 2013 at 2:31 AM, Valyooo (99.84) wrote:

The S&P trailing P/E is 21.6, forward is 18...what are you talking about?

Report this comment
#27) On February 17, 2013 at 4:03 PM, valuemoneygreen (83.90) wrote:

My another thing this guy 1200 pick might not be RANDOM either....like someone stated....just like yours wasn't random....jeepers just trying to point out facts and numbers and someone starts with bashing my english....and my short sentences and proper grammar....I think that is pretty rude..... I am arguing investing in gold not how someone spells or speaks. awallejr thanks for your reply....even though I dont agree with some of the stuff you say at least you have some good reasoning and some facts to back your thoughts.

Report this comment
#28) On February 17, 2013 at 4:15 PM, Valyooo (99.60) wrote:

Well I made a rude personal attack because you called my prediction "dumb".  If you bothered to read books on the history of money, you would know that over time there are cycles between gold backed money and paper backed money. When they switch from paper back to gold, they re-fix the amount of dollars backed by an ounce of gold.  If government goes back to a gold standard and says an ounce of gold will back $6000, and I am predicting that will happen based off of 1000+ years of history, how is that irrational behavior?

Report this comment
#29) On February 17, 2013 at 4:17 PM, Valyooo (99.60) wrote:

You call me dumb and then expect me to treat you kindly?

Report this comment
#30) On February 17, 2013 at 4:18 PM, Valyooo (99.60) wrote:

My apologies, the 22 p/e is the dow utility.  S&P P/e is 18

 

http://online.wsj.com/mdc/public/page/2_3021-peyield.html 

Report this comment
#31) On February 17, 2013 at 4:18 PM, Valyooo (99.60) wrote:

The P/E of the Russell 2000 is 32...much broader index...that doesn't worry you?

Report this comment
#32) On February 17, 2013 at 4:22 PM, valuemoneygreen (83.90) wrote:

I asked awallejr if the number u gave was dumb! Jeepers. I NEVER said your number was DUMB. Look at my last couple statements....jeepers I said your number COULD BE CORRECT. Do you understand that English?

Report this comment
#33) On February 17, 2013 at 4:24 PM, valuemoneygreen (83.90) wrote:

Somebody help me here. Please.

Report this comment
#34) On February 17, 2013 at 4:30 PM, valuemoneygreen (83.90) wrote:

All I am trying to get at is Gold is too hard to value if one gives a 1200 number and one gives a 6000 number.....Let all value WFC I highly doubt the valuation varies by that kind of spread! I can give number to come up with a fair price for Wells Fargo and someone elses may differ even by 50% but I think WFC's fair price is $45 dollars and someone else says it is $225 I think someone has to be a little off base don't anyone else agree?

Report this comment
#35) On February 17, 2013 at 4:42 PM, valuemoneygreen (83.90) wrote:

Is that just as dumb? Valyooo's number? Just asking. @ awallej

That is what my comment was. I NEVER stated I thought your number was dumb. Does anyone agree? Holy cow. Read what else was said in this discussion, I was just refering to comment #7 when I asked that ? to awallejr read the last sentence....it seemed to me he was saying there was no bases to their arguement thus I assumed and maybe I used the wrong words and by no means were they directed at you because I stated @ AWALLEJR...I asked AWALLEJR if HE thought your number was DUMB.

Report this comment
#36) On February 17, 2013 at 4:55 PM, valuemoneygreen (83.90) wrote:

Valyooo....yes I think the small caps or overbought.....that is what happens in the later stage of a bull market.....large and mega cap stocks tend to outperform.....look at DOW compared to S&P.... if you go too JohnCLeven 's last blog about the DOW being a bad indicator and answer my brain tease.....you will understand. You may think it is dumb and that is fine or a waste of time but I like showing people different ways to look at things. If one pays attention and tries to learn and not be narrow minded....and I am NOT implying YOU are narrow minded. Go to my CAPS page and feel free to ask questions.... I am more than happy to tell you how I go about looking at things....AND believe it or not I want to see how u or anyone else looks at stuff...... we may dissagree! AND THAT IS FINE!

Report this comment
#37) On February 17, 2013 at 5:02 PM, valuemoneygreen (83.90) wrote:

I was also just a little concerned about your numbers....were are you getting your S&P earnings from? I comment in that other blog and showed you my numbers. I just want to know your 2012 earnings estimates because those will be trailing earnings in a bit and I am GUESSING they will be 104 and change. That will give the S&P trailing earnings multiple of 1523/104 =14.64 PE which is far from being overvalued historically.

