Showing posts with label gold bullion. Show all posts

Tuesday, January 29, 2013

Two Sensational Facts About Gold Investing That You Might Not Know

[Onebornfree /Financial Safety Services commentary: the title of the piece below, "4 Sensational Facts About Gold Investing That You Might Not Know" , includes the words "sensational","facts", "gold" and "investing". However, here, courtesy of yours truly, are two more"sensational facts" that you might not know about gold "investing" that the article in question does not even come close to addressing - that will doubtless be exceedingly unpopular with "gold bugs" [ I'm a recovering gold-bug myself], "hard money" types and the average gold-loving "libertarian". Nevertheless, I feel that these facts are important for you to understand if you wish to hang on to your savings long term, or if you are looking to make a lot of money via speculations in gold :

Sensational Fact [1] : "Investing" Is Not The Same As "Speculating":
there is a vast difference between the meaning of the word "investing", and the word "speculation". To my mind, an investor attempts to invest and achieve no more than the average gain as historically measured long-term over a number of years for whatever they choose to invest in. On the other hand , a speculator speculates in various markets in an attempt to achieve gains that far exceed the long term historical average gains for whatever it is they choose to speculate in.

Sensational Fact [2] : most gold "investors" are speculating , not investing:
If you put all of your savings [i.e. money you cannot afford to lose] into one specific type of "investment", such as gold [but the exact same applies to stocks, or bonds, or whatever], you are not investing, you are in fact speculating. Why? Because each class of "investment" [i.e. precious metals/commodities, bonds, cash, T-bills, stocks etc. etc.] , only performs well in one, or possibly two, types of economic environment. Therefor, if you place all of your long term savings [i.e. money you cannot afford to lose] into gold, for example, then you are speculating [with money that you cannot afford to lose], that a particular type of economic environment must occur, in order for you gold to "profit".

Question [1 a]: are you absolutely certain that the economic environment that historically gold has always done well in [i.e. inflation] has to definitely occur within your lifetime? How do you know for sure?

Question [1b]: do you understand that simple economic theory demonstrates that no single person can successfully, reliably, predict the economic future?

Question [2] : can you really afford to be speculating in gold [or whatever] with money you cannot afford to lose]?

2 Good Reasons to Buy Gold Now:

I can think of two very good reasons for buying gold now:

[1]as part of a fully diversified long term savings plan. [i.e as an "investment" ]

As part of a long term savings plan for money that cannot afford to be lost, a certain percentage of total savings is always allocated to gold bullion.

This gold is bought regardless of current price or supposed future outlook for the gold market. My long term savings plan recommends that you _always_ keep a certain percentage of your savings in gold, come what may [and so the question of whether or not gold is or is not in a bubble right now is not even an issue].

or,

[2] as a short to medium term speculation for those who think that gold is either [a] in a bubble that still has a long way to go upward [and therefor takes a "long position" betting on continuance of the upward trend] , or [b] is "an accident waiting to happen" and about to suffer a significant price collapse [a "short" position- profiting from a decline in golds price as measured in $US].

As nobody can predict the future of gold prices relative to all others, ALL speculations [i.e both long or short positions] should only be made with money that the individual can realistically afford to lose!

Regards, onebornfree/ Financial Safety Services . ]

************************************************************
4 Sensational Facts About Gold Investing That You Might Not Know

By Frank Holmes CEO and Chief Investment Officer U.S. Global Investors Posted Jan 24, 2013

Our ever-popular Periodic Table of Commodity Returns has been updated through 2012. Investor Alert readers love this chart as it shows a decade of results across 14 different commodities, providing strikingly rich information in a very familiar format.

Last year, 11 commodities rose in value, with wheat rising as the top crop after seeing a significant decline in 2011. It was a similar rags-to-riches story for the next few leaders, including lead, zinc, natural gas and platinum, which all climbed double digits in 2012 after falling in 2011.

Only three commodities declined over the year: Crude oil fell by 7 percent after rising 8 percent the previous year. Nickel declined for the second year in a row. In 2012, the metal lost 9 percent and in 2011, nickel fell another 24 percent.

Coal was the worst-performing commodity in 2012, falling nearly 17 percent. Coal’s been going through a rough spell lately; in fact, the commodity has not been king for five years (although it did record a 31 percent increase in 2010). As Global Resources Fund Portfolio Manager Evan Smith explained to listeners during our recent presentation, for the first time ever in the U.S., natural gas provided more electricity and power than coal did.

