All that glitters

There was a time I believed in gold.

I saw it as a noble defender against inflation which steals the worth of paper money. Anonymous currency you can covet, hide in the back garden and use when the zombie apocalypse arrives. Portable insurance against war, pestilence, insurgence, revolution, chaos, social disintegration, asset confiscation, mayhem or market collapse. A storehouse of wealth that’s eternal. The only sane defence for when sanity’s restored and money is again backed by something real. A last resort and shield from fiat madness and the blind, misplaced trust of sheeple who have no idea what pain will ensue when the debt hammer falls or governance fails.

Then I grew up.

Experience is a powerful teacher. None of that stuff has happened in my lifetime. Odds are overwhelmingly that none of it will. The lesson on precious metals was simple: they’re volatile, emotional rocks which sometimes thrill and more often suck away net worth.

But here we are. The kids have switched from gobbling Tesla to Hoovering gold. The lesson of buy high will have to be learned once again, it seems. An ounce of gold is now worth a little more (in US$) than it was nine years ago, Back then in 2001 there was a debt crisis debate going on in the US, the American dollar fell and PMs advanced. The advice of this blog was stark: sell and take your profits. The response was as expected: you’re nuts. This baby is going to the moon. It didn’t.

Déjà vu. All of the old golden juices are flowing again. And the outcome will be the same.

Now, before proceeding, there’s a reason gold (and its poor cousin, silver) are seldom topics of discussion here. This asset is just as tainted and distorted by emotion as is residential real estate, except it’s basically useless. You can’t live in it. Bullion pays no dividends or interest. Outside of urban centres it’s essentially illiquid. It’s hugely volatile and vulnerable to currency fluctuations. This is not an asset most people should own.  If you need exposure, the best way is through a fund that contains stock in producers. The dumbest way is to hold the rocks themselves. And, no, gold is not money. You cannot exchange it for food at the supermarket or fuel at Petro-Canada. And you never will.

Mostly, however, PMs are not a topic here because of the delusion of those who own some. They are smitten, blinded and myopic. They buy and never sell. They turtle during those long periods when the metals do nothing, or decline, then rush to proselytize when it revives. They trot out 50- and 100-year charts to prove their obsession and acumen, yet almost never do any of the devotees cash in on those temporary gains adding to their net worth. So, no, gold is not a practical investment asset, either.

It’s the stuff you fashion into an altar in the furnace room, then slip downstairs to be quietly, secretly thrilled. Until you grow up.

So what’s going on now that gold has achieved the price of $2,000 an ounce (significantly below its 2011 level when inflation is considered)?

Is this because the world economy will collapse during an unprecedented pandemic? Because of Trump and the increased likelihood he will abrogate or ignore the coming election? Civil unrest and street rioting in America? Climate collapse? The demise of Europe or the growing odds of a US-Sino armed conflict? No economic recovery coming? Pas de V?

Nah. It’s all about the greenback. When the American dollar goes down, commodity prices go up. And gold is the poster child for that.

This from Scotiabank chief economist Derek Holt, who’s a good egg. Smart, too.

Why is gold rallying? Purely because the USD isn’t. Be wary regarding other potential explanations as many of them offer up internally inconsistent narratives. Almost to the day that the US went into shutdown, the USD began to depreciate starting over the latter part of March. The FX market looked at the shutdowns and immediately began pricing a recovery. The USD has depreciated as part of a smoothed risk-on bias across asset classes that has embraced higher-risk alternative currencies. As the has dollar fallen, it’s now the case that 1,900 greenbacks have to be given up in order to buy an ounce of gold versus just 1,500 toward the start of the year.

But is gold also rallying because of a feared pandemic blow-out? Because of concern that the global economy is stumbling or will stumble again? Because of concern that excess stimulus is being tossed onto the economy with inflation around the corner and the Fed might have to turn around sooner than generally believed? These scenarios would generally be cause for the USD to appreciate, not depreciate. In short, don’t take gold’s rally as a sign that something awful lurks ahead when it quite arguably represents the opposite despite a confused narrative that seeks to throw all possible explanations at the wall hoping they can all stick when in reality they lack internal consistency with one another.

In other words, this is probably another golden head fake. Just like all the others. Given the collapse in interest rates, including bond yields, and a 50% jump in stock prices, a bunch of money is looking for something else to hunker down in for a while. It moved into PMs. It will move out again. This is not the big reset. Don’t buy into it thinking you’ve just outsmarted the central banks.

And if you own PMs that have popped in value, you know what to do.

But you probably won’t.

 

191 comments ↓

#1 Bob on 07.27.20 at 3:22 pm

I bought a gold coin from the Royal Canadian Mint a few years ago

Had to laugh when it arrived it is about 1/3 the size of a dime

#2 Joe Clark on 07.27.20 at 3:25 pm

First!

#3 Ace Goodheart on 07.27.20 at 3:32 pm

Warren Buffett on Gold:

[It] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

Big shake down heading down the pipe for Toronto MICs

Apparently, the folks who run these organizations, have no idea how second, third, fourth mortgages work in terms of priority on recovery.

There are entire organizations out there, whose profitability and sustainability as a functioning entity, are based on the premise that the value of residential real estate can only go up. Ie, if you put a third mortgage on a property that has no equity in it, and you wait a few years, you will be able to pull your money back out, with interest, when the over burdened home owner finally throws in the towel and lists the rotten pile of bricks.

This is the actual business model for many MICs. “Invest” in properties which have no equity, and then ride them up, with interest.

These organizations are going to get whacked. They are going to lose everything. A 5% decline in home values will wipe out about 90% of them. The remaining 10% would be on life support.

There is this huge, well connected, politically motivated home mortgage lending group of businesses, run by people who all seem to have come out of nowhere following the Liberals winning the election that put Trudeau into power.

They make their money based on the ever increasing value of residential real estate.

It is amazing to read now, how little these folks actually knew about how mortgages work, when they were building their businesses.

In other news, it is a very good time to purchase US dollars. A very, very good time.

#4 Andrew on 07.27.20 at 3:33 pm

Generally true, but just offering some counterpoints:
https://www.schroders.com/en/sysglobalassets/staticfiles/schroders/sites/americas/canada/documents/investment-perspective-what-are-the-inflation-beating-asset-classes.pdf
https://www.aqr.com/Insights/Research/Alternative-Thinking/It-Was-the-Worst-of-Times-Diversification-During-a-Century-of-Drawdowns
Gold and commodities do offer some good inflation protection in response to unexpected high inflation. Equities do as well, but tend to suffer initially before compensating for the inflation.
Gold is speculative, but the speculative behaviour of market participants isn’t likely to disappear anytime soon. You can take advantage of that. Further, gold and precious metal equities are often uncorrelated with stocks and bonds…perfect for rebalancing into cheap stocks (see March-April 2020).
Needless to say, PM ETFs are better than the physical thing, and you shouldn’t hold onto it religiously. Buy low, sell high. Allocating a few percentage points of it to a portfolio is reasonable.

#5 crowdedelevatorfartz on 07.27.20 at 3:38 pm

@#2 Joe Who?
“First!”

++++
Alas, your were always second in my book Joe

#6 the Jaguar on 07.27.20 at 3:41 pm

“The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.”
-John Templeton

#7 When Will They Raise Rates? on 07.27.20 at 3:42 pm

Not only did the The Fed fail at shrinkinh its balance sheet BEFORE covid, it started expanding the balance sheet BEFORE covid.

And now? It’s game over. Printing ad infinitum is the new normal.

This IS the reset! Not even thinking about selling my stack until we get to the other side.

#8 Dirty Dan on 07.27.20 at 3:42 pm

Leftist body count for the weekend (yes, just THIS weekend):

Leftist members of the NFAC shoot 3 members of… the NFAC in a tragic mishandling of weapons.

https://abcnews.go.com/US/members-armed-militia-shot-breonna-taylor-protest/story?id=71990031

Leftist “protesters” shoot at a Jeep driving down a highway into… other “protesters”.

https://denver.cbslocal.com/2020/07/25/protesters-block-interstate-225-injured-car-drives-through-crowd/

Leftist BLM “protester” fires 5 shots into a car and dies from return fire.

https://www.bizpacreview.com/2020/07/27/cops-confirm-shots-were-fired-at-austin-motorist-who-killed-blm-protester-armed-with-ak-47-952089

If this keeps up the left will wipe itself out. I don’t recall the armed “right wing” radicals in Michigan off’ing each other.

#9 Sail Away on 07.27.20 at 3:43 pm

“And if you own PMs that have popped in value, you know what to do.”

—————-

As a Canadian, I do not think our Prime Minister has popped in value. I would be very willing to sell him to any willing bidder, though.

#10 ElGatoNerodeYVR on 07.27.20 at 3:45 pm

Slow day at WFH office and the smell of summer (or whatever the homeless crowd gathering daily a few blocks away here close to Downtown ignoring the social distancing rules even while sternly reinforced by our brave VPD is smoking) so let’s imagine what would we be investing in a world where PM’s are yet again (Last time in the time of Arthur and the Knights of the round table) the main currency.
1) manufacturers of hammers and chisels so we can chip off the gold bars
2) measuring tools for the above to ensure they are not weapons grade
Of course the government will create a department and a registry to ensure compliance
3) precision scales
4) retail stores secured storage vaults,at POS and back office
5) storage vaults in general for home use and secured locations for the homeless to ensure social equity
6) security companies

And we can go on but likely I hit quota and the emails are starting to roll in so time to go do some work.
Be safe everyone and guard your jewelry.

#11 Wkg on 07.27.20 at 3:46 pm

As long as I have been investing, goldbugs have been pounding the table saying that it it going to 10,20,100k an ounce. Basically it is a worthless commodity, it is used for jewelry, some electronics, and to soothe the fragile mental state of goldbugs.
Here is my gold story. I bought a one once coin in about 1988, I think with exchange I paid 1500cdn for it. Fast forward 32 years, it is worth 2500 can. Better than ant investor group mutual fund return, but nothing to write home about.
The one thing that the goldbugs are right about though is about having a portion of portfolio in hard assets. Farmland is my asset of choice. I own a lots of acres in Sask, truly a wonderful investment. I get checks once a year from tenants, I’ve never met any of them, and according to farm credit data, the price has appreciated every year since 1990

#12 Joe on 07.27.20 at 3:51 pm

At the end of the day diversification is best. Stocks, bonds, cash, precious metals, a principle residence, GICs. No need to put all your money in a balanced ETF. Above all focus on health, family and friends. Life is short. Enjoy!

#13 Learn2investkid.com on 07.27.20 at 3:54 pm

Another great post Garth! Why is gold like a religion for some people? Especially people over 60? Some people trade gold stocks here and there but I don’t know anyone who made a fortune in gold stocks over the long term. I personally like to buy stocks that pay dividends.

#14 YouKnowWho on 07.27.20 at 3:56 pm

So cash holds up in the long run? Paper that’s now being given away like it grows on trees?

