Frank Holmes Commentary on Gold
Did the Fear Trade overreact to the Federal Reserve’s diverging opinions last week? In his latest commentary, “A Test of Strength for Gold,” Frank Holmes discusses the very high correlation between the Fed’s balance sheet and the price of gold in recent years, and reassures gold investors by saying he believes Ben Bernanke will likely keep liquidity high for quite some time. In addition, he recommends keeping an eye on the Love Trade, which has seen a rapid increase in gold demand over the past several years.
Read Frank Holmes’ latest commentary at this link: http://www.usfunds.com/
Gold actually bounced after all the beating it has taken but we have already entered in to bear territory as far as price of Gold is concerned.
Good luck.
Silverfox,
As a gesture of good faith, here is an excellent video (21 minutes) featuring Jim Rickards of “Currency Wars”. This is an excellent review of CURRENT global economic dynamics playing out before us….and my reasoning (Jim Sinclair’s too) for holding gold long term as money.
Comments Silverfox or anyone….http://www.kitco.com/KitcoNewsVideo/
To be perfectly clear… A MUST watch video..for ALL..enjoy!
Wont be in Bear territory for long after benanke’s speech.
Hang on to yer butts!!!
silver fox – how do you call this bear territory? we touched down exactly at long trend support. from here it is only up up and away!
Hey all,
Eric Sprott and Frank Holmes are very divergent is their allocation views. Sprott makes a sensible case for having most of your reserves in gold, with an infinity toward moving another good sum into silver as a long term/investment play. Frank Holmes goes by the “old standard” of the 5 to 10 percent portfolio allocation. It is funny, because I respect both men, and Holmes has gotten A LOT of positive independent feedback from his management of the US FUNDS portfolio. Again, I think it comes down to what YOU are comfortable with. Holmes is a VERY sophisticated global resource equities investor. Sprott is a VERY respected PM PHYSICAL metals holder/marketer -billionaire- who seems to be devoid on an ulterior motive/ego. However, they are both talking their books to some degree because I think that is what they truly believe. I tend to lean toward Sprott’s PM PHYSICAL thinking, with an emphasis on PHYSICAL silver. The fundamentals are incredibly, incredibly BULLISH. Everybody is different and I wish prosperity to everybody portfolio allocation preferences – even you -silverfox…well kinda. 🙂
Marc
P.S. Of course, Silverfox, I am kidding…I absolutely dont wish ill will of any kind on my fellow man, although we vehemently disagree, I RESPECT your contrarian views…..:).
Now , Now…marc , i think we should show SilverFox some respect, he is just voicing his opinion just like the rest of us……As the Big Fella , keeps saying we should listen to both sides of the argument. In this crazy world we live in who’s to say who is right or wrong so long as we believe in ourselves that’s all that matter’s
I believe you are wrong..SilverFox….The same way you think i am wrong…………………
Time will tell , in the mean time keep your comment’s coming. After all , it’s all food for thought.
http://financialsurvivalnetwork.com/2013/02/gold-revisited-weekly-buy-signal/……..good to hear from my favorite ‘Irishman”. Here is a good article GE Christensen….couldn’t resist!
Hi marc . Thanks for the link…..I dont listen to all the noise , I’m not freaked out by the up’s & down’s , Because i BELIEVE the metals are the place to be………………..
Patience my friend , our day will come……….Now i am off to stroke something…………..
A silver coin , What did you think i meant ? haha
Irish,
Your a nut….a smart nut…but a nut..ha.
I agree with Sprott—-your allocation in the PMs should be based on the particular time in assets/cycles. We’re in a PM cycle and it behooves investors to be more aggressive in PMs and hard assets instead of financials. The financials had their days in the 80s and 90s and due to the massive debt/deficits we’ve incurred, they’ll be moribund for years. Even though we struggle between deflation/inflation it still is overall going to be commodities, hard assets, and PMs that should outperform over the next few years. The stock market had a “reversal” day today and could be a negative going forward. Because we’ve seen the death cross with PMs, they’ll have some work to do over the next few weeks. The next 2-3 weeks will determine if we have bottomed out.
It always puzzles me when I hear pundits speak of gold just as insurance as opposed to opportunity for profit. If you have only 5 to 10% of your portfolio in “insurance” and the other 90% goes to hell perhaps you’ll break even but how can you come out ahead? Who invests in any asset class just to break even? If fiat currencies worldwide are weakening in purchasing power, doesn’t it make sense to allocate more into the asset class that will benefit most from currency collapse? At least for a period of time? If we buy wisely (low) and sell high we should actually come out well ahead of the game, provided we exercise good sense and actually sell when prices are considerably higher. That’s my strategy anyway, for what it’s worth.
I agree with your comment, Arnie, about owning the PMs as an “investment”—-I don’t purchase PMs to lose money or just as “Insurance” or a “store of value”. Every asset class moves in cycles; I own more PMs when they’re in their cycle; I own less when their cycle looks as if the sanity is coming back to the financial markets.
