[Micki]

$this->bbcode_second_pass_quote('', 't')here's an article with a brief interview with Warren Buffett out this weekend.

he says he thinks the worst of the credit crisis is over, for Wall Street.

[dunewalker]

Heineken wrote:

"At my age, that question gets scarier."

I was 5 years older than you are now when I bought this old homestead & made it into a home. Only now do I tend to wonder at that question, "what next?". It feels as if the music has just stopped and everyone is looking for a chair, any chair, even a seat on the floor.

[mmasters]

Not a lot of mystery here, there are a handful of super players in the gold and oil market and they are in bed together doing market manipulation. Of course the natural course is for these things to go higher in value in the big picture, however they are just simply rowing the market up and down in the short to mid term and getting a hell of a wealth transfer out of it. Of course when major events happen the market will swing as many of us are expecting but right now since not much is happening and they pretty much control the whole playing field they are manipulating the market in weird directions to pull huge amounts of money. It's a big casino at the moment.

[evilgenius]

Well Cube that's all I was asking. For what it's worth I was into gold stocks. I sold when I saw the recent peak at over $1000 an ounce. I plan on buying back in when the dollar makes it back to $1.75 to the pound or $1.35 to the euro, something like that or maybe $575 an ounce because I too think that this is a long term bull market, I just think that you can't fight the current deflationary trend. I don't think the gold bulls are going to lose everything, just the opportunity to capitalize on the next buying opportunity provided they can wait a while. I guess what I was really mad about was being compared to some little blue guy. Ha, ha.

[Micki]

$this->bbcode_second_pass_quote('', 'I') guess what I was really mad about was being compared to some little blue guy.

[Heineken]

$this->bbcode_second_pass_quote('dunewalker', 'H')eineken wrote:

"At my age, that question gets scarier."

I was 5 years older than you are now when I bought this old homestead & made it into a home. Only now do I tend to wonder at that question, "what next?". It feels as if the music has just stopped and everyone is looking for a chair, any chair, even a seat on the floor.

[dunewalker]

Heineken wrote:

"It's a good question, Dune. How old is too old to make a change on this scale? Will vary widely with the individual, of course, but when there is heavy physical labor and hardship involved there are limits. It's a real consideration for older POers prepping for the future. For some, NO preps may be the rational choice.
A good subject for a separate thread."

A separate thread? Isn't this about the plunge in prices of oil & gold? Oh yeah... I tend to stray a bit, huh? Got mad when Monte first pointed it out years ago...

Well, crude oil is up this morning so far, as are gold & silver--looks like a good time to buy precious metals, if you're not too old, that is...

[pedalling_faster]

$this->bbcode_second_pass_quote('smallpoxgirl', 'Y')eah that'd be great if I hadn't already sunk so much cash into physical metals. I'd pay a big premium to get liquid at this point. This was the first time I've had any money to invest, and I'm kind of taking a beating. Bad timing.

I think I should just hold tight, but it sure doesn't make me happy watching those prices trickle down day after day.

[Micki]

If you still believe CB's will chose deflation over inflation then read this entertaining (and scary) article in safehaven.com

$this->bbcode_second_pass_quote('', 'T')he first quarter monetary policy update from Dr. G. Gono, the Governor of the Reserve Bank of Zimbabwe COMMENDS his peers, the world over. Referring to the United States and the United Kingdom.

[3aidlillahi]

Not to mention that the Congress is working on a bill that will ensure up to $300 billion in US mortgages. That's not a great amount of money in the long-term given our positions but it sets them up to go out and save everybody that they can in the future which could amount to trillions in printing.

[evilgenius]

$this->bbcode_second_pass_quote('Micki', '')$this->bbcode_second_pass_quote('', 'I') guess what I was really mad about was being compared to some little blue guy.

[Micki]

$this->bbcode_second_pass_quote('', 'T')hat kind of stuff is a little too involved for a place like this.

[pedalling_faster]

it's not that gold is worth so much. it's that the US government responds to a lot of problems by printing more money.

$1500 gold doesn't sound so great to me, because of what it says about the value of the dollar.

it's not so much that "gold will soar to $1500" ... it's that the dollar might fall below the $1 = .001 ounces gold level.

@$1500 gold, $1 = .00067 ounces gold.

[evilgenius]

Micki,

Maybe you could read that last post before you start criticizing it. I stated that $300 was the floor at the beginning of the last bull run. I reckon my price from there with additions for oil and labor.

You cite inflationary pressures. I agree they seem substantial and auger a long term bull market approach to gold. What you missed so eloquently was my position on deflation. I have said, in other places on this site, that I believe that you cannot have the kind of money supply losses that the credit crunch has wrought without engendering deflation. I see the Fed and the other CBs trying to inflate their way out of it. I don't think that they can. Combine that with high energy costs and the resultant drag on the economy that will bring and there simply is less money to spend on aggregate demand for gold and other non-returning asset classes (no dividends, no eps).