With 1300 sq/ft condos starting at $1.7m? 4x monthly cost what it is to rent down the street?

$1M homes that look like this?
https://toronto.ctvnews.ca/this-toronto-house-just-hit-the-market-for-1-million-1.5040276
…hey it’s a 2bdrm!

Debt to the gills?

Cash give-a-ways by governments?

I don’t know Garth? Past performances is not an indicator may not be indicative of future results. Just because it has not happened, does not mean it won’t.

For so many years you have been talking about how the fundamentals don’t support the craziness in real estate.
It didn’t. You were right.
And yet $800K homes in GTA turned to $1M. $1M turned to $2M. We’re at what 12x average earnings for an average house? 15x? 20x? What is it now?

Who knows what questionable financial instruments are plumping up the market and all this passive investing as well.

It all sound not plausible and crazy. Until it isn’t. Broken clock is right…all that jazz.

This Pandemic situation is far from over as well. If you were calling it – what act would you say we’re in?

#15 Ejy on 07.27.20 at 3:56 pm

Oh boy, this may be an invite to the nutcases to come out of the woodwork, as they will read the second paragraph and conveniently ignore the rest, especially the part about “growing up”…

#16 T-Rev on 07.27.20 at 3:57 pm

My B&D portfolio officially surpassed its January 1 value today. Went 1/3 cash this morning, mainly by liquidating the “rainy day” type investments (TFSA and some RSP). Left the long term (Bulk of RSP and non registered) As-is. There’s some more short term pain coming, both to the stock markets and the real economy, and I want to have some cash available for downside mitigation, buying opportunities, and dog food. Central bank stimulus or not, Tesla is not worth what’s its trading at, not is the SP500. No way the future earnings are what they were January 1, trillions in stimulus or not. Once the masses are done blowing their government cheese placing bets through Robinhood, we’re going to discover that double digit unemployment, recession, and massive deficits do not bode well for corporate profitability and share prices.

#17 Oracle of Ottawa on 07.27.20 at 4:07 pm

Anytime there’s a market downturn, gold is the logical alternative that will make you money. This has happened countless time in the past century. If you don’t believe me look at any chart. This is not the VIX or Bitcoins. Gold is based on hard assets. Gold has been around for a thousand years and will continue to be well after empires have come and gone. Barrick and Newmont pay dividends. Buy low and sell high. What more do you want?

#18 Wuhan we got y'all in check on 07.27.20 at 4:08 pm

if you want to invest in gold then buy a gold Rolex

#19 Dave on 07.27.20 at 4:09 pm

I bought 10 ounces of gold in 2008 at $800 an ounce and one ounce of palladium for $400 an ounce. I sold the gold 8 years later at a 100% increase in value and sold the palladium 9 years later at a 400% increase in value. I am glad I am out. I am now buying freeze dried food which lasts for 25 years. Value of the food will always go up and you can eat it too.

#20 H.D. Knucklehead on 07.27.20 at 4:10 pm

Bit Coin too, my two cents worth. Other than for nefarious type transactions of course…

#21 Doug on 07.27.20 at 4:20 pm

Sold 250 silver maples last Friday – selling last 150 this afternoon – the gold maples at end of week $$$$

#22 Dave on 07.27.20 at 4:20 pm

Oil and Gas Companies fund Police Groups in US
Is anyone surprised?

https://www.theguardian.com/us-news/2020/jul/27/fossil-fuels-oil-gas-industry-police-foundations

#23 O caNnABis! on 07.27.20 at 4:21 pm

duDEs It’S liKE 4:20 oVER anD OVer aGaIN I am LOVin thIS locKDOWN!!

#24 Ronaldo on 07.27.20 at 4:23 pm

#11 Wkg

I bought a one once coin in about 1988, I think with exchange I paid 1500cdn for it. Fast forward 32 years, it is worth 2500 can. Better than ant investor group mutual fund return, but nothing to write home about.
—————————————————————–
If you paid $1500 for that 1 oz coin in 1988 you overpaid by about $960.00. Gold in USD average around 440 in 1988 and the exchange around 1.23. At the moment in CAD gold is quoted at 2590 so in CAD that 1 oz you bought in 1988 would have increased in value by 380%.

#25 Faron on 07.27.20 at 4:25 pm

Thanks for the post Garth. I watch gold prices like I watch those of bitcoin — with detached bemusement. I wonder what your thoughts are on the recent nomination of Judy Shelton to the US Fed. She awaits Senate approval, but probably has the support.

Judy envisions a return to the gold standard (a form of) in the US. Some think this is one of the drivers of the present gold flurry.

Your thoughts?

Will. Never. Happen. – Garth

#26 Axehead on 07.27.20 at 4:29 pm

Unless you are Keano Reeves, not much use for the stuff. But, it sure is a special metal: heavy, soft, does not tarnish, the best conductor of electricity, more …

#27 Faron on 07.27.20 at 4:29 pm

#14 Ejy on 07.27.20 at 3:56 pm

Whaddya mean “out of the woodwork”? The nutcases are the credenza and table lamps of this place. :-)

#28 KingKouros69 on 07.27.20 at 4:36 pm

No complaints with my Permament Portfolio in my RRSP.
25% – VTI (USA Index Fund ETF)
25% – IAU (Gold ETF)
25% – VLB.TO (Long Term Bonds ETF)
25% – PSA.TO (Cash ETF)

#29 Do we have all the facts on 07.27.20 at 4:37 pm

Any idea why the central banks in a Russia and China have stepped up their purchases of gold lately. Do they know something we might be overlooking?

It’s that or US$, and so, political. – Garth

#30 Linda on 07.27.20 at 4:38 pm

Precious metals have allure – most folks own/wear at least one piece of jewelry because most folks like pretty things & if they sparkle/shine, so much the better. As a medium of exchange however they have their drawbacks. Anyone who has ever rolled a bunch of loose change & brought it into the bank knows just how heavy a few rolls of coins are. Those pirate chests of gold being buried in a secret location? All I can say is, those pirates had serious muscle if they had to haul a chest of gold/silver far enough inland to ensure it wouldn’t be washed away in the next high tide. Now add in the issue of theft. Sorry doomers, but a society that requires the use of gold/silver coinage in order to obtain goods/services is probably not the kind of society most people would enjoy living in. I like my luxurious lifestyle of potable water, sewage treatment, medical services etc. just fine. Don’t want to return to ‘nasty, brutish and short’ which is when precious metals were generally used in payment, thanks all the same.

#31 Dirty Dan on 07.27.20 at 4:42 pm

#14 YouKnowWho on 07.27.20 at 3:56 pm

This Pandemic situation is far from over as well. If you were calling it – what act would you say we’re in?

When various doctors wrote letters saying the pandemic was over blown and we shouldn’t quarantine young healthy people, the pandemic was looking fishy.

When the same doctors who said we should stay inside advocated it was still fine to protest, the jig was up.

When MSBNC interviewed pediatricians asking if they would send their OWN kids to school and they said yes, the scamdemic was in the open.

After the election this pandemic will vanish like a fart in the wind… well except for the blaming China part. Their flexing in the South China Sea won’t end well when US, JPN, INDA and AUS get involved.

#32 Boomer Bill on 07.27.20 at 4:43 pm

Folks, if you have just woken up to the fact gold has hit almost $2000 an ounce put your money away as you will truly be the last and greatest fool. The time to have bought gold or better yet, gold miners was when the pandemic shutdown began. I scooped up 20,000 shares of Barrick when it cratered to below $20 a share in March. Check its closing price today and weep.

#33 Toronto Rocks!!! on 07.27.20 at 4:45 pm

Here is what a million dollars will buy you in the 3rd largest metropolis in North America…

https://toronto.ctvnews.ca/this-toronto-house-just-hit-the-market-for-1-million-1.5040276

Land value. Don’t fall for such a juvenile media story.- Garth

#34 crossbordershopper on 07.27.20 at 4:48 pm

i used to like gold till i started growing weed, gold doesnt smell nice, and doesnt produce babies, retirement plan for me was to supplement my income with 4 legal plants, well 6 if your up to get a ticket, 4 cycles a year, a pound per, its quite lucrative to just grow for personal use and for shareing with friends and family.
Thanks Justin,

#35 AM in MN on 07.27.20 at 4:48 pm

There is a difference between investing for a profit vs spending money (or losing opportunity) with some of your portfolio as an insurance policy.

Back when there was a “Gold Standard” (rise of the British and American Empires), you didn’t own gold to make a profit, but you could hold cash and have faith in it’s value.

Our more modern, global economy now has other assets that the currency is effectively backed by. This is why the term “Petro-dollar” was coined to describe the US$. Anyone who wishes to do global business needs to hold a reserve of US$. To a lesser extent, C$, GBP, AUS$, EUR and other currencies that are liquid (for now!)

The problem is that there is no time in recent history, incl. 2009, where the printing presses went into to overdrive at such a rate, and with no end in sight as the public now wants their free everything with no possible way for the government to raise that amount of revenue through taxation.

As I’ve explained before, money printing is a wealth tax, a growth in the denominator with no increase in real wealth to back it. Also, it isn’t evenly distributed as those in the know and with special access get loaned nearly free money, and in the case of the government, may not ever pay it back. I’ve used the Argentina example before, and it holds true here.

10% of your portfolio in gold is not unreasonable, some in physical… remember what happened to “registered” gold in the US in 1933! At this point, Bitcoin is better than physical gold.

This is to hold, long term, not trade. An insurance policy against a crash.

Although most people living haven’t seen a crash or a bank failure, it still isn’t inconceivable. Imagine if the COMEX (which just shipped 170 Tons of physical), couldn’t produce the redemption demands from paper, which now sit at over 100x the physical? The Central Banks would try a bailout, but the amounts would be so large and speed needed so short it may not be able to keep confidence.

The drive in price is not coming from CERB gamblers tired of TSLA, it’s coming from Central Banks and governments around the world making sure that they have the ultimate liquid asset whet he system freezes up. Yes, these players do ship 747 Freighters full of the stuff around the world when they need to. None of them will be in the mood to sell until the Fed starts shrinking it’s balance sheet back to something reasonable. Remember the UK govt. selling it’s holding for $400/oz 20 years ago? Not going o happen today.

These are not hot money flows, and the price isn’t going to crash any time soon.

#36 greyhound on 07.27.20 at 4:50 pm

“They are smitten, blinded and myopic.”
Yup — but a few aren’t; the difference between a “goldbug” and a gold bull is that the goldbug never sells.

“Why is gold rallying? Purely because the USD isn’t.”
Really?
Negative real interest rates which continue to drop have nothing to do with it? Confidence in central banks which is slowly eroding virtually world-wide has nothing to do with it? Fiat currency debasement has nothing to do with gold’s rise?
I remain unconvinced.

