Some people obsessed with Goldman Sachs (NYSE:GS) have nothing better to do than attempt to dig up dirt to portray them in a negative light, and in some cases that is well-deserved, but the recent faux scandal, where they're accused of offering conflicting gold advice to clients based on their wealth is an exercise in ignorance concerning the overall money-management sector and how it has always operated.
Of course clients are offered differing advice in general, as everyone has completely different risk and comfort levels, as well as goals.
The gist of the story is Goldman advised wealthy clients they the possibility of deflation makes it better to get rid of gold, while telling people with less net worth that the price of gold could rise as high as $1,300 over the next six months.
The highly unlikely deflationary scenario was a reference to the Federal Reserve standing back, along with other central banks, and staying on the sidelines in the current economic conditions.
Goldman said, "We see gold as being vulnerable to central bank inactivity in the face of rising deflation risk."
What is going on here, is high-net-worth clients are always more concerned about preservation of principle than those with lower net worth.
So any threat or possibility of losing money is part of the strategy of managing their accounts. Others aren't so worried about that, as they're willing to take more risk in order to build their net worth, as it's not to the level of their goals.
With that in mind, this isn't contradictory whatsoever, but laying out possibilities to two completely different mindsets and goals of people and institutions with different financial strategies.
Strategies of preservation deal with protection, while strategies of growth deal with more risk. It's not exactly rocket science, and only the clueless and those outside the financial management industry could make the silly, unwarranted and ignorant statements made in this case.
Goldman may deserve castigation in a number of areas, but this is one which reveals the writer has no idea of how the industry works, and makes him and his media outlet look stupid.
Showing posts with label Gold Investors. Show all posts
Showing posts with label Gold Investors. Show all posts
Monday, August 23, 2010
Thursday, August 12, 2010
Investors Flee to Gold For Safety as Economy is in Shambles
Very few people seem willing to admit the U.S. and global economy is under extreme pressure. Investors know it though, and fled to gold as a safe haven today, pushing gold futures up to their highest level in eight weeks.
The words "unexpected" continue to come from economic writers concerning jobless claims rising, Europe not being as strong as asserted, and China's production falling.
Even today economic writers use terms like the "recovery is slowing," as if there ever really was an economic recovery.
Jobless claims climbed to a five-month high today, while industrial production in Europe and China both fell. In the case of China, it plummeted to an 11-month low.
This doesn't include the horrid sovereign debt crisis of Europe, which is being ignored or covered up by the mainstream press, who seem to believe a few turns of the knob over and everything was magically turned around.
Governments and the press seem to be attempting to hold up the global economy by wishful thinking and Disney-like hopes and dreams, rather than the harsh realities that should be brought out into the open so it can be understood and prepared for by people.
The fact that the Federal Reserve "changed it mind" concerning dropping its monetary stimulus points to the real condition of the economy. They committed to doing whatever it takes to deal with the weak economic conditions recently, again revealing there are extreme concerns about what is really happening.
Gold investors should rejoice, as the Treasury and Federal Reserve can't help themselves. They're going to continue to print money and buy U.S. debt in efforts to artificially prop up the economy.
What don't they get about it not working in the recent past? How much they going spend? Two trillion this time?
Either way, they are going to do the very predictable, and we can count on that. That means gold prices are going to take off again, as they have today.
The words "unexpected" continue to come from economic writers concerning jobless claims rising, Europe not being as strong as asserted, and China's production falling.
Even today economic writers use terms like the "recovery is slowing," as if there ever really was an economic recovery.
Jobless claims climbed to a five-month high today, while industrial production in Europe and China both fell. In the case of China, it plummeted to an 11-month low.
This doesn't include the horrid sovereign debt crisis of Europe, which is being ignored or covered up by the mainstream press, who seem to believe a few turns of the knob over and everything was magically turned around.
Governments and the press seem to be attempting to hold up the global economy by wishful thinking and Disney-like hopes and dreams, rather than the harsh realities that should be brought out into the open so it can be understood and prepared for by people.
The fact that the Federal Reserve "changed it mind" concerning dropping its monetary stimulus points to the real condition of the economy. They committed to doing whatever it takes to deal with the weak economic conditions recently, again revealing there are extreme concerns about what is really happening.
Gold investors should rejoice, as the Treasury and Federal Reserve can't help themselves. They're going to continue to print money and buy U.S. debt in efforts to artificially prop up the economy.
What don't they get about it not working in the recent past? How much they going spend? Two trillion this time?
