Posted on 05/24/2010 5:58:00 AM PDT by blam
Gold Is A Horrible Investment, Too, Says Prechter
Henry Blodget
May 24, 2010, 8:42 AM
We had uber-bear Bob Prechter on TechTicker last week. Her thinks the Euro will disintegrate. He's not optimistic about gold, either:
Peter Gorenstein: It looks like it’ll take more than a trillion dollars to bring buyers back to the stock market. European markets continue to fall Friday despite Germany’s approval of the massive euro zone bailout. The major European indexes are each falling 2% in intraday trading.
The euro, however, is getting a slight boost. It's off its recent four-year lows and is now trading for more than $1.25. Still, sentiment remains negative on the future of the euro.
Usually a contrarian, Robert Prechter of Elliott Wave International isn’t so inclined when it comes to the euro. Near term, the euro might rebound, but he says it’s entirely possible the European Union will break up in the next 10 years.
Of course, the euro’s recent loss has been the dollar’s gain. Prechter predicted a strong move in the dollar on Tech Ticker over a year ago. “The dollar appeared to be on the verge of disintegrating last November,” he tells Aaron in the accompanying clip. “I thought that was one of the best contrary opportunities I’ve ever seen.'
Prechter is less enthusiastic now that everyone is piling into the dollar. “The dollar is no longer a bargain,” he says. “I don’t think the bull market is over but I think the best of it for the time being is over.”
Meanwhile, the most popular alternative to currencies, gold, isn’t such a good buy either, according to the veteran market watcher. “It’s losing upside momentum at the same time more people are getting more enamored with it,” he notes.
[snip]
(Excerpt) Read more at businessinsider.com ...
A contrarian would notice that there is an ad selling gold every 5 minutes on TV and the radio.
A contrarian would notice that if you ask just about anyone they will tell you it is a sure thing that gold is going to be taking off any day now.
didn’t we just read in the last few days about Soros, Russia, China, etc. upping their gold holdings?
Maybe I’m having a “spell” or something?
Unfotunately, investing in currencies is like trying to find the currency that sucks the least. The dollar may be strong in relative terms, but that is not saying a whole lot. It's not saying a whole let about the economic prospects around the globe, either.
A trillion in debt is suppose to make people happy during a dent crisis?
Blodget is making his prediction on gold price based on his belief we are in a deflationary depression. China is buying gold because the need to hedge their US Treasury position. Personally, I doubt we are in a period of large deflation. The Fed is propping up the money supply too much.
“.... sucks the least”
Wow, that just about sums up ... EVERYTHING at the moment.
Precter has been bearish on oil since it was $300.
It kinda does, doesn’t it?
I’m long SPAM, ammo, and Band-Aids myself.
Precter has been bearish on gold since it was $300 in '01
Without gov't props, especially the "prop" on healthcare costs, businesses would understand their risks and be willing to invest, which means hiring. The current administration is creating an atmosphere of economic chaos, making it easier for investors to sit on the sidelines and maintain their cash instead of attempting to grow it. Basically, get the gov't out of the way, and things will improve.
I’m no expert, but I thought that gold was generally not seen as an “investment”. Rather, it holds value during times of inflation. If inflation is coming, owning gold provides some protection.
Gold, indeed, is a “horrible investment”.
However, it is a wonderful “wealth preserver”.
I’ve said to many these are unique times, as we simultaneously have both strong inflationary pressures (debt, borrowing, printing of money, etc.) and strong deflationary pressures (housing, equities, real estate, etc.). Right now the two are holding each other in check, IMHO - thus hiding what’s really going on.
This is why both the inflationary pundits and deflationary pundits are right in the fundamentals of their arguments.
Eventually one will break loose as a greater force than the other, and that’s when all h*ll will break loose.
And there is no prophet to tell us which one will be the stronger ultimately determinate force.
Of course, I have no idea what I’m saying as I have only a degree in English, graduate work in Psych, years of executive experience in electrical engineering, computers and construction.........
arlis
Bucket with a hole in it. The deflationary cycle is pretty much out of the Fed's control now and probably has been for some time now.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.