Too bad. There are no negative rates in NA, and won’t be. The US$ is the world currency and far from being debased. And thank goodness for CBs. They just saved our asses. – Garth

#37 Penny Henny on 07.27.20 at 4:57 pm

Never mind gold. Did you see bitcoin today?
Disclosure I have about 13% of portfolio in XGD.

#38 JM Keynes on 07.27.20 at 4:59 pm

#25 Faron on 07.27.20 at 4:25 pm
Thanks for the post Garth. I watch gold prices like I watch those of bitcoin — with detached bemusement. I wonder what your thoughts are on the recent nomination of Judy Shelton to the US Fed. She awaits Senate approval, but probably has the support.

Judy envisions a return to the gold standard (a form of) in the US. Some think this is one of the drivers of the present gold flurry.

Your thoughts?
————————————————————–

Folks, educate yourselves on what life was like under the gold standard. Reading JK Galbraith’s great book Money or his other great book, The Age of Uncertainty and see what life was really like under a gold standard. If you are not a reader let me help you out. Life was crap with constant deflations and depressions. Here is the great Galbraith explaining it in a BBC television series he did based on his book The Age of Uncertainty.

https://www.youtube.com/watch?v=McW2aFpJxsM

#39 JacqueShellacque on 07.27.20 at 4:59 pm

My first question in either side of the debate would be what one foresees needing to protect oneself against by holding PM (or conversely, what one shouldn’t need to worry about by not holding it). The worst case scenario where you are still alive is no utilities, no banks, no grocery stores. The value of any PM at that point would be what it would get you in exchange for anything you need to keep you alive. So Garth your approach is probably too rosy, on the flip side the bricklickers need to understand why they’re holding PM and under what contingencies they might need it. I can see some value in collecting jewellery and other easily storable PM here and there as a possible means of exchange in the worst case, the worst case being way worse than what Garth is imagining. But whether it would actually help in a real emergency probably depends on local conditions, as there will be nothing centralized if/when something happens that may require actually using it.

You will never see the banks and stores all close. If they did, who in their right mind would give you precious food or gas in exchange for some pieces of metal? Delusional. – Garth

#40 Hugh on 07.27.20 at 5:07 pm

Garth you seem to have faith in the fiat system maintaining its purchasing power as it’s being debased.

Carry on with your perspective but I believe you to be very wrong here. The can of 2008 was kicked down the road and the inflation genie has come to collect.

Hopefully you see the light

Worry about deflation right now, not inflation. – Garth

#41 ImGonnaBeSick on 07.27.20 at 5:07 pm

#191 D Tree on 07.27.20 at 2:54 pm
#170 ImGonnaBeSick on 07.27.20 at 11:58 am

—————————————

Thank you for the detailed breakdown. Lots of food for thought here.

I think the tslas continuous integration design approach is why they don’t work with tier 1 suppliers. Munro & Associates did a complete tear down of the Model 3 and Model Y and posted a comparison. I watched all 40 videos before doubling my investment in TSLA. Here is the summary video if you are interested: https://www.youtube.com/watch?v=TOrrdqje9Og&list=PLkiDlGyJnprdFftxAZ85a5Rp1LlET4Wbr&index=42

Also, Tesla are hiring people with your skill set all over the world if you are interested :) https://www.tesla.com/en_CA/careers/job/automation-controlsengineer-45086

—-

Thanks for this, I really enjoyed that! Sandy is a big deal.. you may not find better analysis than him. He’s practically done it all and is a lot more knowledgeable than me in all things auto, except maybe the actual punching in of logic. I didn’t know the ol’ boy had a YouTube channel!

Heh, and as far as the Tesla jobs, Elon and me both are always looking for good controls engineers.

#42 Camille on 07.27.20 at 5:13 pm

I think USD/CAD rallied through the initial weeks of the crisis, but who’s counting days.
Bitcoin and gold. Millenials bidding anything higher.
When the going gets weird, the weird turn pro. Hunter S. Thompson.

#43 willworkforpickles on 07.27.20 at 5:14 pm

CERB… EIP & Stimulus Support recipients buying gold in sub ounce quantities….too funny.

#44 Hugh on 07.27.20 at 5:14 pm

Look around. Food going up, consumer staples going up, stocks going up, shelter going up.

We need not worry about deflation, inflation is all around us. And if you believe in the CPI, you’re too far gone

#45 Robert B on 07.27.20 at 5:16 pm

I am definitely not telling anyone to buy gold now..

Garth why do hate Gold so much?

Your site has knocked me down before and even your moderators have censored my most recent gold post. So much for free speech.

Gold is a hedge from Countries inflating their debt and de-valuating their currency.
For the record….an oz of gold in Canadian dollars today is $2600.
The price of gold 9 years ago in Canadian dollars was about $1900. Gold is the ultimate currency even against the US dollar..

Over the years there have been many currencies that have been tremendously been de-valuated. South American currencies are a fine example. Their citizens could have preserved some of their wealth by holding US dollars or Gold outside there home currency.

Please correct me if I am wrong…

This is not South America. So you’re wrong. – Garth

#46 Yukon Elvis on 07.27.20 at 5:16 pm

Too bad. There are no negative rates in NA, and won’t be. The US$ is the world currency and far from being debased. And thank goodness for CBs. They just saved our asses. – Garth
……………………………………

Some might argue that interest rates that are below the rate of inflation are in fact negative rates. If mortgage rates are 2% and real inflation is 3% that would be arguably be negative interest rates.

But it isn’t. – Garth

#47 YouKnowWho on 07.27.20 at 5:16 pm

Land value. Don’t fall for such a juvenile media story.- Garth

That sounds like you think it’s worth it Garth.

Yes, buy, build, make it worth $2.5M of after tax money. Maybe even chop it in 1/2 have a house in the laneway and one in the front.

The lot is $1 million, Build a nice hours for six or seven large. Average for the area. – Garth

#48 Inequity on 07.27.20 at 5:17 pm

#32 Bragger Bill
Of course you did, good job! :P

#49 Gold is the Answer on 07.27.20 at 5:17 pm

I believe history will prove how useful precious metals will be in dealing with the great uncertainty of these times.

#50 Q on 07.27.20 at 5:18 pm

“None of that stuff has happened in my lifetime.“

Sure it has. Just not your currency so far.

You don’t buy groceries with stocks either. Both need to be liquidated.

That said, only hold a small exposure for diversification’s sake.

#51 Felon Musk on 07.27.20 at 5:18 pm

#39 ImGonnaBeSick on 07.27.20 at 5:07 pm
#191 D Tree on 07.27.20 at 2:54 pm
#170 ImGonnaBeSick on 07.27.20 at 11:58 am

—————————————

Thank you for the detailed breakdown. Lots of food for thought here.

I think the tslas continuous integration design approach is why they don’t work with tier 1 suppliers. Munro & Associates did a complete tear down of the Model 3 and Model Y and posted a comparison. I watched all 40 videos before doubling my investment in TSLA.
—————————————————————

You doubled your investment in this profitless king of the zombie companies at what price point? If you did it a year or longer ago, I would tip my hat to you. If you have done it recently, you deserve to lose your shirt…

#52 YouKnowWho on 07.27.20 at 5:19 pm

Worry about deflation right now, not inflation. – Garth

For how long Garth?

Can someone explain to me how all this debt gets sorted out? The debt just keeps getting bigger, bigger and biggerer.

Hint: it will not be solved through inflation. – Garth

#53 cramar on 07.27.20 at 5:21 pm

1) I remember when gold was $35 an oz. That was 50 years ago. The Cdn dollar was around par then so roughly $35 Cdn. Today, based on exchange rates, it is worth north of $2500 Cdn.

Using the Bank of Canada inflation calculator (https://www.bankofcanada.ca/rates/related/inflation-calculator/), in 1970 $35 would be $237 today, an average annual 3.9% inflation rate.

Gold is worth 10X that! So great hedge against inflation over long term.

2) I was into PM in the 1980s. Bought gold bars (and silver), plus mining stocks. Sold several years later at a good profit. Wish the heck I kept the gold bars though.

3) Last month was talking to my financial guy and said I am unhappy with bonds used in a balanced portfolio. Not a good balance anymore, like it was 20 years ago. I need something else as balance. Since I had just bought and read the new book “Why Gold? Why Now?” by E.B. Tucker, I said that balance would be in GOLD! Maybe 10%-15% no more. Last month, been the best performing part of my portfolio. But that is short term.

#54 Bark on 07.27.20 at 5:25 pm

“Bullion pays no dividends or interest. ”

Treasuries and savings accounts barely do either. I think Garth is right that part of the rally is because where else should you park your money? The best arguments against PMs fall apart in our backwards world when some of the biggest wall street companies don’t make a profit and loans dont pay interest.

PMs make sense in a world gone mad.

#55 Felix on 07.27.20 at 5:26 pm

Yet another pic of a dogawful mutt attacking an innocent child! Trying to push her into the path of a moving vehicle, no less.

When will this stop, humans!? Smarten up – get a cat.

#56 Faron on 07.27.20 at 5:28 pm

#39 JM Keynes on 07.27.20 at 4:59 pm

Folks, educate yourselves

and

Garth: Will. Never. Happen. – Garth

Regarding gold standard: to be clear, I think the idea of returning to it is pure lunacy. I mentioned Judy because the US is on the way to confirming a gold standard-er to the fed in a position that’s just under the chair. Folks should note that. Just when you think that administration can’t do any more harm… Mind is boggled.

#57 Ponzius Pilatus on 07.27.20 at 5:29 pm

Tesla S is a beautiful car. So, I can see the appeal.
3 and Y are butt ugly. Would not be caught driving one.
BMW or Audi will always be my choice.
I’m proud to say, I never owned a North American car.

#58 mansters on 07.27.20 at 5:35 pm

Gold and silver are going much higher imo. This is the perfect environment. Real rates are negative and going lower. Nominal rates may even go negative. CB’s will never raise rates ever again. All currencies are being debased in true Keynesian fashion.

#59 YouKnowWho on 07.27.20 at 5:36 pm

Hint: it will not be solved through inflation. – Garth

You’ve noted it will be through taxation. Clearly when the politicians started saying this wouldn’t be so one knew it would be.

What about that steaming pile of household debt Garth?

You know…new PS5 and Xbox are coming out soon, so that savings rate will erode again, and the fact that 43% of Canadians are $200 away from insolvency (down from 49%) is nice, but it won’t be so once PS5, new Xbox and Christmas rolls around.

Plus, let’s not kid ourselves – 43% is still A LOT! What would you guys say is an acceptable number here? What % of Canadians SHOULD be $200 away from insolvency?

#60 Macduff on 07.27.20 at 5:37 pm

I bought my son a one ounce gold coin in 2005, the year he was born. It’s worth about $2600 today, about a 10% y-o-y increase. He ain’t complaining.

