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Must Read: Oaktree's Take On Gold - Howard Marks Discusses All That Glitters
The topic of Howard Marks' latest letter is gold. The Oaktree Chairman presents one the better comprehensive pieces on the precious metal, laying out both the pros and cons. Presenting the current broad schizophrenia when debating the value of of gold, Marks, in a comparative allegory to 1952 opinion of Noah "Soggy" Sweat on whiskey, Marks states: "I have no doubt: gold is the ideal investment"...yet..."Gold has no financial value other than that which people accord it, and thus it should have no role in a serious investment program. Of this I’m certain." Arguably one of the better two-sided presentations on gold's true value, we are nonetheless surprised that Marks did not reference the opinion of Dylan Grice (and others before him), who analyzes the price of gold in terms of the global monterey supply, which can be read in its entirety here. Nonetheless, as Marks is always one of the most thoughtful observers on markets, this piece is a must read for everyone.
All that glitters (pdf)
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and dont forget they are all buying now..so it is different than 1985..also the Soviets are not BROKE this time they have reserves and are protecting them by buying gold...just like the Chinese..as well as the Gulf States..as well as the Indians...as well as others.....so what else does that tell you..ya when you are crumbling you dump.everything..because you have to........like the US is doing now..when you are the worlds real banks..you buy alot of freakin gold..has always been that way..all great empires thrived due to backing their currencies with gold..why do you think that was and is ...??????......will try to let you figure it out ...get back to us when you do..
and dont forget they are all buying now..so it is different than 1985..also the Soviets are not BROKE this time they have reserves and are protecting them by buying gold...just like the Chinese..as well as the Gulf States..as well as the Indians...as well as others.....so what else does that tell you..ya when you are crumbling you dump.everything..because you have to........like the US is doing now..when you are the worlds real banks..you buy alot of freakin gold..has always been that way..all great empires thrived due to backing their currencies with gold..why do you think that was and is ...??????......will try to let you figure it out ...get back to us when you do..
Very interesting point.
- just ran across this, also very interesting, and seems to support your chirp.
http://www.the7thfire.com/9-11/EP_Heidner_report/covering_a_bigger_crime.html
gold is like a used car, it's worth what you can get for it.
yeah..and during German Hyperinflation..you could buy a house with one quaret ounce of gold..and you could buy a city block in Berlin for 2 ounces...now boys and girls which one do you want...a used car..some worthless cash or some gold..
I'm curious for some references. The figures do not shock me at all, but I'd like to have more information. Notably on if gold was on the contract, or if you had first to exchange gold for marks. That would surprise me, as no sane home seller would trade a house for dying marks.
Really just STFU earlier you were acting like you were a Weimar expert now you are asking for information?
If I really need to get somewhere fast, I would take the car. In my circumstance, it would have more intrinsic value.
At one point in the Weimar Republic, Daimler-Benz could be bought for the equivalent of about 372 of their automobiles! Can you imagine NO ONE being able to make change for a $5-dollar bill at that point in time?
Well, you're getting somewhere with this comment.
Gold, silver, equities, bonds, dollars, euros, yen . . . all have value to someone else besides ourselves. We acquire one or more because we are hoping that in the future (which if I were a machine could be measured in milliseconds) someone with whom we can do business will accept what we have for something that they have, that we desire.
It is as simple as that.
This week I acquired some more gold and some additional equity positions, by paying dollars. I believe that, in the future, by trading in that gold and those equities, someone else will give me more of what the dollars from which I parted would have bought. I am gambling on this. It is fun, at the least, and it may be profitable.
We shall see whether I am right or wrong.
ZakuKommander, you say you are gambling. Really? I don't think so. In the end the laws of supply & demand will work as they have for centuries spanning countless governments that have failed, fiat currencies that have gone bust, & other sundry calamities along the way that have caused countless currency devaluations. Is today any different? I think not, as you say "[i]t is as simple as that."
Based on that simple, single economic principle, would you rather hold dollars that are being printed at an alarming rate so corrupt politicians can continue their pork barrel spending programs & prolong the inevitable debt devaluation, or rather hold an asset that is diminishing in supply & quality off the face of the earth?
http://data.imagup.com/6/1107410581.png
"We shall see" when the majority of fiat paper holders wake up to the facts about the "value" of their paper dollars after the decades of governmental conditioning finally wears off. The writer of this post is just moving into the stage at which he's doubting his faith in the paper dollar & the system that creates it. He is a creature of habit & bad habits die hard.
