Don Coxe Dissects Gold, As "The Oldest-Established Store Of Value Moves To Center Stage"

Tyler Durden's picture

From Don Coxe of BMO, Basic Points - Summer's Storms and Norms

The Oldest-Established Store of Value Moves to Center Stage

Who needs gold?

Over the decade that we have been advocating exposure to gold and gold mining stocks, we have been routinely subjected to basic skepticism: why gold? Isn’t it irrelevant?

If the dollar doesn’t look good, I can buy the yen.

If the yen looks bad, I can buy the euro.

Besides, what good is gold? Other commodities are useful and, in most cases, absolutely necessary.

But gold hasn’t been needed for central banking for nearly a century, and, apart from jewelry or for providing Mafiosi with a convenient vehicle for storing their wealth, it doesn’t fulfill any purpose that sound paper money can’t do better. (This, of course, assumes the availability of sound paper money.)

In answering a question about gold’s rather dramatic return to store of value status with the portfolio managers of one of Canada’s largest public sector pension plans, we took a new tack:

“The longest-established text-based religion in the West is about the God of Jacob—His works and His worship. For roughly five thousand years, a believer summed up his credo by saying, ‘I believe in God.’

“But when this credo arrived, it had to share space with an alternative belief system that was around for thousands of years before the Judaeo-Christian era began. A believer in this system summed it up, ‘I believe in Gold.’”

Two systems—similar professions of faith. Neither could prove to a skeptical rationalist why its tenet was valid.

As we have thought about this space-sharing and competition between spiritual and temporal beliefs, we have mused that large-scale skepticism about both of them occurred only recently. Darwinism, paleontology, and astrophysics combined to drive the Old Testament explanation of history out of the temples of scientific learning. Keynesianism came along to drive gold from the temples of the central bank money-changers in favor of the printed paper promises of politicians.

Why is gold back among serious, respectable investors?

Why is it now available through ATMs in the gold market of Abu Dhabi?

Is it a return of inflation?

How could that be, when, as the wise David Rosenberg routinely scoffs, “What inflation?”

Indeed, Canada reported its first negative CPI in 44 years, the US, its biggest decline in 18 months, and across the OECD there is, (at least for now), more fear of deflation than inflation. Despite astonishingly high housing subsidies that are swelling the already-bloated US national debt, US home prices remain soft, and foreclosure is not only no longer a disgrace—it threatens to become almost chic. (A recent poll of homeowners disclosed that 55% of those with mortgaged homes believed their house was worth less than their mortgage.) Not all the news is bad: The cost of TARP has turned out to be far less than feared: the cost of saving the US from house price collapses on a scale that would unleash a Depression—including the mind-boggling costs for keeping
Fannie, Freddie and the Federal Home Loan Bank alive and lending, and the various cash subsidies to buyers—is many orders of magnitude above the Wall Street bailouts.

If the only thing keeping house prices from collapse is a boost in the national debt bigger than the total cost of all the US’s foreign wars since World War II, then how can inflation be a threat?

Yes, some industrial and food commodity prices have shown some inflationary tendencies, but, with the exception of coffee, cocoa, iron ore and metallurgical coal, prices have been sagging recently—although remaining far above Lehman lows.

Interest rates remain in the zero range, which would be a sure sign of inflation on the horizon if there were projected increases for anything significant other than wages and benefits for government employees.

Although the Fed’s response to the Crash was the greatest goosing of its asset base in history, raising fears among the putatively paranoid that a new Weimar was being born, in recent months the Fed seems dedicated to proving that its previous promises of piety were sincere. Based solely on the numbers, Bernanke almost seems to be willing to risk outright deflation:

So what makes gold so attractive now?

And who is buying it?

According to the World Gold Council, industrial and jewelry demand have come back sharply (after collapsing in 2009), but the big new buying is for bar hoarding. Banks are running out of vault space and are building new above-ground facilities. (At the bottom of Gold’s Triple Waterfall Crash, banks were moaning that their vaults were nearly empty and were costly to maintain.) In last year’s First Quarter, there was net selling of 28.1 tonnes in bars. This year investors bought 89.7 tonnes. Record amounts of coins are being minted.

China and Russia have bought some gold for their foreign exchange reserves, but these purchases have been mostly from their own nations’ mines.

The SPDR Gold ETF’s holdings keep setting records. If it were a central bank, its hoard would put it in the top four.