It’s worth nothing until you sell. Did you tell him that part? – Garth

#61 Steve on 07.27.20 at 5:37 pm

Back when gold started falling from its highs in 2011, as a young and dumb investor (gambler back then). I bought 10k worth of Barrick Gold stock ABX. So it kept falling and falling, and I kept “averaging down” until I had more than 30k invested in ABX. I waited 2 or more years to get to break even, I was lucky that I got to break even. I finally sold it at break even, and I discovered this blog.

Thanks Garth! And F gold.

#62 Graeme on 07.27.20 at 5:39 pm

I will absolutely sell my rocks but only based on ratios to other real assets.. scaling out as they approach 1980 levels. We are in the latter half of the ’70s now. Stagflation cometh. Play it how you want but I’m holding rocks for a little while longer.

#63 ImGonnaBeSick on 07.27.20 at 5:40 pm

#52 Felon Musk on 07.27.20 at 5:18 pm

You doubled your investment in this profitless king of the zombie companies at what price point? If you did it a year or longer ago, I would tip my hat to you. If you have done it recently, you deserve to lose your shirt…

—–

This guy makes a good point about stock price.. (even if he’s being a D about it)… Listen to Sandy for information about build quality, but listen to Garth for information about stock quality…

#64 YouKnowWho on 07.27.20 at 5:43 pm

The lot is $1 million, Build a nice hours for six or seven large. Average for the area. – Garth

I hear you Garth. It all adds up as the market stands in the inflated form it is as you’ve highlighted. Therefore, it doesn’t really.

On so many fronts it didn’t make sense bunch of years ago when that house would be $1M. Fundamentals didn’t support it. You highlighted it here using logic and common sense – which is absent from that land value and finished product. Say someone builds it, $1.8M end result – that’s 22x average household income in Toronto. 22x!

Heaven forbid they demand $2.499M – or 30x.

You know, $2.5M is not out of question in that area for a 15 foot wide home. Should I both looking at what I would by for $1.5M in south of France? Then again, why buy? Invest the $2.5m and go rent one here for a year, there for another.

#65 Sail Away on 07.27.20 at 5:43 pm

#58 Ponzius Pilatus on 07.27.20 at 5:29 pm

Tesla S is a beautiful car. So, I can see the appeal.
3 and Y are butt ugly. Would not be caught driving one.
BMW or Audi will always be my choice.
I’m proud to say, I never owned a North American car.

————-

If you like the BMW and Audi, Ponze… why are you still driving a Yugo?

I try to be tolerantly even-handed in all my dealings, and own US and Japanese cars, Canadian property, German dogs and Austrian shotguns.

To be fair, the dogs speak fluent English and Spanish and don’t know they are German.

#66 crowdedelevatorfartz on 07.27.20 at 5:45 pm

@#23 oH CanNAbis!

https://www.youtube.com/watch?v=JTSk5cbaZso

#67 crowdedelevatorfartz on 07.27.20 at 5:48 pm

If you thought Trudeau was a bad, repetitive, stumbling speaker before……just wait…….

https://ca.reuters.com/article/topNews/idCAKCN24S2HL

#68 45north on 07.27.20 at 5:52 pm

Ace Goodheart: Big shake down heading down the pipe for Toronto MICs

MICs = Mortgage Investment Corporations

These organizations are going to get whacked. They are going to lose everything. A 5% decline in home values will wipe out about 90% of them.

makes sense to me

#69 YouKnowWho on 07.27.20 at 5:59 pm

#58 Ponzius Pilatus on 07.27.20 at 5:29 pm

Tesla S is a beautiful car. So, I can see the appeal.
3 and Y are butt ugly. Would not be caught driving one.
BMW or Audi will always be my choice.
I’m proud to say, I never owned a North American car.

Has anyone audited the up-front energy required to build these cars? The pollution from mining, the energy, emissions, manufacturing of batteries. And then it’s only as clean as the source of power that charges it – which is mostly nuclear – one of the worst long tail polluting things we’ve got with all the nuclear waste that we’re handing off to the kids while they charge their iPods.

I’ve thought about it and my call is Electric cars don’t make sense. Not with these short life batteries that are non-standardized and hard to recycle.

Same for Hybrids. Why would I buy a car with multiple sources of propulsion and complexity for additional maintenance and reduced useful life, when an efficient ICE engine based car and do it better and cheaper?

These cars cost more and don’t offset cost of ownership and operation. They certainly cost double or more economical cars and don’t save enough on fuel to justify the purchase.

But of course that’s a logical and common sense approach. And what we know is that people will do anything but.

Everyone is so concerned about saving CO2 with electric and hybrid cars. NO ONE cares about the CO2 contribution of all this take out UBER, UBER EATS, etc.

#70 Faron on 07.27.20 at 6:02 pm

#46 Robert B on 07.27.20 at 5:16 pm

have censored my most recent gold post. So much for free speech.

I love it when people cry foul/free speech when they utilize a private platform. Hilarious. If you don’t wan to be censored, go stand on a street corner or get a show on your local community access TV station.

For the record….an oz of gold in Canadian dollars today is $2600.

The price of gold 9 years ago in Canadian dollars was about $1900.

(($2600 – $1900) / $1900 ) * 100 = 37% or crudely 4% per year…

S&P via SPY: $130 nine years ago. today is worth $320 today… (($320 – $130) / $130 ) * 100 = 140% or 15% annual plus dividends… plus instantly liquid plus you actually own a stream of earnings…

I love that too I guess.

#71 Marco on 07.27.20 at 6:05 pm

#58
Audi’s and BMW’s are manufactured not just in Germany.

#72 mycomicshop on 07.27.20 at 6:07 pm

for the last 20 years, gold has been a better investment than Berkshire, and the SP500 (including dividends). that’s a fact.

gold in Can$ is 2600, much much higher than it’s peak in 2011 of $1900. that’s from a low in 2000 of ~$450 CAD.

gold is rising because:

1. central banks are printing tons of money
2. REAL interest rates are negative
3. the USD is falling vs other currencies

until that changes, precious metals will continue to rise.

#73 haha on 07.27.20 at 6:08 pm

If gold is so useless then why do central banks love it and have been net buyers since 2009? This reversed 40 years of being net sellers.

#74 Keith on 07.27.20 at 6:09 pm

The “Gold is Money” survivalist crowd has an interesting perspective. You hole up in your Montana bunker, with an enormous stash of food, water, weaponry and gold, and a giant stack of DVD’s. When society breaks down, you will go out and exchange your gold for what you need.

I’m not sure I want to live in a society, or world where that is the reality. Even if you choose survival mode, and you have chosen correctly, you’d still need to have the biggest and best armed clan in order to hang on to your food, water and gold. Pretty tough odds on that.

Most of my money is in a B & D portfolio, but I have a self directed account for speculation. Cannabis is a terrible investment, but up until legalization it was a great speculation. Precious metals are not a good investment over time, but the sector is hot as a pistol and there are some great speculations happening. You have to preserve capital at all times, but there are profits to be made.

#75 willworkforpickles on 07.27.20 at 6:14 pm

#53 YouKnowWho
The debt will not ever be sorted out. Not by Canadians or Americans but by future invading forces mainly the US is indebted to.
Have fun while sovereignty lasts. If you’re one of the 20% who can afford to that is.

#76 Ron on 07.27.20 at 6:14 pm

#53 YouKnowWho on 07.27.20 at 5:19 pm
Worry about deflation right now, not inflation. – Garth

For how long Garth?

Can someone explain to me how all this debt gets sorted out? The debt just keeps getting bigger, bigger and biggerer.

Hint: it will not be solved through inflation. – Garth

————————-

It will not be ‘solved’ at all. They will just print more and more for as long as you and I are alive.

It’s not a bad thing. And neither is deflation.

For example, solar photovoltaic (PV) power plant projects keep setting low price records for new installations. Cheaper than coal now even without subsidies. And the sun doesn’t bill us for energy.

Renewable energy, AI, cloud computing … deflation , deflation, deflation , it’s a beautiful thing and the sooner you realize it’s here to stay the better off your portfolio will be.

“Free” energy + monetary expansion = equilibrium

Economists still stuck on ‘deflation is bad’. So tell us eggheads, why do we invent new gadgets at all?

#77 YouKnowWho on 07.27.20 at 6:28 pm

#77 Ron

Hey, I see plenty of efficiencies possible that would contribute to deflation.

Then again there is that whole China thing, that would inflate things real fast. Or create shortages.

But let’s put that aside. Let’s say deflation it is.

How does deflation help the debt then? Government or household?

#78 Ron on 07.27.20 at 6:36 pm

Investment ideas for a deflationary world:

1. No commodities. We are making more with less and that applies to energy as well.

2. Software – this is not 1999, software has eaten the world and it’s here to stay. Companies with useful products can scale them exponentially at very little
marginal cost.

3. Monopolies (but only real ones) – banks and insurance dinosaurs face a double threat of permanent low rates and upstarts that can scale rapidly. Good for dividends, but the good times are over. utilities/telcos that own the actual wires in the ground and borrow a lot at low rates will do better.

4. Real estate – one of inflation’s last holdouts. Take it from a former real estate bear, once you accept Permanent Printing Press theory (kinda like MMT) is reality, you’ll realize that there is no reason for real
estate to ever crash. Real estate will continue to rise as long as the monetary base keeps expanding.

#79 Faron on 07.27.20 at 6:44 pm

#197 Sail Away on 07.27.20 at 5:51 pm

#190 Faron on 07.27.20 at 2:44 pm
#176 ImGonnaBeSick on 07.27.20 at 12:39 pm

I think we can agree that a car, even an EV, has more moving parts than a phone.

Ha, true enough. Even a rotary.

However, 5G will rapidly blur the distinction between what is and isn’t phone.

#80 Ron on 07.27.20 at 6:51 pm

#78 YouKnowWho on 07.27.20 at 6:28 pm
#77 Ron

Hey, I see plenty of efficiencies possible that would contribute to deflation.

Then again there is that whole China thing, that would inflate things real fast. Or create shortages.

But let’s put that aside. Let’s say deflation it is.

How does deflation help the debt then? Government or household?

————————-

We’ve given up on paying off debts, that’s old thinking. As long as the economy, and especially technology can create value at the same pace of monetary expansion then the relative strength of the currency stays intact.

#81 Nonplused on 07.27.20 at 6:56 pm

“There was a time I believed in gold.”

Cheez, the first time I read that without my glasses I thought you said “There was a time I believed in god” and thought well this ought to be interesting….

Gold is not at an all time high when accounting for inflation but I think it’ll get there. Gold responds chiefly to inflation and I think inflation is coming. You can’t pay half the population to sit at home and not produce anything without inflation. The deflation will come later when the debt monster the CERB let out of pandora’s box comes back to roost.

