The GOLD scream room

[dualstow]

Go dualstow!!

You too, right? Gold + bonds rebalance if I recall.

[Cortopassi]

Who would have thought.

*Must* keep gold enthusiasm in check!!

[img width=1000]http://i.imgur.com/b4QTuFn.jpg[/img]

[Libertarian666]

Who would have thought.

*Must* keep gold enthusiasm in check!!

[img width=1000]http://i.imgur.com/b4QTuFn.jpg[/img]

I'm sure this is due to Rand dropping out of the race, which means hyperinflation is a sure bet now.
Just kidding... sort of.

[Reub]

Nobody hates gold anymore.

[Dieter]

Just look at 12 months return to keep the enthusiasm in check.....

[dragoncar]

Nobody hates gold anymore.

So it's all downhill from here?


No I still hate gold

[ochotona]

Just look at 12 months return to keep the enthusiasm in check.....

or the 200 day moving average. Wake me up in 200 days.

[ochotona]

[img width=400]http://www.kitco.com/LFgif/au1825nyb.gif[/img]

Could be... but where was it in 2001? 

[Cortopassi]

Sure is an ugly chart, but hey, even this morning, I open up Kitco and every morning expect to see massive red in gold, and instead over $1150.  I don't call tops or bottoms, but we are currently seeing some strength and the more that happens the more gold will get noticed as a reasonable alternative to park money in, other than stocks which have been bleeding.  Not a bad thing.  Gold has suffered for quite some time here!

And/but it is still only $1150!  Just what, 2.5 months ago it was over $1200 so nothing special, but no complaints.  Gold and TLT has made the PP nicely positive for the beginning of the year here, but it did last year too.  We'll see if it can be sustained.

[Libertarian666]

Sure is an ugly chart, but hey, even this morning, I open up Kitco and every morning expect to see massive red in gold, and instead over $1150.  I don't call tops or bottoms, but we are currently seeing some strength and the more that happens the more gold will get noticed as a reasonable alternative to park money in, other than stocks which have been bleeding.  Not a bad thing.  Gold has suffered for quite some time here!

And/but it is still only $1150!  Just what, 2.5 months ago it was over $1200 so nothing special, but no complaints.  Gold and TLT has made the PP nicely positive for the beginning of the year here, but it did last year too.  We'll see if it can be sustained.

So June 19th, 2015 was only 2.5 months ago? How time flies! 

[Cortopassi]

Sorry, I was talking about October, when it was around $1190!  Even that was still 3.5 months.  It does fly.

[Libertarian666]

[img width=400]http://www.kitco.com/LFgif/au1825nyb.gif[/img]

Why not put up a 1000 year chart? Then the latest rise would really look insignificant!

[Libertarian666]

Here's one that goes back a bit further:

[img width=500]http://www.zerohedge.com/sites/default/ ... g-Term.jpg[/img]

No, that one is not acceptable, because it shows a big spike "recently". You have to cherry-pick the charts correctly, or report to the re-education center!

[Reub]

Gold is popping!

[dualstow]

Gold is popping!

As Harvey Keitel said in Pulp Fiction

Let's not start blanking our each other's blanks just yet.

but it does feel good. 

[Libertarian666]

Gold is now up $127 (about 12%) for the year, whereas the S&P 500 is down about 8% for the year.

I should check over on bogleheads to see how the "gold sucks" crowd is doing these days. 

[Dieter]

Gold is now up $127 (about 12%) for the year, whereas the S&P 500 is down about 8% for the year.

I should check over on bogleheads to see how the "gold sucks" crowd is doing these days. 

I'd wait until gold is positive for the trailing 12months. Haven't checked recently - gold beating S&P 500 for the last 12 months?

Edit: latest post (when I checked) on Bogleheads is positive about PME - time to get out?

No replies yet, but might get interesting as they tend to do until closed.....
https://www.bogleheads.org/forum/viewto ... st=2792649

[Libertarian666]

Gold is now up $127 (about 12%) for the year, whereas the S&P 500 is down about 8% for the year.

