Gold Bugs Beware

by: Adam Katz November 13, 2008 | about stocks: GDX / GLD    

Adam Katz

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I hope that all the gold bugs are preparing for the next leg down. Although risk does exist on both sides, the path of least resistance is down.

Then and Now

When researching gold prices, it is common practice to use historical quotes to give some indication of where prices may go. In my opinion that is a very bad strategy. 'Inflation adjusted highs' is simply a fancy way of saying that the price was here, we multiplied by some factor and so the inflation adjusted high is X. Therefore with more inflation the price MUST take out that previous high. That's like saying that Yahoo shares traded for $100 in the past and since earnings have expanded since then, we must ultimately breach that price - ignoring the P/E ratio buyers are willing to pay and by that I mean demand.

You see, just how a lack of viable (good companies) alternatives led to Yahoo's high price due to the price multiple, it was a similar case with gold in the 70s. A lack of alternatives and poor inter-connectivity in global markets made gold the only truly acceptable global inflation hedge and safe haven. Now things are different both fundamentally and structurally. One structural example is the increased use of derivatives and the use of treasuries to act as margin for these contracts. This has led to treasuries significantly outperforming gold as margin calls and safe haven buying have led to escalating purchases of treasuries.

Another problem with using a historical reference is that we have never experienced such a high level of de-leveraging - due to the excessively high credit buildup, that up until earlier this year fueled gold's rise. Essentially the market is correcting the imbalances, exactly what the bugs were calling for, except it's working against them. The size of the de-leveraging is dwarfing the capital that has been injected into the economy.

Gold ETFs

I read a great article on gold ETFs the other day and apologize to the author for not referencing it here as I cannot find it. Please post it as a comment if anyone knows what I am referring to.

The author was arguing that the landscape is very difference in the gold market because of the existence of the streetTracks Gold ETF (GLD) and the prices at which retail investors originally bought in at. The author argued that a lot of the purchases were made at prices above $600, and those investors may be tempted to sell if the price reaches their entry level. We may see a squeeze of sorts on the gold market, should that ETF be forced to liquidate sizable holdings at a fast pace to meet redemptions. Should that occur at the same time as the IMF or a central bank selling gold to meet short term expenses, there could be a structural crash in the price of gold.

The IMF and Central Banks

Institutions setup to pump liquidity into the system at crucial times can come under strain when their balance sheets are stretched and they are forced to raise capital. This is definitely not the largest risk to gold, but it does exist. The reason that the risk is minimal is that gold represents a relatively small percentage of the IMF and most countries' reserves. Things would have to get really bad to force gold selling by these institutions.

New Demand

It's hard to imagine a source of new demand entering the picture. While consumers globally are stretched, expensive jewellery is the last thing on your shopping list. With the majority of gold demand coming from jewellery, it's unlikely that we seen a strong increase in net demand. You can make an even stronger argument by looking at some evidence of gold being pawned worldwide and demand for jewellery being even lower than published statistics.

Then there's gold coin demand. This is retail investment demand and if history has taught us anything, it's that betting against retail speculators is a good strategy. Many dealers are reporting shortages due to the higher demand for gold coins by retail purchasers. This has led many an unsophisticated investor to conclude that there is a shortage of gold and price must go up. As this group of investors continues to load up on coins, this contrarian speculator continues to get more bearish.

Supply

Gold miners just got huge production cost cuts. Mining is an energy intensive business, with tons upon tons of rock needed to find just a little gold. As their core costs come down, their margins increase relative to the market price. However, this is not a market in which to expect rising profit margins. This will enable the miners to decrease the price for the raw metal and try to make sales in a time of falling demand. Lower production costs may also stimulate supply in the short term as miners try to benefit from the lower energy prices and wider margins they are currently seeing.

What About Future Inflation?

What about it? I take two approaches here:

  1. The current trend is falling prices, a shortage in supply of credit globally, and weakening physical demand. You can try to catch a falling knife or claim that commodities aren't in a bear market, but that is risky business.
  2. The reflationary trade will likely result in gold prices moving up at some point in the future, but outperforming equities? I don't think so. At least not from the lows that we ultimately reach. But the government stimulus is inflationary! While that may be true, where is that stimulus going? Take Caterpillar (CAT) for example, who would have to increase in value by 150% to reach its previous highs. This isn't a dotcom company with no real business behind it, this is the leader in global infrastructure. So when global fiscal stimulus picks up and that money finds its way to the market, credit is expanded, but the net benefit that a company like CAT realizes far exceeds the dilution effects of expanding the money supply. Also, companies own lots of real assets which will adjust up in value on top of the contracts they will receive which will expand their bottom line. Cost cutting is another avenue where good managers can increase value. It's almost a nice excuse to clean house, then when things start moving again, they can be prudent and try to get technology to replace labor where possible.

