From gold this week (which was last week) @ the-privateer:
"But what stock investors never even contemplated was that the government or the financial system would put any impediments in the way of a rising stock market. In 1982, they simply looked at the past history of the market and projected it into the future. The Dow had failed in the past, they prudently through that the chances were good that it would fail again. But this time, it didn't.
Gold investors are, quite understandably, doing exactly the same thing. Gold has "failed" repeatedly in the past, why should it "succeed" now? But Gold investors, unlike stock market investors, have an additional source of worry. Most of them know that Gold is the investment that the government does NOT want to see go up. So Gold investors are afraid. Many of them are VERY afraid.
Why should Gold go up? Anyone reading this analysis could easily come up with half a dozen valid reasons. The real question is why shouldn't Gold go up. And the almost universal answer to this question is because "they" don't want it to go up. That is the reason for the worry which presently assails those holding physical Gold. It assails even more intensely those holding Gold stocks and most intensely of all those holding any paper derivatives based on Gold.
The IMF is openly stating that concerted Central Bank action may have to be imposed to "save" the U.S. Dollar. Foreign investment in the U.S, vital for "balancing" the huge trade, current account, and budget deficits now being run, is plummeting. U.S. unemployment is rising. The U.S. corporate debt market is more a minefield than an investment market. The Fed is trapped, unable to either raise or lower interest rates. Knowing all this, and powerless to "fix" it, the U.S. government is keeping its citizens in a state of chronic anxiety and is making ever louder noises about going to war in Iraq. It should be clear that they have their hands FULL.
We think that this time, the "gold controllers" will fail. Like you, we don't know WHEN they will fail. Holding physical Gold in such circumstances is much LESS risky than not holding it. As for Gold stocks, in present circumstances one can either trade them or (we think this is a better approach) be willing to give up most or all of the profits so far in the expectation of much bigger profits to come. "Trading" Gold stocks multiplies the risk greatly, the chances of being "whipsawed" are HUGE. Finally, Gold derivatives are only for those who can sleep easy under great risk. In practical terms, only if one can write off one's ENTIRE investment should one trade in Gold derivatives."
The last statement will probably get some comments<g>
Wayne |
