Articles
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Gold coins vs. bubbled tech stocks
by marketwatch.com
Tense week on the Street, glad it’s almost over, but it ain’t over yet, and I’m adding tiny out of the money put position in two of the bubbled high flying stocks I mentioned yesterday.
These puts will help me further hedge the overall net long positioning of the portfolio with these tiny put positions. Because they’re out-of-the-money, these puts actually have large upside potential if these stocks pullback like I expect them to. If they don’t give us the big pullback, I expect that we’ll outperform on the upside with our individual stock pick longs. Watch this video of “Albuquerque Balloon Fiesta 2012 | Time Lapse.” Remind you of anything? The balloons are stock prices all inflating and floating into the sky in the current stock market bubble.
Here’s some of the highlights of my back and forth this week with Marketwatch readers.
Q. Hello Cody, I have a question regarding the physical gold purchases. Storage is obviously one issue, but what I really don’t see is what I am supposed to do with it in the event of a financial crisis. I find it hard to imagine being able to conveniently buy things like a loaf of bread with a gold coin or ingot. Are you anticipating a new replacement financial structure into which we can deposit our metal hoard? Could you describe in layman’s terms what you foresee happening with the actual coins we purchase in the event of a financial crisis. What do we actually do with them to unlock their value?
A. Since back in the early 1970s when the Republican/Democrat regime completely removed the value of the dollar from a gold/silver-based backing, they’ve simultaneously coerced every OPEC nation to accept payment for oil only in dollars. In short, that’s why we call it a “reserve currency” or a “petro dollar.” Meanwhile, China and Russia and Brazil and the fringes of the EU are sick to death of having to buy dollars to buy oil and they are actively trying to move to a new “reserve currency” to replace the “petro dollar.”
And here in the U.S., ever since the 2008 bailouts enabled the U.S. markets to be pretty much completely corrupted without punishment, along with the sending of trillions of dollars of unearned and essentially non-existent welfare and handouts to the same banks who cost Russia, the EU, and China hundreds of billions of dollars in mortgage security related scams … well, what we know so far, is that regime/Fed in the U.S. will do anything they can with the dollar and their power to control that dollar to the detriment of the value of your savings and wealth.
The end-game of this is most likely a continuation of the long-term decline and eventual collapse of the U.S. dollar as we currently use it, and that eventually you’ll likely trade some of your gold and silver coins for 10-100x the number of dollars (or whatever currency the U.S. and its citizens are using at that point) than you paid for them and use whatever currency regime(s) have replaced the status quo system. $GLD
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