(Please note that the above chart is dated July.)

What the chart above shows is a graphical interpretation of my argument. Firstly, gold rose far more significantly than consumer credit in the 70s. To hit the inflation adjusted high, gold would have to outpace the growth in consumer credit by a large margin which I don't think is happening. In fact, I see consumer credit having low or negative growth for the next 12-18 months as mortgage, credit card and auto loan terms get stricter. As you can see in the chart, this happened in the early 90s as consumer credit didn't grow. Gold price remained relatively flat and then dropped significantly (in percentage terms), once credit started rising again. Why?

In recoveries, the expectation is decreasing risk and an eventual boom. In that environment, the opportunity cost of holding gold increases significantly and money rushes out of cash, gold, and treasuries and into equities. Although this causes a drop in gold price in the medium term, constantly rising credit will still result in a higher gold price as the cycle plays out, but from trough to peak, equities will outperform gold. It is during the second half of the credit boom that investors are advised to shift out of equities and increase gold holdings.

Gold's Status as a Safe Haven

So has gold's position as a safe haven been threatened? In a way, yes. It's not that the fundamentals of gold aren't attractive, but rather the existence of alternative safe havens. As far as the fundamentals go, gold's biggest strength is also its biggest weakness. The limited supply of gold is often argued to be the reason for its great store of value, but that limited liquidity also makes it subject to volatile swings, usually into overvalued territory. As word of gold's safe haven status has spread over the decades, worrying times bring a rush of people into gold, often more demand than the metal can handle. For that reason we see spikes that leave buyers at the peak feeling like they've been cheated.

Access to global markets changes the entire landscape, and the nature of a safehaven can change. Whether it's unfairly beaten down equities, raw land in a politically stable country, or fiscally sound sovereign debt, the global markets present a wide variety of safehaven alternatives. In general, these investments require more sophistication to identify bargain prices and thus don't have the same over crowding problem as gold.

As an example, Buffett's 10% preferreds implicitly (in my opinion) backed by the government in the case of Goldman (GS) and with a solid company like GE, these investments may in fact be lower risk than gold and on an adjusted return basis should significantly outperform gold over the next 5 years, even though he may have acted too early.

Gold's Performance

That being said, gold has outperformed since the peak and YTD - so it's safe haven status isn't totally destroyed - it just has competition. That being said, other investments like Japanese Yen have far outperformed gold.

Conclusion

The gold trade was over crowded and is likely going to continue to unwind as commodity prices have retreated signfiicantly and might continue to do so. Structural issues such as ETFs which have never experienced liquidation strain may become a big piece of the puzzle. Although gold will likely be at a higher price than today's at some point in the future, speculators should brace for lower prices in the interim. Then, once prices turn around, investors should take careful note of trough equity valuation before dumping their funds into gold.

Disclosure: Trading with a bear bias

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This article has 31 comments:

  •  
    Nov 13 09:05 AM
    Your analysis is great -except for one thing. You dont take into account the goldbug(just as many permabears in equity markets think the dow should be at much much lower levels fundamentally speaking but fail to take bulls into account) -The goldbugs are true bulls -many are dollar cost averaging and the price whether up or down, it signals buy -buy- buy . I think you may ruffle some of their feathers with this article-being they are goldbugs - The spread between physical prices and paper is where you will here it most
    Reply | Link to Comment
  •  
    Nov 13 09:09 AM
    So many words... All you need to know is USD down means gold up,and vice versa
    Reply | Link to Comment
  •  
    Nov 13 09:10 AM
    I'm sitting tight with my gold mining stocks waiting for the USD to tank. When that happens gold will explode to the upside.
    Reply | Link to Comment
  •  
    Nov 13 09:49 AM
    mr.g,

    I do take goldbugs into account (I'm not a fan of gold bugs). The truth is that being a gold bug is such a weak investment strategy that although they are fairly large in numbers (and very loud), they don't collectively have enough capital to really affect the market. What happens with jewelery demand and industrial use is far more important. At present the amount of fund liquidation far exceeds the dollar cost averaging going on. Take a look at the gold COT's.