Let me explain "gambling." We are all gambling to some extent. Simply stated, we look at our remaining actuarial lifespans, our projected needs within that period, and the shit that can go possibly down during that time, and try to figure out what it's going to take to be "comfy." I bought some equities last week because for the short term I gamble that I have a chance of making some more dollars, which after all is the only currency that I can use to pay off my credit cards used to buy tacticool weaponry and the new PS3 Move for Xmas. I bought gold as a hedge and an opportunity. But not so much that I'd have to wait to get the PS3 Move and something with H&K goodness.
Each and every one of us is constantly making strategic and tactical decisions on what we have to have to be "comfy." All in all, I take an Aristotelian-Taoist "balanced" perspective, and don't put my faith in any extreme.
The ether was wearing off. The acid was long gone. But the mescaline was running strong. Good mescaline comes on slow. The first hour is all waiting. Then about halfway through the second hour, you start cursing the creep who burned you because nothing's happening. And then - ZANG!
Gotta love the author's naivete re: believing the US isn't corrupt. Methinks this guy needs to get out more.
Overall, I enjoyed the article and feel he framed the emotional aguments on the subject well. Referring to the contest where contestants tried to anticipate which pretty girl other contestants would rank as prettiest reminds me of the board game "Balderdash" which I always enjoy playing. I tend to think about that being more applicable to investing in equities than physical precious metals, but then again, that would be seeing things through my own perspective.
I only know that silver 1/2 oz are impossible to be had. gold I no nothing about.
1300 left:
http://www.apmex.com/Product/59019/2011_1_2_oz_Silver_Australian_Koala.aspx
I posted this previously, but on, what seems an abandoned post:
First off, let me point out that I am not an expert on commodities, nor do I want to be one. I just thought I would throw out this anecdotal information and let someone with more knowledge than I figure out if it is significant or not.
It is well known that India is one of, if not the largest consumers of gold in the world. In the past, a significant percentage of that consumption was by Indian women, buying gold jewelry. According to people I know - including my wife, who is Indian, that is changing somewhat. A lot of people have given a lot of reasons for why Indian women buy gold, from just sheer vanity to a hedge against inflation. The real reason, it seems, in a lot of cases, is for insurance. In India, married women have one property that traditional mores does not allow the husband access too....jewelry. In a country of arranged marriages, having a fall-back plan for a wife is a very important thing, and since when women marry, they are expected to bejewel themselves, well....the circumstance feeds on itself. In the same vein, jewelry can be used - in a country with limited life insurance plans - as a funding source to cover personal or financial strife. Per my wife (who loves her gold) because of the increase in the price of gold, many women are switching to silver and diamonds for the listed reasons. This seems to cut across social lines..i.e., professional women are still buying gold ( but always bought less of it anyway) and poorer women are moving to silver. Her father runs a large jewelry store in Kerala, and his silver sales have skyrocketed in the last year, as gold has held firm (only in jewelry...in bullion, gold has increased about 20%). Another point that I am not sure what it means...in the past, gold-melt from Indian consumers has played a large roll in the price of gold on the market, now, many Indians are hanging on to their gold. Finally, my wife tells me that her sisters (she has five) are buying smaller and lighter gold bangles and chains than has been traditional, and all of them are buying more silver jewelry. So, there it is.....My wife is not an economist, but she keeps track of what goes on in India, and in her father's very large jewelry store. If this means anything to anybody....please explain it to me.
you got a smart wife, STAR.
As an aside, the purity of gold sold in the Indian market is 22kt ( .916 -- the alloy equivalent of the fineness of a British Sovereign ) -- truly, a veritable "store of wealth" than traditional, American 14kt ( .585 ).
"I didn’t think about gold very much during my first 39 years in the money management business. First I was an equity guy, and then I became a bond guy. I never had a client who held gold (as far as I knew) and no one asked for my views on it. In a world in which people thought they knew how things worked and everything went smoothly most of the time, gold was considered largely irrelevant."