As you can see from the table, commodities often have wide price fluctuations from year to year given the many factors affecting supply and demand, such as government policies, union strikes, and currency volatility. That’s why when it comes to commodities and commodity producers, many investors “leave the driving” to active money managers who understand these specialized assets and the global trends affecting them.

Take gold and gold companies, for example. After investing in the mining industry for decades, we’ve taken note of several facts about gold that continue to surprise our investors.

Here are four of the latest:

1. Gold Has Been A Consistent Performer Over The Decade

While the precious metal did not shoot the lights out in 2012, gold’s bull rally goes on. It ended the year up 7 percent, making it a phenomenal 12th year in a row that gold rose in value. In a special gold bar version of the Periodic Table below, you can easily see gold’s rotation among the commodities from year to year.

What’s fascinating is the three-year rising pattern relative to other commodities that emerges when you focus on the bars. Over the past 10 years, gold has risen in position compared with the others for three years in a row, then fallen in relative position in the fourth year before repeating the cycle. Will it follow the same pattern and be in the top half of the Periodic Table in 2013?

2. Gold Should Remain A Hot Commodity In 2013

Considering the global easing cycle and the continuous running of monetary printing presses, I believe the Fear Trade will continue to be a driver of gold over the next several months. Take a look at the projected rise in the balance sheets as a percent of GDP from the European Central Bank, the Bank of Japan, the Federal Reserve and the Bank of England over 2013. The ECB is estimated to have a balance sheet that is nearly 50 percent of its GDP by the end of the year. The Bank of Japan is right behind the ECB, with its balance sheet projected to be nearly 35 percent of GDP. As Mike Shedlock of Mish’s Global Economic Trend Analysis said, “The race is on to see which central bank can load up its balance sheet with the most garbage the fastest.”......................

Read rest of article here
*****************************
FINANCIAL SAFETY SERVICES DISCLAIMER:

Financial Safety Services is NOT an investment advisory service. Financial Safety Services is an educational service that teaches the interested individual non-original [i.e. invented by others far more intelligent than myself], time-tested safe methods/principles that might be successfully used by the individual for relatively low risk speculations in various financial markets.

ACCURACY OF INFORMATION : Financial Safety Services MAKES NO CLAIMS AS TO THE ACCURACY OF ANY INFORMATION EITHER GIVEN AT THIS BLOG SITE, OR IN PERSON TO PAYING CLIENTS. All information given/sold, must be understood to have been acted on AT THE INDIVIDUALS OWN RISK .

********************************************************************

More About Financial Safety Services

[Free phone consultations via "Skype". To set a time/date email: onebornfreeatyahoodotcom ]

Financial Safety Services is a private , mostly off-line, international, person to person consulting service that attempts to show its real-time [i.e. non-internet derived] clients how to speculate safely with money that they can afford to lose. Money that the client cannot afford to lose should never be risked in these speculations

For more than 20 years, nearly all of Financial Safety Services clients to date have been found via direct [i.e off-line, in-person] referral from previously satisfied clients only.

No attempts are made to procure clientele via the selling of the sporadic, deliberately incomplete online information posted at this site. All valuable information is sold to clients, via e-mail, or preferably in person, on a "need to know" customized basis, depending on their specific speculative wants/needs.

Therefor any/all posts at this site are for the reference and possible benefit of pre-existing , real-world, paying clients only as part of my services [and to perhaps help emphasize a particular point I make to them in private], and never for the benefit of the general reading public and casual internet reader at large.

Internet posts arer not made on a regular schedule in order to build an on-line audience; only when I feel that so doing is beneficial to my actual existing clientele.

I have no interest in gaining clients first hand from any posts made either here or elsewhere [if it happens, it happens!] - as I previously stated, to date [20 years+], nearly all of my previous clients have come to me via direct, in-person referral from other satisfied clients- that is, [1]an existing client personally recommends my services to a close friend, [2] the friend contacts me, [3]we discuss their wants/needs, [4] I make a decision as to whether or not I can really help them, [5] We come to a financial agreement- or not :-) .

None- Client Questions?

Should a casual reader/none client have a serious question about an assertion I make on this site, they must write to me at: onebornfreeatyahoodotcom and I will do my best to answer their question. Their first question will usually be answered for free. After that, fees may apply.

Current Client Questions.

All existing, paying client questions are of course, answered for free [usually via private e-mail]- it is part of the service!

onebornfreeatyahoodotcom

Regards, onebornfree

Wednesday, January 2, 2013

The Invisible Hand [Always] Strikes Back

[Financial Safety Services commentary: a good article from Anthony Wile of "The Daily Bell" follows below this commentary. Mr Wile is commenting on the idea, still being promoted by the establishment financial media, that the traditional "buy and hold" strategy for stocks is still reliable, and he zero's in on a recent Bloomberg article that unabashedly promotes the traditional "buy and hold" concept that had seemed to work so well for both Wall Street and the proverbial " man on the street" till around 2000 or so.

