Comments on: Why Does Gold Get No Respect?

By: JPM

JPM — Sun, 19 Jul 2009 11:26:25 +0000

There is a beautiful tale (as all of them) by Poe whose title is precisely
“The gold bug”. I think that it is at the origin of the expression: Being (or not)
a gold bug.

Best regards,

JPM

By: ccohen

ccohen — Tue, 14 Jul 2009 20:51:40 +0000

Shalish:

That would require a lengthy treatise. Hopefully, I won’t get much into certain areas that I am not that conversant with. I intend to focus on market philosophy and how we can best prosper from these extraordinary times. Chuck

By: James from Maryland

James from Maryland — Sun, 12 Jul 2009 14:08:56 +0000

Anyone catch the story from the G8 that Russian prez Medvedev produced a sample of a “world” currency? The coin in question was made of gold, a fact which the UK Telegraph failed to mention in its coverage.

http://www.thedailybell.com/bellPage.asp?nid=444&fl=

By: David Zweig

David Zweig — Sat, 11 Jul 2009 13:20:08 +0000

There are modern ways of designing a sound financial system without using gold.

I describe such a system in my article recently published at Financial Sense Online: http://www.financialsense.com/fsu/editorials/zweig/2009/0709.html

Any comments would be appreciated.

By: Shailesh

Shailesh — Sat, 11 Jul 2009 08:43:56 +0000

Dear Chuck,
You have broadly indicated that West is selling gold and East is accumelating. You have posed a question about possible effect on price.I would like your view on overall fundamentals of gold market in this scenario rather than just the price flactuations.Afterall it will change the pattern of physical holding.Another interesting dynamic I would like you to explain is the magnitude of impact of physical holdings as well as trading by individuals [ as opposed to institutions and Goverments holdings etc.] on fundamentals of gold market. Incidentally , how does GFMS’ report saying about change in fundamentals of gold market corelate with all this – as I could not read the detailed report.
Pardon my immature observations, if any – I am new to all this.
Best of regards,
Shailesh

By: Frank

Frank — Sat, 11 Jul 2009 01:39:35 +0000

Very good article and well written.

I do, however, have one area of contention with Mr. Cohen and some of the commentors (i.e., AYN). There is mention over and over about all the “We buy gold” ads on TV, etc. I don’t know what they are watching, but I usually have FOX News playing, and I must say the “Gold sellers” (Goldline, Rosland Capital, Blanchard, Monex, etc.) seem to outnumber the the “We Buy” ads by at least 4 to 1 … but nobody ever seems to mention them.

By: Tahoe Billy

Tahoe Billy — Fri, 10 Jul 2009 23:28:08 +0000

Rick has enlightened me greatly on fiat currency, gold and the Fed banksters, so has Ron Paul. I now live in a new world where I clearly understand the US Constitution and what it meant, and can also clearly see is has been “abolished”, “high jacked”, “murdered” by the “powers” behind the Fed. I don’t know “who” they are nor do I care, I just want both parties voted out of office and the dollar back on the gold standard.

At parties lately I have been quizzinga few friends after drinks, “what is the ultimate job of the Federal Reserve”? After a pause I tell them “to suppress the price of gold”, and ultimately isn’t that true? While the seem to still be having a huge effect, they are in fact slowly losing the war, no?

William

By: Doug Digger Eberhardt

Doug Digger Eberhardt — Fri, 10 Jul 2009 20:10:35 +0000

Rick wrote:

“Financial Advisors and Institutions: Why do so few people or institutions own or even recommend gold in any form? If you have a broker or adviser, you probably know what I mean. If you mentioned gold to your broker, what was his reaction? Was it supportive or negative? Also, if you own a mutual fund check out how much of their assets are invested in gold shares.”

Couldn’t agree with you more Rick. I wrote a blog piece on this June 30th: http://fedupbook.com/blog/investing/gold-why-doesnt-your-financial-adviser-recommend-it/

We as financial advisor’s (I was one for over 20 years and now write about the industry and other issues) were never taught that gold should be a part of a well diversified portfolio. In fact, gold was and still is listed at the top of the pyramid of risk while the dollar is listed at the bottom of the pyramid as “safe.” Tell that to seniors who have seen their defined benefit income purchase less and less.

I think we both know why gold is never recommended. It starts at the top; the Fed doesn’t want any competition!

I look forward to the “Gold as Insurance” article. I’ve written on this subject as well in my book on gold investing. This isn’t rocket science eh? Yet most of America still knows nothing about gold and the need to possess it, and most advisor’s are still clueless about it.

By: Ben

Ben — Fri, 10 Jul 2009 18:10:09 +0000

To Mr. Cohen,

Thank you for your timely response to my questions. I see your point about blanket statements and smoking guns. Yes, it would seem the West is anti-gold (either that, they make one HELL of a facade). Which is why I leave open the possibility that they are perhaps not… However, after it giving it some thought I have concluded it would be better if they are indeed anti-gold. Much better, actually. This conclusion I reached as I pushed forward in my understanding of backwardation this morning.

All a subject for another time, though. If an opening presents itself in the course of your commentary, I will make my thoughts known here on the forum. But if it does not, I still look forward to reading more. I think Mr Ackerman made a good call to bring in someone of your experience and knowledge to his daily commentary!

Ben

By: Gerald Clifton

Gerald Clifton — Fri, 10 Jul 2009 17:56:04 +0000

Chuck, the reason nobody is ever called a “dot.com bug” or a “bailout bug” is that Poe didn’t write any stories that mentioned either. He DID write a story called “The Gold Bug,” however, and, since language expands by metonymy, “fanaticism” got transferred from the Poe term to the gold crowd. At least, that’s my read on it. As you well know, the gold crowd tends to live out where the buses don’t run. Being among that crowd, I don’t think we’re ALL kooks (my PhD is in Literature, not geology) — some of us are normal people who simply can’t understand how monetary authorities can paper the entire universe, with no basis behind the paper, without consequences. After all, we didn’t voluntarily leave the last vestiges of a monetary gold standard (the Bretton Woods compromise) — we got forced out. Once you get kicked out of any joint, you have to figure out reasons why it is “their” fault and not yours.

So, my simplistic read on monetary history since 1971 is that, if the monetary authorities won’t submit to the rigors of a gold standard, then I’ll just have to do it myself. So I back my cash with gold. I suspect that the silent majority among “gold bugs,” many of whom are far, FAR more wealthy than I could ever hope to be, are doing as I do. Money has to have a basis, or it is merely arbitrarily-decorated ink on paper. I suspect that many of the holders of the truly great fortunes out there (the ones you don’t see parading around on CNBC) are justifiably nervous about what their paper is worth, so they are simply going on their own gold standards.

Or, in other words, if the government won’t do it, then protect your OWN ass.