Report this comment
#38) On February 17, 2013 at 5:13 PM, valuemoneygreen (83.90) wrote:

oops i just saw your link...i tried clicking on it but it didnt work

Report this comment
#39) On February 17, 2013 at 5:21 PM, valuemoneygreen (83.90) wrote:

http://www.investorsfriend.com/S%20and%20P%20500%20index%20valuation.htm

Report this comment
#40) On February 17, 2013 at 5:31 PM, valuemoneygreen (83.90) wrote:

sorry this is the table I used......Calculated based upon earnings yield and S&P 500 levels each year. The raw data for this table was obtained from Bloomberg (and from S&P).....http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/spearn.htm

Report this comment
#41) On February 17, 2013 at 7:42 PM, awallejr (82.99) wrote:

If government goes back to a gold standard and says an ounce of gold will back $6000, and I am predicting that will happen based off of 1000+ years of history, how is that irrational behavior?

It isn't irrational behavior, to be blunt it is silly thinking.  First I guarantee you that what happened during the Dark Ages is irrelevant to today or in the future.  That is apples to oranges thinking and nothing more.

Second and more importantly we will never go back to a gold standard.  Never. The only way it could work is if we pool all gold under one house and issue one world currency.  And you really think that is possible during our lifetime? And if you don't pool it under one house the countries with the gold mines will have the power and the countries without the gold mines aren't going to come on board.

Finally, even accepting your argument, why not $4,000, or $7,000 or any other number.  What happened during the Dark Ages that had set a change of events to make it specifically $6,000?

Report this comment
#42) On February 18, 2013 at 5:32 PM, whereaminow (42.34) wrote:

valuemoneygreen,

You remind me of Newt Gingrich as his candidacy fell apart.  Just lashing out at everyone.

You sent about what? ... 3 or 4 comments my way?  I am going to ignore them as they are not relevant.

Do you have any response to the statement I made in Comment #1?

Since you have avoided answering it, I assume the answer is no. You have no evidence.

David in Libery

Report this comment
#43) On February 18, 2013 at 6:29 PM, ETFsRule (99.94) wrote:

Just stumbled upon this thread.

"#5) On February 15, 2013 at 8:08 PM, whereaminow (87.64) wrote: ajm, Its all about perspective. Anyone who thinks $1600 is a collapse needs to have their head examined. But what is really perking my curiosity is this completely un-scientific conspiracy theory that little old ladies are the reason for gold's historic bull market. And not massive Fed balance sheet expansion Just asking for evidence. Any evidence.... David in Liberty "

According to the World Gold Council, investment demand for gold is up around 300% since 2004. So, the steep rise in investment demand for gold seems to coincide with the rise in the price of gold.

In fact, for much of the recent bull market you could basically divide the total investmend demand for gold by 10 and it comes out pretty close to the price of gold. I think I'll graph it sometime to show the correlation - thanks for the idea.

Total investment demand for gold, 2004: 476.1 tonnes

Total investment demand for gold, 2011: 1700.4 tonnes

2005 WGC report (with data for 2004):

http://www.gold.org/download/get/pub_archive/pdf/GDT_Q4_2005.pdf

2012 WGC report (with data for 2011):  http://www.gold.org/download/get/pub_archive/pdf/GDT_Q4_2012.pdf

Report this comment
#44) On February 18, 2013 at 6:30 PM, ETFsRule (99.94) wrote:

.

Report this comment
#45) On February 18, 2013 at 6:41 PM, ETFsRule (99.94) wrote:

Scratch that, the numbers are pretty much the same - no need to divide by 10. Pesky decimal places!

Report this comment
#46) On February 18, 2013 at 8:15 PM, whereaminow (42.34) wrote:

You're telling me gold demand is up?  Breathtaking news.

Still looking for evidence that little old ladies who watch Glenn Beck are the source of the bull market.

David in Liberty

Report this comment
#47) On February 18, 2013 at 8:19 PM, ETFsRule (99.94) wrote:

"Still looking for evidence that little old ladies who watch Glenn Beck are the source of the bull market."

How about this:

Hypothetically speaking, if you wanted to prove or disprove the theory that little old ladies who watch Glenn Beck were the source of the bull market, what types of signs would you look for as evidence one way or another?

Report this comment
#48) On February 18, 2013 at 8:19 PM, ETFsRule (99.94) wrote:

.

Report this comment
#49) On February 18, 2013 at 8:29 PM, whereaminow (42.34) wrote:

Hypothetically speaking, if you wanted to prove or disprove the theory that little old ladies who watch Glenn Beck were the source of the bull market, what types of signs would you look for as evidence one way or another?

