Posted on 10/24/2001 6:14:50 PM PDT by robnoel
I have taken many hits over the years when it comes to that yellow metal....otherwise known as gold....can I now get some respect....since January these are the facts...
Durban Deep . . . . +84.45%
Gold Fields . . . . +35.47%
Harmony . . . . . . +29.03%
Newmont . . . . . . +24.03%
Barrick . . . . . . - 1.5%
S&P500 . . . . . . -18.66%
Nasdaq . . . . . . -32.57%
I rest my case!
Q: little movement in gold to correspond to the circumstances.
A: The war on gold started in 96....Greenspan expanded his new theory that the financial worlds enemy was inflation....because golds role as a inflation indicator there is no question that in order to achive lower inflation targets gold prices had to fall....if gold went the other way who would beleave what the Fed said
This policy caused the following letter to Paul O'Neill....response unknown
Clarify U.S. Policy on Gold and Gold Accounting Paul O'Neill Secretary of the Treasury ..
I ask you to please clarify the public confusion over the Government’s handling of its gold reserves. There are allegations the U.S. government is involved in manipulating the price of gold. Reclassifications of gold reserves has added to the confusion.
I am writing to ask you as Secretary of the Treasury to clarify the public confusion surrounding the United States Government’s handling of its gold reserves. In the spring of 2000 GATA or Gold Anti-Trust Action presented a 120 page document to the Senate Banking Committee and members of Congress. In this comprehensive document GATA accused the U.S. government and a number of Wall Street bullion banks of manipulating the price of gold for the purpose of maintaining a strong dollar, protecting the huge gold short positions of certain bullion banks (estimated to be as high as 15 000 tonnes), and masking the rate of inflation.
The GATA document is titled Gold Derivative Banking Crisis. GATA alleges that a significant amount of the gold reserves of the United States have been sold without public knowledge by the Exchange Stabilization Fund to keep the supply of gold strong and thus to keep the price of gold down.
If what GATA alleges is true, any investor buying gold or gold stocks is buying into a rigged market. If the allegations are true, many investors have lost money through no fault of their own because of alleged, illegal market manipulation. .....
I'll buy all you can sell at that price!!
The revealing story of a rancher and the national debt
Investigative Documentary By David Morgan, The Asheville Tribune
Case History: Hage v. United States
After years of successfully ranching in California, Wayne & Jean Hage (she is now deceased) purchased a large cattle ranch in Nevada, Pine Creek Ranch, in the spring of 1978. The acreage involved is approximately 752,000 acres. However, as it is mostly desert land, the land's ability to support cattle is far less than might be supposed from its size.
Rob, gold has been the single worst investment over the last twenty years. It is STILL a bad investment.
But, hey, you've got folks you can convince otherwise, so, I hope you get rich off those suckers.
1)...Israel going to war within months
2) ..Terrorists attack and kill 6000 Americans in the US
3)...biological attack becomes a reality in the US
4) ...US goes to war...again
I would of said gold to trade around $600.00.....now that we know that all the things that used to move gold have not there is only one thing left....the strength of the US dollar....the odds now in favour of higher gold prices are 50/50....you place your bet and take your chances :-)
For several years, especially since 1998, we have witnessed the attempt by the mainstream establishment to humble gold and to delegitimize its significance and value. Part of the reasoning that has been used to bring derision to gold has been in its inability to rise again above 300 dollars an ounce.
Yes, it is true that gold has stayed below 300 dollars for several years. But as a store of value how much has the price fluctuated in percentage terms? Between 1998 and October 9, 2001 gold has maintained an average of $280.42. Even taking into account the lowest price gold sank to, $252.80 July 20, 1999, we only see a change in percentage terms of around 10 %. What is the significance of these numbers?
