In search of intrinsic value

Guido Romero Rank: 137 Followers: 2 Votes: 0 Years Member: 7 Last Update: 7 August 2014, 1:08 Categories: Relative Performance Charts
Gold / Gold Stocks
Currencies

Regardless of any recommendations you may receive from anyone, at this particular financial/economic/social juncture, gold bullion stored within your reach is the safest thing - coins are a fine store of value. I don't particularly recommend GLD as a long term investment but only as a medium term holding and/or trading vehicle. If you really must keep funds with a broker and wish to invest in bullion for the long term, I prefer CEF or any of the Sprott funds.

July 8/14 - I am finding negative divergences everywhere I look in the oil segment. Oil companies, service providers, refiners... everywhere! On top of it, the market does not seem to believe the latest news that ISIS (or the Islamic State) is now in possession of nuclear material in Iraq.... something is definitely rotten in the oil patch....

June 24/14 - It is my opinion that the price of oil is key to maintaining the derivative pyramid standing. The technical picture of the price of oil is horrendous however. The fundamentals are even worse. In fact, the fundamentals of oil are so dismal that not even fomenting a revolution in Ukraine (gas) and claiming renewed fighting in Iraq (oil of the light sweet variety which is the most prized) is having an effect on the price of crude. The technical picture for WTI is still remarkably weak. It is my opinion that a break down in the price of crude could be a 'Lehman' event for the general market. In my opinion, a drop in oil prices will engender an unwinding of several Trillion $ worth of derivatives bringing about serious dislocations in the credit markets... hence the interest on the part of central banks and Western governments to prop the price of crude any which way they can...

January 6/14 - I am reasonably optimistic monetary metals may begin to outperform. In the end of course, monetary metals will outperform any fiat currency. The trajectory however is not devoid of bumps and ravines and the timeline is uncertain. Purchasing power is being eroded at the fastest clip of the past 100 years. Del

Less

100 - $SPX since 1980

The S&P is the benchmark I use to illustrate and buttress my argument.

101 - US$ purchasing power versus CPI

105 - 30years US Treasury Bond since 1980

110 - $SPX, the 30yr US TBond and the US Dollar since 1980

120 - $SPX and gold since 1980

125 - Gold since 1980

126 - Gold bullion inflated by the purchasing power of the US$

130 - $SPX valued in terms of gold bullion

135 - The 30yr US Treasury Bond valued in terms of gold bullion

140 - $SPX valued in terms of $XAU the gold mining company share index

Oct 7/13 - This is the power of the Fed. By simultaneously giving trillions to the banks and keeping interest rates artificially low, it can induce corporate re-financing thus boosting the nominal value of the stock market. The direct ramification of this policy is the devastation of purchasing power thus abetting inequality.

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