Heh, maybe the blog author (and others) shouldn't pass around conspiracy theories without any idea how they can be proven.

(Something about Popper and falsifiability.  And I thought you guys were the Positivists!)

David in Liberty

Report this comment
#50) On February 18, 2013 at 9:09 PM, ETFsRule (99.94) wrote:

Why not just answer the question?

If we can all agree on some reasonable criteria, then I'm sure we can objectively analyze the data and draw some logical conclusions. That would be a lot more useful than bickering.

Moving on, I have posted the previously-mentioned correlation here.

I think it is pretty clear that investment demand is what drives the price of gold - and not central banks, jewelry demand, or industrial demand (they all show very poor correlations with the price of gold).

So the question is, how much of the investment demand comes from Glenn Beck fans and how much is from professional investors? It's hard to prove conclusively, but there is certainly a lot of anecdotal evidence of old ladies buying gold, while stories like this indicate that the pros are moving on to other investments:

http://www.ft.com/intl/cms/s/0/d8fc6e66-79e8-11e2-b377-00144feabdc0.html#axzz2LJ4bCXDI

Report this comment
#51) On February 18, 2013 at 9:11 PM, whereaminow (42.34) wrote:

Well, there's one biggie that disproves it.

The bull market started in Sept. 1999.  It had tripled by the time Glenn even heard of gold.

David in Liberty

Report this comment
#52) On February 18, 2013 at 9:21 PM, ETFsRule (99.94) wrote:

Nah it started in early 2002. Gold actually fell from 1999-2001. The bull market basically started shortly after 9/11.

Beck's show didn't start until 2006, which is when gold really started to pick up steam. And it seems to have stalled since he left Fox News in 2011.

Report this comment
#53) On February 18, 2013 at 9:56 PM, Valyooo (99.60) wrote:

@awallerjr,

6000 is based off of money supply growth increase x prior  high in 1980...that is why

 

Also valuemoney and awallejr, you think gold numbers are way more random than stocks? Really? 

How many people on CAPS thought ATPG was a $40 company?  It was ranked stock of the year for 2010.  Now it is bankrupt.

How many people thought IRE would be worth $0 versus people who thought it would be worth $50?

What about BofA?  Bankrupt vs $20?

What about NFLX?  It has traded between 300 and 40 in 2 years with very little underlying difference in the company.

Some people think those small cap china stocks are worth 10x what they are worth, some think $0.

So if you say "I think PM should be worth $90 because it deserves a P/E of 20" and I say "I think PM should be worth $45 because less and less people are smoking so their growth prospects are diminishing", who is right?  Is their a "right" p/e for a stock?  If I told you the P/E of COST should be 14, and somebody else said 18, that is a 29% difference, but could you really tell me one is right over the other?

Report this comment
#54) On February 18, 2013 at 10:00 PM, whereaminow (42.34) wrote:

ETFs,

Well you have fun with that exercise. I'm not interested.  Good luck with your proof.  I hope you find it fulfulling.  

David in Liberty

Report this comment
#55) On February 18, 2013 at 10:04 PM, devoish (99.10) wrote:

 ajm101 comment #3   +1 rec

"do not come between the nazgul and their prey..."

 

On April 25th Sinchuruna posted advice to buy/hold silver at about $45.00, today it is at $30. Gold was about where it is today before a very shortlived run up to $1900.

 "#33) On April 26, 2011 at 9:03 PM, devoish (99.04) wrote:

 

Sinchiruna,

I am sure we don't see eye to eye on lot of things and this is probably another...

Word to the wide for newbies...  Days like this where logic doesn't prevail (miners not rallying even though metal is up) require nerves of steel.  If you trade on margin, use no more than 60% of your margin so you can withstand days like today (or worse raids...) so you leave plenty of fresh powder.

If that does not sound like a bubble warning to you, I don't know what might. The housing bubble lasted 4 years after people began to borrow just to speculate, but that does not mean a bubble has not begun. Anyway if people are borrowing to buy gold/silver, the moneys run out.

just my 2cents.

Best wishes,

Steven"

Sinch replied - 

 "#34) On April 27, 2011 at 8:47 AM, TMFSinchiruna (30.59) wrote:

 

devoish

I mean no disrespect, but devoish, heeding your prior bubble warnings about gold and silver (see comment #6) would have caused investors to miss out on the massive gains realized since. I don't know what a new log sliptter sells for, but I could purchase a lot more of them today than I could have in December 2009. Just food for thought.