Either way, they are going to do the very predictable, and we can count on that. That means gold prices are going to take off again, as they have today.
Friday, May 14, 2010
European Run on Physical Gold
Europeans have been caught by surprise over the announcement that not only is the EU going to bail out Greece, but they put just under $1 trillion on the table to redistribute to the other socialist countries in the region.
Warnings of the consequences to the euro have went unheeded, and now Europeans are not only pouring money into gold, they're also ordering gold bullion at a pace of demand that can't be met, and already some gold dealers have shut down orders in response to the demand, as they simply can't supply it.
The actions of the EU leaders over the last month just over Greece is part of the problem, as it was highly contested as to whether or not they were going to provide them with a bailout. That seemed to imply it was questionable as to whether or not that was going to happen. And now seemingly out of nowhere the announcement comes they're ready to bail out every country that needs help, or at least says they need help.
This is why so many rushed to gold, as they were caught off guard with now generous the EU was going to be with their money, and how that would drive down the value of the euro, and eventually bring it to an end.
Something stinks in how this has happened, and to abruptly turn around and not only bail out Greece, but offer the type of funds that were offers, seems to imply this may have all been orchestrated by politicians and central bankers over a period of time, as it doesn't really make much sense in how it burst upon the scene the way it did, as if there was this huge, inner battle going on, and suddenly everything is okay, and they'll add an additional $800 billion to the pot for good measure.
If there had really been that much resistance, it's doubtful this is how it would have played out.
It must be understood what is happening here. This really isn't a bail out of the nations, this is a bail out of the banks that bought the bonds of these nations.
What this means is these bankers were supporting these socialist, welfare, entitlement societies for many years, which were created by the politicians to garner favor in order to remain in office, and funded by the outrageous acquisition of debt that had no way of being repaid as it was played out. Now it has come home to roost and is being exposed as the fraud it is.
Next step? American and other westerners are going to be called on again to bail out banks, but this time banks which helped created socialist, entitlement cultures where people believe they deserve to be taken care of for nothing, and unions run by these socialists demanding extraordinary pensions and perks with very little in the way of productivity to pay for them. This is why socialism needs to be completely and totally abandoned, along with Keynesianism, which provides the theoretical and intellectual justification for this type of spending.
For Europeans and other western countries, they're again being asked, no forced, by their governments and central banks to bail out these losers, robbing our children and grandchildren of their inheritance so these others can live the easy live at our expense.
The Federal Reserve is already trying to cover its rear-end by saying they aren't going to provide funds so these socialists can live the good life, rather they're bailing out the banks, who I guess, are still too big to fail. What a nuthouse.
Europeans are starting to understand the threat, and since Germans have had this experience in the past, I'm sure they're leading the way in trying to buy physical gold in order to hold onto their wealth, which is slipping away with the failure of the euro.
Warnings of the consequences to the euro have went unheeded, and now Europeans are not only pouring money into gold, they're also ordering gold bullion at a pace of demand that can't be met, and already some gold dealers have shut down orders in response to the demand, as they simply can't supply it.
The actions of the EU leaders over the last month just over Greece is part of the problem, as it was highly contested as to whether or not they were going to provide them with a bailout. That seemed to imply it was questionable as to whether or not that was going to happen. And now seemingly out of nowhere the announcement comes they're ready to bail out every country that needs help, or at least says they need help.
This is why so many rushed to gold, as they were caught off guard with now generous the EU was going to be with their money, and how that would drive down the value of the euro, and eventually bring it to an end.
Something stinks in how this has happened, and to abruptly turn around and not only bail out Greece, but offer the type of funds that were offers, seems to imply this may have all been orchestrated by politicians and central bankers over a period of time, as it doesn't really make much sense in how it burst upon the scene the way it did, as if there was this huge, inner battle going on, and suddenly everything is okay, and they'll add an additional $800 billion to the pot for good measure.
If there had really been that much resistance, it's doubtful this is how it would have played out.
It must be understood what is happening here. This really isn't a bail out of the nations, this is a bail out of the banks that bought the bonds of these nations.
What this means is these bankers were supporting these socialist, welfare, entitlement societies for many years, which were created by the politicians to garner favor in order to remain in office, and funded by the outrageous acquisition of debt that had no way of being repaid as it was played out. Now it has come home to roost and is being exposed as the fraud it is.
Next step? American and other westerners are going to be called on again to bail out banks, but this time banks which helped created socialist, entitlement cultures where people believe they deserve to be taken care of for nothing, and unions run by these socialists demanding extraordinary pensions and perks with very little in the way of productivity to pay for them. This is why socialism needs to be completely and totally abandoned, along with Keynesianism, which provides the theoretical and intellectual justification for this type of spending.