We think that future historians may well report that the moment when gold once again became a store of value was when the dollar began soaring in response to the stench of seared Greece—and gold climbed right along with it. The asset classes that have been inversely correlated since Keynes’s time suddenly united.

When we first noticed this, we headlined it in a Conference Call, which we titled “The Odd Couple.”

That gold and the dollar are fundamentally inversely correlated to each other is obvious. One bets on gold because one is deeply skeptical that governments will fulfill their promises.

So why are they both in a mini-bull market?

We believe this is driven by the squeeze on the European banking system from the drachmadrama:

This forces the weaker banks to borrow in Eurodollars, thereby driving up the value of the greenback. International corporations also collectively rush to adjust their exposures, switching cash holdings from euros into dollars.

Paper Prophets?

Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon.”

He won the Nobel Prize in Economics in 1976 for his work documenting that dictum. It helped to explain stagflation—rising inflation during recessions.

The Keynesians who dominated global economic thinking after WWII believed inflation was caused when wage increases outstripped productivity gains on a sustained basis. President Kennedy’s famed confrontation with the steel industry came when he convinced the Steelworkers to agree to a modest pay boost at a time of rising inflationary pressures. When Big Steel then boosted its prices above the percentage increase in wages, Kennedy declared war on Steel and the industry capitulated.

In the 1970s, a new collective bargaining pattern emerged, as the big unions successfully negotiated COLA clauses in all their contracts—wage boosts plus cost-of-living increases tied to CPI. As inflation surged, the companies and their unions were widely blamed for causing price increases across the economy even as unemployment was rising and most of the OECD was struggling with recessions.

When Margaret Thatcher became Britain’s Prime Minister in 1979, she dedicated herself to imposing monetarism on Britain as the way to control inflationary wage demands from the big British unions.

As she told me in a private meeting in Toronto in 1978, she had had a meeting with Germany’s Chancellor Helmut Schmidt shortly after becoming Tory leader.

She asked him, “Why don’t your German unions make inflationary wage demands like our British unions?”

He replied, “Each year, we have a meeting with the eight German unions.”

In explaining her surprise at this statement, she pointed out to us that there were 36 unions at the Ford Dagenham plant alone.
“What happens when you meet with the eight unions?”

“They tell us what their wage requests will be and we tell them what the economy can afford.”

“And what if the unions demand more than you believe the economy can afford?”

“Then, madam, I tell them that the Bundesbank will not print the money to ratify those demands.”

As she recounted this event, she said, with rising emotion, “Imagine that!  He’s a Socialist and he understands monetarism. I'll bring monetarism to Britain to smash the power of the unions! The coal miners will go out on strike and we’ll just leave them there. Within two or three years, inflation will start to collapse, along with interest rates, and Britain will be on its way back
to being an industrial power.”

She went on, “In 1980, Ronald Reagan will win the Republican nomination and he will defeat President Carter and he will use monetarism to end the inflation era in America.”

What actually happened was that President Carter was forced, because of soaring inflation, to install Paul Volcker as Fed Chairman and he introduced monetarism. He kept raising rates after Reagan was elected, but despite screams from the business community that his tight money was killing the economy, Reagan backed him. The deep recession in 1981-82 with sky-high interest rates arising from strict adherence to monetarism nearly aborted the Reagan recovery.

The most important economic number for portfolio managers in 1980–1984 was the weekly Fed statement showing conditions in the Monetary Base, M-1 and M-2.

We used those numbers to trade bonds, which became our asset class of choice when we dumped commodity stocks once we saw that Reagan would be elected. We moved our portfolio into very long Treasury zero-coupon issues when it looked as if money supply was being brought under control and the Fed could begin to ease.

That was then.

So why didn’t inflation come roaring back when Bernanke doubled the Monetary Base and M-2 was climbing at double-digit rates?

And why didn’t inflation come back when central banks across the OECD were growing their monetary bases and money supplies were climbing? And why did gold take off to record levels when money supply growth began to dwindle and actually turn negative?

We believe that Gold’s recent rise began when investors sought a classic inflation hedge, but its real run came when deflation risks were far more obvious than any evidence of inflation.

As we have written in these pages, gold is the classic store of value. It should retain its value under both inflationary and  deflationary conditions.

That means a great time to buy gold to make capital gains is when inflation is rising.

It also means a great time to buy gold to conserve existing wealth is when (1) prospective risk-adjusted returns on bonds and stocks look unattractive because the economic outlook is for slow growth with (2) a risk of a renewed downturn that would hammer the value of stocks—particularly financial stocks—and real estate anew, and (3) bond yields are too low given the endogenous risks in the currencies in which they are issued and (4) the range of future fiscal deficit forecasts is from grim to ghastly.

