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Guest Post: When To Sell Gold
By Terry Cozon Of Casey Research
When to Sell Gold
By now you have plenty of reason to congratulate yourself for having boarded the gold bandwagon. The early tickets are the cheap ones, and you’ve already had quite a ride. The best of the ride, I believe, is yet to come, and it should be very good indeed. It should be so much fun that your wallet may start to feel a bit giddy – which can be dangerous. So it would be wise to consider, now, how things will be and how they will feel when the current bull market in gold reaches its “end of days.” Because it will end.
Buying at the right time is the key to building profits. Selling at the right time is the key to collecting them.
The 1980 Peak
In 1980, gold briefly touched the then record price of $850 per ounce. In terms of purchasing power, that would be $2,400 in today’s dollars. And for the value of the world’s entire gold stockpile to attain the same share of the world’s total wealth that it represented at the 1980 peak, the price would need to reach $5,800 per ounce.
But so what? Before you can look to those numbers for guidance about what the peak in gold’s bull market will look like, you need to consider how the process that drove the earlier bull market compares with what is happening today.
The earlier bull market was driven by price inflation in the world’s reserve currency, the dollar, that reached an annual rate of 14%. The more expensive it became to use dollars as a store of value (i.e., the more rapidly the dollar’s purchasing power was declining), the more attractive gold became as an alternative way to store value.
The dollar is still the world’s reserve currency. (And not just for central banks. Among individuals and private businesses that want to diversify out of their home currency, the dollar is still Number One.) And the force driving the bull market in gold is once again price inflation. But this time it isn’t actual price inflation that is on the mind of gold buyers around the world. It is the potential for price inflation that is building up. That build-up is coming from:
- Rapid expansion in the U.S. monetary base through the Federal Reserve’s asset purchases. Most of that expansion has yet to be reflected in a growth in the U.S. money supply. It is still sitting, like a charge in a capacitor, waiting for something to set it off. There was no similar liquidity bomb stored in the U.S. economy's closet during the years leading up to 1980.
- Unprecedented growth in federal government debt, which adds to the political attractiveness of price inflation. There were federal deficits during the 1970s, but nothing like today's – just enough to give the party out of power at any time something to talk about.
- The accumulation of U.S. Treasury debt and privately issued dollar debt in the hands of foreign investors. U.S. debt to foreigners wasn't a factor in the years leading up to gold's 1980 peak. This time around, it could be a powerful force for accelerating inflation. Even moderate inflation could spook foreign investors. Their sales of Treasuries and other dollar-denominated IOUs would push down the foreign exchange value of the dollar, which would raise the cost of imports coming into the U.S., which would further stimulate price inflation. A nasty feedback.
And foreign holdings of U.S. debt operate as a second vector feeding the political attractiveness of dollar price inflation. Depreciation of the dollar can be framed as a clever way to shortchange foreign creditors. "It hurts THEM, not US" would be the slogan.
All those factors are working to make price inflation distinctly more severe than it was in the 1970s, which argues for a higher peak price for gold. When the metal does surpass its 1980 peak in purchasing power, the event is likely to be widely reported in the press. I suggest that you not attach any significance to the event. It won't be time to sell.
Sell Signals
But the time to sell will come. Here are the signs I'll be looking for.
Gold and gold-related financial products will be commonplace.
Even today, most financial institutions still hold the "barbarous relic" attitude toward gold. Yes, you can get GLD through any stockbroker, but with a few exceptions, the brokerage firm's heart isn't in it. They offer GLD for the same reason even the best seafood restaurants have a steak on the menu – they know someone will ask for one, even though that's not what they are in business to serve.
Before the bull market is over, that attitude will change. Mainline brokerage firms won't just have gold-related products available, they will advertise them. They will boast about them. They'll claim to specialize in them. And it won't be just the brokers. Your local bank will offer gold-related CDs. Your insurance company may be offering life insurance denominated in ounces.
Gold going mainstream won't mean that the bull market is over, but it will be a sign that it's getting long in the tooth. An early warning signal.
You'll be hearing gold chatter wherever people talk about investing.
The inhabitants of Financial News TV Land will be talking about gold approvingly, and each of them will be trying to suggest he was early in recognizing the gold bull market [TD: such as Jim Cramer who now has gone apeshit over gold - if there ever was a sell signal, this is it]. You won't be able to get through a golf game or a cocktail party without someone talking about gold. Even your brother-in-law will want to explain it to you.
The gold standard will become respectable.
