Kitco Radio – Wed 13 Jun, 2012

Wednesday’s Thoughts on Gold

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Al KorelinLarry Reaugh

  1. On June 13, 2012 at 11:18 am,
    Marc says:

    Big Al,
    I think the “bottom” is in. By that I mean, it will drift down on certain news items that pass through the media. I am “down” in all my holdings except physical gold and silver. My small bond portion of the portfolio is up substantially. Well, isn’t that a SURPRISE! Now, with that said, I want to make it perfectly clear that I am now in the process of selling these bonds (utility and corporate) and using those to fund a purchase of a nice little investment condo in the beach. So what I am telling people is that I am firmly shifting from paper to hard assets including, of course, my favorite – investment RE of which is a major portion of my background is in. Can “they” debase RE, of course not? Unless ‘they” can print buildings and land out of thin air! We live in very financially AMORAL times. There is no utility or (truth) to paper assets, EXCEPT for paying daily, monthly bills and for a HEATHY emergency fund for the unforseeable. (sp). Hey, like I said before, paper is based solely on some counter party to back it. Unfortunately, that counter party is living in a dream world called Mars, Disneyland or whatever “funzone” you want to call it. The wolves are at the door….unfortunately, the majority of Americans are now in a position to become the MAIN COURSE! Ah, got gold, silver, and non-debase (able) assets? Not investment advice, just an opinion. Wishing you all the very BEST!

    • On June 13, 2012 at 2:00 pm,
      Big Al says:

      Hi Marc,

      Welcome to my world!

      Big Al

  2. On June 13, 2012 at 11:39 am,
    naomal says:

    Can you or anyone else verify this story (link below) about a major Italian bank who has closed accounts to the public, thereby effectively prohibiting its customers from withdrawing ANY of their money? If true then this is surely world-shaking news. Would appreciate clarity on this.

    cheers, naomal

    • On June 13, 2012 at 2:09 pm,
      Big Al says:

      As of 2:09 p.m. I cannot verify this other than it is on the internet.

      I will definitely have a comment with the hour.

      Big Al

    • On June 13, 2012 at 2:50 pm,
      John W. Robertson says:

      I wouldn’t want to understate what’s going to come, but I don’t think this is a hugely concerning *** on it’s own ***. I just poked around on some Italian news and looked at this company’s website. It looks like a small internet bank, and uses a bunch of “canned software”, which is a sign they didn’t pay much for their operations, hence why I think they’re small. Such a bank could be out of business due to their own mismanagement or lack of customers, as much as anything.

      Not to steal you’re thunder naomal, but while checking, I did come across this article on Italian government spending accounting for around half that country’s budget. Yikes.

  3. On June 13, 2012 at 1:57 pm,
    Dennis M. O'Neil says:

    Financial Planners have many selling mantras. One popular promoted rule of thumb in today’s free dinner circuit is your age should be the measure of your exposure to fixed income. A lot of annuities have been sold using this rule availing those believing to fork over an ever increasing percentage of their portfolio just because they received a free dinner. I will stipulate for argument sake that this is sound advice.
    If it is sound advice to dedicate proportionately more of your assets to ‘conservative” aka ‘safe’ assets as you grow older.
    Why is it not sound advice to advise investing more of your assets in hard assets when the paper world is flailing like a stranded swimmer in search of something solid?

    • On June 13, 2012 at 2:10 pm,
      Big Al says:

      Hi Dennis M,

      Maybe something to do with the commission structures!

      Big Al

    • On June 13, 2012 at 3:14 pm,
      Marc says:

      The bigger problem is most people don’t realize that the “safer” assets ARE the hard assets. Like James Turk always says…look at gold and silver as a savings account. Who would have ever thought or said that just a few, short years ago. Your last question above IS the TRILLION dollar question!

      • On June 13, 2012 at 5:16 pm,
        Jody D says:

        I totally agree with you concerning looking at gold and silver as a savings account. I had an annuity that I almost lost. The company went into receivership, and I have been praying for the past 2 years that someone would buy the bankrupt company so I might have a chance to get my investment back. Well, this past week, my prayer was answered. Another company bought the belly-up one, and I am requesting my money back. I plan to purchase more physical PM’s.
        Keep Stacking, and my best to everyone!
        Jody D

        • On June 13, 2012 at 5:57 pm,
          Marc says:

          That is GREAT NEWS for you!

  4. On June 13, 2012 at 2:41 pm,
    Richard says:

    Al , those listeners of yours who are heavily invested in the precious metals are probably making the right decision. I mentioned yesterday that gold would probably move up the end of the week and it appears it is. The long term momentum indicators now no longer see a significant decline(of course that couId change). I will continue to believe we’ll see a significant downturn in the conventional markets and gold in all likelihood will move down also but not nearly to the degree of the conventional markets. Currently, one of my favorite charts is signalling this possibility.