What we believe is unfolding is a rush into gold by individual investors who look at the astronomic growth in financial derivatives—particularly collateralized debt swaps—and government deficits at a time when the effects of demographic collapse are finally being understood. According to some guesstimates we have heard, the supply of outstanding financial derivatives may be in the $70 trillion range, dwarfing the combined value of money supplies and debts. The total value of gold is so minuscule in comparison to the supply of these software-spawned instruments that it cannot be any real help in stabilizing global finances—but it can be a haven for investors seeking to protect themselves against an implosion of majestic proportions.

That is why gold and the dollar can—if only for a brief time—rise together, as investors see that the only major currency  alternatives to the dollar—the yen and the euro—are backed by rising national debts, rising numbers of pensioners, falling working-age populations, falling real estate prices, and a falling OECD share of global GDP.

There is no constraint on the ability—or, apparently the willingness—of governments and central banks to create new financial liabilities which can only be serviced if GDP growth rises—on a sustained basis—to higher levels than most OECD nations have seen since the Baby and Reagan-era booms.

Given the average fertility rates across the OECD of 1.3 to 1.5 babies per female, return to the economic growth rates of those eras is really out of the question. Each new generation is roughly two-thirds the size of its predecessor, so construction of new homes, schools, and commercial buildings and filling them with workers—an important component of past periods of rapid GDP growth—has to be at lower rates in each cycle. The alternative—to pretend that the number of first-time homebuyers will reach or exceed the numbers in earlier cycles and, with government stimulus, build them on grand scale in the hope that they will come—can lead only to financial disaster.

In the current financial environment in which risk measures such as the TED Spread and VIX are leaping back toward post-Crash peaks, a momentous shift in investor appraisal of endogenous risks within asset classes is unfolding: sovereign credits are no longer being automatically accorded low-risk appraisals, and banks are being downgraded on the basis of their high exposures to sovereign credits—not, as in previous financial downturns, to dodgy corporate debts or putrid mortgage products.

This re-rating of debt instruments is a sign of the fundamental fragility in financial valuations since the end of those halcyon, bygone days when Moody’s was a homely, plain-Jane stock which lived modestly, mostly off municipal bonds. Its puritanically lofty  standards for Triple-A ratings could be met by only a handful of corporations and a select few governments and their agencies. Then Moody’s suddenly blossomed into a sexy growth stock fattened in all the right places by fabulous fees for analyzing collateralized mortgage instruments and giving them the Good House-Financing Triple-A Seal of Approval. Too late did we learn that Moody’s “experts” never really understood what the underwriters and math PhDs were confecting. Only the aggregators of the underlying mortgages knew about the deadbeat and dead mortgagors, and the systematic home overvaluations—and the only one of them who has been publicly pilloried is Paulson. (No, not that Paulson.)

The world has gone mad today
And good’s bad today,
And black’s white today
And day’s night today…

This week, Moody’s finally got around to lowering Greece’s bond rating to near-junk. They seem to be cleaning up their act—probably in response to some pressure from Warren Buffett.

So…as a store of value for future generations,

If you can no longer believe in residential real estate,
and you can no longer believe in bank deposits,
and you can no longer believe in the dollar,
and you can no longer believe in the yen,
and you can no longer believe in the euro…
What can you believe in?
How about gold?

It’s so old, it’s new again.

It can’t be synthesized.

It’s been despised by every liberal economist since Keynes.

Among the arguments routinely adduced against it is that it pays no interest—but with interest rates in the zero range, the opportunity cost is minimal.

Treasury bonds? Why bet your future on a ten-year piece of paper that pays 3.2% in a currency that’s been in a bear market for most of the time in recent decades, knowing that the new supplies of bonds will be endlessly growing, in good times and bad, because the issuer’s own forecasts say so (and most independent forecasters say the issuer’s numbers are absurdly optimistic)?

The S&P currently trades at its level of March 1998—when Gold was trading at $302.

Industrial and Agricultural Commodities?

To our sustained disbelief, major pension funds continue to hold more than $150 billion in passive commodity funds like the GSCI. This is the investment equivalent of Einstein’s dictum that one proof of insanity is trying the same experiment over and over, hoping for a different result. Because of the contangos—particularly oil—these vehicles are even worse strategies than putting all the funds into Las Vegas slots—because your odds are better with the one-armed bandits.

