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ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

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  • ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

    So ECB is manipulating gold price in euros. Therefore, wouldn't it be better to buy a commodities index as Warren Buffett suggests?

    (I mean that Buffett suggests to choose the market and then buy an index instead of choosing within that market).
    11
    Gold
    36.36%
    4
    Commodities index
    0.00%
    0
    Both
    63.64%
    7
    Last edited by gasull; 08-03-08, 05:59 PM.

  • #2
    Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

    I don't know about opening positions on a forever basis, so for your poll as posed without a time-frame were "Neither" a choice, I'd vote "neither."

    Were the dollar to bounce in here, I think the best bet would be that gold and commodities both correct. But when it comes to commodity indices funds, there are those based on metals, agriculture, energy, and everything if one uses the ETN choices based on Rogers' index. RJZ, RJA, RJN, RJI respectively, I believe these are correct.

    It's certainly possible agriculture could continue up, and energy and metal down, or any other combination might occur.

    I think at times it is possible Buffet's advice might not be timely. http://stockcharts.com/h-sc/ui?s=BRK...d=p14901434560

    I don't know when he gave the advice in the anecdote you posted, but it might not have worked well if it were given last Fall. If given yesterday, it might work out better over the years.
    Last edited by Jim Nickerson; 08-03-08, 07:06 PM.
    Jim 69 y/o

    "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

    Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

    Good judgement comes from experience; experience comes from bad judgement. Unknown.

    Comment


    • #3
      Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

      Here's a timely opinion posted just now by Mega in a new thread regarding corrections in commodities.

      http://www.telegraph.co.uk/money/mai.../ccview104.xml
      Bonds beckon as commodity boom flags
      By Ambrose Evans-Pritchard
      Last Updated: 10:20pm BST 03/08/2008


      Deutsche Bank has called the top of the commodity cycle. The uber-bulls of the oil, food and metals boom have advised clients to take profits before the downturn engulfing most of the global economy works its inevitable effects.

      Oil will slide back towards its "marginal production cost" of $60 to $80 a barrel; gold will slump to $650 an ounce as the dollar recovers against the euro; copper, lead and tin will slowly halve in price; grains will calm down as harvests in Australia and the Eurasian Steppe return to normal.

      The report comes on cue. The CRB commodity index fell 10pc last month, the steepest one-month drop since the onset of the Volcker crunch in 1980. Most raw materials have been slipping for months. Crude was the last to turn after peaking at $147 early last month.
      The other point of view, and the prevailing one.

      For commodity perma-bulls, the slowdown hardly matters. This is a supply story. Oil companies have been unable to raise output for four years. As the oil crunch spills over into food, 30pc of the US corn harvest is being switched to biofuels. Some 26pc of the copper that ever existed in the Earth's crust has been lost, according to a Princeton study. We are exhausting our patrimony of resources.

      I have much sympathy for this view. Asia's industrial revolutions are obviously a game-changer. The term "commodity super-cycle" does not do it justice. We are living through a step-change into an era of permanent shortage.

      Right now, a gently rising supply of commodities is colliding head on with a manufacturing recession and a global building bust of majestic proportions. Bonds beckon.
      Last edited by Jim Nickerson; 08-03-08, 08:24 PM.
      Jim 69 y/o

      "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

      Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

      Good judgement comes from experience; experience comes from bad judgement. Unknown.

      Comment


      • #4
        Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

        gold at$650? Seriously?

        Comment


        • #5
          Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

          Originally posted by gasull View Post
          So ECB is manipulating gold price in euros. Therefore, wouldn't it be better to buy a commodities index as Warren Buffett suggests?

          (I mean that Buffett suggests to choose the market and then buy an index instead of choosing within that market).
          I voted both, and also note that there are other sectors that will do well over the coming years too.

          Note that I also added the following paragraph to the article:
          Lastly, we do not mean in any way to imply that the ECB will win on the longer term with its control or manipulation of gold. Central banks, etc. did not win during the last gold bull market in the 1970s. Our primary intention is to show that control or manipulation exists, and that it should be taken into account for both traders and investors.
          In other words, when gold goes down and it makes little sense, look to intervention & manipulation issues too.

          Lastly, manipulation and "fiddling" has been alive and well in all markets and sector and commodities well before the ECB.

          "Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight."
          - Daniel Drew, 19th century speculator
          http://www.NowAndTheFuture.com

          Comment


          • #6
            Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

            Originally posted by bart View Post

            "Anybody who plays the stock market not as an insider is like a man buying cows in the moonlight."
            - Daniel Drew, 19th century speculator
            Problem is, if you're not an insider, your other option is to buy your milk retail.

            Comment


            • #7
              Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

              Originally posted by Jim Nickerson View Post
              Here's a timely opinion posted just now by Mega in a new thread regarding corrections in commodities.

              http://www.telegraph.co.uk/money/mai.../ccview104.xml
              Bonds beckon as commodity boom flags
              By Ambrose Evans-Pritchard
              Last Updated: 10:20pm BST 03/08/2008




              The other point of view, and the prevailing one.
              Jim,

              I remember about a year ago you asking if anyone followed the gold/xau ratio. Have you taken look at it lately? 5.77 as I write this. Time to back up the truck? (At least according to this indicator.)

