gold price falls, $20 lib spread rises

[Guest]

Re: gold price falls, $20 lib spread rises

Rocky -

I've sold off some bullion, (actually a lot, in the past couple weeks) but that was only because I was way overallocated. I'm pleased with the exit prices I got given how treacherous this environment is. I'm still holding a position in gold and silver bullion that's well more than EJ's (very sensible) 30% so if anything I'm still overallocated. Having said that, I think there's an even chance that we head into a period of a year or even two where the metals will be outperformed by stocks - maybe a lot outperformed. We'll see whether there are hints or clear evidence of that later this year. As to the dow/gold ratio, I'm not clear how this macro trend since 2001 bottoms out this early. I'm convinced that the really big highs in the metals are out in 2013-2014 (multiple sources all triangulate for the big highs out there). I frankly don't know how this reconciles with what appears to be a race towards the 2/1 dow-gold ratio that iTulip's been watching for a long time. They seem to be moving towards each other so fast now that they could concievably get there within months at this rate.

Lukester,
I recall you were big into the precious metals, as well as commodities months back(?), (or maybe years now?).Mainly Silver I think it was you were going all in on. Are you still holding onto these or have you dumped?

The dow/gold ratio has been somewhat in the forefront of my thoughts lately. With the ratio quickly approaching 2/1, 1/1, this would be signaling a time to get back into the Dow in the near future, however, with EJ stating that he will be increasing his Gold share to 30%, I supposed that would imply that the 1/1 ratio, if quickly attained would last quite some time, or is it that the expectation is that the ratio will surpass 1/1 and maybe get to 1/3, 1/4?? Is that even a possibility?

[np]

Re: gold price falls, $20 lib spread rises

what I meant by gold being constant is that its core structure has been the same..... .9999 gold from 100 yrs. ago is still .9999 gold today but the DJIA has been constantly changing its components (companies) through the last 100 yrs.... I was not referring to price movements.... and I don't believe that this has been taken into account..... I wouldn't be surprised if more changes happen to the present DJIA just like they did recently with AIG..... so how can the dow/gold ratio being taken seriously if one variable is and has been constant (gold) and the other is and has been changing throughout time (DJIA).... just my opinion though

[cobben]

Re: gold price falls, $20 lib spread rises

Luke, why do you automatically assume there will be a major stock rally anytime soon, even if the Dow/gold ratio reaches 1? Have you too been surreptitiously programmed by the "buy the dips" subliminal mantra?

Remember, "this time it really is different", or in iTulip speak "everything you know is wrong". Well, maybe not really all that different, not if you look far enough back in time, like several hundred years or so.

Metalman is right, some real reform has to come through and the crooks have to be cleaned out of all levels of the system before it's time to get back into "the stock market". The rats & roaches seem to have taken over completely as it is.

But investing directly in smaller companies where you know & trust the management & the other owners is a different matter.