Buying gold or silver on margin is asenine. So is the word "bubble" because of its rampant mis-use and disparate definitions. The silver price remains firmly grounded in underlying market drivers that are real and have real causes that are not going away.

As for housing, I think you'll find that people were borrowing to speculate in real estate far longer than four years before the peak. Think of all the "flippers" that were out there. Most people I talk to still have zero silver exposure and have no idea what the price is. We are nowhere even in the vicinity of silver representing a comparable case comparison." 

 http://caps.fool.com/Blogs/timely-guidance-for-silver/582509

 silver has now dropped from $45 to $30 

gold has gone from $1600 to $1600

the median price of a house collapsed from $250k down to $210. (much worse in some markets)

Silver fell further than housing.

Gold will not fall further than housing. The same Govt support for housing supports gold (not silver) after the housing money gets into the economy, even without Glen B pumping it on tv.

And just for the record, the logsplitter Sinch was referring to was a bet that our Climate scientists were competent and telling the truth about co2 causing global warming in 2009 with the expected unusual weather events. Before Hurricane Irene slammed me, before superstorm sandy slammed me and before the thirty inches of snow that hit my neck of the woods last week - an amount my part of long island has never seen in one single storm before.

 http://caps.fool.com/Blogs/please-comment-if-you/304826

#6) On December 04, 2009 at 10:22 PM, devoish (99.04) wrote:

Today there are a lot of people recommending I buy gold and silver and miners.

Four years ago there were a lot of people recommending I buy a house, and a condo and Home Depot.

Ten years ago there were a lot of people recommending I buy dot coms.

Fifteen years ago there were a lot of people recommending I use credit.

Twenty years ago there were a lot of people recommending I buy Gov't bonds and CD's.

Gold is like most of those things. It is only worth tomorrow what someone says it is worth tomorrow.

A new log splitter will make me money." 

Now it is Hurrican Irene, Superstorm Sandy, 30" of heavy wet snow, later

Since I warned of a silver/gold bubble, based upon the posts on this website, not on charts, not on politics, but what us folk are saying. gold has not done crap and silver has done worse than the housing collapse.

Since I recommended the log splitter over the metals, gold and silver are both up. But the logsplitter is slaughtering them both. So are the chainsaws. It will take at least $6000 gold to catch em now.

Best wishes,

Steven 

 David, I'm sorry, did I interrupt you before you could reply with the signs you would look for? 

Please, jump right back in... 

Report this comment
#56) On February 18, 2013 at 10:17 PM, whereaminow (42.34) wrote:

Steven,

I have no idea what you are rambling about, or why your conversations with Sinch have any meaning for me.

But thanks for sharing.

David in Liberty

Report this comment
#57) On February 18, 2013 at 10:35 PM, ETFsRule (99.94) wrote:

"#54) On February 18, 2013 at 10:00 PM, whereaminow (87.64) wrote:

ETFs,

Well you have fun with that exercise. I'm not interested. Good luck with your proof. I hope you find it fulfulling.

David in Liberty "

That's weird because you were just asking people for proof, and now you've lost interest in the topic right when we might actually be getting somewhere. I hope you weren't just here for the bickering.

Assuming you are bullish on gold, do you think demand would be driven primarily by hedge funds, central banks, retail investors, or some other party? Do you have any particular price target? I'd be interested in hearing your thoughts.

Report this comment
#58) On February 18, 2013 at 10:50 PM, whereaminow (42.34) wrote:

when we might actually be getting somewhere.

You're not getting anywhere.

do you think demand would be driven primarily by hedge funds, central banks, retail investors

The data for this is on the Web. Just Google it. I already have.

Do you have any particular price target?

The same one I've had for the last 6 years. I have no idea, but I like "up", especially for the long term.

David in Liberty

Report this comment
#59) On February 19, 2013 at 2:31 AM, valuemoneygreen (83.90) wrote:

whereaminow .....I this blog was about the price of gold. I think gold isn't worth even $100 an ounce to ME. And gave reasons I wouldn't invest in it. I know you won't answer my ?'s

Do you have any response to the statement I made in Comment #1?

Why would I answer that? It wasnt even directed at me in the 1st place. I had not even commented on this blog when you may your 1st comment.

