Agoracom Blog
How Bad Is It Really?
Posted by
at 8:36 AM on Tuesday, July 7th, 2009
It’s a pretty sad comment when Hollywood actually thinks they can do a batter job acting than the President can!
Next a comedian runs for Prez… oops! we already had that didn’t we?
As I read your commentaries i am reminded how much we are alike, not in wealth or knowledge but in matters of trading, gambling, speculating, investing and in the belief in one Master and Lord.
I thank you for your continued mentoring and while I am 10 years up on you (one might think that the mentoring should no longer be needed, alas no) I feel comforted by your truth of the dire U.S. state. It is most unfortunate. While I live in Canada, the two countries cannot reside side by side without our feeling your pain too, from an economical as well as emotional point.
I am very grateful that you take the time to share your frank assessment of the investment world you know so well. While I have suffered the pains of the 08 date, I have come to be a lot more cautious in my life, or should I say in my speculations.
Thanks for being there to hold hands, mind and spirit.
Heaven forbid an actor thinks he could run for politics. Next you’ll have a B movie actor who plays second fiddle to a chimpanzee thinking he could become president.
oh……………………………….
It could be worse! It…could…be Sarah Palin!
Peter,
I need something cleared up, please:
Looking at the macro picture, there are essentially two schools of thought. Some say we are in a long deflationary period, like Japan, which will remain for many years to come and we only need to look at that country to see what worked in terms of investment classes. The answer is really nothing. Not even gold. Deflation will drag everything down with it, so goes the argument. The other school of thought is that we have the under pinnings of inflation in place now given the round the clock printing presses which creates an environment which is very friendly to gold, gold shares and commodity investing. (I heard today an Obama advisor pushing for a second stimulus package)
Now, playing devil’s advocate just for a moment, (hear me out) I’ve read the argument that gold did well during the Great Depression, a deflationary period, and therefore, gold should do well this time around (assuming one believes we are in the throws of deflation which seems obvious enough to me. I’m not buying the inflation argument at this point). However, looking at that period for insight doesn’t necessarily support the gold argument. For instance, we were on the gold standard then but not now. Is that a significant distinction affecting the price of gold going forward this time around? I don’t know. Also potentially problematic, (again, I’m playing devil’s advocate) is that Homestock mining chart posted on many web sites showing how well that stock and other miners performed during the Great Depression. Can it really be that easy? A closer look at that chart seems to suggest that HS didn’t really start doing well until about 1932 when the water shed decline was close to completion and (you tell me) inflationary forces began to take hold. So, if we continue to be mired in deflation for years, like Japan, and don’t come out of this thing as quickly as we did in the Great Depression, does that mean that gold really won’t take off unless or until gold sniffs out inflation sometime much later? Was`that in part the reason for your $1,500 price target in 3-5 years after gold breaches the $1000 mark (I hope I have that right). Or was that time horizon a function on how long it may take for the US dollar to lose its postion as the world’s currency?
Don’t get me wrong. The charts on gold and the many shares enjoy a rising trend, no question. Gold (the metal) has never violated its 200 week MA since 2001. My question isn’t so much on the technicals. Maybe a brief post on what organic factors you believe will be present in the coming years that lend itself to a rise in gold and its shares so I have a better understanding of the arguments in favor and against gold (it’s always good to know the other side).
Thank you. Your insights are invaluable.
Maureen, that was beautifully said. thanks for sharing your thoughts which are probably shared by many others.
Ronbon, be kind. None of us know what its like for someone less we walk in their shoes.
ronbon, You are of course right the US would be in terrible shape if it was governed as Alaska has been under Palin. Actors would do a much better job running the country as they have in California.