Today advocates of the gold standard are seen as standing to the good side of whacko, but not by a big margin. But as gold attracts more converts in the investment world, the politicians will want to associate themselves with it by proposing some brand or other of gold convertibility for the dollar. Respectability for the gold standard will be a sign that a majority of the people who are going to buy gold already have.
Other things will look cheap to you.
When gold nears its peak, even if you suspect that that's what's happening, you won't feel certain about it. But when you start seeing investments – probably conventional stocks – that look like strong bargains, treat those sightings as a sign it's time to start selling gold. You know the reasons that led you to buy gold. If you are tempted to sell part of your holdings to buy something whose low price seems to give it better prospects, then you probably will be selling at the right time. You could be selling to the last new buyer.
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The time to sell will be when you are selling it for a currency different than one of the existing ones.
This post contains more wisdom than the one to which we're responding.
Indeed.
FWIW, here are my thoughts on when I would sell gold:
1) If you are wealthy (however you define it) and have have at least a little gold but less than, say, 10% of your assets in gold, NEVER sell it (ex. in emergencies).
2) If you are wealthy and have, say 10% - 20% of your assets in gold (and are nervous about gold), wait until gold goes up some more (to, say $1650 - $2000), then it's OK to cash in some of your gold chips for a decent profit as well as saving up 5% - 10% in gold that you would NEVER sell.
3) If you are wealthy and have 20% or more in gold, sell anytime you want in the price run-up I believe is coming. But, keep 5% - 10% in gold with the idea of NEVER selling.
4) If you are NOT wealthy, and you have some gold, NEVER sell (ex. in emergencies).
One man's opinion.
Disclosure: I have some 7% of my assets in gold and hope to NEVER sell.
EDIT: Physical gold only. If you speculate, well that's beyond my scope of commentary...
7% of your assets now.
But as the price of gold keeps going up it may end up being 15% of your assets without even buying one more oz. Another angle to count on.
Oracle, always a pleasure to exchange thoughts with a Peru-savvy person like you.
You make a good point about 7% going to 15% (or more). Should something like that happen, I would probably sell very little (or none) unless I keep buying. Then, when I have big profits and see other opportunities, well...
It is likely that I will buy at least a little more. I suffer from Gold Fever, it's toughie to shake off!
...
FYI and O/T, but maybe of interest to you. One of our competitors there in Peru asked us to source a specialty bearing for one of their customers. They want 50 pcs of a LARGE (360 kg weight each) that not very many companies make. Their two main suppliers cannot fulfill the order (at least anytime soon). I now have inquiries out to Panama, Singapore, Germany and Qatar (where I have friends). Although we would have at best a tiny chance of winning this order, the dollar amount would be impressive: $300,000 +.
sounds like a turbine bearing
i wondered about your, seemingly unusual, screen name.
Hey, DCRB, here's a graph of silver holdings.
"Transparent Silver Holdings"
See anything wrong here?
http://www.caseyresearch.com/gsd/sites/default/files/Transparent%20Silve...
dupe post, sorry
Non-expert Bearing sees only a big jump in certain holders of silver bullion. But, I think I have also read that there is less bullion available than before.
Did I win the prize?
The miners must have gone nuts or somebody is fibbin'.
In today's world, what fool would sell Gold.You spend it if you must.
It is real money...not a speculation vehicle.
Sorry man, that's not what most gold bugs are thinking. As indicated, they will eventually unload hard and heavy onto the last average joes and never to heard again. The smell of ponzi, the smell of tulipmania. http://abetterwaytotradestocks.blogspot.com/2010/10/trade-gold-for-what-it-really-is.html
We know that in this day and age, gold just can't be a standard currency. Dr. Nouriel "Doom" Roubini explains why the gold standard has too many fundamental problems, causes too many economic crisis, and that it won't work. http://abetterwaytotradestocks.blogspot.com/2010/11/precious-metals-gave-rise-to-tulipmania.html
We know that in this day and age, gold just can't be a standard currency.
Forget "this day and age". In the next day and age, gold will be the standard currency.
