Topic: Jim Rogers: Before All This Is Over, Gold Is Going Through The Roof (Read 293 times)

Gold has been sleeping for a long time, and I feel like a lot of people have already forgotten the fact that it's still one of the safe havens that people will turn to in an economic downturn. There is also silver, which I feel like is definitely underappreciated as well at the moment.After the gold rallies earlier on in this decade, gold prices have essentially stabilized and found a bottom, and is now moving sideways instead of having a particular direction in which it's moving at. That is a pretty good sign that it's preparing for a bull market. Demand for gold as a store of value will come naturally, as more people realize how unreliable fiat is.

I don't see the data backing you up on this. Price to earnings ratio of the S&P 500 as of May 2018 is 24.17 on a trailing twelve month basis (graph below), which is pretty inline with the average for where we are in the business cycle. It is above the long term historical average, but a tad below the average since 1990 which stands at 24.43 (21.15 back to 1980), so prices are not "sky high" relative to the current era of earnings and especially considering that companies have only gotten more profitable since the tax cuts. The new tax savings will support continued capital returns to shareholders through buybacks and dividends in a rising interest rate environment, so debt will be less crucial for that and will mute the impact of rising interest rates.

Fake news/email alert from Bullionbypost

Gold bugs are usually people who are into the "world financial collapse is here" conspiracy theories. They are like the people who are into the "Jesus is here, repent now" scams who want to make people scared to manipulate them. Having that said, gold is a good investment but it will not go through the roof. That job is only for cryptocurrencies lol.

It interesting to see how Gold is viewed in the west versus how it is viewed in eastern countries like India. Here it's more of a necessity than just an interest. During marriages, considerable amount of gold is spent for jewellery for the bride as well as groom. It's similar to the diamond engagement ring trend in west on which you guys too spend a bomb.

Keeping this in mind, the demand for gold is always going to be there in eastern cultures. It's psychological and social requirement is so ingrained that even the poorest of the poor try to give away some form of gold during marriages. It is a study topic in itself that how much of this fetish for gold has kept generation of Indian poor trapped in a cycle of poverty as they spend their life's savings for pleasing the society. Even then, there are cases where brides get harassed, abused and at times killed because of the demand for more.

This is an interesting point. About constantly predicting economic crash. Not many of those investors are on the top ten list. What I have found is that the top ten list is full of people who are either A) Critical yet optimistic, and B) sometimes very quiet about their successes. Not often you hear someone like Warren Buffett bad mouthing a bunch of companies or stocks.

I would be interested to know whether the userbase of gold and precious metals is growing or shrinking. Whenever I see someone with gold fever predicting the price of gold will rise, its typically someone who represents older age brackets. Gold and precious metals don't appear to have much support among younger generations. If all of this is true, it could suggest the price of gold will decline. Particularly if turkey and other nations experiencing economic turmoil decide to dump gold they repatriated from the united states.

The price of gold could also be vulnerable to strong manipulation similar to aluminum and steel. Years ago coca cola claimed that aluminum prices which factored into the price of their canning process were being manipulated by goldman sachs and other financial insitutions. There is a split of opinions on this topic and it is controversial. But it might be said that manipulation of aluminum prices aren't so different from what happens in gold markets given the tendency some have to take quantities of gold off the market or in turn adding quantities to move the price in one direction or another.

Gold lacking utility it can't be utilized for much. Goods and services often can't be bought with gold which limits its utility and in turn its price.

Recently however countries like china have proposed allowing free exchanges of gold for their native currency the yuan. Others like Erdogan have proposed a move back to a gold standard. Perhaps support for gold is in our future. Although it is also possible that turkey, china and other nations are only hyping gold to raise its price before they dump their gold holdings on the market.

Jim Rodgers has been bearish on the stock market since the 1980s and how well has that prediction worked out? The stock market has been a tremendous engine for wealth accumulation over that time. People who constantly predict economic collapse are tiresome, and it's very much a case of the boy who cried wolf. Jim Rodgers isn't the worst of them, but because there are so many of them, his predictions can mostly be lumped in with them. The bearish sentiment on the stock market has to be viewed as a black mark, even though his own fund handily outperformed. Outperforming something doesn't make the other thing a bad investment. The stock market has been an excellent investment since the 1980s.

I'm not a graduate of any economic-related course, but I do know that day by day, inflation is doing its part at a rapid pace and the overall debt of the US alone is growing, with figures reaching a staggering $21-T currently. Sure the US can print more and more money as long as they wish, but the question is until when can it hold? Also, not all people are lucky enough to be a Youtube star or Instagram influencer or a crypto trader; do remember that there are hundreds of thousands of homeless people relying on meal stubs and the government to continue living. All in all, I think the world is already in a pretty bad shape, economic-wise. A steep correction in the stock markets might come sooner, but expect it to be a harsh one.

But before we even come to that are there any real signs that a bear market is coming? or are there any real signs that a recession might even begin? Because what I am seeing is good, unemployment is not that big to make a crash and those who are unemployed have now found ways to make money online from blogging in Youtube to trading crypto which we can consider that they are earning something even if they are unemployed. Big companies as well as government projects are providing jobs to their locals. Looking at how money flow inside the pocket's people makes you think if there will be a bear market soon.

Jim Rodgers has been bearish on the stock market since the 1980s and how well has that prediction worked out? The stock market has been a tremendous engine for wealth accumulation over that time. People who constantly predict economic collapse are tiresome, and it's very much a case of the boy who cried wolf. Jim Rodgers isn't the worst of them, but because there are so many of them, his predictions can mostly be lumped in with them. The bearish sentiment on the stock market has to be viewed as a black mark, even though his own fund handily outperformed. Outperforming something doesn't make the other thing a bad investment. The stock market has been an excellent investment since the 1980s.

Regardless of Jim Rogers' history, my rationale for not getting into the US stock market at this point is that the prices are sky high and not justified by fundamentals, because:

- the market was hanging on to the hope of the Trump tax-cut coming true, after the hope of all other potential good news had been dashed.

- the market is largely supported by by companies borrowing money cheap and buying back their own stock, in an environment where the Fed is almost forced to keep raising rates.

To the credit of the elites, there are signs they are trying to deflate the bubble preemptively.  (This is all very similar to 1928-29 BTW!)  Though this is good policy, it's not a good sign for investors.  The elites certainly know a lot more than we do.  Either they succeed, in which case the prices should go down before they stabilize, or they fail, which means there will be a worse, market-driven crash down the road (and BTW the latter scenario must be why they try to deflate the bubble in the first place.)

Just about the only scenario that is short-to-medium term bullish for US stocks at these prices is that the elites succeed, in engineering a preemptive reset-by-inflation of the entire system (assuming they are pursuing this for this time frame, which is by no means certain.)  In that scenario, it's best just to hold cryptos anyway.

You're probably right, but I haven't seen any data on that.  The thing is, older folks probably remember the time when the US was on the gold standard and still harbor some nostalgic but irrational feelings toward precious metals.