39 years ago, on August 15, 1971, the United States abandoned the gold standard after 182 years, dating from 1789. At the time, the dollar was worth 1/35th oz. of gold, or $35/oz. In the next ten years, the dollar price rose to $850, an increase of over 20 times, while stocks went nowhere and bonds were a horrorshow.
During this DECADE, Howard Marks "didn't think about gold very much."
There was, however, another investor who did very well in the 1970s. George Soros accumulated gains of 40x during that period, in large part by trading commodities, including gold.
Helllloooooo stupid people? COMMODITIES have been going up for 8 years! GOLD has been going up for ten years. Who are you going to listen to? The guy who still "doesn't think about gold very much"? Or are you going to listen to the guys that made money the last time around? Soros apparently owns 2100 tons of physical gold bullion. His former partner, Jim Rogers, has been beating the commodity drum for years. Jim Sinclair, the biggest and best gold trader of the 1970s, has been banging the table day in and day out.
Howard Marks is just another clod who is getting steamrolled by currency depreciation, just as happened the last time around. How dumb can you get.
+1
Yeah, I wouldn't put any stock in what this "expert" thinks. He hasn't paid attention to gold which has been one of the greatest appreciating assets of the last decade, and he still holds out hope that the US isn't corrupt from top to bottom! I'm mystified as to why this article is a "must read".
http://arxiv.org/ftp/arxiv/papers/1011/1011.3706.pdf
http://www.upscale.utoronto.ca/PVB/Harrison/BellsTheorem/BellsTheorem.html
"...It will be seen, therefore, that this picture provides a serious problem for inflationary cosmology, assuming that our events are not in some unforeseen way spurious. In the inflationary picture [14] the onset of inflation, or Big Bang, would be represented, in Fig. 6, by a horizontal line which is extremely far down the picture, having little connection with such hyperbolae h. Although it is still geometrically possible to obtain circles c of small angular radius from events occurring either in the early inflationary phase or near the Big Bang before the inflationary phase takes over, the statistical distribution of observed circle radii would be very different from what we appear to see, this inflationary picture providing relatively far more circles of large radii and extremely few of tiny radii, since the source events would then lead to plane-wave disturbances randomly moving across the CMB celestial sphere Σ. In any case, such explanations would be completely at odds with the standard inflationary philosophy, which would require the effects of all such early hypothetical explosive events to be ironed out by the exponential expansion. Moreover, our finding that such events have a recurrent nature, with successive events producing effects of the same order of magnitude, seems very hard to square with the inflationary point of view. It may be pointed out, however, that exponential expansion does not, in itself exclude recurrent effects of the same order of magnitude. This occurs also in CCC where in the late stages of the previous aeon there is also an exponential expansion which allows for recurrent effects of the same order of magnitude. But for the reasons stated above, to reproduce the effects that we appear to see, within the framework of inflation, one would require a mechanism for producing recurrent explosive events close to the inflationary turn-off point. No such mechanism has ever been seriously contemplated."
I have a degree in multi-color sprinkles...and in the cupcake world, we contemplate such issues on a regular basis.
Trying to use mere words to describe magic is like trying to cut a steak with a screwdriver.
- Tom Robbins
hey Starry, you and blindman both cupcakes†
+ 1
Congratulations Tyler ! You have once again successfully drawn out much passionate commentary, which is why we keep coming back to ZH. Almost daily you scoop all other financial media combined!
Regarding the issue to hand, i always let the market tell me what it is doing. I never try to tell it what to do. So, i carry a few pure silver US quarters with me, and occasionally attempt to pay for small purchases at the silver melt value. When one day, someone accepts, I will know we are at a tipping point.
So far, for the retail clerks, a quarter's just a quarter, silver or not.
I will take them at melt as long as you do the melting:)
1st - this is the type of pablum I'd expect from a stock and bonds salesman - since there's no commish involved in recommending gold or silver, it's not in their realm of reality.
2nd - (bottom of page 7) "While traveling, I was shocked to hear someone (okay, a gold producer possibly “talking his book ”) describe the U.S. as having a corrupt political system in the grip of special interests and being committed to the debasement of the dollar. While I know the stimulative actions being undertaken may well cause the dollar to weaken, I like to think the part about corruption isn’t true."
