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alstry (< 20)

Welcome Ursa Major....The BIGGEST Gold Bear of em All.



January 29, 2009 – Comments (20)

I have just been retained to defend the Gold Bears.  It has been made clear that on CAPs, there are not too many defending the sell side of the Gold equation.  There are fairys, and chimps and others pounding their chest how Gold is the place to be.....and it quite well may be, but according to Alstrynomic evaluation, Gold is for Fools.

There are two primary reasons the CAPs Fools advocate for gold:

First, most people buy Gold as a hedge against inflation......well those who see inflation right now are clearly living in another era or don't know how to count total money creation.

Second, others see it as a hedge against catastrophic breakdown in governments or social order....this one I find most amusing because if such an event happens, the only thing you will be able to use gold for is capping your teeth.  And if you think a gun is the better choice, it better be a machine gun with an unlimited supply of bullets....and even then, you likely won't make it through the first reload.

No my friends, the world is not coming to an end, and even if it was, you think having a bunch of gold around you would help?  Maybe I should just call you Pharoh?  Do you think if you had enough in the bank, the bank would let you take it out?  Do you think if the world was really coming to an end, anyone would give a damm about gold?  Just look at New Orleans AFTER Katrina, you think gold was better than cash??????

There is a new perspective in town about Gold, and it is the Alstrynomic perspecitve.  It is not neccessarily the right one because who knows how fickle people's emotions are as they will bid up anything to rediculous prices if emotions get stirred up enough.  In the past, tulip bulbs were worth more than an entire farm.  A share of an internet toy retailer was worth more than a toy retailer iwth a bigger internet presence and hundreds of profitable stores. 

Yes, my friends, as far as investments go Gold is for Fools and there is no better forum than TMF to bring it out.  It used to be money decades ago.  It used to be a sign of wealth for thousands of years.  But just like the dinosaur who roamed the globe, it is now better in museams for show than holding for dough.

Now if people go nuts and  start bidding up the price for whatever reason, the upside is unlimited.  But as more and more people lose their jobs, bussines shuts down, wages get cut, governments start cutting back.....there will be less and less money to buy anything.  And if you have a choice between a golden apple and a apple made of gold, if you are hungry, the apple wins every time.


20 Comments – Post Your Own

#1) On January 29, 2009 at 8:41 AM, alstry (< 20) wrote:

And the beat goes on and on and on...

WASHINGTON (MarketWatch) - U.S. unemployment lines stretched to the longest on record in recent weeks, the Labor Department reported Thursday, a sign that the U.S. labor market continues to worsen. Continuing jobless claims rose by 159,000 in the week ending Jan. 17 to a seasonally adjusted 4.78 million, the most since the government's records begin in 1967.

1967?  That is about halfway to The Great Depression and we are just starting our session.

For all you gold fairys and chimps who can't hear the beat.......

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#2) On January 29, 2009 at 8:52 AM, carcassgrinder (33.25) wrote:

holy shit Alstry.....I comletely adhere to Alstrynomics position on gold.

Also....I could have died a happy man without ever seeing that video or hearing that song.  That video has burned images in my head that will unlikely subside before the economic crisis ends.....thanks a lot.... 

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#3) On January 29, 2009 at 9:39 AM, goldminingXpert (28.78) wrote:

awesome post!

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#4) On January 29, 2009 at 10:42 AM, alstry (< 20) wrote:

Remember that you are embarking on opening a "real" mutual fund.......there is NO LONG ONLY real world.  If you are long and the market goes down....YOU ARE A LOSER!!!!!!  Plain and simple.

No relative outperformance in the REAL world.  There are winners and losers.....profitable investments and money losing investments.  I am quite confident there are not many on CAPs that  have lost as much money as Alstry in a short period of time.  Do you think I gave a damm about my relaive outperformce.

If you are a dog in a dog race, even if you are the winner, you are still a dog at the end of the race.

Welcome to Alstrynomics...the REAL world application of FACTS to investing.

No guns or gold to defend yourself in the blog.....time to bring out the REAL defense....

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#5) On January 29, 2009 at 10:49 AM, BradAllenton (31.74) wrote: 

I don't own gold and have no use for it, but people who are in it are beating the market soundly. As far as your repetitive argument about deflation, it is just as temporary this time as it was the last time. From 1914 to 2008 there have only been 12yrs of deflation. 5 or 6 of them were around the great depression.

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#6) On January 29, 2009 at 10:51 AM, alstry (< 20) wrote:

Well, that could mean if this is twice as bad as The Great Depression, we only have 10 more years to go.......

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#7) On January 29, 2009 at 10:59 AM, BradAllenton (31.74) wrote:

True and yellow stone could blow and kill us all. Situations like that have no fall out plan. The bottom line is the government has only one way to "cure" this problem, spending and printing. The end result is inevitable. Deflation for now....... hyper inflation soon to follow.

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#8) On January 29, 2009 at 11:05 AM, alstry (< 20) wrote:

You could be right...but when that starts happening, expect Alstrynomics to be one of the first to be standing on the mountain tops and screaming INFLATION.

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#9) On January 29, 2009 at 11:26 AM, Schmacko (91.82) wrote:

This is your best most relevant blog post in a long time.

I'm not a gold bug by any means and I 100% agree with your assessment of how valuable gold will really be if things do fall apart.  However gold still can be a useful "safe" hedge play.  If you bring up a 6 month chart of GLD compared to the DOW Jones it tends to move in a counter direction a good deal of the time. 

