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The Man Who Lives Without Stocks
Tim Iacono, is a man who lives without stocks. He does this from a remote mountain top in rural Bend, Oregon, where he has the luxury of spending his days researching long term trends in the financial markets. Maybe it is the incessant rain that keeps him working indoors so long, sifting through the grains of data he pulls off the Internet.
Whatever Tim is doing, it is working. It was his spot on calls on precious metals and commodities during the “naughties” that has enabled him to live this sought after lifestyle. When his research led him to conclude that real estate was careening off a cliff, he sold his California properties and made the move north. His successes led him to launch a blog in 2005 and an investment website in 2006. Today, The Mess Greenspan Made boasts 26,000 followers at the aggregator site www.seekingalpha.com.
With the exception of the odd commodity producer or gold mining shares, Tim has completely avoided investing in paper securities for the past decade. He believes that stocks are still in a secular bear market that has at least a few more years to play out. When government stimulus runs its course later in the year we could be in for another downdraft as severe as the debacle that ensued in 2008-2009. Your mom & pop investors, battered by two collapsed stock bubbles in ten years, have gone missing in action in the latest rally, preferring to hide their money in bonds instead. This will only end in tears.
Instead, Tim thinks that you should haul your Bee Gees records and leisure suit out of storage and start practicing the hustle. There will be a return of an investment environment last seen in the 1970’s, when inflation was high, paper assets were shunned, and cash poured into precious metals and commodities. He especially likes gold, the beneficiary of a coming wave of inflation and an emerging market central bank bidding war. He has a near term target of $1,400/ounce and a decade end goal of the old inflation adjusted high of $2,000. A favorite ETF of Tim’s has been the (GDXJ), which focuses on junior gold miners, unlike the (GDX), which only directs money into the big companies.
Tim prefers gold over other precious metals because it will hold up better in the coming collapse, as it did last time. He thinks every asset class except gold will get hammered. As gold still has to digest its recent meteoric gains, and is currently lacking a weak dollar tailwind, he is advising readers to sell calls against current long positions to bring in marginal income.
Furthermore, Mr. Iacano thinks the outlook for bonds is poor at best, but the coming downdraft in financial markets may take the ten year yield from the current 4% down to 3% before we enter a prolonged rise. Bernanke is attempting to cure the current economic collapse with new printing press financed bubbles, inviting inflation to return with a vengeance. The early signs of this can already be seen in the white hot ascent of Chinese real estate prices.
The outlook for US real estate is terrible. He sees at least another 12 million foreclosures hitting the market before the fever breaks. Personally, I think there could be more. If we get another 20% drop in prices, the spill over into the banks carrying properties at “aspirational” values could trigger a second financial crisis. His message to investors is “rent, don’t own.”
To learn more about Tim Iacono’s research, please visit his website at http://timiacono.com. To listen to my interview with Tim Iacono on Hedge Fund Radio at length, please me at www.madhedgefundtrader.com and click on “Today’s Radio Show”. There you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free.
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Awesome summery, thank you.
I was watching gold go from dink to $800+ in the '70's. I had a friend who had 500 Krugerands in a safe deposit box that he had purchased for $35 each while stationed in Durban. He would not sell. He was waiting for gold to hit $1000. It didn't and crashed. Why?
how did you get the delmonte .. you cant eat 20's
oh so you took the bucks bought the delmonte
same difference go to the thousand of gold banks lol
dealers etc.. cash the gold for dollars anywhere in world any day,, take the cash buy the delmonte .
chew gum walk .lol
what a weak stupid response about gold
Don't be a sucker, dumpster! It's that old "you can't eat gold" argument in a different wrapper. You fell for it.
You can eat gold...won't hurt you a bit (well, sharp shapes could be a bit uncomfortable) you just have to get it back out of your poop later. On the upside, it is immune from confiscation for a couple of days.
Last place I want the gubmint to be looking.
Someone mentioned spam....don't forget the canned carrots and spinach, along with the chili and tuna. They taste better than gold. DelMonte is the place to be.
The big question is who owns the 160,000 tons of above ground
Gold? Country held reserves account for only about 30,000 tons.
See http://www.zerohedge.com/article/gold-holdings-country
Who holds the rest? Its definitely not all in the form of coins and jewelry!
Whoever holds the other 130,000 of apparently private Gold
controls the market.