++
Yep, a growing economy requires an increasing monetary unit supply to represent rising sum asset value in order to maintain stable monetary purchasing power and velocity. In which case a gold backed currency's purchasing power would increase over time and that is worse than 3% inflation. What motive is there for the productive investment that profit capitalism is systemically dependent upon when you can make risk free gains by withdrawing your liquidity from the economy? An economy of savers does not function for long. Gold standards are inherently deflationary. I don't like the profit system but as long as we choose to maintain an obsolete economic system, fiat is by far superior. Fiats only problem is that those who are given the authority over its supply are not held accountable for its abuse and thats the fault of the ignorant and thus consenting citizenry, not some all powerful jewish elite. Not to mention wasting our precious diminishing net energy resources (what all money actually represents) mining metals that are then used to represent the scarce energy value embodied into mining the metal in the first place, the fucking definition of insanity. Or as usual, nations deciding that its far easier to just take the gold they want from another because they do not have the natural deposits the oligarchy wants for themselves. Yeah, just great huh, more damned resource wars is just what the world needs. Anyone who believes we are returning to a gold standard is flat out of luck, unless one wants to pack their bags and spend the rest of their days living within the closed borders of some future central asian or middle eastern religious fundamentalist dictatorship shithole. Yep, all in all a gold (or any commodity standard) sounds real swell. If nostalgic for the days of the horse drawn coach and the tallship, a new gold standard will definately take us there and eventually all the way back to stoneage.
I have no idea why you were junked, your post was brilliantly well-written.
It's not the fiat that's the problem, it's the Fed. Fiat can be regulated differently. Switzerland seems to be able to handle its fiat quite well.
I junk both of you. The original because there is nothing wrong with gentle deflation, which is what occurred under the gold standard (outside of wartime, when the currency was inflated). You, because you believe so that as long as the right person (maybe you) wears the One Ring, everything will be just fine.
Word, the deflation is like dividends on your money.
But I guess some people love being the perpetual victim, and want the bankers
to steal from them via inflation..
Strange, as Britain was on the gold standard from 1815 to 1915 a period of immense growth in trade (Empire) and industry (industrial revolution) yet did not experience a matching deflation.
Yes, if only we had the "right" central planners who would not be swayed by human nature to take advantage of their position of power. Give me a break.......
some of this sounds convincing to me, particularly the part about fiat's only problem being that those given authority over it are not held accountable for its abuse and that's the fault of the ignorant and thus consenting citizenry (the rabbit), not some all powerful elite (known to be a snake). however, as this IS the case other things follow.
like keynesianism actually makes sense were we not, apparently, such fallen creatures: unable to save and conserve surplus in the expansion to have reserves to "dissave" in the (current) contraction, we are looking at "reverse keynesianism" over the last credit cycle (1980...) where we ran huge deficits during the boom and now are to tighten our (personal, local, state, federal and global) belts during the depression. nice.
fofoa makes a good point (among many) by distinguishing the three main uses of money: medium of exchange, accounting measure, store of value. while it seems clear that fiat has advantages as a medium of exchange and gold as a store of value, the accounting is a touch fuzzy with long lived assets and liabilities priced out in gold and current stuff in fiat. still and all it is an illuminating perspective.
re: selling gold. imo 1980 is not as relevant to us today as, say, 1935. we are not in the second and last part (1965-1981) of an inflationary cycle (1942-1981). we are in the second and last part (2008...) of a deflationary cycle (1981...). using the earlier (30's...) cycle, gold may not give up much of its gains nominally (unlike 1980 to, say, 2002) but will have them inflated away when "real" inflation hits (like late '40's) and other inflation (economic expansion) investments work better.
of course the current cycle may be more compressed than the prior twenty years (1930-1950...) as the central bank(s) seem much more sure of themselves, in effect moving the stimulative effects, at least the monetary ones, from ww2 into the early '30's.
Really? That's the impression I get.
i have lived thru high inflation unemployment, price and import controls, supply disruptions and shortages. gold was money and those who had it had far fewer problems. think of groceries and what you would want for them in a %35-55 inflation environment. no one can convince me that we won't see this in my future or the futures of most here.
IQ 145 - Your post is one of the most brilliantly succinct posts in ZH history. Thank-you for getting the point across without the need for a publisher.
IQ 145 - Your post is one of the most brilliantly succinct posts in ZH history. Thank-you for getting the point across without the need for a publisher.
+1
Always quick with the one liners ay Miss Mensa. Why not show us your hand instead of spewing empty critique? Yeesh, there are plenty of dumbfucks here on ZH, myself included, but at least everyone knows where we stand.
Oh, and I have a double digit IQ and a smaller than average half circumcised penis. Not that I ever made a conscious effort to measure, my penis I mean. But anyhoo, just thought you would like to know.
1 Unjunk
"My cold dead hands" Though I'm sure my kid's will squander it when I'm gone...