But gold also seems to be highly correlated to the US national debt, which is skyrocketing. This is another reason I think it will make new all time highs even accounting for inflation but I don’t know when. Soon I think. But it won’t go to the moon. The miners are still digging it up and jewelry demand is way off. So if you are one of the creatures that haunts this bog that still has some your next annual rebalancing should take care of things. Take some profits and redeploy the money. Don’t let it get too big. Even a tree doesn’t grow to the sky. And it is a speculation, not an investment. I find it works well as a small part of a diversified portfolio but rebalancing is still key.

If you want to hoard precious metals in the pantry for the apocalypse, silver coins are probably a better choice. Copper is the money of peasants, silver of the merchant class, and gold of kings. That’s why the gold was always kept in the castle and later the bank vault. It is of no use to the common man for commerce. It’s like walking around with a wallet full of $1,000 bills. You waitress can’t make change.

#82 Tom McLeod on 07.27.20 at 6:58 pm

The difference this time is the Fed printing USDs at dizzying speed while paying virtually nothing to investors in return while creating another asset bubble. Silver is not only a precious metal but the best conductor of electricity. So there is an industrial use for it. At this point I’d far rather own well managed silver equities than paper backed by a hideously indebted country that will have no choice but to inflate their way out.

You mean the paper you use to pay for accommodation and your food? Yeah, useless. – Garth

#83 Damifino on 07.27.20 at 6:59 pm

In 1973, when I was 22, my college contemporaries were terrified about societal collapse. The reasons were many: nuclear war seemed imminent, an economic maelstrom was just around the corner, and anticipated global cooling was about to usher in a new Ice Age humanity was unlikely to survive. It was taken for granted in my circles England would be uninhabitable by the year 1990.

Harry Brown was a well-known prognosticator at that time. He’d written a book called “How I Found Freedom in an Unfree World” which I read cover to cover. In a nutshell, Harry was of the belief that no one is their brother’s keeper and only one’s own counterproductive programming keeps them from getting all they desire in a world where others are pleased hold you back. It was Mr. Brown’s aim to help you break that programming.

I also read Brown’s follow-up book “You Can Profit from a Monetary Crisis”. Harry’s main financial advice was to convert all one’s cash to silver coinage and open a Swiss bank account. Why he thought the Swiss Franc would remain viable after a global calamity, I couldn’t say. He was fond of pointing out that when panicky people were desperate to buy bread with wheelbarrows full of useless paper all you need do was dig up your sack of silver quarters in the backyard (under cover of darkness) and buy what you needed from the local greengrocer who now dealt only in ‘real’ money.

It took a while, but I too finally grew up. I discovered that, to some degree at least, I actually am my brother’s keeper. That is, as long as he isn’t a ne’er-do-well who would sponge off others forever rather than just a hard working countryman who may have genuinely fallen upon hard times.

And the silver coins and the Swiss Francs? Well, that all seems a bit silly now, as does the coming Ice Age, or for that matter, the imminent desertification of our northern latitudes.

#84 Dead Cat Bounce on 07.27.20 at 6:59 pm

I find it entertaining Scotiabank dumped all their gold and silver in April 2020

#85 Cristian on 07.27.20 at 6:59 pm

I have gradually bought gold bullion over the last 6 years to rebalance my portfolio, trying to keep it at about 10%.
It worked great as a risk-decreasing asset, especially in the last 6 months. Cost me only $45 a year for the safe deposit box at the bank. Took me about 5 minutes to sell it all 3 days ago for over 40% profit in order to crystallize the capital gains (in case the CG inclusion rate is screwed by T2).
Moving the funds now to a US$ gold ETF since we’ll be leaving Canada for good in the next year or two and it’s a headache to carry bullion from one country to another.
Why am I still holding gold? Because nobody can predict what the economy and the world will look like in 6, 12 or 24 months. Will it be back to where it was before the virus? It won’t, I am certain about that much. I am also certain that most markets, if not all, are overvalued. Overvalued markets don’t turn down on their own. Something usually triggers them. What will it be this time?
“The world is getting ready to be repriced. Everything is going to seek a new value. Real estate, stocks, commodities, food, medical costs, college costs, government, entertainment, sporting events, clothes… Everything. Some price adjustments will be minor and some will be significant. I expect many to be deflationary, although some markets and items will see significant price increases.” (John Mauldin, 25 July 2020)
So I’m trying to be ready for anything and to preserve as much of my capital as I can over the next 2-3 years.
After that, we’ll see.

#86 mycomicshop on 07.27.20 at 7:08 pm

#71 Faron on 07.27.20 at 6:02 pm
________________________________________

why don’t you try that calculation from Y2000? gold made TWICE the SPY, with LESS drawdowns for a Canadian investor.

why don’t you try it from 1971 when Nixon took the USD off the gold standard? 9.2% PA compounded for a Canadian investor. That is comparable to other long term investments.

gold has long periods where it goes up, and long periods going down.

stocks have long periods of ups, and long periods of downs.

both have a place.

#87 Flop... on 07.27.20 at 7:08 pm

#193 Gravy Train on 07.27.20 at 3:25 pm
#147 Flop… on 07.27.20 at 9:48 am
“I made a genuine attempt to help.[…] Anyway, not the response I was expecting, but I tried, good luck…” Do you have any training or experience in career counseling? Tell me: Do you think you can also perform surgery without a medical degree? :P

//////////////////////////////////

Hey Gravy, someone put too much salt in you?

A little salty over nothing, don’t you think?

Was it because I didn’t plug your buddy Dick Bolles?

We went from waiting tables , to construction cleaning, to surgery?

O.k., sounds cool!

Waiting tables has been disrupted.

Construction cleaning has not.

Right now for a lot of people is not dreamy career time, it’s how do I make up the shortfall from this disruption.

Originally it was looking like a multi-month disruption, now it’s looking more likely a multi-year event.

CERB only goes so far.

Surgery has also being disrupted.

As far as performing surgery without a medical degree, sometimes I think about pulling out a bottle of vodka and my black and decker drill and having a go at removing the 8 screws in my foot…

M46BC

#88 Nonplused on 07.27.20 at 7:11 pm

#9 Sail Away on 07.27.20 at 3:43 pm
“And if you own PMs that have popped in value, you know what to do.”

—————-

As a Canadian, I do not think our Prime Minister has popped in value. I would be very willing to sell him to any willing bidder, though.

————

Ha! Funny. But sometimes you can’t give away your stuff for free. Just have a garage sale sometime. Those roller blades you paid $120 for? Free. The trampoline you bought your kid on “sale”, only $400? Free. Often times people won’t even take your “free” stuff unless you deliver it, which means it may as well go in the landfill except there is a $15 minimum dumping fee and a charge per ton.

So anyway long and short I think it would cost us a lot of money to get rid of our PM’s.

#89 TheNecessaryDorsalMuscles on 07.27.20 at 7:15 pm

In the interest of balance, Mish appears to utterly shred the “gold vs USD” narrative here:

https://www.thestreet.com/mishtalk/economics/nonsense-from-the-wsj-on-gold-vs-the-dollar#comments

Back in December he wrote:

“With the US dollar right where it is now, gold has been at $450, $380, $1080, and $1480.”

He’s interesting because he’s pro gold, but 9/10 of his posts are bashing the pumpers for coming up with equally delusional relationships to explain price movements.

My view is that people who refuse to own any amount of gold at any time are every bit as “psychologically interesting” as those who convert everything they have to bullion. All-or-nothing thinkers tend to miss out.

The real problem for the Gold believers is The Problem Of Induction: Just because its been money for thousands of years and just because every time governments try to manage money, they screw it up and we go back to gold doesn’t mean we will go back to gold as they screw it up this time.

Consider bitcoin (which I cannot bring myself to buy). Blogs like this one were warning you of a bubble when it was below $4000. You could have bought it at $5K, watched the top pass @$20K, wondered why the hell you were still holding it at $15K and then panicked and sold @$10K. And if you just rode it all the way down you’d still be back @10K now.

“Efficient markets” are the great lie of our age: The trillions they are printing have gotta go somewhere and people are becomming increasingly desperate to fix the raging hole in their finances. Own a bit of everything including gold/silver and something is gonna save your ass when you least expect it.

#90 Do we have all the facts on 07.27.20 at 7:15 pm

Garth your comment about worrying about deflation got me thinking about what Stephen Poloz said about using monetary policy to tread a fine line between triggering inflation and and avoiding deflation.

What I have trouble understanding is that Gerald Bouey as Governor of the Bank of Canada raised interest rates in the early 1980’s in an attempt to get inflation under control and Stephen Poloz as the Governor of the Bank of Canada warned that deflation could lead to a significant increase in ‘real’ interest rates as the value of money increases.

To those like me that are not familiar with how monetary policies actually help tread the fine line that Stephen Poloz was talking about it would appear that many countries in the world have painted themselves onto a tightrope that could start swaying any minute.

With interest rates at 0.25% and total government debt increasing each year Canada may be running out of tools to keep our balance.

I sure wish I had more confidence in the folks controlling how the few remaining tools in the toolbox will be used as the world economy adjusts to the new norm.

#91 Cow Man on 07.27.20 at 7:25 pm

Yes stay away from the precious metal sector. Poorly performing ETFs like HEP, covered call gold miners. 5 year average return, 17.21% with an annual yield of 4.35 %.

There are at least two other similar Canadian ETFs. Not as long a history though.

Risk rating low. Sure would not want anyone investing in anything like HEP.

#92 Westcdn on 07.27.20 at 7:28 pm

You could right about gold and silver. I like gold because it is immutable. Silver is another story. We will see how this story plays out. I like my bets – so far.

#93 DrC on 07.27.20 at 7:28 pm

Hey guys, found a detached house in Toronto downtown, for less than 1M. Who’s ready to jump in?
https://purplebricks.ca/on/toronto-york-region-durham/toronto/home-for-sale/hab-300-euclid-ave-ia4110230

Getting old. – Garth

#94 Billy Buoy on 07.27.20 at 7:32 pm

I always LAUGH when some people here say NEVER. and Thank god for central banks…..

#95 Steven Rowlandson on 07.27.20 at 7:36 pm

The time to sell is when it is beneficial to do so and not before. We are no where close to that point yet.

A dumb comment. Sell when you have made some money and require the funds. It’s not about winning some prize by ringing the bell at the top. – Garth

#96 Mark on 07.27.20 at 7:44 pm

How do you explain then, when it is added to ANY asset mixer, it reduces volatility and increases returns.

#97 Sharon in Salmon Arm on 07.27.20 at 7:50 pm

Garth…When ( not if) gold hits US $2,500.00 would you then suggest portfolios have 2-5 % in gold?

#73 explained why it’s likely going to continue going higher…and those factors as well as others are likely to be in place for at least 2-3 years .

Would appreciate your thoughts..thanks…

Would I buy a volatile, speculative and non-income-producing asset for clients whose main goals are capital preservation and steady returns when it’s at an historic high? Did you just ask me that? – Garth

#98 Dave on 07.27.20 at 7:55 pm

If China is hit hard again from Covid and flooding…would that impact North America stocks?

Will it impact Canada real estate?