If you still believe the market has some way to go down gold probably still has some upside left to it at least in the short term.  Once you think the next bear market rally is going to start in ernest you're probably better off dumping your gold for something else.

I closed my one gold miner CAPS pick this week.  I'm still long GLD in both CAPs and real life.  I'm completely neutral on the inflation vs. deflation debate.

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#10) On January 29, 2009 at 12:07 PM, VIS46 (39.67) wrote:

Good post. I  agree with you 100%. I am holding on to my cash.Is there any good place to park the money now.

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#11) On January 29, 2009 at 3:34 PM, DemonDoug (30.95) wrote:

We are aligned on this one al, and I think part of my change of heart on gold is due to both you and gmx.

When you look at how gold traded in the past 8 years, it went up with inflationary policies that inflated everything.  The money destruction is still coming hard and fast, but gold hasn't dropped.  Not buying gold right now is the easiest investment decision to make.  The current inflationary policies aren't enough to make inflation take a real hold, gold should have dropped with silver and oil and other commodities 50% not 10% as it has.

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#12) On January 29, 2009 at 3:47 PM, alstry (< 20) wrote:



Gold also has a strong emotional component to its pricing.  People perceive it as a hedge or  insurance against many things.  In the short term, perception is reality and can drive some crazy pricing.

That is why I don't green or red thumb gold in my caps picks.  I simply don't know nor do I pretend to know.

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#13) On January 30, 2009 at 2:55 AM, mliu01 (< 20) wrote:

Sorry Alstry, this post blow ass.

Aparently, you don't understand gold AT ALL. Love your blog. But your war on gold does not make a bit of sense.

Like I said before one of the reason buying gold is USD. USD is destined to be doomed. Good is a vehicle to store the value. Mostly because of it physical attributes.

 Well I guess you will not understand it and won't have an open mind to think about. No bid deal. We really don't care what you think about gold. There will be enough of us to push gold much much higher. And you can hold your worthless $$$ as long as your want. Only time will tell. And my friend the time is on our side.

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#14) On January 30, 2009 at 3:13 AM, mliu01 (< 20) wrote:

BTW, why don't you ask a brits how much it cost for them to buy one oz of gold now compare to just 3 month ago.

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#15) On January 30, 2009 at 3:30 AM, alstry (< 20) wrote:


I keep telling you, I have no idea where the price of gold is going.  Those that play in the space are very emotional on how they value the relic and I have very little abilty to forecast those  emotions.

But in response to question for me to ask a brit....why don't you ask an American how many pounds he can buy today with his dollars versus just 3 months ago.  While you are at it, also ask an American how much gold he can buy today compare to 28 years ago???

I am just focusing on the facts, no emotions play into my analysis.

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#16) On January 30, 2009 at 6:50 PM, mliu01 (< 20) wrote:

Then you should ask how much the same dollar you can buy 28 years ago compare to day.

I wonder how much the Carl's Jr Six dolalr burger would cost them. I wonder how much gas cost 28 years ago compare to  today's low price of 2 dollars.

Sure, ask how much pound can USD buy today.  Can you imagin how much will it cost if USD going down? Can you imagin? You really think USD will stay this high if we pump out trillions and trillions of dollars? That is exactly why people like me dont' trust USD and buying gold. Becuase they can and will print more. I don't know how we will get there. But we will.

 There is no emotion for me in this either. All hard numbers. But do you have numbers in your analysis?

Invest in gold has nothing to do with emotion. It is more of distrust. You think our govt earned more trust from us in the past 2 years? Wonder what is your answer.

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#17) On January 31, 2009 at 9:13 AM, alstry (< 20) wrote:

Then you should ask how much the same dollar you can buy 28 years ago compare to day.

Not near as much, but the same can be said for gold since it is at about the same price as it was 28 years ago...except if I put my dollar in the bank it would have quadripled and gold would have remained the same less any storage and insurance costs.

You really think USD will stay this high if we pump out trillions and trillions of dollars?

I actually think it will get stronger as other countries print even more.

Invest in gold has nothing to do with emotion. It is more of distrust.

I rarely trust government or corporate officials anymore, but I don't think gold is the solution...but I will post positive defenses for gold on PostiveAlstry.

In the end, I just don't know what the price is going to do...I can create solid arguments for both sides.....and I will.

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#18) On January 31, 2009 at 9:21 PM, mliu01 (< 20) wrote:

We are not using gold to buy things for the last 28 years.

So if you use the gold price from the point we stop it and tell me what it is now. Will that be a better thing to compare?

 "I actually think it will get stronger as other countries print even more." Sure, dollar will get stronger against all the currencies that want to follow US into abyss.  That is exaclty why gold bugs buying the gold. Cause it will not end well for all of them

We surely can have global hyperinflation. hmm I don't think anyone used this phrase yet. Global Hyperinflation. GHI I

Why we need gold, simply because we can limit human error control the money.  It is human nature to print and print when they are in trouble.

I don't care what you say about gold alstry. Please just don't be the one come out and yelling confesticated gold a few years later. Alright? That would be a shame.

Again I love your blog. that is why I am here.




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#19) On January 31, 2009 at 10:17 PM, mliu01 (< 20) wrote:

And I might agree with you alstry.


If only we make things, not import stuff from arab and china. I would agree with you we have yen and yuan and euro as foreign reserve.

 Saddly, that is not true.

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#20) On January 31, 2009 at 11:42 PM, mliu01 (< 20) wrote:

 deflation? Oh yea? GB is a dlck. but I have to agree with him.

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