I never understood the 1970's "inflation adjusted" gold price of $2000-$2,300. Here's the rub: measurement of inflation has markedly *changed* since the 1970s. Anyone remember the Boskin commission?
That said, a reference to John William's shadowstats is helpful. If we measure the growth of inflation from then to today using the metrics from the 1970s, then the inflation adjusted number should be closer to $8,000 an ounce.
Am I wrong here?
Sorry Racoon didn't mean to shake your confidence in your gold position and call you a sheeple, after all you are a racoon. Maybe you should look at a chart and go ahead and buy it at the 100 year high because they tell us ad NAUSIUM it's going higher.
Gold works in any environment? On what planet. Charts are these things you can get on paper or on a computer. When you look at them they show you the history of Gold Prices, check out some time.
OH and theres a website for you it's called, CNBC.com.
ENJOY!
"When you look at them they show you the history of Gold Prices, check out some time. "
Yip, I think you need to reassess, THERE HAS not been ANY other time like the one we're in, ever.......as in NEVER.
Correct. Let's use the graph/chart argument as proposed.
Just a sampling of how different this "recession" is:
http://panzner.typepad.com/.a/6a00d83451591e69e20120a7c50731970b-800wi
Thanks for the reply. I can see your point about charting. Sometimes it tells the story, sometimes not. I got a chuckle out of the "shake your confidence" comment. Not likely that your solid argument (still looking for one) will divert my attention from precious metal acquisitions. I'd go to the trouble of directing you to assorted well-respected reasoning about gold and deflation but I've done it so many times that I find it tiring. I don't feel that tilting at windmills is productive. "...hundred year high"? What planet are you from? Is gold going higher, or is the fiat dollar depreciating against gold? You should look into some basic principles.
Here is a starter piece: http://cowles.econ.yale.edu/P/cd/d12b/d1253.pdf
And here: http://matterhornassetmanagement.com/2009/12/07/gold-is-not-going-up-pap...
And here: http://dailycapitalist.com/2009/10/17/money-a-semi-pictorial-fable/
And here: http://www.marketskeptics.com/2009/03/fed-is-planning-15-fold-increase-i...
Oh, what the hell, here's one more: http://mises.org/daily/4153
To be truthful, and no offense intended, why should I care what your investment goals and vehicles are? Also, it's not that one of us will be wrong, and one right. We could both come out even in the long run going totally different ways. There is not a perfect balance of zero sum outcomes. Besides, I don't have every single cent in gold/silver, just a higher than "recommended" allocation. Gold could halve in fiat currency "price" and I would still be ahead of the game. Am I talking my book? Well, duh.
And while we are at it, you only told us what you would not use as a wealth preservation method, not what you do use.
As for CNBC, I do watch the programming quite a bit. I find it to be a great contrary indicator, and I have my favorite "experts" who, in telling me what they like, tell me what not to buy. Somewhat like the old axiom: "Know thy enemy." Besides, they can be quite entertaining! Kudlow and Cramer are hoots, and there are a few hot chicks as well. (Christina Romer not in that group.) I will have to admit that I quit wasting time on Cramer a couple of years ago. Just couldn't stomach the circus-like antics. Thanks for taking the trouble to reply, yipcarl. My best to you and yours.
Oh yeah, remind me one of these days to tell you the story of the $50 car.
Whether he is well followed or not, I think Mr. Iacono has a pretty good grasp on the view at 30,000 feet.
From my perspective, it's all an issue of timing. I do think we are likely to hit a wave of asset deflation (and lower bond yields) as the Bernanke strategy of reflation starts to backfire. If the reaction to this is printing even more money (again, a massive misallocation of resources), you'd better start backing up the gold truck.
But where are we in all this? The Fed is slowly pulling the reins from its massive (misallocation of resources) liquidity experiment, and there is still stimulus money out there to go through the system. Perhaps it all starts coming unwound with pricking Chinese real estate bubble (throw in Australia and Canada as well). Then the next wave of foreclosures in the U.S. hits, along with abosrbing outright defaults.
The cynic in me says Washington will bless ZIRP + Stealth Monetization until the November elections, though... even if it means lying about inflation data. This was little known, but the Fed expanded its balance sheet over $30 billion-- in the first 2 weeks AFTER the March 31 MBS purchse deadline. Perhaps these were "clearing transactions" as the Fed claims. Perhaps not. We'll know in another 30 days.