    Marp,

    That kind of simplistic analysis is exactly why the gold space gets crowded and overvalued. All goldbugs do is preach value (with regards to inflation), yet don't care what price they're buying gold at. Take a look at this chart and tell me that there's no basis risk in that strategy www.plusev.ca/gold-usd.../. Gold has strengthened far more than the dollar has weakened.

    Moses,

    I agree with that strategy.. I think that gold stocks will beat gold price out of the gate when the time comes. Energy costs come down 2/3rds and if gold only comes down 1/2 then theres lots of extra cushion on their margins.
    Reply | Link to Comment
  •  
    Nov 13 10:51 AM
    "those investors may be tempted to sell if the price reaches their entry level. We may see a squeeze of sorts on the gold market, should that ETF be forced to liquidate sizable holdings at a fast pace to meet redemptions. Should that occur at the same time as the IMF or a central bank selling gold to meet short term expenses, there could be a structural crash in the price of gold."

    The author should read the prospectus and understand how redemptions work before jumping to invalid conclusions based on hunches. Your argument makes you look silly once actual facts show you don't understand what you're talking about.

    Redemptions are conducted by presenting the ETF with a total of shares and cash equivalent for a pre-defined amount of gold plus expenses. The ETF then delivers the physical gold in exchange for the shares.

    Purchases are the opposite. Gold and cash is presented to cover the predefined amount plus expenses and shares are issued in return.

    https://ssgafunds.com/fund_doc...

    The ETF can't be "forced to liquidate" because 'liquidation' means delivering physical gold for shares presented, by definition.

    How exactly does that mechanism create "a structural crash in the price of gold"?

    The number of ETF shares at any given time is limited. They are traded on the open market. Buyers pay cash to sellers. The ETF itself is not impacted one iota by the price of the shares at any point in time. If GLD trades at $1, the ETF will still have just as many ounces of physical gold in storage as they would if it traded at $100,000.

    The ETF is only required to produce the physical gold under the cirmstances noted above and further expanded upon in the prospectus. If someone were to buy and present every single share plus expenses the ETF would only be obligated to deliver every ounce of gold in storage.

    The ETF NEVER sells the gold in the open market.
    Reply | Link to Comment
  •  
    Nov 13 10:59 AM
    "Institutions (central banks) setup to pump liquidity into the system at crucial times can come under strain when their balance sheets are stretched and they are forced to raise capital."


    Once again the author exposes his lack of understanding. Central banks don't sell assets to raise capital. They don't need to.

    They PRINT the money and lend it to the gub'mint in exchange for gub'mint debt.

    A few moments on Google will show that central banks around the globe have been selling LESS gold than they had announced since 2006. If anything, sales reduced below expectations would help support the price of gold on the market.

    www.resourceinvestor.c...
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  •  
    Nov 13 11:14 AM
    Smarty Pants,

    I'm not referring to a squeeze on the shares. Secondary trading doesn't result in any change in their gold reserves (ie if me and you exchange shares). However, if in the day there are more sellers than buyers, then the dealers will return the shares to parent and physical gold will be sold. Just how when dealers go to them with additional demand they buy additional physical gold for the fund.

    I found the article: www.kitco.com/ind/nadl...
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  •  
    Nov 13 11:17 AM
    I don't know the exact dollar amount for gold five years hence nor do I know the exact dollar amount for the S&P five years hence. NO ONE knows!

    However, here are few things I think I know...

    1. The US and World economies are going to decline in real terms over the next FIVE years. This might happen fast (two years) or slower (5 to 10 years). The US economy needs to be completely restructured away from speculation, consumption, government and services and back into manufacturing, mining and agriculture. This of course doesn't mean the former are going to disappear, but only shrink some.

    2. If deflation strikes hard, the stock market will fall faster than gold. The dow jones / gold ratio used to be 40 to 1. Now it is about 12 to 1. It is on its way to 2 to 1 or less. Under this scenario the dow jones would fall to about 1000 - 1500. This is the 1929-1934 scenario. Under this scenario a prudent investor should sell all and wait in cash or safe bonds. What constitutes safe is a good question.

    If inflation strikes hard (1970's style), both the market and gold will likely increase. The market only marginally, but gold will skyrocket - $10,000 / oz.

