Comments on: Where Is Your Golden Idol Now, Babylon?

by: Babak

Sat, 01 Nov 2008 01:50:22 +0000

Bill, if we do have deflation or even zero inflation, then gold won’t go anywhere anytime soon. The best time to buy gold is when inflation is so high that real rates are zero or negative. But if we see deflation, even at a 0% interest rate, real rates will be positive. Just sayin’

by: Bill K

Fri, 24 Oct 2008 16:48:27 +0000

I’m buying Gold for the first time in my life. Seriously. Picked up GLD (Gold ETF) a few minutes ago in the 72s. while Gold is in the 730s. I think it is a great “end of the world” play and might also go up if the market recovers. Seems too good to be true. You may remember I called Gold just another commodity that’s bubble had burst a couple of months ago in the mid 900’s on this website. So that is a pretty sharp change for me.

I think getting money out of the bank and putting it in your sock drawer and holding on to Gold might be very popular in the next couple of weeks if this market selling continues. I think these actions are over the top but that doesn’t mean they won’t happen if panic continues. Crazy times and people might get a little crazy.

Bill K

by: Babak

Fri, 24 Oct 2008 05:05:19 +0000

Tony, I’m still leery of gold stocks.

by: Tony

Wed, 22 Oct 2008 23:44:36 +0000

Hi Babak, The K-ratio closed at .23 today and the HUI also closed below support of 175. Unbelieveable, the HUI is down over 50% in once month. With the HUI down nearly 70% below its high of 519.68, do you think it might be a good time to scale in? Tony

by: Ruben

Sat, 18 Oct 2008 20:40:49 +0000

I agree that this gold thing is a big myth, if anything in bad economic times gold values will sink along with other commodities.

by: PEJ

Sat, 18 Oct 2008 09:49:08 +0000

Hi Babak
I haven’t jumped in, but I started to look for appropriate vehicles to do so, and I couldn’t find anything for HUI. Do you have any to suggest? Hopefully ETFs?

by: SilverRider

Sat, 18 Oct 2008 09:14:42 +0000

Gold will rise and along with his ride will tag his little brother Silver….Together they will scale true mountains..as rugged and sacred as they may be, new heights will be reached..A new beginning is just around the corner..and the metals will stand and be worshipped once again..they will call this era THE GOLDEN AGE…take notice all….you have been warned…

by: Babak

Sat, 18 Oct 2008 03:46:48 +0000

I wouldn’t jump in right now because I think we are headed down a bit more. Hulbert just wrote about the sentiment he tracks for gold and it is at +37.9%. To put that into perspective, in October 2002 it was -21%

by: Russ Abbott

Fri, 17 Oct 2008 19:55:27 +0000

Your K-Ratio article suggested buying gold — or gold stocks — when the K-ratio is down to .4, as it was last May/June. So now it way below that. So why not buy now?

by: Johan Lindén

Fri, 17 Oct 2008 14:01:46 +0000

Babak, I think your exemple DO prove that gold has been some kind of haven this year. Gold has fallen by as much as the dollar has gained compared to for exemple the Euro.

But even in absolute terms a minus 4 for is “okey” compared to how everything else has gone. Sure, just having cash would have been better, but I still prefer to risk a little premium to have that gold in case hyper inflation comes. None of your studies admits that hyper inflation can be a reality. And with fiat money it will happen some day. I rather be proactive.

I think it is lunacy no not always hold a little bit of that real currency called gold. Just as an “insurance” one should always have say 10%. In these days where governments and central banks seems to have lost control I would not hold under 20% in gold and I would be ready to buy more.

Thanks for good input

Disclamer: I am currently holding gold.