Obama's cronies will do a lot of tough talking on financial reform, and pass a optically tough reform bill between now and November... but just remember... even current regulation isn't seriously being enforced by our regulators. Why should new (and tougher) ones be enforced? We'll see how far Obama carries the populist ferver against the finanacial system, though.
Except GOLD?
WRONG. Gold is going die as well. We're still on this gold as a safe haven eh? I thought this was Zero Hedge and not CNBC? Deflation will ensue for years to come and gold will fall along with everything else.
Newsflash! The loudest cry you hear is gold OVER and OVER again, you want to follow the sheeple be my guest.
So, I take it you prefer to hold fiat currency, that will be worth less than Gold?.Wait till we wake up one Saturday morning, and hit the Net, and find your Green has been devalued 10-1,100-1.......Then you will most certainly scream.
yipcarl .. clueless to the max.
and how many years have you been in gold surely not more than Sinclair's 50 . He says different . along with Russell, dines , and even mises the austrian master ,
when you have more than bildge to throw about gold ,, then some may take your comments a little more serious ,, once again you are clueless about the place of gold . yadda , yadda
Another old argument. Gold works in any environment. The deflation/gold story has been told. Did you miss that news flash?
And I'm as puzzled as anyone about Friday's action...with Goldman and the entire Ponzi bezzle under fire, gold should have SOARED.
Simple, Paulsen owns a majority of GLD........fear of having to dump it, a lot to get out of an asscrack, with the GS deal is why.
Spooked folks, if you remember, the GREECE debacle(ongoing), did the same thing, lowered the Gld prices.
People fled RISK ASSETS..........into that sure Green thing.
I am always amazed,just shows you how ignorant the masses are.
why be puzzled .. read the back up commentary from GETA.
and the dude who wants to stop talking about gold .
what do you like to talk about , lets find something your chatty about ,
bet it also is banded around a lot. and is tiresome to many lol
Hey, dumpster, how's it going? I'll take the bait if you were referring to me as the "dude who wants to stop talking about gold". What I want to stop is the inane discussion as to whether it's a good or bad way to hold one's wealth. Sort of like the "you can't eat gold" argument. Don't you just sigh when you see that? I'd rather discuss current events and how they impact markets/investing rather than try to settle (again) a 2,000 year old argument. Have not seen Master Bates posting lately. Now he was one to stir that old pot! (Did you mean GATA?)
rocky
GATA
was just talking in generalities sorry about the dude rocky dude lol
last time master bates was around i believe he had just come back in from making a pizza delivery
of course talking about current affairs and how they effect investing not really interested . and usually that involves hitting knats with hammers
I am a long term kind of guy. so the million little lap tops trying to pound out a nickle is boring to the tears ,,
stopped watching the TV babes years ago. FTV is a commercial laced pavlovian bell ringing place,
Gold . this time around ,, best to have a little
most do not have a clue. but i supppose they are and have nothing to protect , still getting their feet wet in the real world .
If gold is going to periodically rise and correct, sometimes seriously, then this creates opportunities to earn more fiat currency and plow it back into gold during those corrections. It's no good denying the efficacy of this even though it is hard to time.
I don't like cash either, but with the current artificially-low COMEX gold price allowing us to purchase the physical metal cheaply, why not play the ETF, stock & gold-denominated bank account paper game to earn a few more $$$ while we're waiting?
Speaking of waiting, gold seems to again (unlike two weeks ago, after the latest Greek worry episode) be trading with the dollar. But not so closely; the correlation seems to have broken down a bit. We need this trend to continue, because our ultimate goal is to destroy the mainstream investoriat's view of gold as a "risk asset". Why the hell gold is rising WITH REITs, financials and retailers is perplexing to we who undertsnad the real role of the metal! Gold should be the ultimate SAFE HAVEN, along with commodities. But instead they dash for trash and paper dollars...
Gold was trading inversely to the dollar for a couple days there last couple of weeks, after the Greek scare. That's what it SHOULD do!
Obviously, gold does well in times of currency & debt panic, of default fear. We need: MORE sovereign debt doubts, higher unemployment, less GDP gain per dollar of debt, currency turmoil and slumping consumer spending. I think we'll get these!
Are we going to rehash the gold story.... again? This is getting tiresome.
Just buy it, or don't. If you like it, fine. If not, fine.
If you need confirmation bias just enter "buy gold" or "sell gold" in the search box and read to your heart's content.