Report this comment
#60) On February 19, 2013 at 3:06 AM, valuemoneygreen (83.90) wrote:

whereaminow.... see you made comments and I asked you ?'s  on the comments you made. Why would I answer what you asked the author of this blog to answer? That don't make any sense to me. I can't even comment on this blog any more. I hope gold goes to $100 an ounce so people stop talking about it. I don't invest in it short or long so I really don't care. I just like hearing what people have to say. I wasn't blasting out either. I asked people to look at your caps page and picks. You made them. Thats what we do in caps and everyone can see. What is the big deal? From now on I won't call you out, ask you anything I will just say you're right your views are the best and no one should question your thoughts because you are more thoughtful have a better idea of what is going on than anyone else and have read more books and have formed better oppinions than everyone else, my grammar and education lacks enough were I can not even talk to someone as knowledgable as you. I bow to whereaminow

Report this comment
#61) On February 19, 2013 at 8:09 AM, valuemoneygreen (83.90) wrote:

Also valuemoney and awallejr, you think gold numbers are way more random than stocks? Really?

How many people on CAPS thought ATPG was a $40 company? It was ranked stock of the year for 2010. Now it is bankrupt.

How many people thought IRE would be worth $0 versus people who thought it would be worth $50?

What about BofA? Bankrupt vs $20?

What about NFLX? It has traded between 300 and 40 in 2 years with very little underlying difference in the company.

Some people think those small cap china stocks are worth 10x what they are worth, some think $0.

So if you say "I think PM should be worth $90 because it deserves a P/E of 20" and I say "I think PM should be worth $45 because less and less people are smoking so their growth prospects are diminishing", who is right? Is their a "right" p/e for a stock? If I told you the P/E of COST should be 14, and somebody else said 18, that is a 29% difference, but could you really tell me one is right over the other?

I couldn't help but comment one more time because this is what I am getting at everone and the example here that Valyooo gave is exactly what I am trying to say..... see I would not invest in ALOT of things because I can't judge what they r worth. But BAC I have...why? It was trading @ $5 and I thought its value is closer to $20 I could go through and determind facts and numbers in a reasonable way to come up with my price I think it is worth. I can't do that with gold. I can do it with the 80 to 100 investment I do look at. I can do it with PM and KO......WFC HSY.......a 29% difference (and when I buy as in your COST example is at the LOW end of the range.....I would buy at the 14 pe instead of the 18 because maybe I am a little wrong) is nothing like the current price of gold and your 6000 number within the next 5 years. This is the point I am getting at and why I...stay away from investments like gold plus the other reasons I give. So to answer the ? you DIRECTED @ me. Yes and no it depends on the stock you are talking about.  I stay away from the stocks or whatever investment I can not judge what I think the value is ESPECIALLY if no one else can in a reasonable manner IN MY OPPINION. Does that make sense to anyone? This is all I am getting at in these comments. I ain't bashing anyone I am just giving facts my thoughts on how I look at things. And trying to get facts and thoughts from others. I did just bash whereaminow in my last statement because frankly I get a little fed up with him.

Report this comment
#62) On February 19, 2013 at 8:20 AM, valuemoneygreen (83.90) wrote:

Now I want to ask if you understand this? @ Valyooo

#35) On February 17, 2013 at 4:42 PM, valuemoneygreen (77.29) wrote:

Is that just as dumb? Valyooo's number? Just asking. @ awallej

That is what my comment was. I NEVER stated I thought your number was dumb. Does anyone agree? Holy cow. Read what else was said in this discussion, I was just refering to comment #7 when I asked that ? to awallejr read the last sentence....it seemed to me he was saying there was no bases to their arguement thus I assumed and maybe I used the wrong words and by no means were they directed at you because I stated @ AWALLEJR...I asked AWALLEJR if HE thought your number was DUMB.

And this is the last comment I will make on this blog. I got to get away!

Report this comment
#63) On February 19, 2013 at 10:25 AM, ETFsRule (99.94) wrote:

"

do you think demand would be driven primarily by hedge funds, central banks, retail investors

The data for this is on the Web. Just Google it. I already have."

Wow I knew Google was good, but I didn't know it could search into the future...

Report this comment
#64) On February 19, 2013 at 10:26 AM, ETFsRule (99.94) wrote:

.

Report this comment
#65) On February 19, 2013 at 11:00 AM, whereaminow (42.34) wrote:

ETFs,

Sorry. The question read weird. Anyway, no I don't know where demand will come from in the future.  I assume the proximate cause for gold's rise will be the continuing domination of the economics profession by lunatics and the continued oligarchical political rule by free-lunch promising brown-baby murdering psychopaths.  

valuemoneygreen,

I haven't updated a CAPS pick in years.  I don't pretend to be a stock guru and never have. My writings are almost entirely on economics, which is a different sphere of knowledge.  I have CAPS picks because I thought playing the game might be fun and informative.  It was ok but I prefer to simply follow the CAPS players that are way better at picking stocks than I am.

