Posts by "fleetwood"

1 Posts by Anonymous "fleetwood":
Florida , United States
Posted Anonymously
14 years ago
May 12, 2010 1:46
First let me say that I've never really been a GOLD bug, but I've been long GOLD (GLD calls) since 1140 when it broke out of the 4 month inverse H&S patter on 4/7 (which I think projects to about 1275ish). I'm hoping for a pullback soon, so I can add to the position.

I'm not an economist, or expert analyst like Ashraf, but I think that the long-term fundamental backdrop in GOLD is extremely attractive over the next 3-5 years. Maybe more so than any other asset class... EUR,GBP, USD, and YEN all have some pretty serious issues to one degree or another, and I think that most people will eventually come to realize that you can't solve a global debt crisis by creating more debt. The major world governments and central banks have provided massive fiscal and monetary stimulus to the tune of trillions of dollars (I heard $32 trillion globally, but that was a while ago, so I'm sure it;s probably more) in the past 3 years; and world economies are no better for it. The crisis is just being pushed forward in time, and additional leverage has only added risk to the system. The European crisis has only begun, and I don't see how the EU can survive in its current form. I have doubts that they can even execute the plan to begin with, but even if they do the tax bases will take such a huge hit that the PIGS will be insolvent.

I'm also impressed that GOLD has continued to push higher in the face of a rising US dollar. However, I understand that their inverse correlation is not perfect. GOLD also seems to have re-gained it's "safe haven" status recently. During the deflationary spiral of 2008 GOLD went lower along with everything, but US Treasuries - Now it's going higher despite the "risk aversion" in the market. Treasuries and GOLD are also moving higher together.

It seems to me that GOLD is definitely a big winner if there is inflation, and I also can see scenarios where it would be a winner in a deflation as well (or at least outperform).... GOLD has been one of the best asset classes in the world over the past decade, and I think that the fundamental backdrop is even better now.

I know that Ashraf has been cautioning of a potential larger correction to 900 for some time now, but it seems like GOLD has everything going for it at this point. What could cause that to happen? (too much speculation?)

I'm also considering moving ALL of my long-term retirement funds into either physical or paper GOLD. I think that worst case scenario is a 20%-30% correction (which I don't see happening), but even if it did stocks, and most bonds would probably be down a lot more. Over the long-term I think it will outperform all other major currencies, so can somebody tell me why I should or should not do this?