Next Level: GOLD $1,350.00

that is a pretty good sign that we are going to see it start to trend down.

 

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Part of my job is to cruise the investment news every day starting at 6:30 PST.

 

Marc's been wrong before..he's flamboyant, a firebrand and likely gets quoted a lot because he's made some good calls (and a lot of money) during his career.

 

Yes, Elaine you're helping the price to go up. And you're right about central bank buying. You'll likely be seeing more buying by central banks.

 

While Dr. Doom ( this is the same guy, right) tends to be deserving of his name, the logic he uses seems pretty sound. I don't want it to happen, but that won't make it 'not so'.

 

Quite right..the asian cultures value gold more than we do. They have older civilizations and more experience with the ups and downs of economic cycles.
Is there a lesson in here for our relatively young country?

 

american like 14k, 18k and 22k gold. but asian like 24k. american eagle is 21.6K. and we bought a lot of it. american buffalo is 24k. we like it because it was a buffalo not 24k gold. example of failure on 24k gold is the spouse's gold series. well. the mint should have sent all spouse's gold to asia and marketing there. it might be a sell out. try to bring an american eagle and sell it to asian. the first thing they ask. how many K is that?. 21.6K. no way jose. they just want 24K. period. they prefer to have 24k rectangular gold bar.

 

It's the same guy..he also made the assertion about a few weeks ago that the dollar was "going to zero" (see link) which I totally disagree with. I rather live with the idea that gold won't go below $1000.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aCTvaK5ca0x0

In the past 10 years, I've read enough Marc Faber articles to realize that you've got what to take what he says with a rather large grain of salt if he's "shouting" about something. Obviously, if you're willing to call yourself "Dr. Doom", you've got to live up to the image.

Marc's on the Barron's roundtable every year with a bunch of other famous folks. These Barrons' articles are worth reading because all of these guys are questioning each other's views. Marc comes across as a more reasonable personality in this format. For what it's worth, a lot of these guys (Marc included) were bullish on gold in the Roundtable articles published in fall of 2007 and 2008.

 

There is always a lesson, the question is what? I doubt that any country including ours has the experience with a global economic crisis. Gold has always been, and likely will be for the forseeable future, a comforting asset to which people will go to in the times of insecurity.

While we may or many not disagree, I do believe that Asia has their sites set on displacing the US in its current role of the "center of the financial world". Students work harder, study harder, and "want it more" than the "lost generation" of 18-25 year olds.

Economists like the weak dollar, as long as its in "an orderly fashion"...reminds me of the frog and the boiling water parable. Convert $$ to gold which is probably the 2nd most (?) accepted form of payment over dollars and it becomes relative subtle to sell gold to get Yuans without the alarm a direct currency transaction would generate.

One of the key points in your comment is that Asian countries have been around for 1000s of years....they think long term, we think long-term is year over year -- I laugh everytime someone on CNBC says well profits are up compared to this quarter last year -- yeah, this quarter last year most people thought the end of the world was coming...big surprise..

Sorry for the rant, but yes...there is lots we can learn from asian culture...we better start soon!

 

He is not a PM guy.

 

Dollar going to zero....highly unlikely. As you say, he probably doesn't really mean that, just the direction is down and the need to 'be noticed'...he would get drowned out by all the other $ bears if we remained in the 'safe zone'.

So from an Investment Banker's perspective, do you think I am overstating the case the need to fear/respond to a Chinese attempt to displace the US $?

 

before it is the mexican peso dominate the world. currently, the u.s. dollar. what's next. euro?, or a new currency?. i don't care. i just want gold. i am goldfingers. james bond 007.

 

It's gonna have to get over $3000 before I would consider selling any of mine, and then I would only sell some bars. I'm holding the coins 4ever. My kids are gonna really freak one day when I'm gone and they go to my bank and open up my safety deposit boxes! Maybe by then I'll have installed a safe in a false wall or something. I really enjoyed that site Boxer mentioned the other day - http://www.hiddenpassageway.com/ Great safety read there too by several people!
I feel strong that gold will hit $2,500 in the next year or so. I think right now we are all amazed to see it go up $10 a day or so, but I think it might very easily go up as much as $50-$100 in one day . . or more. Gold is gonna just keep going up and up and up, and I don't think it will ever come back down to $1000-$1500 again. Once it passes $2000, it will never drop below that point again. Just my gut feeling again.

