Posted on 11/08/2009 2:09:58 PM PST by blam
Gold Bars Selling Like Hotcakes At Harrods
Henry Blodget
Nov. 8, 2009, 9:49 AM
Gold smashed through an all-time high of $1,100 an ounce on Friday, bringing some solace to gold bugs who have been losing money on the metal since the 1980s.
Gold still hasn't come anywhere near its late-1980's peak on an inflation-adjusted basis ($1,800 or so), belying the general theory that it's a great inflation hedge. As the world gold frenzy really takes hold, however, $2,000-an-ounce predictions are coming fast and furious, so there's always hope.
The NYT surveys the gold landscape, checking in on the ultimate symbol of the rush--the bars on sale at the counters of Harrods:
[L]ast month, Harrods, the 160-year-old London department store, began selling coins as well as gold bullion ranging from tiny 1-gram ingots to the hefty, 12.5-kilogram, 400-Troy-ounce bricks that are so often featured in movies and stocked inside the vaults of Fort Knox. Harrods’s lower ground floor, where the gold is peddled, has been packed with interested shoppers.
“The response has been astounding,” said Chris Hall, head of Harrods Gold Bullion. “Bars are definitely more popular than coins. The 100-gram is the most popular.”...
THE Harrods gold line is made by PAMP, a rival Swiss refiner down the road here from Argor-Heraeus, in the nearby town of Castel San Pietro. And demand for bars weighing 100 ounces or less for individual investors is up 80 percent, said Marwan Shakarchi, the chairman of MKS Finance, a Geneva company that owns PAMP.
[snip]
(Excerpt) Read more at businessinsider.com ...
bump
Maybe the Goldline dude was right after all.
This news led to the opinion that there must be a gold bubble. The rebuttal is here:
http://www.321gold.com/editorials/casey/casey110509.html
“....If the top were in, we’d be in the midst of an all-out Mania. Are we? Do you get the impression there’s a rush into gold by the greater public right now? Are headlines blazing the covers of major magazines pronouncing gold as the new investment king? Has Wall Street gone gaga over gold and silver? I ask because these are the true signs that a trend has entered its final blow-off top and would signal it’s time to get out.
“I decided to put Bert’s prognostication to the test, and I invite you to play along.
“First, I struck up casual conversations with my friends, neighbors, relatives, acquaintances, my wife’s co-workers - heck, even my seatmates on airplanes - angling to learn how much gold they were hoarding, about the killing they were making in gold stocks, and how they were getting rich from all their precious metal investments. (In fairness, I had to exclude my dad, who is an award-winning gold panner, but he’s the only one.)
“I found no one - not one person - who is actively investing in anything gold or silver, let alone rushing to buy or hoard the stuff. I had two people who confided that they did own gold, but in both cases it was inherited. A few were curious how they would go about doing such a thing, and fewer asked if I thought they should. Most everyone looked at me blankly when I asked; they didn’t seem to know what I was talking about. When I got a reaction like that, it was pointless to ask about gold stocks. Of the handful I did ask, most had never heard of Barrick Gold, the world’s largest gold producer....”
Isn’t ‘HOPE’ what got us into this mess!
If the dollar is going to be virtually worthless why are they trading their gold for dollars?
In related news, WalMart STILL has trouble keeping their ammunition shelves stocked. Most notably missing are 9mm Parabellum, 45 ACP, 380 ACP, 32 ACP, 38 Special,30’6 (ballistic tips), 223 (ball or ballistic tip), etc. For those lucky (or unfortunate enough) to own 40 S&W or 44 Magnum, limited supplies can be found around 4 am most Tuesdays. Of course, shot shells in Turkey, 6 1/2, etc are plentiful......
Damn, I need to take a little bit of that extra $100,000 that I keep in my sock drawer and start buying some gold.
That is a good question. Most people could only buy an ounce or two. What good will it do, unless you have a lot more? Also, in a total societal meltdown, lead will be more valuble than gold, because it will have a powder charge behind it.
