Oldtent Archives 2007 - 2008

They are doing all those things because they are terrified of the deflationary forces in play.  If there was no deflation, or no severe risk of it, none of those things would be done.

They will try to inflate their way out of it.  Their previous attempts succeeded, and I am not betting that they won’t succeed again, but this time if they are “successful” I think it will be a Pyrrhic victory.  As it sounds like they are going to monetize all the bank debt, their success and failure seems assured.

….They got enough trouble….first day of Winter and all

incongruous , oil/gold ratio is really relevant as a criterion to decide that gold is now a good buy because its price is so out of line with the price of a barrel of oil. 

Isnt there a deal dating way back between the US administration(representing not only USA but also Britain and the rest of Europe too)   and Saudi Arabia (representing the OPEC group) which says how the two respective parties will manipulate and reciprocate the two commodity prices, that is the price of an ounce of gold and the price of a barrel of oil.?  (For example,  if you, Saudi Arabia , keep the price of oil low for us petroleum consumers in the U.S. then we  in the U.S. will use the PPT and the FED and the Treasury to keep the price of gold low for you, as you accumuate gold from your petroleum sales.) 

So, in my opinion, whatever the Saudis and the US administration decide might change the oil/gold ratio or gold/oil ratio from time to time.  These ratios are not usable in my opinion as a criterion for investment decisions, because the sheik or the president could alter the ratio at any given time for some particular reason.

Please correct me if I am wrong in my opinion  that the gold/oil ratio or oil/gold ratio at any given time is irrelevant.  Cheers.  Equiz.

If you decide to go for it, I sure wish you the best of luck, as you said the volitility could be a killer. Timing is everything. Me, I haven’t got the guts to try it. ha just call me chicken-little…..The ’set-up’ sure is enticing though

But the volitility in that trade lately could be a killer….

I guess being long gold stocks is a play on the Gold/Oil ratio

Though it was written in jest, why would you hold investments you do not believe in?  As far as the deflation versus inflation thingy- I think it is pretty obvious by now.  Massive deflationary background created from decades worth of spending and corruption is being combatted with massive dollar inflation.  The result is stagflation in spades.  Deflation……yes of course, in fact, the Dow is down against Gold by around 73%……….but it is still up in Dollar inflation terms.  The PM stocks are up against Gold, except for the explorers that move really big in the 5th wave environment.  That is the “recognition point” when investors who are confused by the deflation versus stagflation thingy finally “get it” and chase everything that holds Gold and Silver in deep storage.  The same thing is just beginning in the oil sector, now.

  “Can’t eat gold is a misdirection” - true

  “Can’t eat gold is a non-starter” - huh?

not for those who don’t have any. If fit hits the shan and the folks have no gold, dollars are worthless, what do you think they will trade with? What will they value? Food, fuel, water. Frankly, if things get Armageddon type bad, I won’t trade any of those three things for your gold.

   You’re right about housing, much further to fall. Same with flat screen TV’s and SUV’s. That’s about the sum of deflation.

   We are talking about gold as a currency, nothing more. JS himself doesn’t view it on any other level. It is the great equalizer against irresponsible governMENTs and CB’s.

  BTW - You won’t get a taker on your bet. I offered a measly $20 that NEM would hit $49-50 before $39-40 after a prognostication was made that NEM “could” go to the $36-38 area.

In his previous life, grimace did a good job of bringing this to our attention, as well as others. The ratio is now lower than when the PM stocks bull market began on 11/15/00. Believe it or not!

JBI

PS - I believe we’re just about at a point where GOLD has no other option but to go……..

…… and in a BIG way.

summertime……when the livin is easy…..

Sounds like ther should be a song there somewhere HA

If I were an Arab oil Schiek I think I would be trading a little of my oil for a whole lot of gold…..

That relationship sure seems way out of wack.

FGC…..you still thinking about the shortin oil and long gold ?

“The ratio of Gold to Oil from 2006 to present (sitting at 6 currently). The chart is showing an extreme bargain of gold relative to oil. If the ratio were to restore to the peak in 1999 of 26, today’s $130 oil price will equate to a gold price of $3380/oz.”

“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.” Jesse Livermore, Reminiscences of a stock operator.

From…….
www.gold-eagle.com/editorials_08/lee061908.html
Not All Metals Are Created Equal
Metals Review For 2008 And 2009
(Part I)

John Lee, CFA
June 19, 2008

~ ~ ~ ~ ~

JBI, still wanting to buy more GOLD and Silver

For some reason my mac doesn’t like that link. Safari shut down twice when I tried to link to it. Don’t want to try it a third time. Mac guys—–have a clue??
Dusty

….the Longest Day of the Year…..
…Still Bright here till 9:45 PM

….How about Our Posters in Scandinavia…?
…..Midnight Sun ?