Gold is the recently-awakened Sleeping Beauty, who always was beautiful but was overlooked. She is ready to take the throne among stores of value that was long occupied by sovereign credits.

The handsomest courtier in her realm wears the crest of a long-necked water bird.


Until very recently, the case for gold was almost always presented as a hedge against inflation.

That case remains valid, because if the US and European economies revive, then the pressure on the Fed and ECB to raise rates will become intense, even though unemployment will still be at historically high levels and politicians will be screaming that any rate increases will punish the poor to reward the rich.

If the major central banks do not raise rates, investors worldwide will begin to bet heavily on a return of inflation.

However, those monetary Rubicons seem off in the distance, given modest US growth, and barely-perceptible recoveries or renewed downturns within the eurozone.

We believe gold should be a significant component in most high net worth wealth preservation programs, and in most endowment and pension funds.

For the first time since 1980, Germans and other Europeans with long memories are pouring into gold dealerships to exchange euros for coins and small gold bars. Germans have watched as twice in the past century their currency was utterly destroyed. They were strong-armed into believing Ludwig Erhard that their nation could have a currency that was as good as gold, and that revived faith was the underpinning of the German Miracle. That faith is now eroding, and individual savers are protecting themselves. Long-suppressed atavistic attitudes that suddenly coalesce into fear-driven behavior can have momentous  consequences.

Summing Up

Browning said it (In Rabbi Ben Ezra), “Leave the fire ashes. What survives is gold.”


Full June report by Don Coxe, a must read for everyone, can be found here.

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DoChenRollingBearing's picture

Anyone with wealth who does not have any gold should start buying gold & silver immediately.

Diversification and insurance all wrapped up into one nice package.  So simple.

justbuygold's picture

I continue to buy as much of Central Fund's  Silver Bullion Trust   ( SBT.un on Toronto Stock exchange) as I can get my hands on.   Right now it is trading slightly below its NAV which is a steal compared to the normal 10% premium.

nuinut's picture

How Can We Possibly Calculate the Future Value of ... Gold?

Stocks to Flow ratio.

The fact gold has no utility is its utility.

Gold...Bitches's picture

actually, it has many utilities... just no economic ones at anywhere near the current price.  Thats another indication that its not anywhere near to being a commodity, like say copper, or nickel, or uranium.

dnarby's picture

So howcome you get to embed links in text and I don't? >: /

nuinut's picture

HTML. Use disable rich-text link below comment box.

Anyone can use it.

sheeple's picture

FOFOA always have interesting articles on gold

M31Capital's picture

Thanks DoChen for the timely advice.  

DoChenRollingBearing's picture

M31, since my Sarcasm Detection Meter doesn't even work, I say:

Thank you for the kind words.

Even though worthies beyond me have been howling at the winds saying the same...

I completely agree with the highly esteemed Gordon_Gekko that time is short, buy physical gold now.


QuantumCat's picture

The masses are almost always wrong, and we would be wrong at looking at a snapshot of public reaction to debt crises.  The lessons they learn are generally applied at the wrong time.  Gold is making new highs, yes, but the momentum is waning at all degrees... from 1 min to monthly. I think we will see at least a multi-year correction during deflation and the average opinion on the matter, almost by definition, is sure to get it wrong. 

Implicit simplicit's picture

The masses are not buying gold. ZH population is an outlier to the general population.

DoChenRollingBearing's picture

Quantum, I quite agree with Implicit.

I only know two (2) people who have physical, non-jewelry gold.

I think that we are still in the early innings.  And if things go really bad ("TSHTF"), gold may be a life saver.

goldfish1's picture

In your opinion, how great of an outlier?

Blindweb's picture

An outlier in the financially educated space alone.  Then determine what percent of the population is financially educated. 

technovelist's picture

The masses are almost always wrong

Let us know when "the masses" have 10% of their assets in gold. Oh, they don't have any significant assets? Hmm, that is a quandary...

Not really, of course: those who don't have any significant assets don't have any significant effect on prices. However, those with significant assets also don't have any meaningful amount of gold; there isn't enough gold in the world for that... at these prices.

Quinvarius's picture

Is that the latest anti-gold idiocy?  Failing momentum?  That doesn't even make any sense.  Doesn't that imply that it is moving on something other than momentum?  Wouldn't that be a good thing?  Maybe you should try more critical analysis and less parroting someone else's discredited arguments from 2 months ago.