Guaranteed they'll blow it so party your ass off now.
Tyler, sometimes I get the feeling that you are stuck between a trader and a realist who recognizes that gold is just another competing currency that will arbitrate all others, rare and coveted, historical precendent as reliable currency, fungible, transmutable from element into money and back again, born in a star, not a printing press. People obtain gold for honest, solemn protection, not wild, coke-snorting speculation. Maybe there will come a time to sell.. When I see the guillotine get re-introduced and a whole shit bag full of bankers' heads rolling down the avenue of the Americas.
yup. just leave 'em a map and a shovel.
I ain't leaving my kids diddly. They are grown, self-sufficient, and smart. Giving them assets would only spoil them. I'm going to do my best to taper down to being indigent by the time I kick the bucket.
Junk away...
RockyRacoon, i share your path. Speaking of "bucket" . Time to make my bucket list.
Rocky, merehuman, two of my favorites here at ZH.
Well, I'm leaving as big a chunk to our only kid, spoiled or not (at least working now and independent) as I can. I WILL have a nice glide path in my later years, but then she gets it what's left. Without Unca Sugar knowing (at least the gold part).
Spoiled or not. She will get it. Not .gov. Not the Golden Horde/MZBs...
...
Now on to my own bucket list...
This sums up why china will be here when we are not.
Apparently, the time to sell gold was a couple of hours ago.
Sheesh! That's a pretty stiff move for a Thursday night.
a friend of a friend's sister-in-law is Jamie Dimon's 3rd PAs manicurist....apparently some new PM blog started and they are determined to destroy it.
we all just hope that blogger will carry on undeterred.
yeah, very brutal move for asia...the entire PM and oil complex is getting smashed. Not used to seeing a -20 POG out of the overnight.
The OP is garbage, if gold has another "bull run" like that, there will be "new dollars" to exchange into. With declining production, the price has inherent support
Excuse me Mr. Turd, I have a question - I was looking at the world spot price for gold, silver and palladium on the Kitco website and I noticed the light blue graph line representing the Nov 9 NY close looks exactly the same for these three PMs. How is it the gold, silver and palladium behave so similiarly at exactly the same time, but not not platinum?
From WSJ:
http://blogs.wsj.com/marketbeat/2010/11/09/hey-gold-bugs-dont-forget-abo...
Great chart!
Timmy G-20 is running around right now frantically trying to get any finance minister or head of state who'll listen to him to look at today's DXY chart...
"See! Look! We're doing it, sure 'nough! I toldja we wouldn't debase your reserve currency, see?!"
Regards
Dufus holding here.
I think a part of the "new normal" is $30, $50 or even $100 moves for gold + and - at frequent intervals. Panic. Calm. Panic!
yup...just watch
$1407 down to $1383 in the blink of an eye....
check out my live spot gold price tweets @spotgoldprice
ooops double post.
I trade my Gold for new armor and weapons and potions or repairs on what I have. But usually you find better ones just scavenging the dead.
I imagine others trade theirs for new or higher level spells and wizard robes.
I traded my gold medallion of me wearing a gold medallion 4 cash!
@Gully:
Nyuk, nyuk.
Isn't he great folks?! Give him a hand!
<golf clap>
The time to sell is when you need to buy a necessity and the seller requires legal tender. For those who were around during the late 70's early 80's, remember the lines of people waiting to sell their gold rings, family silverware, etc, when PM prices skyrocketed? Well, this time around this group is non-existent. Today, most people with 'holdings' have no intention of selling, unless absolutely necessary. When someone suggests selling for any reason other than that above, be suspicious. Ask yourself what might be his real motives?
+1 gazillion dollars = 1 Amero
*
Always gotta have an exit plan....
exit plan for what??? physical gold has proven through the ages that it holds its value against whatever it is being measured against. 1 oz of gold bought you 2 ok suits 100 years ago, as it does today, as it will 100 years from now.....so exit for what???
you're preachin' to the golden choir home-boy. Apparently you haven't hedged your bets for the time when free-gold may not be able to trade freely / easily amongst the heard....
moooo.
"free-gold may not be able to trade freely / easily amongst the heard"
Or seen?
herd....
doggis
Wow, what tailors take Gold in trade?
It is in WOW right?
'Tailors'? By that do you mean privately owned 'small businesses'? You ought to try that 'Au in exchange for services' idea of yours sometime, you may well be surprised...
But, yeh, don't try to buy a jug of milk with gold at the local 'FoodFlood' where the 15 year old min. wage clerk is likely lacking the saavy to tell your specie from your fiat.