By dollar volume, this is the most corrupt government in the history of the world - bailouts, TARP, QE, QEII, none of the $$ went to solve the root problems and only went to banksters for more bonuses.
My bottom line is, there is not a single fiat currency out there worth holding - USD, J-Yen, UK Stirling, Euro... all are junk - for me, there is only 1 currency, PMs.
I regret spending the 10 minutes to read this crap.
Well, I have bank accounts in foreign countries in: Thai Bhat, Malaysian Ringgit, Singapore Dollars, Korean Won and Vietnamese Dong...and I could care fucking less what the exchange rate is. For me, convenience has intrinsic value.
Great idea to do this, have foreign accounts with local currency - and who knows, maybe the bhat, SingD, Won or Dong will hold out longer than the USD. Either way, I like your strategy of not having all the eggs in 1 basket.
How about a campaign to make SPAM the next reserve currency? It’s a great little store of value, internationally recognized, indefinite shelf life, can feed the family, and pets too. And, when TSHTF, it will probably have a higher value of exchange than one of those shiny metal things.
- it will be soon enough, name your price.
Spam is loaded with calories too...
Sorry but when TSHTF the the shiny metal things called BULLETS will be worth more than spam
tptb must be getting seriously desperate, to be able to funnel 2 back to back silver propaganda pieces into zerohedge, with mad troll activity. what comes after the fear mongering? arrest, for advocating crashing JPM? financial terrorism?
+14,000,000,000,000
Sheeple (and the shepherds) will "dance until the music stops".
Neither Gold nor fiat shall ultimately have any value to anyone. Until then, the spread should work on the basis that governments can't print Gold. Nor can they print food, shelter, love or salvation. That is the problem.
If you don't have a fair amount of productive capital already, then you are fucked. Your returns will never outrun the diminution of your purchasing power.
Gold is the corpse of value. Neal Stephenson--Cryptonomicon
... and silver its coffin?
What Mr Marks forgets to ask himself is "what is cash and where did originate from"? It looks to me that Mr Marks has not studied monetary history and as a result does not realise that gold and silver are cash and that the dollar or Federal Reserve Notes are a claim on cash! How can he analyse cash flow when he does not have an idea of what real cash is? The way to work out the price of gold, Mr Marks, is to go back to 1933 (when the U.S. was last on a gold standard) see that one ounce was $20.67 and then calculate the growth in the supply of $s or Federal Reserve Notes since 1933 and extrapolate to 2010! I have not done the calculation but I am sure that with the amount of gold the U.S. government says it has and the money supply in existence it would actually be a lot higher than $1400 per troy ounce.
Is Tyler getting weak knees on gold? Anyway, these endless arguments are so tiresome. It's like listening to the feminists "It's all in the eye of the beholder, if people didn't value women for their beauty then the world would be a very different place". Well, that's true, but it's a MOOT POINT. People have always valued female beauty and they always will, so get over it already. Gold is money. Gold has always been money. Gold will always be money. Grow up and face reality....
The intrinsic sophist notion that gold is an investment is the flaw to all arguments about gold today.
It isn't an investment.
It is simply money, unencumbered by the shackles of derivative. Do I care what the price of it is?
Only if I don't have any..........
What irritates me is this guy doesn't own any, has never owned any by the sounds of it and yet we read him like he understands.
As my teenage son says "whatever"
Gold is a multigenerational purchasing exercise whereby smart families teach their children to buy gold on program so that their wealth is stored outside the familiar channels of trade and commerce.
My family has done it for 300 years. Are we rich? Who cares - it's irrelevant. It isn't owned by any one person in our family.
It is the family jewels if you will. It is never sold except to bribe the prision camp guard for escape or save the family during times like these.
Bankers laughed at us for 25 years.
They laugh no more.
Teach your family how to break the fiat habit, that is the greatest legacy you will have.
Give a man a fish and he eats, teach a man to fish and he prospers for life
Salute bitchez, happy holidays
You only care about the price of gold if you don't have any.
Brilliant
I have gold and silver because I believe some time in the short/medium future the STHF and have no idea what will be worth what, if my bank will send my cash to money heaven, my house lose 50%, my job gone and shares crash to the dirt.