Invisible hand vs. All-seeing eye

Of course, the truth of the matter is that "The Invisible Hand" , is always striking back and correcting capital misallocations. This effectively means that the economic future can never be reliably and consistently predicted.

Meaning, if you take Mr Wile's "gloom and doom"/continuing bull markets for gold and other "hard" assets predictions seriously, bet on them all only using money you can safely afford to lose- in other words, speculate in those markets you believe Mr Wile predictions will benefit, don't invest in them long term with money you cannot afford to lose.

Likewise for any believed stock market boom predictions by the likes of Bloomberg etc. - remember that these future prosperity predictions have just as much chance of being right or wrong as do Mr Wile's {or any one else's} "gloom and doom" scenarios.

And by the way money you cannot afford to lose should, as usual, always be kept in a long- term savings plan that has no bias towards any particular economic future, and that is instead designed to make a small profit regardless of what the economic future may hold: a stock market boom, a deflationary collapse, continued recession, or whatever.

On the other hand, should you be lucky enough to have money you can afford to lose should events move against you, then stock market index option "calls" [if you believe the stock market is headed upwards from here], or index option "puts", or "shorts" [if you believe the market has peaked and will shortly collapse], or maybe other similar simple arrangements that might also bring you profit should your bet be correct, [ with suitable "buy in" points and automatic sell prices and other safety measures firmly in place] , might be the way the to go. Or, if you feel [i.e."know"] that Mr Wile is correct, then buy gold bullion.

Happy speculating! {with the money you can afford to lose, that is}] Regards, Financial Safety Services.

Saturday, December 29, 2012 – by Anthony Wile

"Bloomberg has posted an article entitled "Americans Miss $200 Billion [by] Abandoning Stocks" that is presumably supposed to illustrate the folly of avoiding equities but in my view merely illustrates the difficulty of sustaining this meme.

And make no mistake, it IS a meme.

The idea that one can simply buy and hold equities like family heirlooms was always suspect and is more-so now. That's because people simply cannot internalize the reality of a failing economy and a booming stock market. The cognitive dissonance makes them wary.

Thanks to what we call the Internet Reformation, many people are much savvier about how the market works and the way the economy behaves. Such individuals are not apt to assume that the US recession is over just because the mainstream media proclaims it is so. They are nervous and not easily willing to dump large amounts of cash into the stock market.

Who can blame them?

This doesn't stop Bloomberg from launching articles like this one. The idea of course – the dominant social theme if you will – is that investing is frightening but those with a strong stomach can become wealthy if they just "stay the course." Here's more:

Americans have missed out on almost $200 billion of stock gains as they drained money from the market in the past four years, haunted by the financial crisis ...

Assets in equity mutual, exchange-traded and closed-end funds increased about 85 percent to $5.6 trillion since the bull market began in March 2009, trailing the Standard & Poor's 500 Index's 94 percent advance.

The retreat shows that even the biggest gain since 1998 failed to heal investor confidence after the financial collapse that wiped out $11 trillion in U.S. equity value was followed by record price swings in equities, a market breakdown that briefly erased $862 billion in share value and the slowest recovery from a recession since World War II. Individuals are withdrawing money as political leaders struggle to avert budget cuts that threaten to throw the economy into a new slump.

"Our biggest liability in the stock market has been the total destruction to confidence," James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $325 billion, said in a telephone interview. "There's just so much evidence of this recovery broadening." ...

Individuals have also seen evidence that computerized trading is making stock markets less reliable. An equity rout temporarily sent the Dow down almost 1,000 points on May 6, 2010, causing investors to question the stability of market mechanics and the effectiveness of regulators.

Botched IPOs for Facebook Inc. (FB) and Bats Global Markets Inc. earlier this year led to concern about trading and exchange technology, while Knight Capital Group Inc. nearly went out of business in August after it bombarded U.S. equity exchanges with erroneous orders in the wake of improperly installed software that malfunctioned.

"Whether it's the flash crash, the low-growth economy, unemployment, uncertainty about jobs -- those things just don't engender any desire to risk money," Walter "Bucky" Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama, said in a phone interview. "Investors say: The stock market? I don't have a clue as to how it works anymore."

Those who have organized modern equity markets have no one to blame but themselves. While certain stocks (especially small stocks) may offer legitimate promise, the larger marketplace is seen as unreliable. Too much has been passed off as legitimate that is not.