    If hyperinflation occurs (unlikely) ... we are all toast anyway.

    Under inflation cash and bonds lose value, stocks are mostly stagnant.

    3. Bottom Line - In five years I expect to be able to purchase up to 10 times as many shares of companies than I can now. These companies will be of higher quality than the current ones. In order to survive the fire, balance sheets will have to be deleveraged and management focused on short and long term survival rather than pure enrichment of themselves.


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  •  
    Nov 13 11:20 AM
    Smarty Pants,

    The title of that section is entitled IMF and Central Banks. The IMF doesn't print money and may have to shore up their reserves by selling gold. I heard this from an excellent analyst who used to work for the IMF. It's unlikely, but if they get stretched far enough they may have to.

    According to Nouriel Roubini, the Fed is likely to try anything else before turning the printing presses on. Anything includes selling some gold in my opinion.

    www.plusev.ca/nouriel-.../
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  •  
    Nov 13 11:35 AM
    Howard Ruff thinks physical Gold will go down on the near term, ignore him at your own risk. Pay for your own subscription.
    Reply | Link to Comment
  •  
    Nov 13 12:31 PM
    "However, if in the day there are more sellers than buyers,"

    This cannot be. By definition the number of buyers is the same as the number of sellers else a trade would not occur. Same can be said of any exchange traded stock. If nothing else, the market specialist is a buyer or seller for a particular trade. There are no one-sided trades, only bids and asks.


    "Just how when dealers go to them with additional demand they buy additional physical gold for the fund."

    Again, read the prospectus. Dealers either bring gold to trade for shares or they bring shares to trade for gold. That is the only way the ETF's gold stock changes. They don't receive "dealer demand" and go buy the gold on the spot market. The Dealer buys the gold (or already has it) and deposits it in the ETF in exchange for shares.

    The ETF is essentially serving as a gold warehouse. If people bring them gold they store it and issue shares to represent that gold. People trade those shares on the open market freely until someone collects enough shares to redeem them for physical gold out of the warehouse. The ETF charges fees for either transaction.

    The "exchange for shares" mechanism is an arbitrage function which helps to keep the price of the shares close to theh price of spot gold.

    About the only time someone would pay the ETF a fee to convert physical gold into paper gold is when you can buy the physical gold for less than the price of the paper shares, trade the physical for new paper shares, and sell the paper shares at a higher price than you paid for physical, thereby driving the paper price and spot price toward each other.

    This situation might emerge when there was great demand for the paper shares and the bid was increased to the point where it is profitable to engage in the physical for paper swap. But it is the outside party who initiates the exchange, not the ETF. They bring physical gold and the ETF takes it in exchange for paper shares.

    (The only other time I could imagine is if you would rather actually hold the physical gold in your hands and were willing to pay the fee for exchanging paper shares for physical delivery, but most people can't afford the amount of gold for the minimum exchange.)


    "According to Nouriel Roubini, the Fed is likely to try anything else before turning the printing presses on."

    Too late. They are already printing like crazy. The adjusted monetary base is up nearly 50% from a year ago. Once this money works its way through the economy inflation will re-ignite.

    research.stlouisfed.or...
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  •  
    Nov 13 12:34 PM
    Buyers don't have to equal sellers with ETF's.If there are net sellers, then the dealers make a market and redeem the shares with the parent.

    www.kitco.com/reports/...
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  •  
    Nov 13 12:51 PM
    The analysis presented at your reference link is erroneous as well.

    The absolute purchase price will have nothing to do with the inflow and outflow of physical gold.

    If the paper is trading for 2% less than physical then you will see outflows as paper shares are bought and traded for physical which is then sold at a profit in the spot market.

    If paper is 2% more than physical you will see inflows as physical gold is deposited for paper, which is than sold at a profit on the stock market.

    It doesn't matter if the spot is $50 or $500, it is the DIFFERENCE between the paper and physical prices which drives deposit/redemption.

    When stock market investors "pile in" to (or "pile out" of) the ETF shares and temporarily drive the paper bid price above (or the paper ask price below) the current spot price then one of the authorized dealers will execute an arbitradge trade for a quick profit.