It is because I don't know what will be safe or when it will be safe my only option is to put some in the ultimate thing of value, gold and silver. History tells me that when everything around you is collapsing and a mess gold and silver will always have some decent purchasing power. (In Zimbabwe a spec buys you a loaf of bread).
At some stage after TSHF and a decent resolution to troubles seems planned I will convert some portion back fiat AUD and start looking at shares again. I will always now maintain some gold and silver holdings and stocks.
Exactly if there is ever a bank holiday then you are either fucked or you're not.
Around here gold is distained so much there are ads in every paper offering to buy gold. Literally every jewelry store has a sign in the window saying they buy gold. There are even occasional workers in costumes at the curb with signs to suck you in to sell your gold. They are getting enough gold at that location that they can pay somebody full time every day to stand out there and wave a sign at folks stopped at the traffic light.
For those with really short memories - this was not common ten years ago. People are hoarding gold right now because a few of us see our lords in the castle are fools who can't run things. We may be peasants but we will protect our families as best we can.
In Argentina gold coins and bullion were not common. But I was told by someone who lived through it that small pieces of hallmarked jewelry traded very nicely.
I still remember a documentary I saw years ago about the under-classes in India. These folk had to sleep on the sidewalk at night and carry every thing they owned. Yet when asked what she wanted an older lady living like this expressed that she would like a small piece of gold jewelry - "before she died". Owning a home was beyond any expectation she could muster, but a little bit of gold was some stability to her.
I've been married over 30 years and I buy my wife a nice piece of gold jewelry every 3 months on the average. I don't pay retail. She now has more wealth in that jewelry than all the stocks and bonds she has in multiple accounts.
Yes gold only has the value people place on it. Historically they have continued to value it very highly as other things like land swing wildly in value. It is portable and does not depend on princes declarations for it's value.
You and zillions other writers can continue to write zillions of pieces and comments on gold, all of which question Gold or Silver - like no income, produces nothing, not to eat, barbaric relic etc bla bla bla ... fact is:
My PM holdings (bought in Euros) have doubled in last few (2-3) years - and instead of 1 car , now I can buy 2 car, and instead of 1 house 2 houses, or double of food, or 2x DOW or DAX etc etc - in the very moment I'm going to sell it.
If that is not the best investment in last 2-3 year - then you are still living 10K BC. Or missed basic math. Or these are just mouthpieces of guys who missed the train and instead lost their pants and desperately whining now.
Though - you may continue to bash and question PMs - I'm gonna hold my PMs another year before I sell for another additional minimum 25% of profit. And all of that tax free - as in my country gains on coins are tax free after having held them for a year.
Long live our beloved white witch Blythe! Long live Nadler and long live all the PM doubters and bashers out there! As this just helps to buy more time and more cheap shiny stuff.
Don't sell. If you bought at the right time, you will be just fine.
Still hold physical silver bought under $7.
Still hold physical gold bought after iraq war.
However expect around 2012/Q1 a deflationairy spat to start. Hence will sell physical then and/or short the hell out of it. Just to rebuy later at considerable (20-30%) lower prices.
Next peak thereafter around 2016.
And here in US we think we have it bad?
Just wait, Watch. Learn.
http://video.nytimes.com/video/2010/12/18/world/africa/1248069453456/pro...
elaine blasts time...
http://emsnews.wordpress.com/2010/12/15/nice-jewish-billionaire-boy-chosen-over-assange/
Astonishing - a completely useless article, completely devoid of any useful facts.
And wrapping up with absolutely no conclusion whatsoever.
Dribble.
Its merits lie in notions you're not aware of.
The problem with the gold value as faith argument is that it is already deeply entrenched in the banking system. All the gold leases, shorts, and fake paper scams and sales used to suppress gold have created a web of demand to unwind them. Gold's debt backing is as real as any other debt based paper currency, but it can't be printed to satisfy the debts. Bankers and governments chose to transact in gold as units of debt and wealth. These transactions need to be serviced and unwound.
"Yes, gold is probably more likely to continue serving as a store of value than to quit. And yes, maybe one should have a position. But is this the right price at which to start . . . ?"
Today, if you believe governments will continue to debase their paper money until they can't -- that being the point in time where people refuse to accept fiat in payment for goods/services.