And many investors have internalized the disconnect between the economy and stock market performance. The Federal Reserve's tremendous money printing has boosted stock prices over the past four years, but this has only illustrated the control that the elites exercise over investment activities.
Facebook was the big story of 2012, but its wretched overpricing and downright weird business model had investors scratching their heads. The suspicion that US intelligence agencies had a hand in both the IPO and the company itself didn't help Facebook's cause.

The Flash Crash received a good bit of attention, making investors aware – as they had never been before – of how quickly stock valuations could change. But it's really quantitative easing that is the outstanding issue – the one that Bloomberg chooses to present without properly explaining the mechanism.

There is generally a great deal of talk about how stock markets and stocks themselves are value-oriented investments. But what is clear to many people is how close the market came to a meltdown in 2007-2008. The system proved a good deal more fragile than people have been led to expect.

Couple that with the Fed's ongoing money-printing that has literally doubled equity values and you get increasing resistance to the whole idea of stock investing. First people are frightened by the breakdown of the system itself and then they are exposed to ongoing – "industrial strength" – monetary manipulation.

What do those in the industry expect? What do elites that have built up the modern stock market believe people will do with their money? People "get it" ... and not in a good way. The Age of Promotion is waning in the setting of a waxing monetary expansion that was aided and abetted by mainstream media misdirection for decades. Too bad.

Once the Great Depression hit, people gradually stopped investing in stocks. Even after World War II, there was no appreciable action in US equities. NYSE officials ended up going on road shows in the 1950s to tout the benefits of stocks and stock-market investing.

At the time, the markets were ripe for US stocks. The US dominated the world, which had been mostly destroyed by the war. US industry was ascending and US power was at an all time high. People who invested in stocks were amply rewarded.

That's simply not the case today. US debt is in the tens, even hundreds, of trillions. The dollar itself is increasingly looked upon with suspicion around the world and its reserve status may be in jeopardy.
Perhaps most questionable from an investment standpoint is the money that has already been released by central banks in order to stimulate the economy. Much of this currency remains trapped in bank coffers, but it will circulate eventually.

The circulation of these trillions will cause tremendous price inflation – that will in turn result in significant interest rate hikes. As in the 1970s, these rate hikes will damp the recovery (to put it mildly), and stock prices as well.

I haven't even touched on the so-called fiscal cliff, which I believe will be resolved one way or another without the entirety of its tax-and-spend burden being implemented. But it, too, illustrates just how vulnerable equities are to outside political forces and their potential impact on the economy.
The past five years have shown investors clearly that stocks are NOT the proverbial "sure thing." There are good stocks, of course. There are good investments.

But this Bloomberg article is focusing on the wrong argument. The powers-that-be may wish to encourage stock investing, but reminding people of how far down the markets have traveled, and how extensively they have been manipulated by central bankers is not the way to do it.

The road to recovery for many kinds of equities will be a long and hard one. Even gold and silver stocks will struggle. The problem is that reality has caught up to the promotion. The market itself has struck back.

Of course one can argue, as we do, that the current US stock behavior – and modern downturns – have been in a sense planned by the powers-that-be for a variety of reasons, mostly having to do with impending global governance. But it is also obvious that Money Power seeks a continual "buy in" to the systems it has created and implemented.

This time, people aren't buying. Despite all their power, the elites are still at the mercy of the Invisible Hand and the natural laws that govern us all. It will be nice to watch the Internet Reformation swing the pendulum back in the direction of truth."

Article source

FINANCIAL SAFETY SERVICES DISCLAIMER:

********************************************************************

More About Financial Safety Services

[Free phone consultations via "Skype". To set a time/date email: onebornfreeatyahoodotcom ]

For more than 20 years, nearly all of Financial Safety Services clients to date have been found via direct [i.e off-line, in-person] referral from previously satisfied clients only.

Internet posts arer not made on a regular schedule in order to build an on-line audience; only when I feel that so doing is beneficial to my actual existing clientele.

I have no interest in gaining clients first hand from any posts made either here or elsewhere [if it happens, it happens!] - as i previously stated, to date [20 years+], nearly all of my previous clients have come to me via direct, in-person referral from other satisfied clients- that is, [1]an existing client personally recommends my services to a close friend, [2] the friend contacts me, [3]we discuss their wants/needs, [4] I make a decision as to whether or not I can really help them, [5] We come to a financial agreement- or not :-) .

None- Client Questions?

Current Client Questions.

All existing, paying client questions are of course, answered for free [usually via private e-mail]- it is part of the service!

onebornfreeatyahoodotcom