Gold is a good idea.
However, it is only a partial protection against inflation, because whatever nominal gains you get from higher gold prices, if you sell you must pay capital gains tax. That is true whether the gain is real, or just due to inflation.
This is a big trouble with capital gains taxes: they eat up capital, and they eat up inflation hedges like gold. Government devours wealth: they don’t care whether they are reducing the savings of a nation. Power depends on bribing your constituents, and that is what BIG MAFIA (otherwise known as the federal government) is up to.
Soon it will be racist to buy gold./s
My Walmart has a ton of 223, but I’m done full up.
The difference between the 1980s dip back down and now is simple.
Now, instead of a president trying to get inflation under control, and put policies in place that create an economic climate favorable to job creation and exapnsion (ie government getting out of the way), and actually DESIRING a prosperous and robust America,
we have mother-F@@KING SOCIALISTS running Congress and the WHITE HOUSE that have as their goal the destruction of America as a superpower and pissing away money by confiscation of it form folks under wealth redistribution schemes Uncle Stalin would be proud of.
THAT’S THE DIFFERENCE!!!!
Bet it ain’t ballistic tip....probably soft point or round nose, etc.... or 55 grain.
Because they need to pay bills and/or buy stuff in the present.
There's some pretty precise wordsmithing there. Yes, if you are "a gold bug who has been losing money on the metal since the 1980s", then $1000 gets you in the black, not counting inflation of course.
But it's been a 400% bull market since 1999 or so, arguably half of the time period Honest Henry is implying that every gold bug has been brooding in his bunker.
Is that show “Gold Fever” still on? I always got a kick out of it. Changed back to Cable, and haven’t found it.
The trouble with gold is the capital gains tax on “collectibles” and all gold is classified as collectible. That means the tax is something like 38% on the gain.
* Guns
* Ammo
* Gold
* Silver
All five of my closest friends carry guns all the time. We are aged 62-68.
One friend bought his wife an AR-15 for Valentines Day. Last year, we built us our own shooting range.
Send $40,000 and I’ll go buy that gold for you. ;)
I’ve been saying much the same thing for quite some time now — despite its performance over the past decade, it’s not a bubble. Here’s my checklist from a post on September 16th:
- Nothing can be in a bubble unless it is well past the previous inflation-adjusted all-time high
- Gold regularly drops up to ten percent in three days or less and once dropped more than twenty percent nearly without a break in 2008. Bubble price action goes one way.
- In every case, gold “corrections” have taken weeks and months to recover. Bubble price action is exponential — not a grinding, grudging “recovery”.
- It is almost a commodity, yet supply is not readily available. That’s a supply shortage, not a bubble.
- Boiler-room companies (i.e. cash4gold) are begging the masses to sell to them, not to buy from them
- CNBC is still bashing goldbugs instead of worshipping them
- We haven’t seen a TIME or Business Week magazine cover with a cartoony John Q. Public engaging in borderline-sexual acts with Lady Liberty from the Saint Gaudens Double Eagle
- Nobody you know, knows what Lady Liberty from the Saint Gaudens Double Eagle looks like
- Hollywood hasn’t yet made gold-related TV shows, movies, etc.
A clarification: Yes there are plenty of commercials on TV (up to three in a single commercial break on many FOX daytime shows for example) for people begging you to buy gold, but these are long-established companies not recently created companies like cash4gold. We’ll see boiler-room operations springing up to sell gold, but they aren’t here yet.
http://www.freerepublic.com/focus/news/2340999/posts?page=30#30
I will also note that it was just this past week that Clark Howard on CNN hooted down a caller who wanted to buy actual gold and steered him to the gold ETF instead with the usual knocks regarding insurance, delivery, storage, etc.
The Mineral “Envelope of Money” currently has $13 in it.
If I thought that gold was going to $2,000 an ounce (the inflation adjusted 1980s price) I'd hang on to what I had and borrow money using the gold as collateral -- if I really thought gold was going to keep on going and going.
