I like physical gold because it is inherently less risky -
miners will likely melt down with the broader market, if
the derivative bomb blows up. So far any spills from subprime
CDO and other junk have been contained by the Paulsen-Bernanke
team, but the bomb has sure grown bigger. It might just go off
at some point, who knows. I would suspect carry trade blow
up then, and gold to the moon, but you never know for sure.
Lots of so-called liquidity will be vaporized, so gold just
might tank as well. If it does, I'm positive that post-meltdown
CB efforts will push gold to highs never seen before. That's
just my take on gold, and since I see some risk, I just hold
the physical. FWIW, I don't expect gold bull market to end
any time soon. When it's done with, DOW=gold or DOW<gold is
a possibility, IMHO. That means a price tag of at least a
few thousand $ per Oz. The other option is that they will
try to print the world out of the trouble, but I have no
idea how that will work. The leverage seems to only
get bigger as they are doing it now. So da moon is the ultimate
destination for gold, but it could crash briefly with the
market, as the speculator long futures positions unwind.
All IMHO. |