#99 Trevor on 07.27.20 at 7:58 pm

Garth, thank you for being a sane voice, in an insane world.

#100 Idiocy on 07.27.20 at 8:05 pm

regarding Tesla

Tesla is a US government abetted stock promotion disguised as a car / technology company to further several agendas.

Research its early history, starting with the political donations by Musk to Obama right thru to the billions in US government subsidies and regulatory assistance provided the company.

No other “startup” has received this kind of government financial / regulatory assistance in all of history.

In addition, no other public company has received such light scrutiny or censure by the SEC except maybe for Enron.

That said, my predictions for Tesla, should the share price fall meaningfully lower;

1) shares will be split , maybe as much as 10 for 1
2) Space X will be folded into it

It will not be allowed to fail.
It does too much for too many interested parties.

#101 Sharon in Salmon Arm on 07.27.20 at 8:13 pm

Garth…When ( not if) gold hits US $2,500.00 would you then suggest portfolios have 2-5 % in gold?

#73 explained why it’s likely going to continue going higher…and those factors as well as others are likely to be in place for at least 2-3 years .

Would appreciate your thoughts..thanks…

Would I buy a volatile, speculative and non-income-producing asset for clients whose main goals are capital preservation and steady returns when it’s at an historic high? Did you just ask me that? – Garth

No. That’s not what I asked you…

#102 Flop... on 07.27.20 at 8:14 pm

#122 CERB: Australia vs Canada on 07.27.20 at 3:34 am
#41 Flop
Are we really comparing apples to apples? What are Australia‘s eligibility requirements? Did Aussie CERB really allow 15 year olds (living at home!) and minimum $5k gross earnings to qualify for what sounds like will be tens of thousands of taxpayers’ money?

////////////////

It’s probably not apples to apples.

More likely apples to macadamia nuts.

I’ve stated before, they have a hybrid system there, they didn’t scrap their version of EI totally to switch to CERB.

They kept part one and then added part two, The Coronavirus Supplement.

The monthly payments are currently higher than CERB but will be rolled back towards the end of September.

As far as youth getting the Coronavirus Supplements yes if you were already 16-24 looking for work you were receiving The Youth Allowance and then 1,100 a month on top of that.

We don’t have anything to compare what Ottawa is doing, to provide some sort of comparison, Australia is the best one in my mind.

I have tried to decipher why Canada’s budget deficit is close to 100 billion more than Australia when they are running the same types of programs.

During the Global Financial Crisis the two countries deficits were both records at the time, but within spitting distance, 56 billion for Canada, 54.5 billion for Australia.

Half of my money is in Australia, the other half here.

Hong Kong lives under the One Country, Two System set-up.

I live under the Two Passport, Half A Brain set-up…

M46BC

#103 Gravy Train on 07.27.20 at 8:18 pm

#87 Flop… on 07.27.20 at 7:08 pm
“[…] Was it because I didn’t plug your buddy Dick Bolles? […]” Dick Bolles knew* more about the job market than you will ever know! If people relied on subject experts rather than well-meaning but misguided do-gooders, there’d be a lot more happiness in this world! And yes, you can quote me on that!

*The past tense was used, as Bolles died March 31, 2017.

#104 KNOW IT ALL on 07.27.20 at 8:21 pm

ALL that SHINES is SILVER!!

Gold is used for investment purposes and jewelery. It is merely a short term trade in the investment industry.

However 75% of the silver mined every year is used in our everyday lives for very important purposes and it’s becoming more scarce every year. If Demand, Supply, & Scarcity drive price then have a look…..

Modern and Industrial uses of Silver include:

Silver in Batteries
Silver in Fuel Cells
Silver use in Electronic and Circuit Boards
Silver in mobile Cellular Phones
Silver in Solar Panels
Silver Solders
Silver in Automobile Switches
Silver in Car Glass Coatings
Silver in virtually all Mirrors
Silver Nanoparticles in Medicine
Silver Engine Bearings (cars, airplanes, helicopters)
Silver Electroplating
Silver Antibacterial Clothing
Smart silver textiles and clothing
Smartphone useable Gloves Silver laced fingertips
Hospital surface silver ion spray
Silver backed DVDs and CDs
Silver Pharmaceutical Creams
Silver in various Medical Equipment
Silver RFID technologies
Silver Superconductors
Silver Wound Dressing applications
Silver in Photography
Silver producing Antifreeze
Silver laced Deodorant
Silver used in Stained Glassmaking
Silver Musical Instruments
Silver Tinting Sunglasses (e.g., Transition glasses)
3d Printing Silver Applications
Silver use in Weather Modification
Silver fillings and Dentistry use
Silver Cavity prevention
Silver in Surgical Mask protection
Silver in Medical-Surgical Implants
Silver use in X-Rays
Silver used in Chemical Production
Silver in Air Condition Vents
Silver Pool Purification
Silver Water Purification
Silver Window applications (double or single pane)

“One of the greatest investment opportunities of this century”

Poor man’s gold. More tears have been shed over this than the yellow stuff. – Garth

#105 Gold? on 07.27.20 at 8:22 pm

Hi Garth
Thank you very much on your post on gold, I have been asking for weeks your thoughts. So thank you!
Full disclosure I own the bars and raw gold.
Years ago I was like you I believed In gold and thought it would be great it a melt down of the economy.
Now? In March everything dropped when logically gold should have went up.
I bought gold ETFs as they are liquid and can sell quickly.
Only kept it about 10 percent of my portfolio as insurance.
So based on today it’s not needed any more?
Maybe I should ask how do you hedge? Or you believe stock markets will always be higher years from now?

My only thoughts and I asked you a few weeks ago about all this debt and are you worried. I believed you answered. That you were worried about taxes and long term interest rates rising. Thanks for your answer hopefully o quoted you correctly.

I am more than ever confused about gold, I will follow your advice and start selling my bars.

Again thank you for your insights
And thank you for all your comments in the comments section.

#106 TurnerNation on 07.27.20 at 8:29 pm

This comments section should provide retrospection. Along with a glimpse into the emergent reality – being foisted upon us in the guise of a forced, global shutdown. Behold your A.I. future.

But first, it’s been known for years that all sports stadiums – including Toronto’s Skydome [sic] employ facial recognition cameras trained onto the crowds. But why, a mob of yelling anonymous people: who cares? And the push last year into 5G installation into the same in the USA.

Well this is why, what our global elites have been working on for years. #staythome and let the A.I. sooth you: in this WW3 all humans are presumed to be live deadly Bio-WMD. (“We know he has WMD” right?)
Control the mind, and the rest will follow. Where are all the sick people…on your telescreens only and in your mind. Healthy people are still sick! In the New System.

“Major League Baseball is starting to look and sound just like a videogame.

First the league announced they will be using crowd noise from Sony’s MLB video game, and now Fox will be using cutting edge virtual crowds in their broadcasts.

Here’s how it works:
Fox Sports, in its 25th year of broadcasting MLB games, has teamed up with Silver Spoon Animation to create the technology. The company said they are using Pixatope software. Sports Business Journal previously reported on Fox’s virtual crowd tech.

A Fox spokesman told CNBC the network tested the software out at Arizona’s Chase Field about three weeks ago. It passed the test.

At first, we’ll see the virtual crowds in the wide shots only, but eventually the technology will be able to show closeups of players, fans reaching out for home runs and maybe, if we’re lucky, the Kiss Cam.

Fox said the level of detail will even allow the network to control what fan gear the crowds are wearing and how they react to specific plays. For example, the virtual fans may leave the stadium if it looks like the home team is going to lose in a blowout.

Fox is looking to make the broadcast feel and natural as possible, so the technology will be used sparingly, and it’s not expected to be used for every play. Fox told CNBC it’s also “exploring” the use of virtual fans in NFL broadcasts when the season starts in September, but nothing has been finalized yet.

Fox Sports will fill empty baseball stadiums with virtual fans that react to what’s happening on the field | CNBC”

#107 Robert Ash on 07.27.20 at 8:53 pm

I believe it will be Deflation for a period of time, as Bankruptcies and Prices are pressured downward, with Falling Incomes, from Job Losses, and General Economic Contraction. Then more problems, will ensue, mostly as a result of whatever policy mistakes are put to the test. The Policy mistakes, the most reactive will be provided via the USA. TESLA is an example of a Stock that doesn’t seem to follow any fundamental review or Price Discovery, and this is my concern, with making purchase decisions.

#108 Dwilly on 07.27.20 at 9:02 pm

Hi Garth, thanks for addressing gold. I’ve been interested in your take in a while. I agree with you on many fronts – it is speculative, it is not an “investment” (in the sense that it does not create new economic value or pay dividends as a business does). And you and the Scotiabank guy could very well be right about the recent run-up. (but I tune out all short term price moves)

I do think Gold might still have a place in a (larger) portfolio, though, in a small amount (5% tops) for the following reasons. 1) It is famously anti-correlated with other stuff you are likely to have in your portfolio. Going back as far as I can, the anti-correlation is stronger than any other asset class. And 2) if you view it in that light, or as “insurance”, rather than an investment or hoping to boost returns, I think you can make a case that holding 5% of your portfolio here is a reasonable insurance bet. A 5% allocation will not materially impact your long-term returns, but in panic/crisis time, could provide the small boost & stability you need to help overcome emotions & provide some sense of security.

So my thinking would be:
– Portfolio under $1M (or at least high 6 figs), don’t bother
– Portfolio over $1M, consider a small (5%) allocation and use the metal itself, not mining companies as they are fraught with similar risks to your equity allocation and lack the anti-correlation / insurance factor you are after. IAU, GLD will work.

#109 Pete from St. Cesaire on 07.27.20 at 9:15 pm

OK Garth; but —
A) why did central banks worldwide start stockpiling gold over the last decade.
B) Look into what people used to bribe their way out of Fascist Italy, Nazi Germany, Franco’s Spain, etc. Their freedom certainly wasn’t paid for with the paper currency of the imploding nations that they were escaping from.
C) Of all the mediums of exchanged used throughout history, which one is the only one who’s value has never declined to zero? Precious metals.

#110 not 1st on 07.27.20 at 9:20 pm

RBC Dominion will hold your gold for you and issue a nice little line of credit against it. So it does have utility.

#111 Freedom First on 07.27.20 at 9:20 pm

I have no emotional ties to any thing. I like to buy an asset when it is at a low price to me and sell it when it seems like a high price to me.

I never have debt. I live alone, and a vasectomy was a wise choice I made decades ago. I knew overpopulation was killing the planet, and the 50% divorce rate is ruining lives. I am close to 70 and would never have wished, or will ever wish to trade places with anyone.

Freedom First

#112 Tripp on 07.27.20 at 9:54 pm

Can’t find any news follow-up on the RBC fake gold sold to an Ottawa jeweller few years ago. Was that an isolated case? If not, how many tungsten wafers could be out there?