Oh right, Au is down 30 US pretty polly monopoly money bitz or something, so the paper-pushers are cautiously poking their pimply heads out of their hidey-holes again to spout more hubris-based jingoist nonsense.
Hey Gully Foyle, why don't you try to buy land in Vietnam with your favourite debt-based paper. Hunh, what's that? They wouldn't take it? They wanted something with no counter-party liabilities, really? And they made you feel stupid for even trying to offload that fiat crap for a real asset? Well, at least you can take comfort from knowing that now you're getting somewhere in the 'disillusionment dept.', hey?
'WoW' ; geez that's clever.
"... How's that going for you, being clever?"
Gully Foyle<noncomittal>: Great...
"Well keep it up then!"
I'll sell my gold when Jesus comes back. Until then, it's mine, beeyotch.
"They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD" Ezekiel 7:19
Boba,
You had best pray your not one of the ones in that prophecy.
Jesus coming back, and the Day of the Lord are two or three separate events.(depending on your view).
Nah, it's all the same event. Stop reading Tim LaHaye and Hal Lindsey and read Peter, Paul and John instead. Just one day---wham!--resurrection, judgement, rapture--all at one time......no second chances......no salvation by genetics. Trust me...I've spent a lifetime studying it. It is much clearer than the preachers would have you believe.
Where do I hitch my wagon?
Orthodox Christianity. Accept no substitutes.
http://www.orthodoxinfo.com
religion , yuck yuck. personal experience teaches best to the observant student. So much is hidden in the sublety of the moment and the sound in silence.
+1
________________
Jesus is comming and he looks pissed.
yeah, they didnt mention euro's or dollars in the bible.
Fiat says it well.
Sell gold for what? Dollars?
There will be no Volcker. The dollar won't bounce back. The US is insolvent.
I might trade my gold for a farm.
The bubble is fiat currencies, not precious metals.
Same thing here, I will not sell for any fiat currency.
Yes, I will part with my gold when I "buy the farm", not before.
Agree. If currency becomes gold backed then the need to "time" a gold exit is largely irrelevant. To explain, a gold backed currency (assuming it is fairly valued) implies that the debt overhang is gone and credit creation is not going to explode again any time soon, which in turn means asset prices are not going to be materially impacted by imminent monetary/credit conditions. As gold is now 'cash' the timing on exit of gold becomes a simple return based investment decision. You cannot possibly know NOW what the relative value of assets will be upon gold remonetisation, e.g. farm land as the author suggests.
Agreed - worrying about selling it or trading it for land is ignorant of it's core purpose which is to protect purchasing power. If when the fiat collapse happens and a new system is enacted, if you have retained your purchasing power than that itself makes you richer than many others.
"it's core purpose which is to protect purchasing power"
This is only true of the PM's are purchased as a speculative investment (hedge against inflation). Some of us that hold PM's do so only as a source of barter in the event that the orderly transition to a new monetary system that you envision does not occur - or takes a very long time to be enacted. In that case, trading PM's for a farm (equivalent to self-sufficiency, or a higher level of self-sufficiency) is the better use of the stored "wealth" of owning PM's.
I am not a speculator or gambler. I own my ranch outright, and I have put aside food, have a reliable water source, "protective measures" and have some PM's to barter with in the event I need goods or services should a major financial crisis erupt. I can price fresh beef in ounces of silver or gold. Folks attempting to "buy on credit" can also be dealt grains of lead in exchange for their efforts.
"if you have retained your purchasing power than that itself makes you richer than many others."
But, if you die while waiting for the perfect time to sell out at peak exchange rates (should that ever happen) you may not be alive to reap those benefits. A rich dead man is still dead....
One must eat, have water and shelter.
I am with you my friend...
"There will be no Volcker"
Yowza...
That's the fundamental crux of the matter now, isn't it?
The "Heart of Saturday Night" so to speak.
(unintended loaded pun..)
Well spoken.
"I might trade my gold for a farm."
That's my exit strategy.
Or several of them...
like it.
from gbug to farmer.
~MV
I think gold is fantastic as money, but an even better form of value is food stuffs as we head in to the financial collapse
I'm sure the squid is perfecting its intelligence on gold holders, and will tax it like no tomorrow very soon
so get what you need now, because the asshats running the asylum hate gold bugs and people who can do for themselves
Buy a farm in South America, Southeast Asia, Middle East?