It can be argued that guys like Marc Faber, Jim Sinclair, Eric Sprott, Doug Casey etc are “talking their book” when they recommend a higher allocation of gold, but why is it their book? Because they’re far smarter than most investors and they’re putting their money where their mouth is, so at least they’re acting with integrity. They’re not married to gold forever, and when something better comes along, that’s where they’ll go. Seems to me I read once that Warren Buffet said “Diversification is for those who don’t know what they’re doing”. Why invest in losers just so you can say you’re diversified?
BOY ARNIE D.,
I think you are absolutely spot on, IMO!! Even Rickards said something that you so eloquently are not agreeing with. He said use gold as insurance. So, if you have $100,000 in cash, allocate $10,000 to gold. You will be ok, if your paper assets/ plus cash get hammered. WHAT? I think Rickards is extremely credible, but he too talked the “insurance part of gold….again….what?!!!! ALL MY RESERVES are in gold. I sleep at night. Insurance, somewhat, but I am here to beat the ponzi paper schemes…I will need MUCH, MUCH more than an insurance hedge.
Sounds like we’re on the same page, Marc. My aggregate average gain in gold and silver BULLION is up well over 50% since I started buying; PM stocks are another matter, but I do agree with the “greats” that gold will increase considerably in the next few years and the mining companies are the source of bullion, so when currencies start collapsing, as many of them assuredly will, and when above ground bullion is very hard to get, by the law of supply and demand , it seems to me that mining stocks will become super hot. Understanding and patience are required, but if we get the big picture right it seems to me the details will sort themselves out.
That’s great, Arnie…continued success. I think this bull market is far from over. But, yes, patience and perseverance will serve us well. Plus, cash flow; as, of course, bullion doesnt provide a rate of return…who cares – we backed the right ‘horse’.
For the moment, cash flow is not my biggest concern, although in a few years it will be. I take comfort in knowing that gold is highly liquid and if I ever get into a really tight spot I can trade bullion for cash the very same day in whatever amount I need. I also keep at least a three supply of cash tucked away for emergencies and a 2-3 month supply of food.
Insurance: “To make sure, certain, or secure.”
How about this: Calculate you total living expenses for 2012 in ounces of gold. Do it again 5 years from now, and again 10 years from now. Assuming that your standard of living has remained approximately the same, the number of ounces of gold used to pay expenses will be about the same. The amount in number of dollars is irrelevant.
So, taking a modest example that 25 ounces of gold paid for all your expenses in 2012; if in 2022 you can live at the same standard of living for 25 ounces of gold, what have you done?
You have insured, secured, preserved your wealth; ist es nicht wahr?
On the other hand, buying shares in gold producing companies is the way to leverage your investment and come away with more than you started with.
That’s my story & I’m sticking to it.
Ja, mein herr, du hast es richtig. ( yes, my good man, you’ve got it right). In 1913, when gold was $20/oz, you could buy an entire man’s outfit of good clothing for either one ounce of gold, or $20 cash. Today you can still buy a good complete man’s outfit for one ounce of gold (1600), but what can you get for $20 cash? A pair of socks, or a belt on sale.
Stick to your story, it’s a true story.
Mike Maloney says he is 100% diversified because he owns both gold and silver.
Gold preserving and silver should allow a person to pocket a little extra gold.
So far Mr. Bob Moriarity is exactly right on with his bottom call.
Gurus make money selling subscriptions, the only reason to own is to sell at a profit,
there is no shortage, in other words, its not rocket science.
Now you all got me doing it. I’m thinking in terms of gold.
I sold my AR-15 two weeks ago. I bought it years ago to compete in service rifle matches. I kept it as an investment for my retirement. Quality guns keep their value. It sold for the rough equivalent of an ounce of gold. The purchase price all those years ago was roughly equivalent to an ounce of gold.
By George, Fred, I think you’ve got it!! It takes a while to make that shift from pricing things in term of dollars to thinking in terms of gold equivalency, but once you do, it changes one’s resolve and perspective. This principle applies equally to art, real estate, homes, etc., anything of lasting value. You just proved it to yourself.
Hi Arnie. If you havnt already done so, try figureing what you need to retire in gold. Its alot easier than figureing in currency. Its what should be taught to kids in my opinion. Thank the federal reserve it isnt.lol
Jim Rickards! Wow what a guy!
Rev
Frank Holmes and Eric Sprott are tops in this business. I personally prefer physical silver but bigger traders like gold too which is fine. The current selling event arrives once every 3.5 years and then we get a rebound. Some days this is like watching paint dry but have patience. The last 6-8 months of this years’ long rally could deliver 80% of the whole upside (it has historically) Don’t miss it. We reco 10% in coins and some in daily requirements stuff and some in trading stocks. -Traderrog
Roger Wiegand
traderrog@comcast.net
http://www.tradertracks.com
http://www.letustrade.net
http://www.wavelengthpublishing.com
liquidity is indeed high, but velocity of money is not and wont be. bernanke wants another housing bubble and he will get it. we will not get hyperinflation, we will get deflation or a currency confidence collapse. it will be 2008 all over again.