Deflation Talks Resurface

The inflation/deflation debate is front and center again as news comes in that we have the lowest rate of change in core inflation since 1957. Deflationists are having a field day warning once again of a coming stock market collapse. They are warning of a repeat of the 1930′s-style Great Depression and the “Lost Decade” in Japan. Very prominent economists, including Paul Krugman, are saying that we are going into…

Monster Correction or Buying Opportunity?

These are the kind of days I live for as an investor since I love volatility, fear, and general market confusion. I’ve been waiting for weakness to cover my shorts and buy on dips. Well here we go, I am slowly buying the dips here in stocks. As for gold, I feel obligated to add a small position here. We all saw how $1320 acted as a level of support several times, then…

Changing Your Perspective and Profiting

Investing fascinates me because people can have the exact same data and come to completely different conclusions. We can look at the same charts and trade in different directions. Ultimately trading is a zero sum game: when one person loses 50% on the short side, another person makes 50% on the long side. Based on the profits being made on the long side in gold, I can tell you for a fact that…

Embrace the Correction in Stocks and Gold?

We are seeing some corrective activity in nearly all asset classes today, which for bulls, is very constructive. As I speak, the stock market is getting pummeled, gold is down $40, and silver is down $1.70. For those who have been looking for an entry point into the bullish tape, it may be arriving. All of you know that I am bullish on gold and silver. But given the current…

Great Interview with Jeremy Grantham

I wanted to continue the debt crisis discussion today, but the following interview with Jeremy Grantham was too good to pass up. I agree with about 90% of what Grantham says. He is well-read in history and boom/bust cycles, which obviously gives him a great advantage in the current market environment. The interview is embedded below. A brief discussion of his thoughts follows.   Bonds vs Stocks Grantham thinks the Fed is blowing…

Understanding the Debt Crisis

I am going to take a couple of days to try to go over some of the salient points in this ongoing debt crisis. There is a lot of misinformation out there that is being spewed by some of the most prominent economists, including Paul Krugman, who says that we must spend now and worry later. Naive souls hang on his every word- after all, he’s a Nobel Prize laureate, right?  To me,…

Where are the Gold Permabears?

We are in the middle of the monster push in gold that has a big bull’s eye on $1600. You can choose to fight this move, or you can choose to embrace it. I have chosen to embrace this move and the fundamentals underpinning it. We are in a debt crisis, and a currency crisis is unfolding as we speak. There will be major economic shocks in the future, most likely in…

Record Highs in Gold Sending a Warning

Even casual observers of the markets know that precious metals stocks have gone absolutely ballistic. As I’ve said numerous times, the hardest thing to do in bull markets is to hold for the big gains. Selling is easy. Taking profits is easy. Shorting is easy.  The bull market in gold appears to be entering a new phase. Gold bears can talk all they want about a gold bubble, but the…

Gold and Precious Metals

China Considers Buying IMF Gold

From Forbes, China weighs purchase of IMF gold: China is considering buying gold being offered for sale by the International Monetary Fund, Market News International said on Monday, citing two unnamed government sources, but the report could not immediately be confirmed. “China will consider buying if the price is right and the return is relatively high,” MNI quoted one of the government sources as saying. Gold, which had dipped just…

Some Thoughts on Gold and Silver

Readers of this blog will know that I believe gold and silver are still in the middle stages of a major bull market. How many people know that while stocks have remained flat, gold has quadrupled this decade? When retail investors get involved in this gold bull, price action will be explosive, making any prior moves in gold seem miniscule. That will be my signal to liquidate positions. However, we’re…

Barrick Makes Big Bet on Gold

In bullish news for gold bugs, The Globe and Mail reports that Barrick has removes its gold hedge. For those of you not familiar with the gold industry, a hedge is an agreement to sell future gold production at a fixed price. A hedge is a conservative bet that gold prices will either go down or trade sideways. Any removal of a hedge is a bet that prices will go…

Some Gold and Silver Stock Charts

Now that we’ve got $1,000 gold out of the way, I’m sure some investors have begun eyeing gold and silver stocks. Since gold made an intermediate term bottom in early July, gold stocks have embarked on a rather stealthy runup. While the S&P 500 has traded sideways since July, gold and silver stocks as a whole are up 30-50%. I suspect precious metals stocks may need to rise 100-200% before…