David in Liberty

Report this comment
#66) On February 19, 2013 at 5:19 PM, ETFsRule (99.94) wrote:

David,

It sounds like you may be investing in gold based on emotions rather than using unbiased, logical reasoning. That usually doesn't work out very well. But, we'll see what happens.

Report this comment
#67) On February 19, 2013 at 6:30 PM, awallejr (82.99) wrote:

Also valuemoney (I assume you men Valyooo and not yourself) and awallejr, you think gold numbers are way more random than stocks? Really?

Where the heck did I say that?  Seriously Value I don't mind people arguing with me but don't put words in my mouth.

Report this comment
#68) On February 19, 2013 at 8:59 PM, devoish (99.10) wrote:

 inthemoneystock,

Nice post. Enough interest for 67 replies but only four recs. My guess is golds defenders don't want you getting the suckers to think. Maybe the defenders are the ones who rec'd your post, but I doubt it.

Best wishes,

Steven 

Report this comment
#69) On February 19, 2013 at 9:03 PM, whereaminow (42.34) wrote:

It sounds like you may be investing in gold based on emotions rather than using unbiased, logical reasoning.

Weird. I've rarely been less emotional. Are you sure you read my comments correctly?

David in Liberty

Report this comment
#70) On February 19, 2013 at 10:32 PM, ETFsRule (99.94) wrote:

"Weird. I've rarely been less emotional. Are you sure you read my comments correctly?"

Yes I am sure.

Can you explain the connection between something about brown people and the price of gold?

Regardless, any system for predicting future price movements of gold must account for the current price of gold - otherwise, despite any bearish or bullish factors, you would have no way of knowing if it is currently overpriced or underpriced. So most of all, it is clear that numerical, data-driven arguments have the most value.

Report this comment
#71) On February 19, 2013 at 11:02 PM, whereaminow (42.34) wrote:

Can you explain the connection between something about brown people and the price of gold?

Yes. Wars cost money and are inflationary (classical definition). Is that a controversial or emotional idea?

David in Liberty

Report this comment
#72) On February 19, 2013 at 11:05 PM, Valyooo (99.60) wrote:

@awallejr,

 

You said "Finally, even accepting your argument, why not $4,000, or $7,000 or any other number.  What happened during the Dark Ages that had set a change of events to make it specifically $6,000?"

 

Why not $40 for KO?  Why not $35, or $47 

 

Name any stock, and then ask, why do you have a price target?  Why not a different price target that is lower, or higher? 

Report this comment
#73) On February 19, 2013 at 11:15 PM, awallejr (82.99) wrote:

And just for the record, the logsplitter Sinch was referring to was a bet that our Climate scientists were competent and telling the truth about co2 causing global warming in 2009 with the expected unusual weather events.

Going to hyjack this thread mainly because this quote gives me a chance to comment on something I wanted to, namely President Obama's State of the Union Address.  Personally I consider the President an extremely intellignet man.  But notice what he said when on the topic:

"I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy."

Reduce pollution and adapt to climate CHANGE. Sounds a lot like what I argued for in our other threads huh Stephen?

Report this comment
#74) On February 19, 2013 at 11:24 PM, awallejr (82.99) wrote:

And Valyooo you didn't address my criticism.  Why not KO etc? Because the market at any given moment will dictate the price. And as long as they continue to improve profits and increase dividends over the years one would expect it to perform well.That could change in which case you move to another.  As I said elsewhere, MONITOR.

But you made the silly argument that 1000+ years worth of history and the Government going back on the gold standard will put gold at $6,000 within 5 years.  I will again ask you, what happened back during the Dark Ages that set a chain of events in motion that will cause gold to become $6,000 within 5 years?

Report this comment
#75) On February 20, 2013 at 12:24 AM, ETFsRule (99.94) wrote:

"Yes. Wars cost money and are inflationary (classical definition). Is that a controversial or emotional idea?"

No it isn't emotional or controversial. But how does this relate to the price of gold?

We have had much more expensive wars and more inflationary wars: WW2, Korea, Vietnam, etc. And gold did not show any extraordinary gains during any of those wars. 

Compared to those wars, our current wars are relatively puny. So why should this cause the price of gold to increase?