Can we move along?
I don't know. I remember during the RE buble days, there were loads of TV ads on "how to get rich in RE" schemes right up to the crash.
Now, I am seeing more and more ads on TV selling gold.
It doesn't smell right. Too many people on long side of the trade.
Mojo,
Yep, but the VAST majority of people are STILL clueless, and do not buy.I have many friends, that have made small fortunes,are one step away from retirement, and think they have their financial houses in order.
STILL, just plod to work, and let their financial investors buy their paper for them.They are clueless, I hate it, their my FRIENDS.
But, they cling to the past, and hope for the best. But, they are going to lose it all. ALL..............
Nothing would make me happier, if I did not know what I know.
I wish GOLD was $300.00 an oz again, and we could live our lives without daily dodging the boulders coming our way.
I wish we all could be back to normal...........
Sadly, there will never be a Normal again , never.
As for market manipulation, sure it's there.........but, SOON, and very soon, the demand for physical will overpower their ability to control the prices.
And confiscation happens if they find it, and there are safe places to own, out of CONUS.
If he had said go all in a year ago and now said he was out of
stocks, I would find a pedestal for him.
To his credit, on average, the last decade has been a perfectly
lousy time to park money in stocks.
Without some idea of what will happen politically
and who holds all that above ground metal, I can't consider
Gold a very safe investment. Those that can control the market,
paper or otherwise, can drive it to the basement if they
want to.
I believe we will see a short squeeze crisis followed by a
collapse of price, possibly engineered by an FDR style
confiscation
Buy Gold and Silver or don't its totally up to the individual. But if you do proper data mining its obvious anything paper especially fiat currencies, are becoming less and less valuable by the year. When the PTB collapse the current economic system, in favor of their new 1000 year counter plan only a few things will hold true value (water, shelter, food). During that crossover time period, AG, AU, will be the only true internationally accepted currency.
good summery of tim Iacono and his forward looking ability .and his understanding of gold and where it fits in this cycle of economic understanding
those who chew gum and walk at the same time can sort this out, others still learning the difference
zero hedge comes from many different points of view,
and the gold story is one of a rise to 1130 from 260,, and the continual fogging thinking of many.
best to get some gold . save a seat for the next couple years
Zero Hedge posting such an article is akin to the next issue of Fisherman's Weekly not mentioning the word "lure" in all its pages. What is the world coming to ?
so Adam whats your real objection to the article ,
are you up to date ,, don't believe the gold story . or just satisfied with statius Que
and you don't believe folks can sort this out for them selves .
the sad irony is that we are into 1130 gold .. after a good run from 250..
now we get comments like why invest because tim says to .
where have these people been waiting in some cave,
and now a tim post gets them spouting ,
read the gold airwaves
tim is being very conservative
you folks do understand that gold is money? that the fiat hoards are plying away at creating ton of paper.
read the predictions of the many gold centered experts the sinclairs the dines armstrong others.
gold is not only going to 2000 but also to higher prices ,
it will become the backing for international trade . governments will soon be buying at 1600 and higher ,
the play is in session we are just in act 2 of a 6 act play
get to the dance now. get a chair chosen set in it. place a jacket on the seat if you go for a break,
what about cash lol
sure that works. as it has since a buck was a buck now worth 3 cents ,
is the dollar going to be worth 20 cents in five years . i doubt it but gold will sky.
serpentine
p.s. to buy gold
is to walk on down to the coin guy plunk some of the cash that you have diligently saved . with a portion take the gold coins home tell no one ,, then next week repeat.
to think that buying gold is to buy a paper promise of gold . is to think your eating a nice prime rib and getting canned spam
What about CASH?
Let's see if I've got this right. I should invest in gold because Tim Iacono, whom I've never heard of until now, says it is going to 1400 and then 2000. Sounds like a good way to invest to me!
So what do suggest, cash? If you can tell me where the 105 billion dollar loan came from then maybe I'll consider it
where exactly that it says that "you should"? or "we should"
I like Tim's work too, but you should check your geography. Bend is located in the eastern half of the state in the rain shadow of the Cascade mountains. The average rainfall in Bend is only about 12" per year with most of that occurring between November and March. If I lived in Bend, I would be working outside on my deck with an awesome view of the mountains and the desert.
what's with the junk flag...its true
Bend isn't near rual enough for my taste either...but then I guess its all just fly over space for MHFT.