    The net effect is that inflows will result when there is a large demand to buy paper shares and and outflows will result when there is a large demand to sell paper shares. The absolute price of the ETF at that time is irrelevant to the inflow/outflow.
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  •  
    Nov 13 01:00 PM
    Adam -
    lets say in march 08 I bought all of my gold at 1000/ounce without dollar cost averaging - with that one ounce at the time(march 08) I could trade it in for 364 gallons of unleaded gasoline(gas was 2.75/ gal nymex mar 08)- Today I could sell the same ounce at $720.00 and buy 497.55 gallons at 1.45 a gallon.you get pretty much the same result across the board -wheat -oil- nat gas-copper -silver- Thats value in a deflationary situation
    my point being price doesnt matter to a gold bug as much as him maintaining his purchasing power - is he upset prices arent acting better in the current situation ? absolutely , but the preservation of purchasing power outweighs it and risk is at a minimum (if no leverage)- the strong dollar- yen could turn in 24 hours or 10 weeks but it will happen very quickly who wants that risk?


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  •  
    Nov 13 01:11 PM
    "If there are net sellers, then the dealers make a market and redeem the shares with the parent."

    Firstly. The number of buyers still equals the number of sellers as your 'dealers' will be the buyer for all those transactions. The concept of "net sellers" is bogus. There is always a bid and an ask price representing a buyer and a seller in the ETF. Only when a buyer and a seller agree on a price is there a trade. Do you suggest that at the end of every day all traders are filled if they have entered a limit order? Only if a buyer agrees on the price. There is no guarantee that an order will be filled.

    (Also do not mix the concept of a market maker on the stock exchange with the parties who are allowed to exchange ETF shares for physical. They may be the same, but they may not. See the prospectus.)

    Secondly, why would a dealer do that unless they were the market maker?

    They would expose themselves to enormous risk of price movement between the trade and the exchange. The ETF price has changed downward by 10 percent in a one hour period in the past. Are you suggesting that these dealeres are willing to risk losing 10% of their trade by selling shares throughout the day and waiting to the end of the day to redeem the them?

    I don't think so. They wouldn't stay in business very long that way.

    What if they don't have 'enough' shares to redeem the minimum amount? Then they are stuck with shares they don't really want and the possibility of overnight price changes against them.

    No. Your interpretation is misguided. The only time a dealer will initiate an exchange is when he knows for a fact he can buy cheap and sell dear in total as with a price differential. That's how dealers make their money. Virtually risk free arbitrage or buying the bid and selling the ask in a balanced market (which is what the market maker tries to provide by adjusting the bid/ask based on order flow).

    Buying all shares offered to exchange at the end of the day doesn't even make financial sense. They would have to pay the exchange fee to exchange and then more fees to sell the physical gold. Then the next day pay the same fees again to reverse the process. It would lose them money every day even if they didn't have price risk. Transaction costs would kill them.
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  •  
    Nov 13 01:18 PM
    mr. g,

    Good point. I was a strong believer that gold would outperform silver & oil several months ago... Now I just think that the relationship has gone too far. In the long term, the increase in price of factors of production (energy) and consumption (agriculture) will outpace the increases in a cash equivalent. There are alternative safe havens to gold but no alternative to filling up my tank.

    Also, those who dollar cost average are subject to economic conditions. Unemployment rising means less new money going into investments and more investments being liquidated to cover expenses - especially in a negative savings economy.
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  •  
    Nov 13 01:30 PM
    Smarty Pants,

    I really don't care to take this argument further as the mechanics of the GLD ETF are not significant enough to spend so much energy on. As I said I consider it to be a very minimal risk in the price.

    All I will say is that there has to be a buyer for every seller in the secondary market, but as the prospectus states there are Authorized dealers who essentually act as market makers.
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  •  
    Nov 13 02:38 PM
    Adam, you brought out the best in Smarty..he's sharp..

    Smarty...wish I could have gotten my clients to read and understand propecti,like you,when i was a registered rep....would saved me a lot of explaining time later..
    Reply | Link to Comment
  •  
    Nov 13 11:26 PM
    "New Demand"

    Saudi Arabia is buying and China plans to buy gold. A good start.
    Reply | Link to Comment
  •  
    Nov 14 01:12 AM
    Re Gold,

    There has been absolutely no physical gold / silver available in US + European markets . The central banks have not been selling gold + the lease rates have skyrocket lately . This is what happened just prior to the last surge in gold price . Check it out .
    Reply | Link to Comment
  •  
    Nov 14 01:30 AM
    Smart gold investors aren't expecting a straight ramp-up in price. As others have said, it's best to average-in. And not to bet everything on gold. But it's an important part of a portfolio, for many. As is silver.