Report this comment
#76) On February 20, 2013 at 12:44 AM, whereaminow (42.34) wrote:

Central banks and war have a long history.  The first central bank, the Bank of England, was set up to help pay for war.  Same with the Second Bank of the United States, which helped pay for the debts from the War of 1812. Unlimited power to create money has coincided, though not directly caused per se, the most unlimited wars in human history.  World War I ended the classical gold standard in Europe (and any hope for liberty there) as warring countries printed and printed until the illusion of redeemability could not be maintained.  

The Vietnam War did dramatically affect the price of gold, so much so that in spite of the price fixing agreed to in Bretton Woods the market could not be stopped, and the gold standard had to be abandoned. 

I don't know if you read Mises links, but for anyone following this weird thread, here's a great history (Part I, you can find a link to Part II in the article) on the fight to keep gold pegged at $35 and why it eventually was lost (by the government, or won by the market so to speak to price gold properly)

http://mises.org/daily/3325

Compared to those wars, our current wars are relatively puny.

I doubt that's true, especially in terms of costs.  Particularly WW2 and Korea were extremely short conflicts compared to these wars. Vietnam was so costly it ended the gold standard. Although human cost was higher in those wars, I don't think they come close to the dollars expended since 9/11 to fight these, inflation-adjusted or not.

I spent so much time with that god awful war machine.  I was in Kuwait when the war started.  I was working for a contractor in October 2003 when the first contracts were handed out.  Seriously, it was sickening.  It was the start of my awakening so to speak. I remember going home in November of that year.  I was sitting at a bar with a buddy from the Marines.  We were both typical "Patriots" back then.  I was depressed and angry at the corruption.  Yet, I stayed out there for 8 freaking years. Well, you don't become an anarchist overnight I guess.  I'm glad that chapter of my life is over.  

Anyway, I'd be truly surprised based on what I witnessed first hand if 1) there was ever a "victory" in this war in my lifetime, and 2) if there was ever less waste and corruption in a war effort.  I'd be shocked by it, because no one back in the States seems to have any idea how much money is blown through out there.

Oh well.  

Anyway, wars are expensive. Especially endless war using billion dollar trinkets to fight goat herders with machine guns that somehow just can't be pacified year in and year out.  Golly gee whiz.  So I'm guessing there's plenty more war money to be spent.  

David in Liberty

Report this comment
#77) On February 20, 2013 at 12:51 AM, whereaminow (42.34) wrote:

Since we're just wandering now, I find it really ironic that so few people realized just how bad a Ron Paul presidency would have been for gold bulls.  Take a look at this chart:

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/draghi/gold%20ceiling%20old.jpg

Now imagine if Ron were elected and able to push a billion in spending cuts, lol.  

Like they say, bet with your wallet not your heart.  I guess most libertarians are like me.  They're willing to sacrifice the value of their holdings for liberty, but implicitly know that the status quo will prevail anyway so it's not really a sacrifice at all. Just realism.

David in Liberty

Report this comment
#78) On February 20, 2013 at 1:13 AM, awallejr (82.99) wrote:

So why should this cause the price of gold to increase?

The printing press?

Report this comment
#79) On February 20, 2013 at 11:00 AM, Valyooo (99.60) wrote:

awallejr,

Yes, buy and monitor.  I don't like gold short term, but when I buy I will monitor.  Just like if KO keeps up good profitability their stock will rise, the same as if we have negative real rates and every country prints like crazy gold will go up.

All I am saying is if you think it's silly to have a price target on gold you should think it equally silly for people to come up with price targets for stock 

Report this comment
#80) On February 20, 2013 at 12:01 PM, awallejr (82.99) wrote:

I never said it is silly to have a price target on gold.  I questioned Gareth's 1200 number because he gave no reason for it and I questioned your price target because I am sorry but you gave a silly reason.

 

Report this comment
#81) On February 20, 2013 at 12:16 PM, ETFsRule (99.94) wrote:

"I doubt that's true, especially in terms of costs.  Particularly WW2 and Korea were extremely short conflicts compared to these wars."

WW2 was so much more expensive, it's not even a fair comparision. Our defense budget was almost 40% of GDP in 1944. Today it is 4% of GDP.

"Although human cost was higher in those wars, I don't think they come close to the dollars expended since 9/11 to fight these, inflation-adjusted or not."

If you looked at the data, instead of just reading various rhetorical arguments, then you wouldn't have to guess.

Anyway, good luck with your theory, but I don't find it to be very convincing, and I don't see a historical correlation between defense spending and the price of gold. ie:

http://upload.wikimedia.org/wikipedia/commons/a/a5/US_defense_spending_by_GDP_percentage_1910_to_2007.png

Report this comment
#82) On February 20, 2013 at 12:20 PM, ETFsRule (99.94) wrote:

.