And when TSHTF do you expect your property to be respected by the cheering mobs?
Do you think poor destitute people in developing nations are that stupid? Everyone and their dog will be able to put 2 and 2 together and will figure out who was responsible for the whole mess.
White Rhodesian farmers had a picnic compared to what you will face.
Who will save you then? Your "don't ask, don't tell" bankrupt marines?
It will be hard to steer and paddle a blind and crippled aircraft carrier when the chinese EMP the shit out of everyone.
Sorry pal, no one will come to your aid.
Your land will be confiscated, split and given away to the ragged masses who will dance over your flag and that of other countries that will go to the shitter. In reward, they will vote for the smiling populist politician who dishes out your land and gold to them in the next elections taking place wherever you might have had the insane idea of hiding from the coming tsunami.
As for you, you will be detained, declared an illegal immigrant under *new* laws, and treated like a criminal who is stealing their land and who is responsible for their foreign currency reserves in USD and EUROS to become toilet paper overnight.
Have you ever considered such scenario? You should, it could become very real.
All those people you (or your government) stepped on....they will have all the incentive and opportunity to get their revenge....in spades. And they will not let another boot (chinese made boot) to replace the one over their necks today. You see, when TS does indeed HTF, it will be every country for itself. A major breakdown of the financial system will also carry with it breaking of treaties, contracts and yes, chains too.
No one will allow China to tibetize them.
Get an ag lease on the Island of Hawaii. Better do it soon though. It's time to establish squatter's rights.
I always wonder why more Americans don't consider Canada. Pretty sure law and order will be maintained in the rural areas, esp. if you spend any amount of time getting to know your neighbors. Too cold? Southern BC is the warmest part of Canada, not a huge accomplishment, but I'll take rain if it means no snow in the winter.
No guns allowed.
No hand guns allowed. You can have all the rifles and shotguns you want, if I recall correctly.
That's fine. But, I'll bet you a pile of lead that I'm gonna take a few with me.
I have a farm, but I would like a bigger piece of dirt....
Farms are like wives. They both need a lot of work and dedication, but your neighbor's always seem nicer.
Personally, the time to sell is when a few eagles will pay off the mortgage. And I have a BIG mortgage.
I remember reading robert kiyosaki (author of rich dad poor dad) say that the time to sell Silver is when 500 oz buys you the averaged priced home in America. Some others say 200 oz of Silver Eagles is more realistic. So a few Gold Maples or Eagles might not be to off of the mark!
I have a farm, but i would like a bigger piece of dirt...
Kramer? Paulson? Geithner? Greenspan? Summers? Gensler? Come to u pick Pickpocket Farms!
Right on Citxmech.
Yep, the right time to sell your gold is when you arrive in another country and can buy a farm or enough property to farm. Make sure you plant your new roots in a country that has this alien, crazy concept called "property rights." You don't want to waste your gold bribing border guards (e.g. Dept HomelyLand InSecurity) to let you out. Be sure to get out before shots are fired, becuase that is when the iron curtain descends. There is nothing written anywhere that says you have to be a part of any kind of violence, or suffer from the forthcoming financial catastrophe. Just leave before you can't leave. It is already a hell of a lot harder than you could possibly imagine....totally unplugging from this grid and relocating yourself to another country, but it is currently still possible. Live in peace and try to enjoy the rest of your days on earth.
The US was insolvent in 1971, yet gold spent 20 years falling in $ terms from 1980.
The $ bubble is tenacious.
The U.S. might have been insolvent in 1971 but everyone knew that it had the most productive 35 years of a huge demographic bulge in the populace coming up. With sensible spending, everything could have been fine.
DonutBoy parks it in the bleachers!
Exactly, here we have just another in the long line of research missives that treat gold as some sort of hedge or wager that will, at some point, need to be collected. Gold is owned because it is an undefilable currency. It should be held until the next "Bretton Woods" agreement. Only then would I be willing, for commerce purposes only, to convert some gold back into currency.
www.tfmetalsreport.blogspot.com
There is nothing novel in this posting, just rehash of commonplace sell signals. /Boring/
Plus I echo the sentiments of DB and TF in that Gold is Money, nothing else.
FOFOFOFOFOFOFOFOF Of Another, basics for enlightened monetary thought.
And still, Tyler has not added FOFOA to the must reads. He ever authored a story here the other day.
C'MON TD! ADD FOFOA!
And I sell when Jim Sinclair starts a fancy on a currency. Until then, I guard my G & S with lead bitchez.