"Sometimes a cigar is just a cigar"
Money can be anything. One always barter one item for another. Fiat currencies only get their value with taxation. You cannot pay your taxes with gold bars, turkeys or bushells of corn. Moreover, taxation should also only serve one purpose and that is to control the economy. When the economy is weak, taxes should be lowered to get more money into the hands of the people so that can they pay their bills. When the economy begins to overheat, taxes should be raised to preempt inflation. Don't see much wrong with fiat currencies other than the decision makers have no clue about monetary policy and keep making one mistake after another. If there were assets that may have great value in years to come, water and energy should be them. They are far more useful than pretty metals. Gold is like diamonds - simply "A girls best friend"
These will be the last playlists I post for y'all. While it is not immediately apparent, there is a synergy between music and this site. How that tradition will or won't continue in the future is something I'm not in a position to answer or influence, yet its my sincere hope that it does continue. To all y'all who have enjoyed these: thanks for clicking, dancing, contributing and coming to ZH in the first place.
Artist of 2010 - Arty: http://www.youtube.com/view_play_list?p=59866B8C070FA64C
Best of 2010 - Statica & Heatbeat: http://www.youtube.com/view_play_list?p=F79EBE9FB77C107C
Freshy Fresh (a freshened up from the last time playlist): http://www.youtube.com/view_play_list?p=B64086D4A6EDA49C
(d)
Canned, dried and vacuum-packed food, bichez!
It should be pretty clear looking back over the past century that governments are the biggest players moving the "real" value of gold - that is, relative to other goods, not just in nominal currency terms.
I'm not talking about the bizarro conspiracy theories of top-secret manipulation.
I'm talking about two usually quite public government activities: the hoarding of gold by governments, or disposal of such hoards, and excessive monetary expansion, or the reining in of it.
There is undoubtedly something about gold that has led governments throughout the ages to view it as a convenient means to hoard value. Even the pre-Columbian American civilizations developed the same tradition, completely independently of the old world.
In modern times, there has been a lot more selling by governments than buying, in belief that gold hoards are old-fashioned and no longer made sense. This has been the most important factor driving gold's descent during recent periods when its value has descended. The beginning of the gold bull market of the past several years coincides pretty well with the tapering off of government disposals.
Excessive monetary expansion and the reining of it has been a lesser but still important factor. During inflationary periods gold tends to increase in value faster than inflation, but when monetary expansion is then brought under control a la Volcker's early years at the Fed, gold tends to drop in value in real terms.
So to be a gold bear in today's market on any time scale longer than short-term tactical, you need to believe either that governments are about to dispose of more of their hoards - perhaps you think Obama will sell off Fort Knox? - or that the Fed is about to change course and sharply tighten monetary policy. Frankly, you've got to be nuts.
Even with just a continuation of current monetary policy, and no new government gold hoarding, gold will continue to rise in real terms. So in these conditions, gold is an investment. Those who say that gold is money can argue that gold is merely retaining its value in a deflationary climate. But gold is not money in today's world, as you can't conduct transactions with it. And Gold has always been too valuable for daily money - that role was played by silver.
The really interesting potential for gold though is if governments revert to hoarding it, on a substantial scale. The modern practice of using securities tied to the future tax payments of a country's population as a substitute for gold is not really working out. These don't really retain their value well, as governments can easily issue far too many of them to plausibly repay. China is wondering what it's nominally $1.2 trillion or so pile of Treasuries and wondering what the hell they're really worth, as any significant selling by a holder of such a huge hoard would cause panic and kill their value. China paused its buying of Treasuries in mid-November, and you've seen how hard Treasuries have fallen, despite the Fed buying two-thirds of net issuance. Any move by China back to gold hoarding would be huge for gold's real value.
(d)
It is all about demand. If there is always a desire for the metal it will do ok. So today, without governments having to buy it to support their currencies, it is all about that Bernay's psychological game that controls the masses. Have the masses consume on the basis of their desires rather than their needs and you can sell them anything. The question to ask is does gold serve a true need
delete
Regarding gold and silver, stay thirsty my friends
Sorry Tyler this is not a good article about Gold.
The author Mr Howard Marks has not enough information about Gold but he is writing about it. He is trying to find the exact price of gold but he has no idea how the banking cartel worked to fix the price superficially low for 30+ years and they still do with the JP Morgan, GS shorts.( basically they are the fed)
Mainly Fed and Bank of England and with the US military political pressure other Central banks agreed to keep a cap on the price of gold for so long.
