Back in January, I posted a link to a Goldman-Sachs call for gold at $1200 by 2018.
I made fun of it because they claimed to be basing their analysis on economic recovery in the next couple of years. I honestly thought we had seen the last of gold below $1500, let alone at $1200. It doesn't surprise me that the news out of China was what it was, and
the effect on commodities is not all that surprising. An awful lot of
people were suddenly forced to sell off and turn up some cash. In that regard, what happened today doesn't match up exactly with what G-S seemed to have in mind in terms of the dynamics or the time frame, and it's not down to $1200 yet -- though it could be tomorrow.
Is there manipulation of the markets by the heavy hitters? Does the player with Boardwalk and Park Place, Pennsylvania, Pacific, North Carolina, and all the railroads have an advantage in Monopoly? Or maybe a better comparison is Dungeons and Dragons. I never played D&D, but I had some family members, especially a brother-in-law, who were players. My brother-in-law was a college professor and a Dungeon Master. "The Dungeon Master can get you," he said. "Sooner or later, if he wants to take you out, you will lose."
I have to admit I'm shaken, but not stirred up enough to sell. The big picture hasn't changed. The fiat currency will explode. It always does (so I've read). When PMs go down I'm happy for the buying opportunity. When they go up I'm happy. I guess, since I have a 10+ year holding strategy, I'm not too concerned. If I were a year or two from retirement that would be a different story.
ReplyDeleteRight, you haven't really lost anything because you still have the physical metal. My investing strategy was shaped by a remark Sam Walton made after the market crashed in 1987 (I think). People were panicked and freaking out, and the world was about to end. It had nailed a lot of people, and Wal-Mart stock had dropped massively along with everything else. So some reporter found him and stuck a microphone up to him and wanted to know what he thought. Sam said, "It's just paper."
ReplyDeleteHe still had all his stores, warehouses, and inventory. People were still buying stuff at Wal-Mart. What was the big deal?