    • On June 13, 2012 at 3:07 pm,
      Marc says:

      Like all of Big Al’s contributors to this site, you add confidence and CLARITY TO our situation. Let’s look at is this way – I am not smart enough to have unbridled confidence in totality. That is fool hearty and very dangerous. Just ask (if you could) the many, many persons of past history who thought they had ALL THE answers. They are either very broke or very, very…………(.not with us anymore). If it wasn’t for this site and our ability to hang together and research knowledgeable pros on this internet – who knows if we wouldn’t collaspe as individuals. However, AS AN INFORMED GROUP we will survive AND prosper – together. Let’s hang together or hang separately.
      Doc, one last comment when you said “…… precious metals are PROBABLY making the right decision….”that is a very, very important statement. There is absolutely no certainty in life. I will be responsible for my mother’s, brothers, etc. welfare. I have nobody to blame except myself. However, out of respect for Big Al’s and everybody’s tireless work on this site/blog, I feel responsible to give my opinion and let the chips fall where they may. The important thing I did this in “good conscious.”

      • On June 13, 2012 at 3:38 pm,
        Richard says:

        Marc, it’s rare that I take a strong position in my investments. I often use the statement, “in all likelihood” or” in all probability'” or similar statements. I use those type of statements as it relates to short-term and intermediate term movements in markets. But I will take strong positions when it is almost completely obvious that history is ready to rhyme again. The global mess today is one of those times in history where it is screaming a “rhyming”. I go with odds and the odds are extremely in the corner of those who bet on gold today and bet against the conventional markets. Marc, of course I could be wrong but it would take a miracle of unimagined propensity to reverse the situation this globe is in—I don’t see how weak man will be able to find a way to control the deleveraging monster on the prowl. The monster will have his way until the process comes to an end. The only winner as compared to other assets will be gold or gold will be less affected then any other asset class.

        • On June 13, 2012 at 3:47 pm,
          Marc says:

          Yes, doc…true words of wisdom.

  5. On June 13, 2012 at 3:12 pm,
    John W. Robertson says:

    It’s nice to hear Larry get back to his roots and talk about gold. I half expected him to blurt-out manga-gold, or gold-ganese.

    Owning a set 10 or 20 or 50% of assets in metals isn’t entirely useful as it really depends on what other assets you own, where you live, how soon you’ll need the value converted into something, etc. 10 or 20% seem low, unless you have a significant quantity of those other assets, potentially as valuable as metals. But in case of dips, I wouldn’t be 70 or 100% into metals either…not yet at least! I would also consider (and have tried) to build some tradeable inventory of things, some which seem of low value today. Just in case, as Bob Moriarty said, or as naomal said above, ATM’s stop working.

    • On June 13, 2012 at 3:15 pm,
      Marc says:

      John W.,
      IMHO, your spot on! Now, where is my chocolate cake!?

      • On June 13, 2012 at 11:08 pm,
        John W. Robertson says:


        Listen, maybe I’ll come rent out that condo of yours on the beach. I’ll pay you in all the chocolate cake you can eat!

    • On June 13, 2012 at 4:40 pm,
      Dennis M. O'Neil says:

      John W. you may want to buy a few cases of Jack Daniels.
      The highly desired beverage stores well, drinks well, trades well and due to the square bottle takes up less space than its round botlle competitors.

      • On June 13, 2012 at 11:10 pm,
        John W. Robertson says:

        That’s a good one! I had half thought about booze, but you’re right. When wealth becomes scarce, a decent bottle of whiskey (or is that bourbon?) sways a LOT of influence.

  6. On June 13, 2012 at 3:39 pm,
    Jerry Mabie says:

    As long as we’re sharing our thoughts with the understanding that there is no investment advice found within the thought I will let it fly and invite the criticism and outcry that may follow. I am the crazy one in the family that raises eyebrows during family dinners with my enthusiam about the metals amd my suggestions that beach front property should at least be researched for potential positive results. Referring to the Cape Canaveral area where with the discontinuance of the shuttle program there are many attractive real estate properties for sale.
    I am in 75% in pm’s and the balance in real estate. Now of that 75% there are mining shares and those shares are in the bucket 25%. The gains in the metals offset the loses in the shares for now. The real estate? What can I say. Down 50% and still declining and the holdings are in the most popular areas of central Florida.
    Don’t have any idea why I wanted to share this. Maybe boredom with the market. Enjoy the site and the contributions.

    • On June 13, 2012 at 3:54 pm,
      Marc says:

      If it is any consolation to you – I am almost where you are. Except my RE trumps the metals. I am either really smart or really dumb. I will let time decide that. But, I, you and a lot of folks on this site have 5,000 years of REAL wealth/history behind us – gold, silver, real estate, farmland, etc. I will just sleep like a baby tonight. And, I am pretty sure you will to – my friend.
      All the best,

      • On June 13, 2012 at 3:57 pm,
        Marc says:

        BTW, that is another HUGE opportunity in Florida RE now that the “space guys” have left!! Must be much more attractive around the cape vicinity, no?

        • On June 13, 2012 at 9:21 pm,
          Jerry Mabie says:

          The cape vicinity is real attractive now. I sold my cocoa beach condo in 1997. I can buy it today for $ 5,000.00 more than I sold it for. The cape lay offs devasted the area in the 90’s, now with the shuttle gone there are real bargains to be had. I rode out three hurricanes while I owned it and don’t consider them a factor at all.

  7. On June 13, 2012 at 6:36 pm,
    Paul L says:

    Gold closed above the 50 moving average today and we need to head to the 200 day near the 1680’s. Commercials will put a roadblock there. They have massive short positions now.

    • On June 13, 2012 at 6:41 pm,
      Richard says:

      I agree.