Slider,
FOLKS on this thread may not remember when you were not interested in gold. They don't remember when you made a small remark insinuating goldbugs and traders were, well let's say, out of touch. I do remember, it was September 99, just before the Washington Agreement rally, as it is now known. I caught the rally and (quite recklessly) margined it for the first four days or so.
In retrospect, I believe that rally changed your mind on gold as a trading vehicle, it certainly changed my portfolio, ggg.
(Worth noting, at the time the 99 rally started, no one knew what the reason behind it was for the first few days.
Gold bugs were saying "What the..??", always a good sign!)
Now in the years since, you have made an excellent reputation as a timer in energy and were one of the first to call the November 2000 bottom in Gold (though there would not have been much lost in waiting for isopatch's end of Nov 2001 gold bottom call). I was there also, back when you paid your dues earning that reputation.
But on your take on gold I disagree with on two counts, while agreeing in general with some of your points.
The two counts are major and will make the difference in the longer term. Which may be the point here, your focus seems short to intermediate term, while mine has shifted
(as noted on the thread in November) to a long term focus.
One point is this Gulf War has little in common with the original Gulf War, though we may have very little trouble taking IRAQ out, the international political and economic environment in which this conflict will reside is very different from that of 90-91.
My second major point is that oil and gold, while commodities, are two very different animals and do not march to the same drummer.
Oil is the economic lifeblood of developed countries and will be for two or three decades at least.
Gold on the other hand, powers no cars, is not essential to daily life as in shelter or heat or the production of food, in fact it is in no way, shape or form a necessity of modern life as petroleum is for the average American Joe.
Comparing gold to oil is always risky.
Comparing Gulf I to Gulf II is also risky.
Gold does have certain unique and apparently inherent qualities despite it's recent orphaned monetary status of the last 32 years. It is the touchstone of paper currency no matter what is said about it. There are many unique qualities, one not often recognized is that much of our record of antiquity is found in its varied hand worked forms of art, in ancient coins and in the historical records regarding gold, yielding a near eternal verity to it's lustre.
With all its strange and varied qualities, TA on gold can be risky.
Greenbacks are a most recent invention, dating from the Civil War and a number of abortive attempts at paper money before that. In essence, a debt instrument based on the taxing powers of the government. In the past greenbacks were limited only by the trees extant, in the present, represented now by derivatives and the traces of electrons in virtual space, they are in practice unlimited.
Gold on the other hand has been hoarded since the first caveman picked up a nugget, yet there is a bit less than a troy ounce in existence for every person on earth. Evidently there are a lot of goldless people around. In any other trade, they'd be called "customers".
But golds greatest quality now is as the Inquisitor of Debt, a public service it never shirks, for it cannot, it is the essence of golds very nature. We are only in the opening arguments in that court and sentence is a long way from being passed in the case of Gross Debt & Bursted Bubble vs Gold.
Best Regards, Down Scope,
Roebear |