Note: FOFOA is the deal. There is someone else who has added a FO to the title.
http://fofoa.blogspot.com/
I'll forth that promotion of FOFOA!!
The best gold writer on the net.
Period.
I'll forth that promotion of FOFOA!!
The best gold writer on the net.
Period.
I checked out the new blog, Turd... Kick Ass! I already have it bookmarked and will be checking in daily.
Somebody (or multiple somebodies) here a while back pointed out that you do not sell gold, you spend it. I would say the same for silver; why else would it come in such teeny tiny coins???
Good seeing you around Colonel!
The price of gold, and the efforts you and dumpster apparently put Bravo to shame, put him back in class!
My opinion re selling is above.
...
I also concur re the remarkable Turd Ferguson and his commentaries here at ZH.
Ah, Colonel, one other thing, O/T but perhaps of interest to you.
I just bought a brand-new book titled The Gun (C J Chivers) which looks to be mostly a history of the AK-47! It includes other material on other guns, the politics of weapons in the USSR, US military comments re the AK and the M-16, etc. It's the next book after I finish the one I am reading now.
FYI!
Thank you DoChen. I will look into it. I have been insanely busy lately, and haven't had any time to post. (sound of cheers from the ZH populace....)
I still read every day, usually fall asleep in the motel or camper with laptop on my chest, trying to get through one or two articles. At least ZH headlines are usually descriptive enough to keep you clued in.
Ah, the Bearing wishes tfmetalsreport.blogspot.com the VERY BEST of luck! Long may it prosper.
Might want to take a quick look at "Freguson" there, a typo?
EDIT: Perhaps I should consider a blog too. YAFOFOFOA (Yet Another Friend Of FOFOA). Can I trademark that?
I know you were joking, DCRB, but the FOA franchise has been diluted.
The latest FO3A is not in the line of succession. Although the work is fine.
Cool Turd. Look forward to seeing you up top as a contributor some day.
One thing people need to understand Gold is not just money it is "International Money".Wack,wack,wack on Gold and Silver in the paper market,
the Comex is fighting a battle for survival they have no physical so don,t sell to give them any,desperate to keep the price going lower to stand any chance of not being nuked.Buy on this dip it could be the lull before one hell of a storm. Bankers not just burning midnight oil,they haven,t slept for weeks,how sad.Wonder how many threats were made behind closed doors at the G20,or do you just set a missile off near California ? Interesting times indeed.
Unfortunately, we'll all be trading our gold for a farm, eventually.
Personally, I'm getting a little too old to operate a farm, so buying a farm is probably the only option left. But that can wait for awhile, I hope.
I'd be glad to come over and give you hand with your melons!
Naughty greedy racoon! :-D
Yo melons as well, Missy!
There seems to be sense in this. Maybe the bubble finally finishes passing through the real estate market around the same time that gold is hitting its medium term peak.
Farm for sale : 300 troy pounds (it's a real good piece)
When your neighbor starts telling you how much he has made on his gold purchase .... we(you) are probably gettin close to a top. Still a ways off, time wise tho.
Regards, CU
When Leo's mom starts buying gold I'm getting out. I will settle in New World Order dollars which should be good for the next ~100 yrs.
I plan to sell my gold when 10 year rates hit 15%.
I'll sell maybe a fifth to buy 15% Treasuries. Fast forward to a fifth for 50% Treasuries. The rest, never.
sell when Ben sells 2000 tons.
So we are going to apply sterotypical sell signals to an atypical situation? Sorry, I am not buying it.
If you view gold as an investment, then you sell it like any other investment. If you view gold as money, then you hold it until you need to buy something with it and hope you never have to.
A-Men , AP...
One would think your comment would be obvious, but not so.
Funny how the obvious escapes us sometimes.
As long as I don't have to eat at your picnic, I think we can agree.
One of the surest signs of a top will be the collapse of the dollar. At that point we are near the end of the bull run...problem is the period between when the dollar collapses and some fuckwad politician decides to fix it could be a couple of years.
And if you have worthless dollars you starve to death waiting for shit for brains politicians to finally understand that money has to be backed by tangible assets. With Gold/Silver you get to eat while those fuckers sit in Washington trying to understand what to do.
This is true. Remember, though, that you don't own it if you can't protect it. History shows that those with guns are usually still eating late in the game, too.
time to sell is....
when you
stop buying
Remember a one year bond with a conservative 4% yield is a 200 Dollar gain at $5000 Gold but only a $40 at $1000 Gold.