I should check over on bogleheads to see how the "gold sucks" crowd is doing these days. 

I'd wait until gold is positive for the trailing 12months. Haven't checked recently - gold beating S&P 500 for the last 12 months?

Edit: latest post (when I checked) on Bogleheads is positive about PME - time to get out?

No replies yet, but might get interesting as they tend to do until closed.....
https://www.bogleheads.org/forum/viewto ... st=2792649

I'm on that thread, and I wouldn't worry about BHeads being too positive on gold.

[ochotona]

Gold is beating S&P500 on a trailing 12 month basis

-7.74% gold (IAU ETF)
-7.91% SP500 (SCHX ETF)

as of yesterday's close

The people I follow on gold all believe it may hit $1220-ish, then subside, and continue to drift lower because of deflation, 2 of the 3 still think below $1000 is where it is going.

[ochotona]

I found data squirreled away.

              GOLD          CPI
1926      $20.63          17.7
1933      $26.33          13.0

Gold appreciation 27.63%
Purchasing power increase due to deflation 36.15%
Combined purchasing power increase due to holding gold during 1926-1933 deflation 73.77%, which is CAGR 8.2%

Now... how does gold work both as an inflation hedge and a deflation hedge? How can it do both? Or is it just a crisis hedge? Someone explain it to me. It seemed to work in the Great Depression.

[Libertarian666]

I found data squirreled away.

              GOLD          CPI
1926      $20.63          17.7
1933      $26.33          13.0

Gold appreciation 27.63%
Purchasing power increase due to deflation 36.15%
Combined purchasing power increase due to holding gold during 1926-1933 deflation 73.77%, which is CAGR 8.2%

Now... how does gold work both as an inflation hedge and a deflation hedge? How can it do both? Or is it just a crisis hedge? Someone explain it to me. It seemed to work in the Great Depression.

That was because the US dollar was defined as a specific weight of gold, then the dollar was "devalued" (this is actually a type of partial default) so that it was worth a smaller weight of gold. This was reported as an "increase in the price of gold", but that actually was just another way of saying the same thing.

Today the "US dollar" is defined as... well, actually it's not defined as anything, so it can't be devalued (partially defaulted on) in the same way. Now all we can see is the market's gradual and fluctuating withdrawal of any remaining exchange value of the "US dollar", which will end in total repudiation in the same way as all other similar experiments have ended.

[ochotona]

.... then the dollar was "devalued" (this is actually a type of partial default) so that it was worth a smaller weight of gold. This was reported as an "increase in the price of gold", ...

{{forehead slap}}

[l82start]

probably a stupid question.. but was gold actually traded for 20 bucks during the depression, or if you had a gold coin and rent to pay, food to buy, kids to feed, etc.. did you take the coin to some shady guy down some back ally and get a better price?

[Libertarian666]

probably a stupid question.. but was gold actually traded for 20 bucks during the depression, or if you had a gold coin and rent to pay, food to buy, kids to feed, etc.. did you take the coin to some shady guy down some back ally and get a better price?

Until 1933, a $20 gold coin was $20. They were the same thing, so no better price was available.

Once Roosevelt used an executive order to seize all the gold that people had left in banks for safekeeping, he raised the price slowly to $35/oz., as part of a harebrained scheme to raise commodity prices.

He also prohibited ownership of gold by Americans other than for a few collectible coins per person, which wasn't much of a problem for most people who didn't have $20 (or $35) to their name anyway. Any gold you had was supposed to be turned in to the government.

However, so little was turned in that "about uncirculated" $20s still sell for a modest premium over their gold content.

[l82start]

i suspected that since i had not heard of it being done, that this kind of shady dealing was unlikely to have been wide spread, (hence the stupid question preface) it just seemed to me that when times are tough and people struggle, that (illegal or otherwise) any possibility to Arbitrage would have been jumped on..  either trade against foreign currency or hustling based on the greater fool theory...