              Comment


              • #8
                Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                Originally posted by Andreuccio View Post
                Jim,

                I remember about a year ago you asking if anyone followed the gold/xau ratio. Have you taken look at it lately? 5.77 as I write this. Time to back up the truck? (At least according to this indicator.)
                Andreuccio, that is one of the things I track, and it has been hitting new highs as I write; however, Hussman, who apparently devised the indicator, has been out of gold stocks for some while, I forget how long. He got out of a 15% long position in mining stocks and put that allocation into foreign currencies in the HSTRX fund. I haven't read Hussman's today's note yet.

                If Hussman is not backing up the truck, it would cause me pause to do so.

                Finster, I believe, made the point about PM stocks moving with general equities. If you think equities have more to go to the downside, then perhaps the PM stocks do also.

                I cannot answer your question even after writing all this.

                Originally posted by Hussman 8/4/08
                The Fund also continues to hold just over 15% of assets in foreign currencies. Overall, the Fund's position is generally defensive, so I would expect Fund volatility to be generally restrained until we have the opportunity to establish longer bond durations or a fresh exposure to precious metals or utility stocks. For now, we don't observe sufficient evidence to establish higher risk exposure in these areas (HSTRX performance chart).
                Last edited by Jim Nickerson; 08-04-08, 03:36 PM.
                Jim 69 y/o

                "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

                Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

                Good judgement comes from experience; experience comes from bad judgement. Unknown.

                Comment


                • #9
                  Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                  Originally posted by Andreuccio View Post
                  Problem is, if you're not an insider, your other option is to buy your milk retail.
                  True, but failing to take insiders and similar factors into account can be dangerous to your wealth.

                  There is a cost difference between milk at Costco and other places, and also quality differences in raw milk or milk from Whole Foods.

                  And there are ways to divine what's going on behind the scenes without being an insider.
                  http://www.NowAndTheFuture.com

                  Comment


                  • #10
                    Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                    Originally posted by bart View Post
                    True, but failing to take insiders and similar factors into account can be dangerous to your wealth.

                    There is a cost difference between milk at Costco and other places, and also quality differences in raw milk or milk from Whole Foods.

                    And there are ways to divine what's going on behind the scenes without being an insider.
                    So maybe I have to buy my cow at night, but at least I'll bring along a good flashlight.

                    Comment


                    • #11
                      Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                      So unless I want to be a perma-bull I should sell now. OK. Where to put my money into now? Short-term US Government debt? Any ETFs for that?

                      Comment


                      • #12
                        Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                        Originally posted by Jim Nickerson View Post
                        Andreuccio, that is one of the things I track, and it has been hitting new highs as I write; however, Hussman, who apparently devised the indicator, has been out of gold stocks for some while, I foroget how long. He got out of a 15% long position in mining stocks and put that allocation into foreign currencies in the HSTRX fund. I haven't read Hussman's today's note yet.

                        If Hussman is not backing up the truck, it would cause me pause to do so.

                        Finster, I believe, made the point about PM stocks moving with general equities. If you think equities have more to go to the downside, then perhaps the PM stocks do also.

                        I cannot answer you question even after writing all this.

                        Here's both the short and long term picture on the ratios of all three major indexes, for what its worth.




                        http://www.NowAndTheFuture.com

                        Comment


                        • #13
                          Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                          Originally posted by Andreuccio View Post
                          So maybe I have to buy my cow at night, but at least I'll bring along a good flashlight.
                          I say fool them all, and buy at dusk and use infrared goggles to help locate anything on the ground that smells. :cool:

                          Better yet, follow Will Roger's advice
                          "Don’t gamble! Take all your savings and buy some good stock and hold it ‘till it goes up, then sell it. If it don’t go up, don’t buy it."
                          -- Will Rogers

                          ;)
                          http://www.NowAndTheFuture.com

                          Comment


                          • #14
                            Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                            IF the POG is being manipulated, it could be good news for you.... eventually

                            the bigger the manipulative effort is,
                            the longer the manipulative efforts last

                            the bigger the ensuing / replying breakout will be

                            the "better" the manipulators think they are doing, the more they pat themselves & each other on their backs, the worse their self-imprecation is

                            Comment


                            • #15
                              Re: ECB manipulating gold, so, wouldn't it be better to buy a commodities fund?

                              Originally posted by Spartacus View Post
                              IF the POG is being manipulated, it could be good news for you.... eventually

                              the bigger the manipulative effort is,
                              the longer the manipulative efforts last

                              the bigger the ensuing / replying breakout will be

                              the "better" the manipulators think they are doing, the more they pat themselves & each other on their backs, the worse their self-imprecation is
                              Spartacus, could you explain this further?

                              Who is going to buy all that gold that the ECB is releasing? The ECB itself? Gold isn't such a needed commodity any more, like it was in the past.

                              Comment

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