This is the core role of Gold - it is not divorced from debt it is a husband and fiat is its bitch.
I like your quotation. I'm putting it in my list of quotations.
Mr.Casey says we are BARELY entering Phase III.
There are absolutely no bubbles, and J6P, is still on the sidelines, but is starting to sniff.
They smell a TURD(not our Turd), but the one we talk about here every day.
He thinks that the BIG money is yet to come, and as Mr. Durden says, without saying it, is when do you take your profits.And be happy.
The only issue I have, and I have wrestled with this a while, is WHERE do you put profits?,cash is shit,ALL currencies are going down (unless a major course change is made,currency Wars Part Deaux is continuing) and keep them, and what else can you HOLD that is better than continuing to roll the dice on Gold?.
I have not found ANY.
And as each day goes by, I see more and more reasons to HOLD it...............Not less.
Other than Ag, and Oil, everything else is subject to getting you into a Break Back Mountain condition.
Land?, so you can get it on the cheap, WILL you be able to keep it, and pay the taxes?.
We are headed directly into the buzzsaw of Hyperinflation sooner than later.
Unless someone with a brain changes course in the 10sq mile area of the Monarchs.
I do not see that happening either.
So, best foot forward, someone else come forth with anything you can own, that WILL save your bacon.( lifetime of labors).
I cannot.
Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; but debt is the money of slaves.
Nice little aphorism.
Mozzer
Now I don't know, but I been told
it's hard to run with the weight of gold,
other hand I have heard it said,
it's just as hard with the weight of lead.
I read SHTF plan where that was posted today, also. Great blog!
Awesome Mozzer.
And I'll be a happy gentlemen, thank you very much. King's are in a perpetually dangerous position. Too many I's on the throne!
ORI
http://aadivaahan.wordpress.com
Hear, hear.
So I guess you made it off that deathstar thing, huh?
Replace debt with credit cards.
Madison Ave completed that long ago.
I did this a while back. I put my student loan and house on the credit card at 1.99% interest, then paid them off. If I defaulted on the cards, at least the nondischargeable student loan and house were secured (not to mention my interest rate on the student loan was 9% and the House 5.35% when I got out of them). All of it is paid off now, but it gave me room to default on cards, instead of the house.
Too good!
real estate will lag the asset appreciation because it is dependent on extraneous factors including neighbors, comps, unemployment, liquidity, and government. a bit too much imo.
Dos, put a little in the Canandian-dollar (CADO) if your willing to take some risk
also hedged long positions in multinational food corporations seems like a way to preserve some value, if your willing to have some money in the squid system
In 1980 at the peak of the gold bubble you could buy a house for 75 OZ of gold. I figure when this bubble is ready to pop it will be closer to 50 OZ .. Well i already got my 50 oz's now i waitin to get my house!!!!!!!!!!!!!!!!!!!!!!!!!
After the reset in the value of gold, you'll be able to by a few neighborhoods with 50 ozs.
actually, you could get 2 in vegas right now. course, you have to pay to own housing.
In 1940 the average cost of a new home was $3920, or 112 oz of gold at $35/oz.
In 1980, the average cost of a new home was $68700, or 81 oz of gold at $850/oz.
In 2008, the average house price $238880, or 239 oz of gold at $1000/oz.
I don't have data for 2010, but assume that the average house price is now $200000, then that would be 143 oz at $1400/oz. So gold still seems undervalued compared to where it was in 1940.
I think that people who are planning to "sell at the peak" are probably deluding themselves. If there is a gold bubble, the peak will probably only last for a very short time and everyone will be too spellbound to sell. In 1980, everyone was probably planning to sell when it hit $1000/oz. And if it had hit $1000/oz, they would have upped their target to $1100/oz and so on.
Another point is that I was alive in 1980, watching television news and reading newspapers and magazines and I was only dimly aware that there had been a gold bubble. It was not like the dotcom bubble where everyone was constantly talking about it. I do remember reading about the Hunt brothers, but that was more like an oddball newsfiller type of story. There was a bit of talk about reverting to the gold standard around that time, but it wasn't a major topic of conversation.
I view my PMs as an emergency fund and don't plan to sell them unless there is absolutely no other choice. With luck I will never need to sell them and they will be left for the kids.
Good luck on your house! You may just get it.
50 oz !!!! That's swell. Say, where do you live? Uncle Sam would like to stop by to congratulate you. Ever thought of making a contribution to help pay down the National Debt? It would be awfully patriotic of you !