I remember well during the euphoric days of the great bull market analysts decrying gold's poor rate of return while the Wall Street hero stocks at the time were ascending every year 15%, 25%, and in some cases even doubling in price before the end of the fiscal year. Remember Cisco, Intel, Lucent, and Yahoo? These served as the cornerstones in everyone's portfolios. Remember Ariba, Ebay, JDS Uniphase, Microstrategy, Palm, Priceline.com, and Qualcomm? These were the stocks that were going to make everyone rich. Collectively these stocks have decreased over 61 times in value. Which is to say that 100,000 dollars invested equally in these eleven cornerstone stocks is now worth approximately 1,639 dollars. That is a depreciation of over 98% in value.
Oh, that barbarous relic, gold, that has seen its price fluctuate on average only 10 % these past several years!
Yahoo sold for 250 dollars and has descended as low as 8 dollars a share. Let me calculate: a 97% reduction? Think for a moment. There actually were those who paid 250 dollars a share for Yahoo. Microstrategy ascended to the lofty high of 273 dollars to as low as $1.10. And the Internet bubble stocks? Too many to mention.
100,000 dollars invested in the darling Microstrategy at its high of 273 dollars a share has seen its value plummet to $402.93. What if the individual holding Microstrategy at its peak, had sold the stock, and consequently invested the proceeds in that barbarous relic gold, and in particular a gold mining stock? If that individual had had the foresight to sell Microstrategy at its peak, and invest that 100,000 dollars in NovaGold he would have seen his money increase almost 14 times to the lofty sum of $1,380,000. But, oh, I forgot, "I'm in it for the long-term". Or another favorite? "You can't sell now and lock in your profit because you will have to pay taxes."
The most horrendous thing concerning the bashing of gold has not just been its price manipulation, but the horror of horrors is that investors have been encouraged to ignore gold totally, and not consider any portion of it as a part of their portfolio.
Just 5 years ago, and for years and years investors were advised by almost every professional money manager to keep a portion of their portfolio in gold equities to act as a cushion in the event of a market downturn. As the bulk of common stocks would decrease in value during a bear market, the solid gold company stocks would appreciate in value - thus saving many a portfolio from utter devastation.
Goldcorp, Meridian, Agnico-Eagle, Glamis, Newmont, Placer Dome, Homestake, Gabriel, Harmony, Gold Fields, Durban Deep: these conservative gold companies on average have doubled in value this past calendar year.
Gold in the past was always considered at least to be an insurance policy during a bear market. Gold was a life preserver on board a ship in the middle of a deep and uncertain ocean. Remember the Titanic and how the passengers were told that they didn't need lifeboats or life preservers because the ship was unsinkable? So also investors have been told concerning their need for gold and gold related equities. How many portfolios would have been saved this past year and a half if investors had but read the pages of history and followed the old practice of blending in a little yellow within their portfolio?
Even if gold takes a while to go past the 300 dollar price I will not lose faith in it as an investment and a store of value. Also, the longer it remains below the magic 300 figure the greater and stronger the eventual rise will be.
There is an old saying that says "follow the money". To keep my perspective concerning gold's true value I have always followed the money, and considered who still is investing in that most noble of all metals, gold.
A gold investor, Warren Beckwith, made the comment a couple of years ago "Banks don't run mines and we don't run banks." How unfortunate a statement -- for without the gracious loans provided by the banking industry, never would any gold mine produce a single humble ounce of gold. Mines need the generosity of the moneylenders to provide the huge sums of capital required to explore, drill, develop, and create a producing, profitable gold mine.
Gold has always had an aura of "inaudibility" and "invisibility".
Gold is inaudible as it quietly maintains its presence making not a sound as it sits silently buried under the deep earth or resting quietly in a hidden vault. Gold is invisible because its power, aura, and allure lie hidden, buried and entrenched in everyone's heart and soul. Every true believer knows that even the City of God and its streets are made of pure gold, like clear and transparent glass.
Gold may remain inaudible and invisible, hidden and buried, as over 12 tons today remain buried under all the rubble of what once was the World Trade Center, but it is still there, and it will still be of value and worth when it is eventually unearthed and brought back to the surface.
Aw, give the dude another chance. He knows all about the gold business, very strong. Besides that he is on top of the political situation in the southern parts of Africa.
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