Posted on 09/23/2011 7:31:22 AM PDT by SeekAndFind
Prior to the last couple of weeks, there were four really big "safe haven" assets that were going up basically every single day as financial markets got more and more unglued.
They were: Gold, the Swiss Franc, US Treasuries, and Japanese yen.
None of them yield anything, all have a pretty fantastic history of storing and returning value. None are associated with unsound monetary regimes.
In the last couple of weeks, there's been a shift. US Treasuries and Japanese yen continue to hit brand new all-time highs. On the other hand, gold and the Swiss Franc have (to different degrees) collapsed.
So what separates JPY and UST in this environment?
Well, people have never really liked either. Generally, the investing community has argued for awhile that they're both wildly overvalued. Bill Gross the king of bonds was short UST for most of the year. If you tell the average person that you're a bond bull -- when yields on the 10-year around 2% -- you get a funny look.
The yen is the same way.
As you can see in this chart, speculators are pretty overwhelmingly long dollars against the yen. Note that in every other instance here, speculators are mostly short the dollar, so this is pretty dramatic.
Meanwhile, unlike the yen, gold and Swiss Franc have had serious bulls making the case that they're, well, the gold standards in terms of safety. People are actually, and actively long those assets.
And thus it's no surprise that when the going got tough, and investors were forced into liquidation mode, they sold what they were long (gold and Swiss Franc) not the assets that they were never really bullish on in the first place, Treasuries and yen.
(Excerpt) Read more at businessinsider.com ...
They call this gold correction a collapse? I’d call it a buying opportunity. Gold will be the last asset standing.
The problem is you can’t eat gold or use it to fill your tank. I lead toward more consumable commodities, like food and oil. Oil has taken a beating, but it always comes back because there will ALWAYS be a demand for it.
Ladies & gentlemen: buying T-bills up and changing
them from short due-date to long due-date as the Fed is doing does not create wealth.
It is simply paper shuffling.
It is an illusion of wealth creation. It creates no
wealth.
The rising USD in relation to gold copper and the
global indices is an illusion...simply a response to a
(short-term) sleight-of-hand. Thursday’s indices tanking is a vote of no- confidence in Bernanke. Fleeing gold is nuts. Fleeing stocks of companies that really produce things that people value and cannot do without, the companies that actually create wealth, and to move that money into Bernanke Dollars, is approximately like trading a gold ring or the deed to an acre of land for a wooden deck chair on the Titanic that looks like it might float as the ship upends and breaks up.
Gold is profoundly undervalued and so are the shares of dozens of the USA’s and the globe’s best and most profoundly Wealth-Creating companies
This is very important. You’re seeing dividends tied,
for the first time, to Real Wealth, to Commodities, not to paper.
As gold has become the New 21st Century Money, so
also will silver, not far down the road, this decade.
By late in this TwentyTeens decade you’ll see great companies tying their Q dividend payment to the price of gold & silver.
Allow all this to play out. But stay away from those T-bills... it is only a short term play.
Weaponry, lead, gunpowder, and the ability to reuse spent shell casings will net you all the food, fuel, shelter, gold, whatever... that you could ever need if society collapses.
Either you can take it from those that have it... or they will give some to you in return for protection.
Silver is presently at $33 per ounce, which means that one 90% silver dollar is worth about $24.
Gasoline which cost a quarter per gallon when I was a kid now sells for about 16 cents, when purchased with silver.
I think I will hold on to my silver and gold despite the recent changes in the value of the dollar. It makes me suspicious that perhaps it is the dollar and other currencies that are moving around and that REAL MONEY (gold and silver) have maintained their purchasing power over many decades.
Yes, guns & ammo are consumables too.
The problem is you can’t eat gold or use it to fill your tank.
Where can I store $50,000 worth for 5-25 years?
you can take it from those that have it...
Please keep that in mind.
George Soros
That presupposes that someone took my advice and stocked up on guns, ammo, and the supplies to reload their spent casings.
See, my point is valid!
:-P
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.