QuantumCat's picture

For example, RSI... market tops are generally built on waning momentum.  If you don't know I'm talking about, then you are making a great counter point to Implicit Simplicit's proposition.  Your position on Gold seems to be quite emotional... I challenge you to consider the implication's of that.

JLee2027's picture

God told me to buy silver.  Was that based on emotion too?

Anton LaVey's picture

No, if a chunk of metal "told you" to buy other chunks of metal, it means it's time to get your head examined...

Bada-Bing! Thank you, I'll be here all week! Do tip your waitress!

(Sorry, could not resist - and I agree with you, Gold and Silver are your best friends right now)

FrankIvy's picture

Anton, you're going to have to find another venue.  You wrote - "No, if a chunk of metal "told you" to buy other chunks of metal, it means it's time to get your head examined..."


Re-read his post.  He said GOD told him to buy silver.


Of course, maybe Gold is God.

Anton LaVey's picture

Ah, yes, I knew I needed to clean up my glasses this morning...

On the other hand, if "GOD" told him to buy Silver, it is definitely time to get that gentleman's head examined.

Last thing I noticed is that Deities are not really big on investment advice for the punters.

JLee2027's picture

Wrong!!  The Bible is filled with investment advice. Hundreds of passages.  The only real money is Gold and Silver, paper money is an abomination. God owns all the Gold and Silver, we are the authorized custodians. 

"The silver is mine and the gold is mine," declares the LORD Almighty (Haggai 2:8).


Deuteronomy 25:13-15 (ethical business dealings)

You shall not have in your bag differing weights, a large and a small. You shall not have in your house differing measures, a large and a small. You shall have a full and just weight; you shall have a full and just measure, that your days may be prolonged in the land which the LORD your God gives you.

Anton LaVey's picture

Ah yes, indeed.

On the other hand, have you ever read the following?

Then he said to them, "Watch out! Be on your guard against all kinds of greed; a man's life does not consist in the abundance of his possessions. (Luke 12:15)

Or maybe this?

Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. (1st Timothy 6:17)

I rest my case, your honor.

Treeplanter's picture

If we are seeing a market top, it is likely very temporary.  The central banks are trying to smack the metals down right now.  If they can, we get a buying dip.  The growing problems with supply are going to join up with increasing demand.  I'm the only one I know buying gold and silver.  Wait til Sarah Palin's facebook page discusses the advantages of having a stash of real money...  Money and emotion are old friends, we do get carried away.

QuantumCat's picture


Perhaps we are only in the first inning of this gold bull market, and only ZH and moneyed individuals are participating, but I think we are near the end of it.  This "inning" has lasted nearly ten years, and unless you are linearist, markets work in cycles.  Gold commercials currently dominate FOX "Buy your gold where I buy mine... Rosland Capital (G Gordon Liddy)", and quite a few non-financial market types have liquidated their assets in exchange for gold. Perhaps gold will go to $10,000, but timing is the bitch.  What was your stance on the dollar last year, out of curiosity?  Just asking...

Apostate's picture

I agree that there is an extremely remote possibility that gold will decline in price in dollar terms, but you're incorrect that all assets move in cycles.

Fiat currencies - like companies - often go to zero.

In fact, just about every company in history has gone to zero. Every fiat currency except the ones currently in circulation have also eventually gone to zero.

In gold terms, the megatrend in the dollar is overwhelmingly towards zero. 

DoChenRollingBearing's picture

Apostate, you too are a marvel to ZH!

Long may you write!

+ 10,000

Apostate's picture

It's an honor to write beside you.

lawrence1's picture

Good article, and I would recommend reading fofoa to better understand gold and its place in the world and what may well happen. And I would welcome reading any critique of fofoa's viewpoint.

Ragnarok's picture

Same.  I asked for critiques of fofoa'sviewpoint a while back as well, and what people disagreed with was what happens after the fiat collapse.  Will "Freegold" manifest itself or will gov't/bankers become aggressive?

nuinut's picture

There are no critiques that hold water. I've looked, and asked, and only ever found the same old tired BS that gets wheeled out by occasional commenters here, ie. "you can't eat it", "it has no utility", "my dog ate my homework", etc etc.

The only people I see debating it are the ones who don't understand it, whilst thinking they do.

The latest post, linked in my first comment above, should put the nail in the coffin.

FOFOA said:

With each pass-through of the dollar more "flow gold" is moved into "stock gold", not the other way around like commodities and paper.

That statement explains one hell of a lot, but the real problem with peoples understanding is this:

Another said:

Your past holds little of knowing value outside of currencies, this does block the good view!