    If the economy recovers, precious metals rebound too. But gold and silver also serve as protection against nightmare scenarios like the dollar collapsing. Unlikely, but it is possible.
    Reply | Link to Comment
  •  
    Nov 14 01:33 AM
    Ah the war of words continues - thank you all for much enlightenment.

    Given the remarkably high premiums charged for purchasing physical gold and silver due to the apparent physical shortage, it is hard not to want to bet against the masses. Kind of like the old "odd lot" rule in the stock market. But, I remember back in the Hunt Brother days there were enormous lines at the dealers to dump the family silver at $25 and up. Those folks are still smiling 25 years later, so evidently the masses are not wrong all the time. And, there is certainly plenty of incentive for buyers to purchase physical gold and silver as it has been about that long since the outlook has been so unsettled.

    Also, a contrarian might consider the profit potential of taking the other side of the Cash/Treasury/T-Bill "bubble". I guess that would be stocks, commodities and (gulp) real estate. We don't know if these prices are "low", but they are "lower" than they were not so long ago. Should the Greater Depression actually be avoided, the profit potential in these investments is high. Somewhere an investor is selling some of his/her Treasuries and rebalancing the proceeds into gold/silver/stocks. Possibly trying to sell high and buy low as there is a rumor that is a good way to make money.

    Finally, I suppose someone someday will actually figure out how to put all one's eggs in one basket correctly everytime, but until then a diversified portfolio across investment categories looks like a good way to go.
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  •  
    Nov 14 09:06 AM
    "The reflationary trade will likely result in gold prices moving up at some point in the future, but outperforming equities? I don't think so"

    Equities, after adjusting for real inflation and not the governments BS, are way behind gold. Even at this point with massive forced selling in precious metals anything, the price still remains above the buy and hold level for the DOW if pick a point some 10-15 years ago.

    The principle fallacy in your argument is that you treat gold as a commodity not unlike corn or hog bellies. You have heard it before, gold has always held a monetary function in the world's economic system and will continue to do so when the fiat currencies fall apart.

    You also rest your arguments on the current price of treasuries. The repatriation of dollars and panic buying of treasuries from foreigners will come to an end when they realize that a US debt default is a real possibility. The fate of the US as a soveriegn nation rests in the hands of the Chinese at this very moment. If you don't think this is so then you are truely nieve in calculating the largess of the US dollar. It has fallen apart and once the rest of the world decides on a plan to move away from a dollar based reserve system then all your chicks will come home to roost, as the Rev Wright would say!
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  •  
    Nov 14 09:15 AM
    Smarty Pants, as you already have realized, poor Adam doesn't quite get it about "owning gold". He may never come to his senses, but then he supports his thesis with none other than the media whore, Jon Nadler, which says it all for his argument against ANYTHING!

    As usual, Smarty, you were spot on!
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  •  
    Nov 14 11:01 AM
    "You have to choose between trusting to the natural stability of Gold and the honesty and intelligence of the members of the Government. And with due respect to these gentlemen, I advise you to vote for Gold." - George Bernard Shaw

    Gub'ments/central banksters worldwide are creating trillions in new "money" which will inevitably cause hyper-inflation. Go ahead and trust fiat FRNs and other paper, I will trust real money. Your paper casino markets fluctuate wildly, but when I open the gun safe, my physical silver and gold bullion always look the same.
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  •  
    Nov 14 12:10 PM
    For a decidedly contrasting viewpoint on gold, read: www.moneyandmarkets.co...
    Reply | Link to Comment
  •  
    Nov 14 12:41 PM
    "It's hard to imagine a source of new demand entering the picture. "

    How about me?

    Stocks are hardly the "new flight to safety".

    GS and GE may be a place to park a bit , but we aren't going to get the deal Buffet did , and I dont think they and their ilk will be the new "gold rush place to be".

    Bonds may crash as interest rates rise - not right away, but I dont plan on timing it to the last second fully invested.

    Foreign stocks are a good diversification tool , but as Peter Schiff has found out to his surprise , no panacea.

    Nobody knows how low/how long all these entities may go , but everyone does know that gold wont disappear.

    So , as I said per demand -

    How about me?


    "Supply"

    I'm positive that you are aware , and d