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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (24645)	1/14/2005 9:25:12 AM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 110194

gold did well in the Depression despite the money shortage. the main reason was that nobody trusted the banks. so we might ask whether there is a possibility that people could lose their faith in banks again. that would make gold good as its eponym.

To: Square_Dealings who wrote (24645)	1/16/2005 10:59:35 AM
From: gregor_us	Read Replies (1) \| Respond to of 110194

I've Had ALot of Skepticism About Gold for Several Years. After some conversations with Russ earlier in 2004, and mulling it over, I started opening up to the idea of owning some metals. After Bush ws re-elected (I predicted Kerry would win Ohio, I was wrong) I continued waiting to see if Bush was going to signal full steam ahead on the crazy SS Reform Plan with its massive borrowing. When the stories emerged around Thanksgiving to confirm that, I bought shares in GoldCorp, and I also bought longer dated GoldCorp options. And I bought Canadian Silver Maple Leafs. So do you think the lack of savings also means gold will drop significantly because there's no money to put into savings via gold? I go back and forth on this because I have been a gold bull but I can see the possibility that people are living so far beyond their means that there is nothing to put in savings, in fact its negative, piles of debt. Maybe ultimately everything will be sold to repay the debt. This has been my long-standing concern about holding gold once a severe Recession has had time to develop. However, gold is such a small market when compared to the US Treasury Market, that I feel marginally more optimistic about gold during the midst of a severe recession. As I have been writing, the first move that probably takes place in the US treasury market as we "head in" to recession is up, as the market returns to what worked in the past. But as I have also been writing, on the matter of whether there is enough domestic capital in the US to support the gargantuan supply of US treasuries--during the midst of the Recession--the initial move in Treasuries will be unsustainable. So I feel more optimistc about my gold holdings and silver, actually, during the period when we are heading into recession, and the awareness of that transition is developing. But gold too could run into trouble during the heart of the recession. I think gold might need global support during that period (treasuries would absolutely need continued global support during that period). Finally, my personal decision to take some gold positions was decided by what I saw as major US Policy decisions going forward. Unfortunatly for me, my personal decsision also came not long after the launch of the gold ETF which unsurprsingly marked a top in POG. In my opinion, very, very little of the SS Reform plan borrowing schedule, the 100+ billion war supplemental, and the projected 615 B 2005 budget deficit is/was in the market, in the dollar, or in gold. So my timing to get in looks bad, but I am optimistic for the positions as we head towards a point of fear about the above. I have serious doubts about all asset values during the next recession, from treasuries to gold. LP