Shameful's picture

FOFOA seems to think that our govs will encourage it's citizens to hold wealth in gold. Holding wealth in something like gold could be a great idea for the citizens but that removes the govs ability to loot savings via inflation.  Now it should be clear to anyone that the state particular in the US only exists to pillage the public.  This is the first goal of all governments, to provide for the care and well being of it's political elite and bureaucrats. Sure he might be right and the value may go to the moon, but I expect Uncle Sugar to eye it greedily. After all Uncle Sugar is willing to kick on capital, wage, and price controls as history shows. Does anyone think that the IMFS$ system will crash and Uncle Sugar will just kick back and say "You gold bugs got it right! I like you guys so I won't try to come after you"?

Now if FOFOA is right and we do see Freegold, then it seems to me that anyone with any significant gold holdings would be well served by hitting the bricks and fleeing the epic center of the IMFS$ collapse.  Now I don't expect confiscation but I do expect a mighty tax.  Uncle Sugar will demand his piece of the action, he always does.

I like reading FOFOA and hell he could be right, but Uncle Sugar is not letting a looting opportunity pass him by.  Particularly when it would be so easy to rally the populace for a gold tax to attack those evil "speculators"

nuinut's picture

Shameful, nice to see you back.

This comment: #12, in the ZH Freegold forum, addresses your point about Uncle Sugar wanting his cut. There is a lot more to say on that front, but that comment sums up my take on it.

I think Uncle Sugar, and the $IMFS, is coming under real pressure at this time.


Übermensch's picture

That is correct. To few people in the US own gold for there to be an uprising for the draconian policies the government will start implementing against gold holders.

sheeple's picture


'Reflection' is a great article [recent] from FOFOA

DoChenRollingBearing's picture

It is really hard to predict the future, so I go with what is cautious and makes sense to me.

FOFOA's writing is dense but has the ring of truth to me.


If FOFOA's prediction of $55,000 / oz (2009 non-hyperinflated $) comes true, I win the Lotto!

But, Chumbawamba, at 110% all-in-gold will win the POWERBALL and be the Alpha-Male around here.  Comely virgins will knock at his castle gates...

So if that comes to pass, go ask Chumba for a loan and not me!

Gubbmint Cheese's picture

Read Lewis' "The Big Short" over the weekend. Whether you liked the book or not, I (for one) loved Eisman's approach to traders when he'd ask, "so how are you going to f*ck me?". So as we process these bailouts and read about the steps the govt is taking to 'save the system' - I hope more people ask:

"okay, so let's say I help you save this system.. how are you going to f*ck me?"

edit: that's totally rhetorial btw.. ;p


Implicit simplicit's picture

Great book. Finished it a couple of weeks ago. A good story with a nice educational message regarding the crookedness of wall st..

Implicit simplicit's picture

Many people who don't like gold still believe that everything is going to be fine with the economy and the stock market. It's sad really.

PhattyBuoy's picture

... yep, and tragically, with their life savings trapped in a 401K.

FrankIvy's picture

Well this is it, really.

For most of the anti-gold folks out there, it's really just a question of not agreeing/seeing/believing that the end is nigh.  If I thought that we were "pulling out" of the "recession," for example, and I thought it would soon (read - within a few years) be BAU, then I'd certainly sell gold right now and take my 300% profit. 

It's like this - if they're right about their fundamental premise, then they're right about their fundamental conclusion.

Of course, IMO, their premise is wrong.  The end is nigh.

sheeple's picture

Whoa BEEM-MO is actually circulating a constructive article ... nice post ZH!

Spitzer's picture

nothing wrong with BMO.

I have noticed more gold bugs saying that you can get rich by buying gold and gold stocks now, for a while they just said to have 20% or so as insurance.

I never liked the insurance dribble, fortunes will be made in gold over the next few years.


Treeplanter's picture

You nailed it, Spitzer.  I have everything I own in gold, silver, and the miners.  I see low risk combined with once in a lifetime gains.  Yesterday I sent my family an email discussing the coming short squeeze, that time is running out to get in at a decent price.  No interest, other than calling me Goldie.  Kids! whatsamattawitkidstoday...   

strannick's picture


Dang that was good.

Zerohedge is like university, except

1.where you learn interesting usefull things dont have to bankrupt yourself for the rest of your life to pay for it. dont emerge a brainwashed ideological idiot after 4 years of listening to tenured, smug, lazy-minded oafs