For Europeans and other western countries, they're again being asked, no forced, by their governments and central banks to bail out these losers, robbing our children and grandchildren of their inheritance so these others can live the easy live at our expense.
The Federal Reserve is already trying to cover its rear-end by saying they aren't going to provide funds so these socialists can live the good life, rather they're bailing out the banks, who I guess, are still too big to fail. What a nuthouse.
Europeans are starting to understand the threat, and since Germans have had this experience in the past, I'm sure they're leading the way in trying to buy physical gold in order to hold onto their wealth, which is slipping away with the failure of the euro.
Saturday, April 10, 2010
China and Future of Gold
There are so many interesting things that China brings to the table reference to gold in the years ahead, it's hard to know where to start.
For example, they are unique in the world other than their neighbor India for the consumption of gold as jewelry, which will probably actually bring demand for use of the metal beyond investment, and to a lesser degree, industrial uses.
Although India has always had the demand for gold, it wasn't near enough to make a difference in normal economic times, so that was never really a factor. But add millions of Chinese to the retail gold market, and it has a lot of potential to move gold for years to come, although that has yet to play out to see what type of level that will be.
One thing for sure, the Chinese like gold jewelry, and with the growing middle class with money to spend, there will definitely be a huge increase in demand, but again, we have to wait until that plays out going forward.
Estimates from the World Gold Council have Chinese gold consumption doubling over the next decade, so that's not an insignificant amount.
The same thing with investment demand from China. The Chinese have been encouraged to acquire physical gold, and gold investments in other areas as well, increasing the support and foundation under gold in a way we may have never had before. That means we're entering into uncharted territory for demand, and even in healthy economic times that could be a factor in shoring up gold at a much higher price level.
Industrial demand isn't that much of an element in the price of gold at this time, and even with the huge Chinese market it's hard to see that being a big part of the gold demand picture.
All taken together, this is a major shift in gold, and as India continues to create a larger middle class with more spending power, we'll see gold jewelry demand grow there too, probably along with investing in gold. It will demand on how high the price of gold will go and how much the people in the middle class have to spend.
Either way, China is leading the way in gold, and there can be no doubt the way we viewed gold in the past several decades has changed forever, and it's anyone's guess how far it'll go, especially as people increasingly consider it a currency; something that hasn't happened in a long time.
For example, they are unique in the world other than their neighbor India for the consumption of gold as jewelry, which will probably actually bring demand for use of the metal beyond investment, and to a lesser degree, industrial uses.
Although India has always had the demand for gold, it wasn't near enough to make a difference in normal economic times, so that was never really a factor. But add millions of Chinese to the retail gold market, and it has a lot of potential to move gold for years to come, although that has yet to play out to see what type of level that will be.
One thing for sure, the Chinese like gold jewelry, and with the growing middle class with money to spend, there will definitely be a huge increase in demand, but again, we have to wait until that plays out going forward.
Estimates from the World Gold Council have Chinese gold consumption doubling over the next decade, so that's not an insignificant amount.
The same thing with investment demand from China. The Chinese have been encouraged to acquire physical gold, and gold investments in other areas as well, increasing the support and foundation under gold in a way we may have never had before. That means we're entering into uncharted territory for demand, and even in healthy economic times that could be a factor in shoring up gold at a much higher price level.
Industrial demand isn't that much of an element in the price of gold at this time, and even with the huge Chinese market it's hard to see that being a big part of the gold demand picture.
All taken together, this is a major shift in gold, and as India continues to create a larger middle class with more spending power, we'll see gold jewelry demand grow there too, probably along with investing in gold. It will demand on how high the price of gold will go and how much the people in the middle class have to spend.
Either way, China is leading the way in gold, and there can be no doubt the way we viewed gold in the past several decades has changed forever, and it's anyone's guess how far it'll go, especially as people increasingly consider it a currency; something that hasn't happened in a long time.
Wednesday, April 7, 2010
Jim Rogers: Commodity Bull Market Continues
Jim Rogers on Commodities
Jim Rogers reiterated again recently that the commodity bull market will continue on its run, as demand for raw materials continues to rise and supply fights a losing battle to keep up with it.
Rogers added that gold investors should hold on to their positions in the metal, as he maintains it'll continue to rise on through the next decade.