Report this comment
#83) On February 20, 2013 at 12:42 PM, whereaminow (42.34) wrote:

You're maknig a different argument. Let me rephrase so you understand mine.

What is the total cost of military expediture from 1941-1945 versus 2001-2013, inflation adjusted?

 I don't see a historical correlation between defense spending and the price of gold. ie:

You're kidding right?  You don't see the price of gold rising under a gold standard?  How incredible.

Anyway, I said nothing about its relation to GDP.  I don't care about GDP.

Here's our shocking conclusion.  You ask for me an explanation.  I provide it. You change the parameters (GDP anyone?), ignore every statement made in the explanation (no comment on WWI ending the European gold standard? No comment on Vietnam ending Bretton Woods? No comment on the historical role of central banking and ware? No comment on the actual cost of of this war in dollars spent) and then tell me it's not convincing. 

Well, who said I was trying to convince you?

David in Liberty

Report this comment
#84) On February 20, 2013 at 2:40 PM, Speculatormaster (< 20) wrote:

But is simple this last two years gold was struggling to reach new highs was stuck almost ever around 1685 the oz. , the bull expert soon or later get tired of wait for it to up, and dump this investment wisely, while other buy to them, what can investors pretend gold will up for ever?

You can't pay food with gold, you can't also carry  with gold, because run the risk of be robbed, so the only safe investments right now I think is US Dollars, not gold, that was in up trend for almost 11 years, no bull market can last forever, inclusive the gold market.

In contrast now I think the us dollar must up, and markets are struggling to go down, that indicate one thing, not all the money is going really safe, are sending the money to stocks right now, but I think stock are overpriced, also are stuck in aprox. Dow 14,000 in my particular case.

I am sideline and will not invest unless find stocks with good risk/reward, in few words stocks that pay good dividends and plunged, by missed earnings or cut of dividend that cause huge plunge. Giving a good oportunity to a good risk/reward scenario, but gold definitly don't have that scenario, all the contrary have a bad risk/reward ratio.

Report this comment
#85) On February 20, 2013 at 4:05 PM, Valyooo (99.60) wrote:

My reason is the 1980 price target adjusted for monetary inflation how is that silly?

Report this comment
#86) On February 20, 2013 at 4:22 PM, ETFsRule (99.94) wrote:

"What is the total cost of military expediture from 1941-1945 versus 2001-2013, inflation adjusted?"

David, this is your theory, you should have this data on hand, assuming you have looked at the numbers.

"No comment on the actual cost of of this war in dollars spent) and then tell me it's not convincing. "

You haven't shown me the data, so of course it's unconvincing.

If you are able to show me a correlation between inflation-adjusted defense spending and the price of gold, I will gladly take a look at it.

But, anyway, it seems plainly obvious that this theory is false. For instance, during the 1980's, to fight the cold war, we spent much more on defense in inflation-adjusted terms than we spend on defense right now. Yet, the price of gold dropped during the 80's despite the military buildup that took place under Reagan.

Report this comment
#87) On February 20, 2013 at 4:22 PM, ETFsRule (99.94) wrote:

.

Report this comment
#88) On February 20, 2013 at 4:51 PM, whereaminow (42.34) wrote:

David, this is your theory, you should have this data on hand, assuming you have looked at the numbers.

Why?  I have to prove this to you?  You wanted an explanation and I gave it to you. If you don't like it, don't believe it, want to believe that we spend the same amounts to fight these wars as the 1980s, who am I to tell you otherwise?

Believe what you want dude. I was just answering your inquiries. Seek answers elsewhere if you don't like mine.

David in Liberty

Report this comment
#89) On February 20, 2013 at 7:39 PM, awallejr (82.99) wrote:

My reason is the 1980 price target adjusted for monetary inflation how is that silly?

You also said this:

 If government goes back to a gold standard and says an ounce of gold will back $6000, and I am predicting that will happen based off of 1000+ years of history, how is that irrational behavior?

as I critiqued in #41 above.  If you just argued inflation I would have said fine though I hope we don't get the inflation it would take to get gold to $6,000 in five years.

Report this comment
#90) On February 20, 2013 at 7:43 PM, awallejr (82.99) wrote:

For instance, during the 1980's, to fight the cold war, we spent much more on defense in inflation-adjusted terms than we spend on defense right now

Are you including the money we spent on the 2 Iraq and Afghanistan wars as well, because I have a hard time believing that.

Report this comment

Featured Broker Partners


Advertisement