Posted on 03/06/2013 7:43:09 AM PST by SeekAndFind
Former Texas Congressman Ron Paul is known for his full-throated endorsement of gold as money. And he's put his money where his mouth is by investing in a lot of it.
Last year during the presidential election, The Wall Street Journal reported on Paul's financial disclosure.
The Congressman's portfolio was heavily weighted with precious metals. Last year we learned that a shocking 64 percent of Paul's $2.4 to $5.5 million portfolio is tied up in precious metals like gold and silver.
At the time, people were gushing at how smart of a move that was in that market.
But today, gold is getting massacred — it's been said to be in a "death cross," the market rally means prices are sliding, and sellers are getting desperate — and Paul's investments seem to be tanking too.
Via Google Finance, here's what has happened to three of Paul's largest holdings — Barrick Gold, Goldcorp and Newmont Mining — in the past 6 months. Losses of over 20% on each:
Paul has investments in 23 other miners — many of them small Canadian risky "juniors" — so it's doubtful he's doing much better with the rest of the portfolio.
(Excerpt) Read more at businessinsider.com ...
I think the price of gold is being manipulated down. The central banks can do this easily because of the paper transactions of gold without the actual gold to back it up. How long this game can go on I don’t know.”
Gee whiz, Batman..... manipulated down? Can you say Soros? My gut feeling is/was that the 2008 market crash mere days before the 2008 election for Zippy was a concocted meltdown forced upon us by evil folks like Soros. He makes billions while the little guy suffers. What was it I read recently about Soros and gold..... So I see him as a manipulator HHHmmm? No Gold Standard. That is an issue. Thanks for your input.
Gold should not be viewed as an investment but as a hedge against inflation. It has dropped recently because so much money is being poured into the stock markets to make a quick buck while Ben "Gutenberg" Bernanke is cranking out the QE.
But monetary policies around the world [the currency wars] underline the wisdom of owning gold for the longer run. Paper money will begin to collapse at some point when people lose confidence in them as a store of value.
No telling when that will be, but at the rate they're being printed one might think sooner rather than later.
Maybe it’s just a correction from a huge gain, or maybe it’s reversion to fundamentals:
In the time that gold went up 5X, the supply of dollars in the world went up only 10-15%, so the price of gold has increased way beyond inflation fundamentals. 5X gold only makes sense as a hedge against a probable hyperinflation, so the market must be saying that hyperinflation has become less probable.
For the stock market, two factors, fundamental and monetary. Fundamental: technology is replacing people, producing huge productivity gains. Obamacare is accelerating that trend. Monetary: with zero interest rates, there’s no other place to put your money if you hope to gain. So far the gains have happened. This will work until it doesn’t.
My two cents.
Thanks to all. Very interesting. Bennie Bern prints like a crazy man (what’s in it for him??) and Zippy runs around golfing. What could go wrong with this picture?
Probably his employee discount...
I’m reading “Antifragile” by Nassim Nicholas Taleb. He makes the point in “The Black Swan” and “Fooled by Randomness” that probabilities of dice throws and roulette wheels are a very great deal more predictable than things like market moves . . . and intelligent people often don’t even get the predictable stuff right. But we fool ourselves by rationalizing how we “really” predicted what happened, even if we didn’t put our money on the right horse at the time.His ultimate point seems to be that everyone should evaluate his own circumstances and insure himself, best he can, against unacceptable losses. His own reaction to his own knowledge of the difficulty of timing the market is to invest very conservatively, on the one hand, and put a little money in very speculative stuff OTOH. So his portfolio should be hard for the market to burn, and he has exposure to take advantage of really big events. His point is to stay away from "moderate” risks because “moderate” risks have a way of turning out to be big risks in reality.
So the question, for someone with investments and otherwise on a reasonably comfortable fixed retirement income, is how to hedge against inflation. Metal is certainly one option. But if you take physical possession, you then might be worried about physical security. So that would not exactly be the sovereign remedy for insomnia, either. There is a school of thought that while gold has been seized by FDR, silver is a commodity with industrial uses and therefore is not readily subjected to the same arbitrary impositions that gold had been affected by. But the price of silver is more volatile than that of gold.
I find the gains in stocks laughable with the backdrop of the world basically on the precipice of a global recession.
With that said, the price is the price, and it appears gold is ending its gold bull. Best find a way to exit in a timely way.
What does it tell you that gold is flying solo this time around? Copper still strong. Oil still strong. Equities strong. But gold dead.
What does it tell you that gold is flying solo this time around? Copper still strong. Oil still strong. Equities strong. But gold dead.
It tells me that people still misunderstand gold's role. It has no significant industrial use and is, therefore, underestimated by those who do not understand its true value as an inflation hedge.
Even the great Milton Friedman [a man whom I hold in high esteem] expected that gold would drop to $10/oz. from its artifical $35/oz. once Nixon closed the gold window.
He was wrong. With the gold window gone and the artificial price of $35/oz. no longer supported, gold soared. Gold's price varies according to inflation expectations.
At the moment, those are low. That will change.
People who think of gold as an investment buy gold stocks.
My thinking is that when the dollar collapses, I want some actual gold bars [even if they're an ounce each] that I can sell for a few wheelbarrows full of currency to buy food at the local store and gas for the F250.
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