GOLD: Gold and Armageddon

Gold Shrugs Off Armageddon
13 JUL 1, 2015 9:00 AM EDT
By Barry Ritholtz

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This was the week Greece inched closest to chaos, as a bank holiday and a technical default caused markets around the world to erupt in turmoil. They recovered somewhat Tuesday, and futures looked stronger Wednesday morning, but on Monday, the NASDAQ Composite Index lost 2.4 percent, the Standard & Poor’s 500 Index lost 2.09 percent and the Dow Jones Industrial Average fell 1.95 percent. Volatility exploded, as the Chicago Board Options Exchange Volatility Index surged 35 percent, its biggest increase in two years, to 18.85.

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Regardless, gold seems to going nowhere fast. Feel free to send me an e-mail explaining how wrong and stupid I am. I have an archive of all the messages warning me that gold would teach me a lesson in humility. “You’ll see” these e-mails smugly assure me, “your comeuppance will be here any day now.” My plan was to respond to each on its fifth-year anniversary with a chart showing the performance of gold versus all other asset classes and the details of how much money has been lost.

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I’d never call anyone names.

And, I’m a gold bug. But most of my money is in the “casino”.

One has to think, that the Greeks stuffing euros under their mattress to avoid confiscation and the Swiss fund managers wanting to take physical possession of their Swiss francs to avoid negative interest rates, there is some merit in keeping small amounts of bullion coins at home as a hedge.

The “prepper” movement always says: “Store water, beans, bandaids, bullets, and bullion. Two is one; one is none.”

When you see the political corruption of Crony Capitalism, the large proportion of folks permanently on the dole, and the expansion of the welfare / warfare state, you must see that the balloon has to pop eventually.

Eventually, like the Little Red Hen in the children’s story, the makers will stop making and what do the takers take then?

I don’t know when the music will stop, but one best have a chair then.

And, I am POSITIVE that there is manipulation in the markets.

That being said, I’m content to average in to gold if they are selling it at a discount. As long as I take delivery. 

Ya ain’t gonna Corzine me. 


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One thought on “GOLD: Gold and Armageddon

  1. I have a long-established close online friendship with Edmund Contoski of and have been greatly impressed by his books in the area of economics and gold and such. His “Makers And Takers” is an absolute classic and was the book that finally gave me an understanding of the whys ‘n wherefores of the world’s gold-based economics. I’d always considered concerns about gold to be kind of silly — kind of thinking about the folk tale of the maiden who showed the king that a handful of grain was worth more than a handful of gold when one was starving. But Ed shows very nicely, in an incredibly readable way, the hows and whys of how that sort of monetary system evolved and how and why it continues to work.

    He has new book out, “The Impending Monetary Revolution, The Dollar, And Gold” which is also excellent, but a bit more technical. He explains such things as the “debt to GDP” ratio, and had actually made some predictions about how serious the Greek situation would get as the ratio approached 100% (It’s currently at about 130% I think.) According to his models the US is in a fair amount of trouble too: When Obama took office we were at around 70% and we’re currently just over 100%.

    Strongly recommend both books for anyone interested in the subject.

    – MJM

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