This has changed 10 years ago after the China entered the game and they decided not to sell buy just opposite buy.( the author claims nobody did know who was buying is bullshit, China is buying and everybody knows this info). Since then the Cartel is broken and all central banks started to buy gold.
This is one of the worst articles i have read about Gold.
"Gold has no financial value other than that which people accord it, and thus it should have no role in a serious investment program. Of this I’m certain."
Oh, yes? Is this not true of T-Bonds? Cash? Anything else? Oaktree, smoaktree.. let's focus on the value of money and not on the price of gold.
It is obvious that TheGreatPonzi is an ignorant fool. I keep wondering why everyone spends so much time responding to him. What a waste of intelligent effort.
short list of commodities in approximate order of declining utility: food, ammo, fuel, gold, FRN's.
"Oh gee, its not a (fiat-money)-flow generating asset, so I cannot price it..." Its only the abandoned standard, and a time-tested one. Figure out yer own valuations Bitchez!
Gold, or Sovereign Bonds, chose your poison. Religion and real wealth will persist.
Has Howard Marks ever read Murray Rothbard?
The U.S., India, China, and just about every other country in the world uses Gold as part of their reserves. I believe I read somewhere that the U.S. reserve has 76% of its assets in Gold. Someone perceives the value of Gold to be pretty high. Wishing Gold to be worthless is just wishful thinking.
"Now there’s nothing behind the dollar but people’s belief in it."
Actually, I think that there is something going for the dollar that gold doesn't possess. The US government has a military that is unprecedented in world history. (Is it bloated and wasteful?....probably, yes.) And if you are thinking "what a waste of resources" then tell me HOW much you would pay for such
protection if we didn't presently have it and barbarians were marching
Southward from Canada? (This is not to imply that Canadians are
Barbarians).
This is the crux of the matter:
"Thus it’s not whether gold has value, but whether people will impute value to it."
So, yes keep some gold. But keep some dolars too.
Uh oh, I'm seeing far too meny mentions of CHF being a store of value when two months ago this was unheard of. Time to scale back the CHF longs if the contrarion indicator (most of you here, no offence) is to play out again.
trading one roll of toilet paper for another roll of lesser or morer toilet player....is imbeciliotic.....gold silver..or get decimated.....why do you think China and Russia are HUUUUUUUGE buyers..not to mention the Gulf States....you think these guys know something that all the stupid paper traders dont know ???
Someone sure has a vested emotional stake, a good trader you would not make.
If one type of toilet paper is declining more than another type I'm sure you can see an opportunity to profit. "GOLD BITCHEZ" is not the only trade in town.
"Cramer: Buy Any Dip in Gold Prices"
http://www.cnbc.com/id/40718431
Attack of the Shills!
http://www.youtube.com/watch?v=k-y9Bn0tPJg
Oh No, more Gloom and Doom on Gold..........
Another fricken ETF.
http://www.businessweek.com/news/2010-12-19/baker-steel-plans-new-gold-fund-expects-record-prices-in-2011.html
Forgive the source, just happened into it.
But, I would say they agree with the majority of the WORLD, on where this is headed.(their projected price limit, is incorrect, but their at least getting real).
http://www.bloomberg.com/news/2010-12-20/soros-gold-bubble-at-1-375-has-...
Itz long as fuck but a nice read.
Physical gold represents 'payment in full' (as the holder knows that someone, somewhere, at some point, had to do some actual work to obtain the metal, refine the ore, etc.) whereas fiat currencies, while aspiring to represent work as well (except through debt), do not necessarily carry that inherent value; as they could have just arrived directly to the creditor, hot off the presses. For a fiat currency to function, there has to be the 'faith' that the paper has value, but gold physically represents the value of effort and work. The holder of gold may not know exactly how many hours of labour, or how much invested capital, went into producing the metal he holds, but the holder can definitely be certain that there was some. Not necessarily true for the fiat currency. Any certainty there is conferred by coercion and force. You can have 'faith' in those too, I suppose...
Regards
dup
Paging Mr. Gecko. Mr. Gordon Gecko.