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Old 04-13-2013, 01:38 PM   #21
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I personally think that future inflation expectations are already built into the price of gold. So I'm not so sure that the price of gold will go up when inflation finally picks up.
+1 Gold tracks negative interest rates better than it does inflation.
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Old 04-13-2013, 01:54 PM   #22
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Now if only I could've found a REIT that invests in freshly originated non recourse debt. Pay that debt back with inflated dollars up to 30 years from now. But, it looks like I'm about a month late to the party.

Next best bottom feeding opportunity appears to be energy sector. Anyone think it's a good inflation beater? But, it's only a 10-15% off sale, right now, depending on your view.

If only I had more liquid cash.

/troll on.

Shouldn't have paid extra toward the mortgage the last 6 mos. But, I guess the first 5 years of a 30 year will have about a 3x multiplier on interest savings vs. principal.

/troll off.

-CC
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Old 04-13-2013, 07:37 PM   #23
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Thanks for all the comments. I too prefer businesses with real assets and real profits, but some of my most profitable investments over the years have been commodity based. I wouldn't invest a lot in gold or gold securities, but once you get a decent asset base there are only 2 ways to move the needle. Invest some relatively small amounts in "win big or lose" investments (long shots), or invest a lot in securities that while you may have high confidence of succeeding, it would take a lot of luck to make large gains. Long dated options on crazy governments. Right of wrong, one of my investing maxims is that a lot of crap happens that neither I nor likely anyone else can really predict. While gold is not cheap, gold miners certainly seem to be. Admittedly, partly because they have been low profit undertakings.

But as Manuel, my favorite philosopher mechanic, who helped me get back on the road near Loreto in Baja California said when I offered my confident 25 year old gringo opinion about what was going to happen-Vamos a ver, señor, vamos a ver.

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Old 04-13-2013, 08:25 PM   #24
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The problem with having physical gold as a hedge against an apocalyptic melt down is that an ounce of lead (in the form of a couple of 230 grain 45acp bullets) may trump your gold. . . . . .
I plan on using the 180 grain .40s&p to protect said stash of gold and food
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Old 04-14-2013, 04:56 AM   #25
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Back in the late nineties, tech stocks were all the rage. Folks who never owned a share of stock before were suddenly jumping into the market. I remember the expressions on the faces of some colleagues and thinking, this must be a little like how it was back in 1849 California.

I think allot of what's behind gold prices is something similar...but maybe for different reasons though. Folks believe, perhaps rightly so, that they need to avoid risk. So some buy gold and some buy bonds. The problem is when too many have the same idea. Rising prices make the assets of risk protection ...risky.

It's probably not a bad idea to have some gold in your portfolio, provided you buy it when not so many of us have driven up the price.
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Old 04-14-2013, 08:05 AM   #26
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The problem with having physical gold as a hedge against an apocalyptic melt down is that an ounce of lead (in the form of a couple of 230 grain 45acp bullets) may trump your gold. . . . . .
+1 (at least to protect your gold and "stuff")
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Old 04-15-2013, 09:21 AM   #27
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The problem with having physical gold as a hedge against an apocalyptic melt down is that an ounce of lead (in the form of a couple of 230 grain 45acp bullets) may trump your gold. . . . . .
Exactly!. But you know, there always will be someone with a bigger gun (or drone), so that may not be the best plan either. Besides, I'll already have traded my stuff for sengsational's bottle of whiskey, and finished the whiskey.
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Old 04-15-2013, 09:45 AM   #28
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Just an anecdote: one of those "gold shops, cash for gold" that popped up around town just closed 2 weeks ago. And, I don't see any new ones opening.
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Old 04-15-2013, 09:46 AM   #29
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Hmmmm. I see that gold is down another $100 or so....below $1400. Only another $200 to go!
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Old 04-15-2013, 10:02 AM   #30
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This article caught my attention over the weekend
Paulson Loses More Than $300 Million as Gold Declines - Bloomberg
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Old 04-15-2013, 10:14 AM   #31
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Anyone ever watch those gold mining shows? I bet you see less people risking so much to mine up in the Alaska/Yukon area if gold continues to slide. Very few of those guys seem to make any profit at all.
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Old 04-15-2013, 10:15 AM   #32
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Anyone ever watch those gold mining shows? I bet you see less people risking so much to mine up in the Alaska/Yukon area if gold continues to slide. Very few of those guys seem to make any profit at all.
It's mostly a life style
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Old 04-15-2013, 10:19 AM   #33
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It's mostly a life style
Yeah, some of those guys would not make it in a normal job/life. Especially the Bering Sea miners - quite a crazy lot!
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Old 04-15-2013, 10:45 AM   #34
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Lifestyle for some, adventure for others.

