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About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Friday, January 30, 2009

Gold -- The Mania Is Back

Gold did cross $925 oz. today as a strong rally continues. On my
long term chart, gold is now back in the mania zone, a prelude to
re-emergence of another price bubble. When gold crossed $1000
in Mar. '08, it moved into bubble territory. Instead of a powerful
bubble run up to $1500 oz., gold topped, entered a 27% bear
market, and surprised many, myself included. Now, we are seeing
gold move up sharply again, as players worry about perceived
inflationary threats from global easy money and fiscal stimulus
programs designed to pull the world out of a deepening recession.
The underlying theme here is that the worse matters get with
the economy, the more that stimulus will be applied, and the
greater will be the eventual inflation and debasement of currencies
once the global economy recovers. There is no shortage of players
in gold for the awaited bubble phase.

Interesting stuff. My Irish grandfather, a vaunted professional
gambler, always told me to never argue religion or politics. Great
advice and to that I would add not to argue with gold buffs.

My macro indicator for gold has it worth about $650 oz. So, I
would say that if you are into gold, have the upside target you
prefer, but keep in mind there is $300 oz. downside price risk
to the bet and even $50 for the short run.

1 comment:

gang100 said...

investment are great!!!