I have always stated my opinion on gold as part of diversification, with the knowledge that I could be wrong. I have been getting more forceful only because the likes of you seem to me to be yelling and screaming about gold going in one direction. I have been telling people that might not happen and maybe gold will go down and what my reasons are. If I don't like to restate my reasons every single time I post my opinion maybe that is my fault. I surely do not see the likes of you on this site restating their reasoning every time I see gold touted as the universal panacea for all things financial.

You have got some nerve suggesting I stop posting. That is uncalled for simply because you don't agree with me. I do not suggest the same for you.

[threadbear]

$this->bbcode_second_pass_quote('evilgenius', 'M')icki,

I have said, in other places on this site, that I believe that you cannot have the kind of money supply losses that the credit crunch has wrought without engendering deflation.

You have got some nerve suggesting I stop posting. That is uncalled for simply because you don't agree with me. I do not suggest the same for you.

[Micki]

I admit I didn't read throught the $300 bit carefully.
On the other hand I did not just cite inflation as being the only bullish factor. And yes, I freqently do tend to repeat reasoning for my position at least to some extent as I don't expect everyone to dig through my old posts. And I certainly don't mind repeating if someone asks.

What I don't get is your arrogant tone and the fact that you seem to contradict yourself.
You say for instance $this->bbcode_second_pass_quote('', '"')Go ahead, buy as much gold as you can since you seem to want to lose everything anyway."

[evilgenius]

No prophecies, no odd econ sites, this thread just caught me a little exasperated at having to explain myself so much. I was getting tired of having to repost my reasoning every time I mentioned deflation when the inflationary crowd rests on their laurels and simply speculates without criticism. Well, that may not be the truth about everyone, but when you feel like you are one of a few that puts out an idea in the face of what amounts to overwhelming criticism it gets old. I rather thought that telling people what I would do and have done might bolster my arguments. I figured that a lot of people like the put your money where your mouth is kind of arguing style. If you don't that's ok.

The fact is some people do sell when they are down. With gold this time around that probably won't be a good idea. Last time this happened, however, it might well have been a good idea based upon the opportunity cost that holding for 10-15 years would have been. Last time the run and bust was not wrapped around the peak, but a pseudo peak brought on by political crisis more than anything else.

If the euro-zone economy begins to falter hard and the dollar is restored it could be, and this is by no means certain, that it will happen again that the price of gold could sink in dollars for a prolonged time. Economies within the euro-zone are potentially facing such a lack of growth that the high rates offered there could make no sense. More that anything it is those high rates and the expectation that they will remain relatively in place that has mostly hacked at the dollar I think. That and the federal spending explosion under the Bush Administration the debt related to which in a way is marked to be sold off to foreigners as a different less safe asset class than US Treasuries via the subprime Fed bundling schemes afoot currently, but that is a whole different topic mostly.

If a significant and prolonged gold price stumble occurs many will be faced with the same difficult decision regarding opportunity costs. Many could choose to sell. If they are diversified they would be protected from having to make that decision for a longer period of time. I think that makes sense.

No, it isn't nonsense to say that less money means less investment, to put it in simple terms. The housing ATM is over. The economy at large is suffering the effects of that. The global economy could be right on the heels of the US economy. Yes, it could be a less severe recession than was first speculated or it could be more severe, who knows? I think that is all the more reason to diversify rather than go all out after a particular asset class. Like I said I do plan on buying back into gold. If it doesn't go down as low as I think it will before it goes up again I will have screwed myself, it's that simple.

Lazy sounds like arrogance because too involved was a reference to having to examine the break even point of the largest miners vs the biggest small players and make assumptions based upon market share and resource stockpiles as well as hedging positions as to whether the line can be held at an average or if there will be consolidation and misery in the mining industry. I don't want to do that for an opinion posting. If you are going to require that from me to back up an opinion you will be waiting a while.

There you are you see, I try hard not to post huge strings like this because I don't really think most people ever read this far. I've done it now. Oh, well.

[Micki]

OK evilgenius.
Perhaps we both picked up something from this argument and we'll bury the hatchet there.

[chrispi]

Here is some supporting evidence that the recent run-up of gas prices is due not to PO, but the falling USD (a.k.a. the Yankoslavian Dinar):

Oil:Gold Ratio

I suggest that you buy as much gold (if you are rich) and silver (if you are poor) as possible.

[cipi604]

Not again! The ratio dollar/oil it's much smaller than the ratio supply/demand.