I had a co-worker in the late 80's who did Alaskan mining in the late 70s early 80s. He went right out of high school (adventure). Lasted a few years, fell to earth, made just enough to get a college education.

And there he was in the corporate world, 5 years behind the rest of us.

This bubble looks very familiar to that one... except, interest rates are completely different.
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Old 04-15-2013, 11:00 AM   #35
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Just an anecdote: one of those "gold shops, cash for gold" that popped up around town just closed 2 weeks ago. And, I don't see any new ones opening.
I tend to us this as another contrarian indicator. All the infomercials offering to sell you gold coins/bars etc then you should be selling not buying.

All of the late night infomercial to get rich in real estate back 06 was another sell signal for my reits.
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Old 04-15-2013, 11:13 AM   #36
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I find this drop in gold extremely interesting and a possible early warning signal for a major drop in stock prices. Unlike the common theory that stocks drop when gold goes up, gold has for the most part lead this unconventional rally since the saving of the banks by not allowing debt to be revalued was begun in 2008 when gold was at about $800 an ounce.

Therefore it seems to me that deflationary pressures, that is the value of those debts held are not sufficient to pay the debts owed or allow for sale of new debt to continue the cycle, are overwhelming the printing presses and forcing redemption of assets that central banks have that they can dispose of without negatively effecting the value of their existing debt.

Indeed most of the countries that are in serious trouble, Cyprus (13 million tons), Italy (2,451 million tons), Spain and Portugal (383 Million tons) have most of their holdings of reserves in gold. The Cyprus decisions as reported in the London Financial Times to sell 10 million of the 13 million tons they hold is most likely being viewed as a first step and getting out of the way of slow moving governments is easy for panicky rich guys.
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Old 04-15-2013, 11:33 AM   #37
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I find this drop in gold extremely interesting and a possible early warning signal for a major drop in stock prices. Unlike the common theory that stocks drop when gold goes up, gold has for the most part lead this unconventional rally since the saving of the banks by not allowing debt to be revalued was begun in 2008 when gold was at about $800 an ounce.

Therefore it seems to me that deflationary pressures, that is the value of those debts held are not sufficient to pay the debts owed or allow for sale of new debt to continue the cycle, are overwhelming the printing presses and forcing redemption of assets that central banks have that they can dispose of without negatively effecting the value of their existing debt.

Indeed most of the countries that are in serious trouble, Cyprus (13 million tons), Italy (2,451 million tons), Spain and Portugal (383 Million tons) have most of their holdings of reserves in gold. The Cyprus decisions as reported in the London Financial Times to sell 10 million of the 13 million tons they hold is most likely being viewed as a first step and getting out of the way of slow moving governments is easy for panicky rich guys.
Could be true. At least for the miners, only a few more days like the last few would be needed to put their prices back to what they were in 2008 or 2009 before the lift-off.

National banks in the Euro zone are in a completely different position from the US or UK or Japan or China. There is a limit on what the member countries in the Euro zone can pull. So in a funny way, it is if they have a gold standard constraining them.

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Old 04-15-2013, 12:52 PM   #38
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I've wanted to buy GLD, as a hedge, for years, but I refused to buy it anywhere near its highs.

It crossed into bear-market territory on Friday, and I bought my first-ever shares today.
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Old 04-15-2013, 02:16 PM   #39
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I've wanted to buy GLD, as a hedge, for years, but I refused to buy it anywhere near its highs.

It crossed into bear-market territory on Friday, and I bought my first-ever shares today.


I wonder if, as others put it, you are trying to catch a falling knife....

I would wait until the knife hits something before buying...
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Old 04-15-2013, 02:24 PM   #40
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I bought equal amounts of gold miners and ETF's today. Nice juicy Div's on the miners and a quick trade on the ETF in tax advantaged accounts.
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