 

A lot of good points in your post. An orderly dollar decline is desirable to prevent panic. All of the economists know that if anything falls fast, it creates panic and that's very difficult to deal with.

Since the yuan is pegged to the dollar and will have to rise sometime it makes perfect sense to buy it while it's artificially depressed. But you don't have to buy it with gold. You can buy a closed end fund or mutual fund with dollars that holds a basket of asian currencies and accomplish the same end.

Your observations about other parts of the world working and studying harder, I believe are "spot on". They want the "good life" we already have. You won't hear this from our politicians (except in a very indirect veiled way) because such a statement would lose them the next election.

Lastly, your observations about "thinking long-term" make total sense. Too many folks want "vending machine" results. You put in a coin and the result drops out an instant later. Not so in the real world.

An example of this was shortly after our new President was elected, the criticism of his efforts started about 30 days after election. Believe me, with all of the problems put at his feet, I'm willing to give the dude a bit more time. And in reality, some of these problems will be resolved in years, not months.

The one thing I don't agree with is your statement that "I do believe that Asia has their sites set on displacing the US in its current role of the "center of the financial world". There is no committee that represents Asia and sets as its goal being the "center of the financial world".

You can be very comfortable not being "the center of the financial world". Just ask most of the folks in relatively small countries such as Luxembourg, Switzerland, Norway, Sweden among others how they feel about their standard of living.

Lastly, I don't think you're ranting. That would indicate you're not being realistic. Most of your post is based on accurate observations.

 

SirCharlie. you are 100% right. i even see gold will depart from currency link. gold will go up by itself just like any other commodity. i also see gold reaching $3,000.00 to $5,000.00 or $10,000.00 in the near future.

 

Let the "Gold Wars" begin!

 

For the last few years, he's liked PM's and as well emerging market stocks.

 

With all the stir about gold and the precious metal prices, perhaps we can break the record.

What was the big stir about when this happened?

Most users ever online was 643, 03-17-2008 at 11:28 PM

 

You right, its not Asia is China...plain and simple. I suspect you are correct that the people of Lux, Switz, Norway, and Sweden are happy with their standard of living. The problem is scale. The total population of those countries is around 25MM. China is 1.4B. Until additional natural resources are brought online (read: Africa), its nearly a zero-sum game...as the standard of living in China increases, there rest of the world normalizes to a relatively lower level (evidence a jobless recovery where US unemployment rates new natural level may be closer to 10% vs. 5%).

Longer term, yes I believe the 'rising tide will raise all boats', but thats a ways away and China is buying heavily into Africa and stockpiling commodities while there are/were cheap. What does the US have that China can't get and won't have in 50 years? We have the best educated, most innovative companies around....but thats clearly changing. ( Do you know that to graduate from HS in California you need only be able to read at an 8th grade level and math at 10th grade???) At least we still produce more than enough food, so we have that going for us, but we have lost manufacturing to China (and the knowledge transfer is complete so all they need is a market until the 1.4B Chinese start buying and the our puny 300MM will get the scraps or higher prices).

Short of doing currency arbitrage as you described (I think it will still be considered arbitrage, perhaps not), which is way beyond the average American (oh thats right, we don't really teach money management until 3rd year of college if you lucky), all the common person can do is buy gold/silver and hope it acts as little bit of a damper on the damage to their personal buying power as the dollar becomes less relevant.

I really hope I am wrong for personal and patriotic reasons.

 

First of all..I'm not an investment banker. I'm not greedy enough.

I work at an investment firm and my daily duties involve a lot of detail work centered around trading, moving money, servicing clients and giving my perspective on the market to the people I work most closely with.

As far as China is concerned..
The Chinese know that they will only hurt themselves at this point in their economic evolution by trying to be the "top dog". Their economic strength is largely based on their ability to export cheap goods.

At the height of our economic success, the U.S. was a strong exporter and also had a strong consumer economy that bought goods made in the U.S. with a lesser amount that was produced offshore.

The Chinese do not have in any way, shape or form a strong enough consumer economy to ascend to the throne of the world's dominant economic power. The creation of a strong internal economy is where they will focus their efforts. It will require a long period of time. At this point they don't have enough educated citizens or enough jobs to revamp a largely agricultural economy.

Economics in China also goes hand in hand with political stability. The Chinese leaders have the very difficult task of fulfilling the expectations of a very large population that for the most part knows about consumer comforts but will unlikely be able to attain them for quite some time.

Compared to the U.S. and Europe when you look at the total picture of China,
it's an infant that is just starting to walk.