Gold
Show graph of price:
http://kitco.com/charts/livegold.html
According to Guy Adami on CNBC, Gold could break sharply to the downside. He traded gold for Goldman
Sachs back in the 1990s. Check his bio: http://www.cnbc.com/id/15838261/
The housing crisis in the US has caused a number of problems, including the weakening of the dollar. The
real "buy America" boom started when the dollar started to strengthen against the Euro. The next
interesting thing is that the top rated mortgages in parts of the US are now heading for being underwater
like the sub-prime. This will cause additional write-downs. Goldman Sachs is net short sub-prime and is
talking its book. If people listen to them (and they have a lot of credibility at this point) then more downward
pressure will be placed on the housing and mortgage markets.
June 3, 2009:
One can no longer look to the past or to the ‘standard rule book’ to see how the FRB is limited. They can
now buy and sell mortgage paper as well as back it when banks do. In these transactions, they can affect
long-term as well as short-term interest rates. The people who have talked me into impending inflation
include someone who argues that it is 4-5 years out. Today Bill Gross affirmed that position of it being 4-5
years out in a CNBC interview. An ad placed on XM radio CNBC told me to panic and buy gold before it
doubles. The ad told me that ‘other gold companies’ were lying to me and I should call them for the true
information. I would say that the gold bubble of 200X is getting long in the tooth if the gold advisors are
calling each other names while advertising for the last few amateurs that take advice from such sleazy ads.
The conundrum is that we need about 15% inflation to get the average homeowner above water. Were that
15% to happen, the housing crisis would be close to over and we could look toward slowly rising prices in
homes. At that point, doesn’t logic say that the price of gold would collapse?
My conclusion is that you want to own real estate if you can find auctions of foreclosed property at bargain
prices. At some point it will be advantageous to buy double short gold. The problem is picking the peak
price of the bubble. Buy DZZ too soon and you may feel the squeeze. I am neutral right now on gold. I have
TBT as my play at this point.
Commodities Index
Show graph of price:
http://kitco.com/charts/livegold.html
According to Guy Adami on CNBC, Gold could break sharply to the downside. He traded gold for Goldman
Sachs back in the 1990s. Check his bio: http://www.cnbc.com/id/15838261/
The housing crisis in the US has caused a number of problems, including the weakening of the dollar. The
real "buy America" boom started when the dollar started to strengthen against the Euro. The next
interesting thing is that the top rated mortgages in parts of the US are now heading for being underwater
like the sub-prime. This will cause additional write-downs. Goldman Sachs is net short sub-prime and is
talking its book. If people listen to them (and they have a lot of credibility at this point) then more downward
pressure will be placed on the housing and mortgage markets.
June 3, 2009:
One can no longer look to the past or to the ‘standard rule book’ to see how the FRB is limited. They can
now buy and sell mortgage paper as well as back it when banks do. In these transactions, they can affect
long-term as well as short-term interest rates. The people who have talked me into impending inflation
include someone who argues that it is 4-5 years out. Today Bill Gross affirmed that position of it being 4-5
years out in a CNBC interview. An ad placed on XM radio CNBC told me to panic and buy gold before it
doubles. The ad told me that ‘other gold companies’ were lying to me and I should call them for the true
information. I would say that the gold bubble of 200X is getting long in the tooth if the gold advisors are
calling each other names while advertising for the last few amateurs that take advice from such sleazy ads.
The conundrum is that we need about 15% inflation to get the average homeowner above water. Were that
15% to happen, the housing crisis would be close to over and we could look toward slowly rising prices in
homes. At that point, doesn’t logic say that the price of gold would collapse?
My conclusion is that you want to own real estate if you can find auctions of foreclosed property at bargain
prices. At some point it will be advantageous to buy double short gold. The problem is picking the peak
price of the bubble. Buy DZZ too soon and you may feel the squeeze. I am neutral right now on gold. I have
TBT as my play at this point.
Commodities Index
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