One of the forum members requested an update on my investment views, so rather than respond privately, here goes.
Remember, make your own decisions. I am not an investment advisor. You are on your own. If you are not sophisticated just buy gold coins and store them in a safe place. This will preserve your savings. Do not sell them until things settle down and the new monetary alternative is clearly sound. If you are more educated about the markets read on.
1. I am appalled at the actions the US FED is taking. They are going to ruin the currency and this country. ZIRP, pushing on a string, quatitative easing. It is ALL BAD.
2. These arrogant, stupid bastards think the economy is a machine and all they need to do is push the right buttons and everything will come out OK. They are blatantly wrong and events will prove this.
3. I had a small hope that Obama might represent somewhat of a change from the past (you know CHANGE was his slogan) but with Summers, Rubin and Geitner controlling the monetary mechanisms it is clear that it will just be more of the same, or maybe even worse.
4. We are now in what I call the crash "intermission" or Obama bounce. Things like financial stocks have stopped plunging, but the real economy is literally disintegrating. YOY car sales down 42%! Huge unemployment. etc. It is bad and it will get much worse. Hopefully it will bring on a revolution.
5. IMHO this will be worse than the depression of the 1930's. Prechter and his elliott wave analysis support that. Also, Robert McHugh. BTW, both these subscriptions are well worth the cost. McHugh is RED HOT, he has called this year perfectly and calls turn dates on many markets to the DAY.
6. IMHO the world has been living a lie for 300 years believing that fractional reserve banking adequately allocates resources and profits. It does not. This lie is being exposed, but it will be a struggle of titans. The Market v. Statists. So far the market is winning. Since the trend is your friend I know who I am going to bet on.
7. Before this is all over the dollar will fail. All paper currencies will fail. Iceland is a good model for what will take place everywhere. For a brief period of time the world will be a very unsafe and unpleasant place.
8. The big picture trend is that paper will become worthless and stuff will have value. The exisitng monetary system will come to be regarded as the fraud that it is and a new monetary system will emerge.
9. Presently I have no stocks sold short. I am long gold. Long silver. and buying gold and mining stocks on every dip. They are a little extended right now.
10. The bond market is clearly in a bubble. Rates will go lower until they do not. I think the reversal will be as fast as the run up. The Dollar Standard is really just a larger version of the Madoff scandal. A ponzi scheme. Rates are being held low because the U.S. is buying its own bonds. Now think about that. It is like writing yourself a check to deposit in your checking account to cover an overdraft on the same account. IT IS A FRAUD. Of course they can pull it off because everyone believes in the dollar standard. The $64,000 question is how much longer will this go on. When it stops going on we have WEIMAR.
I submit that all people need is an alternative and they will use it. To me precious metals are the only viable alternative.
Once this Holiday Rally/Obama bounce is over I will go back to shorting stocks again. I think the stock market is going to totally disintegrate in 2009.
Gold stock prices right now are a gift from heaven. When deflation kicked in they all lost 50-90% of their value. The ratio of gold stock price to the price of gold has never been higher (meaning the stocks are cheap relative to the metal). I lost big money in an aggressive gold fund and I am sad about that, but I am doubling and tripling down because this is the last chance before the train leaves the station. I do however have some concern that even they will be taken lower in the dowturn that comes in 2009. My guess is they get soft, but outperform the general market. I may lighten up if I see trend lines being broken.
The crash in gold stocks reminds me of the crash in 1987. From 1982 to 1987 a bull market in stocks took place. It got ahead of itself and thus the crash in 1987. It proved to be a huge buying opportunity. Gold started going up in 2001. It went up every year from then until present. In fact it is the number one performing asset class in the 2000-2007 period. It got ahead of itself and the deflation and collapse this summer caused people to throw out the baby (gold & gold stocks) with the bath water (all other stocks.)
I like the double gold ETF's as trading vehicles. DGP and UGL.
I own the following gold stocks at various levels. They are overstretched right now, buy on dips.
AU, CDE, EGO, GG, HMY, GFI, KGC, NEM, RGLD, SLW. I also own a bunch of juniors but those are very speculative.
If you don't want to pick names just buy GDX. It is a good gold etf that holds top names. I own it.
Remember these are VOLATILE. If they go down do not sell them. I also own a lot of physical gold and silver. (safely stored off site).
Anyone with wealth has got to do this to protect their hard earned savings.
As an aside, if you want to read a story about what the coming Civil War may look like pick up a copy of Army of The Republic by Stuart Archer Cohen. It's a novel, but it seems pretty real to me. I really enjoyed it.
Best, LWL
PS There is a lot of evidence that the price of gold is being suppressed by the Government. I believe the evidence. The best source on this is
www.gata.org. They have a subscription service at
www.lemetropolecafe.com. It costs $200 per year. I subscribe and find it to be a value.
PPS I have seen many analyses of what gold is really worth. It might interest you to know that the range is $2,000 per oz to $80,000 per oz. I am pretty sure that 2k is too low. I am thinking 5k is easy, 10,20 and 30 are possible. Presently there are $180Trillion of paper financial assets in the world. At today's price there is $4 trillion of gold in the world. So if gold replaced paper assets then gold would be worth 45 times its present value of $840 or $37,800 per ounce. Just food for thought.