.. also I've advised a dear friend to shun the temptation buy gold and I'm looking to cover my butt. She's little but she's wiry.
What are the chances that private ownership of gold may again be outlawed?
There’s some pretty precise wordsmithing there. Yes, if you are “a gold bug who has been losing money on the metal since the 1980s”, then $1000 gets you in the black, not counting inflation of course.
In fact, if we assume that one invested an equal dollar amount each year since then (which is more like a real-world gold bug would do), starting at the peak, gold buyers are doing OK.
If you started at the end of 1970, your average cost per ounce would be $222.15. If you were the “fool” who started in 1980, your cost per ounce would be $420.64. If you started in 1990, your cost would be $387.42.
Obviously, having your money in other things in the 80s was wiser in hindsight, but this shows that no sane investor (who didn’t get foolish and go all in at the peak) didn’t do so bad after all. Also, note that in the early 70s, I don’t think it was even legal to buy gold.
Isn't it obvious? - To buy SILVER!!! :)
The trouble with gold is the capital gains tax on “collectibles” and all gold is classified as collectible. That means the tax is something like 38% on the gain.
(We’ll probably agree that receiving less-valuable greenbacks for your coins you spent more valuable greenbacks is hardly a gain.)
.. also I’ve advised a dear friend to shun the temptation buy gold and I’m looking to cover my butt. She’s little but she’s wiry.
If this is the peak, she won’t get killed. If it keeps going up, she’ll be grateful.
I’ll buy all you have
Gold bars? Are those the ones that have that expensive chocolate in them? Yummie!
Don’t forget, “Uncle” Stalin ransacked every nook and cranny of every single house after taking power. He left NOTHING for anyone except those in the cities who were kissing his ass.
Don’t forget, “Uncle” Stalin ransacked every nook and cranny of every single house after taking power. He left NOTHING for anyone except those in the cities who were kissing his ass. bye bye to your gold...
Video at link. It’s hard to watch, but riveting.
http://www.freerepublic.com/focus/news/2381589/posts?page=1
I don't know what planet Henry Blodget has been living on, but here on Planet Earth I have been making money on gold since the 1990's.
How can you be sure that you have enough?
Don't know. The more traumatic this downturn, the more likely it will happen, IMO.
Why Gold Bullion May Outperform Mining Stocks
By Rocky Vega
11/08/09 Stockholm, Sweden – “Bullion is likely to begin outperforming its producers”, the mining stocks, John Roque, managing director at WJB Capital Group, told Bloomberg. According to his technical analysis, “gold should do better than gold equities … it doesn’t mean the stocks won’t perform, but they will likely do less well relative to the metal.”
It’s been 14 months since mining stocks were last as expensive as they are now relative to physical gold. So, mining stocks may turn the performance lead back over to the bullion price. For four sessions in a row gold futures have risen, which the article attributes to the widely held belief that the Fed is going to be slow to raise interest rates. The Fed’s continued inaction is weakening the dollar and that tends to drive the price of gold higher in dollar terms.
Another reason bullion could outperform mining equities is the ongoing success of exchange-traded funds like GLD. Previously investors purchased gold mining stocks to capture increases in the value of gold, but they now also use gold ETFs which can be more direct and convenient. For investors on the fence between bullion and mining stocks, this is a clear vote in physical gold’s favor.
[snip]
Nurdly,
If you’d started buying 15 years ago, you could have had that 100K for around 30K.
I didn’t think you were being argumentative. No harm, no foul.
What a crook of sh#t. Of course if your plan is to buy high and sell low, then investments in Gold, Real Estate and Equities are all going to lose you money. I feel pretty good about investing at gold in the 250-300 dollar range thank you.
Yeah, I know....40 S&W is about the only thing WalMart usually still has on the shelves...Don’t know why this is unless there isn’t that much demand....all I know is 9mm, 45 ACP, 380ACP, 38 Special and 32ACP are pretty much taken a few minutes after they hit the shelves....
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