Posted on 05/18/2010 5:56:46 AM PDT by jiggyboy
When the mentality toward the market becomes negative, Cramer said during Monday’s Mad Money, there is nothing you can do to change it. But you can try and make some money.
Buying gold is not only the best play on market negativity today, Cramer explained, it is your insurance against economic chaos and inflation. Here are six reasons why you should buy gold right now:
Dependability: Expected to climb to $2,000 an ounce, Cramer said the precious metal tends to rise when other currencies fall.
Can’t Be Copied: As the commercial says, “Central banks are printing money like mad.” That’s a great reason to own gold.
Timeless: Cramer thinks that no matter what is done to counter deflation, gold is the antidote.
A Win-Win: The value of gold-mining companies not only increases when they discover the precious metal, but also when the price of gold goes up. Granted, they can be more volatile than other ways to play gold (see below), because they can underperform even when the price per ounce is soaring. But Cramer said he likes Eldorado [EGO 17.22 --- UNCH (0) ] because “they keep finding it” and Agnico-Eagle [AEM 62.90 --- UNCH (0) ] could have a “breakout” quarter.
Rarity: Even though gold mining companies are a good play, Cramer said, “We just can’t find it like we used to.” The scarcity of this precious metal makes it more valuable.
It’s Universal: Gold can be purchased in one country and spent in another. It can be kept, as is, in depository banks in faraway places for safekeeping.
For those hesitant to jump into the gold market, Cramer recommends buying the SPDR Gold Shares [GLD 119.36 --- UNCH (0) ], an exchange-traded fund that owns gold for you and tracks its price. The GLD can be a safer way to play the commodity than some of those mining stocks.
After 2010, I expect things to go south in a hurry. Especially stocks in new companies and Government bonds. I am looking strongly at Asian markets and Gold for the coming next two years.
Cramers 2008 predictions:
http://investment-fiduciary.com/2009/03/14/checking-jim-cramers-2008-top-ten-predictions/
Speculation in some goldbug circles is that that won’t work this time — Americans would shuffle off to Canada or even England to get the market price.
The “confiscation” plan this time, this is also speculation, is the opposite: they’d announce a gaspingly above-market price for gold, everybody sells it to the government, laughing all the way to the bank, then the government announces that the official US gold price is now 10x-100x what they just paid, goes back to the gold standard, pays off debtors in gold, and abra cadabra, eliminates debt. Everybody gets screwed, which is why it can’t be dismissed out of hand.
Ha, I can’t believe they don’t include his infamous Bear Stearns debacle: http://www.google.com/search?q=%22jim+cramer%22+%22bear+stearns%22&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a
“...they have predator drones”
I’ll just have to make my line a litle wider. If they think I’m worth killing to take what gold I have, then it’ll be past the point of all reason and our entire country will be embattled in a civil war.
Like I said, “Come and Take it”.
With Obama as president, I put nothing past him.
If you outlaw the exportation of gold and make it a felony, then this would deter most "law abiding" citizens.
What about selling off stock to pay off a house (one you want to keep forever)? Good move?
yes, buying opportunities!
GLD’s share ownership of actual gold is so fractionated now that I could not recommed any new investments in it.>>>>>>>>>
I read that big player John Paulson demanded that his shares of GLD be held in actual physical gold and segregated too in the vault. GLD is in physical gold and paper gold. Is this what you mean? Too much bs paper gold?
You got it. I can understand Paulson’s desire.
So much cash has gone into GLD that it’s hard to believe that they have actual possession of that much physical gold. I got out in the run up at the end of 2009.
That would be a great move imho. Especially as the market is likely to get pummled with the growing turmoil in Europe. We are counting on exports t lead the way to growth and the dollar is getting stronger daily. That’s not an Rx for growing exports.
http://theautomaticearth.blogspot.com/
Deflation Is The Primary Trend
by David Rosenberg - Gluskin Shef
Credit is contracting.
Wage rates are stagnating.
Money supply growth is vanishing
The U.S.dollar is strong.
Commodities have peaked.
U.S. home prices are rolling over...again.
Lumber prices tumbling (down nearly 17% from April 2010 highs)
Wal-Mart is cutting prices on 10,000 items.
Home Depot just cut prices on flowers, fertilizers, lawn equipment and outdoor furniture.
TacoBell is offering two dollar combo meals.
The April U.S. retail sales report hinted at deflation in groceries, electronics, apparel and sporting goods.
“Inflation, as long as it also increased my salary, will help me pay my mortgage with cheaper dollars. Kind of like my dad laughing when the bank was trying to get him to pay early on his mortgage back in the 70’s. And of course, you can get into AAA bonds that will provide a higher return. “
http://pragcap.com/a-deflationary-red-flag-in-the-u-s-dollar
Deflation will do the opposite. What current market condition is going to promote stability in your portfolio? The chaos in Europe?
ONE INARGUABLE REASON NOT TO BUY GOLD - Da Gooberment can easily take it from you.
FDR did it.
So can Obama.
Not so. The goberment can request you turn in your gold. Even FDR wasn’t stupid enough to go and confiscate gold. Any gold turned in was done so VOLUNTARILY. We ain’t the chumps they were in the 30’s regarding the goodness of the Feds. Any attempt to confiscate the gold would be met with massive evasion and or volleys of lead.
6000 years of human history all over the world suggest you are wrong.
Yes, I recognize that deflation has been the issue which is why I’ve stayed away from bonds of any type thus far. I did anticipate inflation which has not yet happened but my hedges thus far have worked out.
As far as “stable” versus “promoting stability”, those are two different things. My actions, or lack thereof, is what promotes stability in my estate. That said, I don’t react to “news of the day” and position myself to have upside no matter which way the market goes.
That said, stored food and water, a generator, good location, good neighbors and defensive weapons are also at my disposal. Though, I still think it’s more likely my water and generator will be used during a another flood rather than social collapse.
I, too, have been predicting a wave of inflation. I admit that this has not yet happened, but it could, perhaps beginning late this year or early next. I am very concerned about inflation.
Wrong about deflation, gold, or both?
“ONE INARGUABLE REASON NOT TO BUY GOLD - Da Gooberment can easily take it from you.
FDR did it.”
And so did Richard M. Nixon, in 1971.
Many FReepers here absolutely adore Richard M. Nixon . . he is right up there with George W. Bush in their eyes.
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