While he acknowledges China and India have huge markets that will continue to grow, they alone cannot carry the rest of the world on its economic shoulders, and other countries will need to grow if we're to eventually experience a sustainable recovery ... and I would add, whenever that recovery actually begins.
Gold soared to a 3-month high Wednesday, as ongoing concerns over the Greece debacle continue, and liquidity seems to be the problem again, as consumers and others pull their money out, with banks doing their repo thing with Greek banks.
Although the dollar and yen will continue to be thought of in terms of places of safety, gold is becoming more and more to be thought of as an alternative currency which is far safer than any other in the world.
The U.S. dollar isn't really thought of as safe, just the lesser of evils between all paper currencies.
Jim Rogers on Commodities
Jim Rogers reiterated again recently that the commodity bull market will continue on its run, as demand for raw materials continues to rise and supply fights a losing battle to keep up with it.
Rogers added that gold investors should hold on to their positions in the metal, as he maintains it'll continue to rise on through the next decade.
While he acknowledges China and India have huge markets that will continue to grow, they alone cannot carry the rest of the world on its economic shoulders, and other countries will need to grow if we're to eventually experience a sustainable recovery ... and I would add, whenever that recovery actually begins.
Gold soared to a 3-month high Wednesday, as ongoing concerns over the Greece debacle continue, and liquidity seems to be the problem again, as consumers and others pull their money out, with banks doing their repo thing with Greek banks.
Although the dollar and yen will continue to be thought of in terms of places of safety, gold is becoming more and more to be thought of as an alternative currency which is far safer than any other in the world.
The U.S. dollar isn't really thought of as safe, just the lesser of evils between all paper currencies.
Jim Rogers on Commodities
Saturday, March 27, 2010
Jim Rogers: No Currency Trustworthy
Jim Rogers on Currencies
In an interview on CNBC, Jim Rogers was asked about the lesser of evils concerning paper currencies, and he responded at this time there is no currency that stands in a strong position.
Rogers added he could foresee a time in the not-too-distant future where we may have to hold all of our money in real assets.
"All governments around the world are debasing their currencies," said Rogers, and even when looking for the best among the worst, Rogers, there isn't one that is "attractive on a fundamental basis."
As far as what he would hold at this time, Rogers said he's looking for cheap raw materials, and natural gas and and silver fit that bill nicely at this time.
On the other hand, speculators have entered the gold and oil markets, and Rogers said with the price of gold and oil going up so quickly, it's better to let them "consolidate and rest" for now.
In an interview on CNBC, Jim Rogers was asked about the lesser of evils concerning paper currencies, and he responded at this time there is no currency that stands in a strong position.
Rogers added he could foresee a time in the not-too-distant future where we may have to hold all of our money in real assets.
"All governments around the world are debasing their currencies," said Rogers, and even when looking for the best among the worst, Rogers, there isn't one that is "attractive on a fundamental basis."
As far as what he would hold at this time, Rogers said he's looking for cheap raw materials, and natural gas and and silver fit that bill nicely at this time.
On the other hand, speculators have entered the gold and oil markets, and Rogers said with the price of gold and oil going up so quickly, it's better to let them "consolidate and rest" for now.
Friday, March 19, 2010
Gold Reserve Currency Says Citigroup (NYSE:C) Analyst
Gold as reserve currency
In an extraordinary statement, Citigroup (NYSE:C) analyst Dennis Gartman said the major reason for the unique behavior of gold in regard to its usual inverse relationship with the U.S. dollar has changed, is people are now considering gold to be a real reserve currency, equal to the U.S. dollar.
Of course for some that follow these things closely, they've believed that for years, but to see this in the mainstream media is a major story, to say the least.
So when the U.S. dollar goes up and gold goes up with it, that's a sign that many investors now consider gold as much of a reserve currency as the dollar is. And Gartman added this isn't just a fad, but a "trend [that] shall continue months, if not years, into the future."
Gold as reserve currency
In an extraordinary statement, Citigroup (NYSE:C) analyst Dennis Gartman said the major reason for the unique behavior of gold in regard to its usual inverse relationship with the U.S. dollar has changed, is people are now considering gold to be a real reserve currency, equal to the U.S. dollar.
Of course for some that follow these things closely, they've believed that for years, but to see this in the mainstream media is a major story, to say the least.
So when the U.S. dollar goes up and gold goes up with it, that's a sign that many investors now consider gold as much of a reserve currency as the dollar is. And Gartman added this isn't just a fad, but a "trend [that] shall continue months, if not years, into the future."
Gold as reserve currency
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