#113 Flop... on 07.27.20 at 9:55 pm

#103 Gravy Train on 07.27.20 at 8:18 pm
#87 Flop… on 07.27.20 at 7:08 pm
“[…] Was it because I didn’t plug your buddy Dick Bolles? […]” Dick Bolles knew* more about the job market than you will ever know! If people relied on subject experts rather than well-meaning but misguided do-gooders, there’d be a lot more happiness in this world! And yes, you can quote me on that!

/////////////

Don’t be foolish, Gravy.

I’d never quote you…

M46BC

#114 Dr V on 07.27.20 at 9:57 pm

30+ on the western rock today, and some lake time with family booked.

And garmin is back up! I wonder if they paid the
ransom?

Flop – I think the ozzy hybrid system sounds better as it would pay idled workers the whole shot whilst the youngsters would only get the supplement. Probably
too complicated for T2 though.

#115 Yuus bin Haad on 07.27.20 at 10:00 pm

Of course, it is kind of cool to walk around with a Yukon Mint “Moose” in your pocket, don’t cha think?

#116 Faron on 07.27.20 at 10:02 pm

#86 mycomicshop on 07.27.20 at 7:08 pm

#71 Faron on 07.27.20 at 6:02 pm
________________________________________

why don’t you try that calculation from Y2000

You from the Okanagan? Lots of cherries to pick there…

#117 JacqueShellacque on 07.27.20 at 10:05 pm

“You will never see the banks and stores all close. If they did, who in their right mind would give you precious food or gas in exchange for some pieces of metal? Delusional. – Garth”

Not so sure about that, Garth. I think this whole virus episode has exposed a lot of the fragilities of the overoptimized systems we rely on, and in some ways the financial problems are the least of it. From our perspective today it might sound delusional to trade a can or 2 of beans for a 14k gold chain someone got from grandma for their 13th birthday, but (a) the scenarios where that could happen may not be as unlikely as we like to think, and (b) if it happens everything becomes instantly local. And there will be localities where people would take their chances on that trade, and I don’t think it would be any more delusional than any other attempts at entrepreneurial activity.

#118 cramar on 07.27.20 at 10:33 pm

#60 Macduff on 07.27.20 at 5:37 pm
I bought my son a one ounce gold coin in 2005, the year he was born. It’s worth about $2600 today, about a 10% y-o-y increase. He ain’t complaining.

It’s worth nothing until you sell. Did you tell him that part? – Garth

———-

The same could be said for ANY physical asset. A house, condo, vintage car, art, comic books, baseball cards, etc., etc. Worth nothing (or rather has only a paper value) until you actually sell it to someone willing to give you currency for it.

#119 Unhinged Trader on 07.27.20 at 10:41 pm

Bitcoin is coming alive again. The time to place your bets is now, for the 1,000% run-up that will follow in 2021.

#120 Tccontrarian on 07.27.20 at 10:43 pm

Gold >>> one of my favorite topics!
Like Kenny Rogers song:

you gotta know when to hold ‘m,…
when to run..

Sold 10% of my gdxj, and will continue to sell into strength, probably 10% each time. Raising cash in preparation of the next decline in the General markets – probably within the next 1 to 3 months.
Gold equities will suffer in this decline as well, so good to lock in some profits.
Garth is right – more money has been lost in precious metals than made by the average investor. A few, however, probably <5% have become enriched … I'm halfway there!
TCC

#121 Doug in London on 07.27.20 at 10:49 pm

Yes, once again it’s a PERFECT time to sell gold for a tidy profit but it seems a lot of people are buying it instead. So here we go again with the time tunnel first pulling me in and shooting me back to January 1980 when gold was at $800 (over 2 grand in today’s money) and buyers were lined up in the street to purchase some. Say has anyone heard that new album by The Police with songs like Message in a Bottle, or Walking on the Moon? How about that new one by Gary Numan with the words “here in my car I feel safest of all, I can lock all my doors in cars” and so on. I really like that electronic New Wave sound. Say, are AC/DC going to release a new album later this year?

Almost instantaneously the time tunnel takes me to September 2011 when gold was around 1900 bucks an ounce. I’ve just come back from a road trip to the Atlantic Provinces, and heard that new tune Pumped up Kicks by Foster The People, and also heard the Ford Plant in St. Thomas is closing it’s doors soon. Is that true? Heard both on FM96 today. I also read in the London Free Press about a tornado that hit Goderich while I was away last month. Is gold REALLY going to keep climbing up past 2 grand an ounce?

Now, just to see if I’m actually paying attention, the time tunnel has shot me back to 1999 when it actually made sense to buy some gold. Has anyone heard that new tune I’ve Seen Better Days by Citizen Kane? How about Praise You by Fat Boy Slim or Millenium by Robbie Williams? Has anyone seen that new Star Wars movie The Phantom Menace? Is anyone here worried about anything serious happening when the date rolls over to Y2K? I must sign off now, the weather forecast for eclipse day, August 11, looks best for Romania. Gotta get my ticket and board that eastbound CFR train now.

#122 The wonders of steerage on 07.27.20 at 10:54 pm

#111 Freedom First on 07.27.20 at 9:20 pm
I have no emotional ties to any thing. I like to buy an asset when it is at a low price to me and sell it when it seems like a high price to me.

I never have debt. I live alone, and a vasectomy was a wise choice I made decades ago.
….
Sounds like it was… thanks for sharing dudette.

#123 Gold freedom on 07.27.20 at 11:04 pm

Gold does pay intreset…in india…and the people own it in jewelry form, “rocks” as garth calls it, so they look good and rich when they wear it. India also has a big gold Import duty, without it, Indian gold demand would be much larger and the price of gold higher, but governments hate gold, they hate freedom, no matter, the epic battle of freedom money vs slave money is now being waged like never before in history, the gold Era is almost upon us, soon we will buy everything with digital gold, barbarous relic fiat currencies will be swept into the dust bin. Technology will finally give the gold bugs the victory that has eluded us for so long.

#124 fishman on 07.27.20 at 11:36 pm

I love gold. Its integral to my 5G portfolio. I started averaging in at $500/maple. Started averaging out at $1800 & will take more maples to the bullion store this week at $2500. I fully believe it will keep going uppa uppa. Great urges overwhelm me to buy more. This bullion licking, Trumpster loving,doomer boomer is far gone. Nevertheless, there is a higher power. There is the Great Gartho. His wisdom leadeth me from temptation. Don’t be greedy, take your profit. So I meditate on the tranquility of knowing my gold will be transformed into a 9 month 1.5% TD designated for 2020 taxes. All destined for little potato, he ,like Jesus of the fishes & loaves. By the way, have you noticed with his grown out beard & hair, he kinda looks like Jesus was portrayed in Renaissance crucifixion portraits. With my few shiny heavy rocks, he multiplies them into endless free money for the masses. The Economystic, a free lunch for everyone with nobody working in the kitchen.

#125 Michael in-north-york on 07.27.20 at 11:57 pm

“Why is gold rallying? Purely because the USD isn’t.”

Skipping the gold debate .. is it unusual that the USD isn’t rallying during this crisis?

During the 2001 and 2008 meltdowns, USD was going up against the emerging market currencies, and against the resource backed currencies such as CAD.

#126 Salish on 07.28.20 at 12:42 am

Gold is an across the counter currency in many countries. I live in one. In Canada, cash isn’t even a universally accepted currency any more. And at the rate government debt is increasing debt, your dollar is depreciating at light speed. Increasing taxation and stagflation are killing your chances of getting/staying wealthy into the near/ far future.

So, what is money? No, I don’t believe in BTC, that dog won’t hunt. However, I do believe in gold as a speculative asset for certain investors. I have made good money over the past decades buying stocks that mine for gold. Without some element of speculation in your portfolio you’re going to get killed. Put up a future value calculator and see for yourself. You can’t sleep through this.

For my money there’s no substitute for dividend paying companies that spit back at me every month, quarter, semi and annually. Some gold miners do pay decent dividends, problem solved. There’s another tactic to play out, become a broker or an advisor, you get paid whether you’re right or wrong, like in that famous old book “Where are all the customers yachts?” .

#127 Gary C on 07.28.20 at 12:45 am

Garth, I bought gold at 1150.00 Canadian in 2008, and can sell it at 2500.00 today not a bad return. My mining shares PAAS, AEM, FNV, are up 60% in two years, which are trading shares which I will sell, or get stopped out of.

Is Gold in a cycle, of course, just like everything else.

#128 Sail Away on 07.28.20 at 12:53 am

#100 Idiocy on 07.27.20 at 8:05 pm

regarding Tesla

No other “startup” has received this kind of government financial / regulatory assistance in all of history.

…my predictions for Tesla…

It will not be allowed to fail.
It does too much for too many interested parties.

—————–

Haha, you’re getting close!

#129 KleinRod on 07.28.20 at 1:18 am

Garth, why do you always compare the performance of gold to the 2011 peak? During the previous ten years, it went from under $300 to over $1900. So ya, if you buy at the very peak of a massive decade long bull market, you’re not going to make a good return in the next decade. But if you start picking some other starting dates, the returns are great!

And gold is over $2600 Canadian right now. In Canadian dollars, we’re quite a bit above the 2011 peak (which again, was the peak after a massive bull run).

It’s fine to think that gold is a bad investment, but you’re not making an honest criticism. When you cherry pick dates to make gold’s return look bad and measure returns in US dollars (when you measure the returns in other assets in Canadian dollars), you are really just deceiving your readers rather than educating them.

You’ve been telling people not to buy gold for the last few years. You’ve been telling them to buy stocks instead. Gold proved you wrong. The DOW has been basically flat for the last two and a half years, while gold has been making great returns.

Lots of people have been saying to buy gold for the last couple of years in your comments. They’ve been right. At least you could be honest and acknowledge the reality of what’s happening.

There aren’t too many years in the last 20 years where you would have been better off buying stocks than gold. 2011 is one of those years… but there probably aren’t many others.

#130 Tim123 on 07.28.20 at 1:52 am

I was thinking the same thing that it is close to the time to sell my gold stocks. It is a perfect storm right for gold prices so I will ride them a little higher but I am not going to push my luck too far. I checked the target prices from the investment banks, for the gold stocks that I have and they have all exceeded the price targets.

#131 Ponzius Pilatus on 07.28.20 at 1:59 am

#71 Marco on 07.27.20 at 6:05 pm
#58
Audi’s and BMW’s are manufactured not just in Germany.
—————
Marco,
I would have responded, but I don’t wanna go over my quota.
Sailo, you are the expert. Could you tell Marco why his post does not make sense.
Thanks

#132 Zane Becker on 07.28.20 at 3:26 am

Don’t over-buy into the ‘optimistic’ bullshoot.

https://calgaryherald.com/news/economy/after-initial-economic-rebound-brace-for-a-stall-out-phase-that-could-last-six-to-18-months/wcm/298a188d-8d48-4ed7-95d9-0e0f4d9b0842/

Polititico’s and others want to control your reactions. Take care of yourself first. Don’t get railroaded into being politically correct.

#133 Lobster Man on 07.28.20 at 3:43 am

A recent news story you may not have heard about. It happened also in Wuhan, China. No, it is not a virus story. It is about fake gold.

Is this only the tip of the iceberg?

https://realmoney.thestreet.com/investing/global-equity/china-s-kingold-jewelry-allegedly-used-fake-gold-to-secure-huge-loans-15365197

#134 Investx on 07.28.20 at 4:13 am

So Garth, then what assets do you recommend to hedge against inflation and the continual loss of purchasing power of dollars?

#135 Steven Rowlandson on 07.28.20 at 6:01 am

“PMs make sense in a world gone mad.”

It has indeed and there is no doubt about it!

#136 Sail Away on 07.28.20 at 7:03 am

#131 Ponzius Pilatus on 07.28.20 at 1:59 am
#71 Marco on 07.27.20 at 6:05 pm
#58

Audi’s and BMW’s are manufactured not just in Germany.

————-

Marco,
I would have responded, but I don’t wanna go over my quota.
Sailo, you are the expert. Could you tell Marco why his post does not make sense.
Thanks

————-

Sure.

Marco, it doesn’t matter because all cars look the same in a Tesla’s rearview mirror.

This can be taken both literally anfd figuratively.

#137 Gravy Train on 07.28.20 at 7:10 am

#113 Flop… on 07.27.20 at 9:55 pm
“Don’t be foolish, Gravy. I’d never quote you…” You were right all along, Flop. I was the one who was mistaken in my approach. As the English poet Thomas Gray once wrote, “Where ignorance is bliss, ’tis folly to be wise.” :P

#138 Sail Away on 07.28.20 at 7:12 am

#134 Investx on 07.28.20 at 4:13 am

So Garth, then what assets do you recommend to hedge against inflation and the continual loss of purchasing power of dollars?

————–

Since Garth didn’t answer, I’ll assume this is fair game.

Try Google, Costco, Berkshire, CN & CP Rail, Fortis, Bank of America, as a start…

#139 Sail Away on 07.28.20 at 7:37 am

Here’s what the head of Audi has to say about Tesla:

https://www.google.com/amp/s/electrek.co/2020/07/27/tesla-two-years-ahead-industry-critical-areas-audi-ceo/amp/

#140 Bytor the Snow Dog on 07.28.20 at 7:42 am

I thought this place was a dog, real estate, and virus blog?

#141 akashic record on 07.28.20 at 8:09 am

When the big reset happens, it will be visible from the rear-view mirror.

#142 It can't happen here on 07.28.20 at 8:13 am

Australia police check point

https://m.youtube.com/watch?v=g6FF520NAJo

#143 YouKnowWho on 07.28.20 at 8:29 am

#80 Ron on 07.27.20 at 6:51 pm

But let’s put that aside. Let’s say deflation it is.

How does deflation help the debt then? Government or household?

————————-

We’ve given up on paying off debts, that’s old thinking. As long as the economy, and especially technology can create value at the same pace of monetary expansion then the relative strength of the currency stays intact.

———————-

Obviously. But how long can that strategy last Ron? Until our 50% debt to GDP goes to 150% like Lebanon and CAD loses 80% value? We’re on our way there…credit rating for Canada already downgraded.

#144 crowdedelevatorfartz on 07.28.20 at 8:32 am

@#139 Sail Away

Not all that Elon touches turns to gold.
You have to admit the Tesla “Cyber” Truck was the silliest hyped unveil in past 10 years of auto companies.
Detroit must have been popping champagne corks when they saw it.
A $100 “reservation fee” seems to have the lemmings flocking.
Lets see how many follow through with US $39,900.00 for the “base” (ugh-lee) model.

#145 dont sell on 07.28.20 at 8:43 am

the precous metal party has just begun.Garth dedicating an entire blog entry to Gold? Obviously, its raising eyebrows

the Central bankers must continue to print. Cerb aint going anywhere soon AND we likely have some sweet fearful volatility ahead of us, its an election yr

Cha-ching!!!!!!

#146 TurnerNation on 07.28.20 at 9:07 am

5G was mentioned by Faron. That’s old tech. Any technology we are told about is old, perfected, and usually was developed for the battlefield decades ago: Drones, Google glasses (They pulled those really fast off the market), and so on.

6G is where it’s at. We’re talking Avatar. The tech companies have gathered data on us for 20 years – and in real time more than we can believe. Which is why a real name or photo ID is a requirement to create a Facebook account. Which is why you can Like and other reactions on FB. All feed into the real time avatar they have for you.

Fact: Facebook is the largest purchaser of marketing data. Including credit card purchases. Their profile on you is always only minutes old. Think about that. You walk back to the car, load the trunk…and by then your profile/avatar has been updated. Added to 20 years of data.

To run a marketing campaign, oh I don’t know like a global shutdown or influencing an election (cough, Cambridge Analytica) exquisitely targeting each segment, each person even with real time info, is trivial.

The ‘news’ stories are mainly driven and written by A.I. these days, makes rolling out the New System quite area. Any areas with resisters can be given new cases/lockdowns quite easily.

If you are easily scared, read this presentation of the info a simple video game company collects. It can identify the size of your dog by the sound of its foot-falls. So it knows exactly why you stopped playing their game. Walk the dog.
This is old technology by now, old hat.
Every smart phone and app does this anyway:
https://catbox.moe/c/y1h1lj#gallery-15

Mapping out user’s homes:
https://catbox.moe/c/y1h1lj#gallery-18

#147 Phylis on 07.28.20 at 9:28 am

144 crowdedelevatorfartz on 07.28.20 at 8:32 am
@#139 Sail Away

Not all that Elon touches turns to gold.
You have to admit the Tesla “Cyber” Truck was the silliest hyped unveil in past 10 years of auto companies.
Detroit must have been popping champagne corks when they saw it.
A $100 “reservation fee” seems to have the lemmings flocking.
Lets see how many follow through with US $39,900.00 for the “base” (ugh-lee) model.
——————————-
Along that line… what uses more nickel, the batteries or the stainless steel? I think Elon is performing some hedging for his truck. Seems like a smart idea. He has already looked at stainless changes, I assume for cost cutting purposes.

#148 YouKnowWho on 07.28.20 at 9:36 am

#144 crowdedelevatorfartz

NEVER underestimate fan-boys.

I’ve said it before, and I’ll say it again – Electric cars are definitely a better option to hybrid, but both are stop gaps.

Electric CAN work, but the premium must not be so much higher than internal combustion engine (ICE). Also, these batteries need to last longer. It can’t be a 7 year proposition. We have the technology to allow 500,000 cycles on batteries – yet Tesla or no one else for that matter is using it. The form factor of batteries is not fixed and standardized. The battery pack is not easily switchable. This needs to all be addressed. WE CAN do it. We just don’t want to, because everyone wants to own their own proprietary design and form factor. And so they will continue this path instead of standardizing and bringing true economies of scale and proper technology on electric cars.

Until we have that fast charging, long life, many charge cycles, easily to recycle standard form factor simplicity – Electric car won’t go.

Of course there is the whole issue of charging still and source of that electricity. What’s the latest on Molten Salt Reactors by the way?

#149 Sail Away on 07.28.20 at 9:42 am

#144 crowdedelevatorfartz on 07.28.20 at 8:32 am
@#139 Sail Away

Not all that Elon touches turns to gold.
You have to admit the Tesla “Cyber” Truck was the silliest hyped unveil in past 10 years of auto companies.
Detroit must have been popping champagne corks when they saw it.

A $100 “reservation fee” seems to have the lemmings flocking.
Lets see how many follow through with US $39,900.00 for the “base” (ugh-lee) model.

————-

Beauty is in the eye of the beholder.

Think of people with their kids.

#150 Harry Stains on 07.28.20 at 9:44 am

Mass default a Certainty. It’s already a fact of life at Credit Unions are desperate to manage to collapse of the CMHC.

https://business.financialpost.com/real-estate/mortgages/cmhc-eyeing-new-tools-as-mortgage-deferral-cliff-looms-for-borrowers

Jingle Mail returns. And does anyone think that the 8 million on CERB don’t still need it? The media spews that it’s just a matter of going back to work. What nonsense. There’s no work to go back to. And the case numbers are rising.

#151 Captain Uppa on 07.28.20 at 9:47 am

I am getting so tired of hearing about gold from every single person I know. It’s like they just discovered that it existed.

#152 D Tree on 07.28.20 at 9:53 am

#51 Felon Musk on 07.27.20 at 5:18 pm
—————————————————————

You doubled your investment in this profitless king of the zombie companies at what price point? If you did it a year or longer ago, I would tip my hat to you. If you have done it recently, you deserve to lose your shirt…

———————————————

Cost basis moved from $400 to $800 with recent share purchase. I agree that the valuation is getting a bit ahead of itself in the short run. However I think $1500 will seem like a steal in 5-10 years.

GigaTexas is a terafactory which means 30x the battery production capacity of GigaNevada. That’s 1 of 3 factories that is currently being constructed around the world. Tesla is production constrained rather than demand constrained.

#153 Dharma Bum on 07.28.20 at 10:02 am

I have a gold crown on one of my molars.

I’m a headed to the dentist right now to get it removed and then I’m a gonna cash it in.

Yahoooooooo!!!!! GOLD!!!

And here, yez all thought I was stoopid.

Showed you.

#154 Flop... on 07.28.20 at 10:06 am

Gravy.
#113 Flop… on 07.27.20 at 9:55 pm
“Don’t be foolish, Gravy. I’d never quote you…” You were right all along, Flop. I was the one who was mistaken in my approach. As the English poet Thomas Gray once wrote, “Where ignorance is bliss, ’tis folly to be wise.” :P

//////////////////

Morning Gravy, can’t help but notice you are dancing around the main point in my original post.

That is, the service industry has the wobbles.

Someone worried about earning a regular paycheque might be better off the look at gaining employment in the more solid construction industry.

Why so dark?

Did someone cover up your solar panels…

M46BC

#155 D Tree on 07.28.20 at 10:09 am

#139 Sail Away on 07.28.20 at 7:37 am
—————————————–
Here’s what the head of Audi has to say about Tesla:

https://www.google.com/amp/s/electrek.co/2020/07/27/tesla-two-years-ahead-industry-critical-areas-audi-ceo/amp/

————————————————–

I will admit that Volkswagen is one of the only large autos taking EVs seriously. TBD how their dealership network feels about this. The rest of the autos have nothing but vague announcements about future models and non-existent technology. LOL electric Hummer https://www.gmc.com/electric-truck/hummer-ev

Also, I have my Cybertruck preordered. If anything, it’s a very cheap call option that FSD will be real in 3 years.

#156 Sail Away on 07.28.20 at 10:31 am

#148 YouKnowWho on 07.28.20 at 9:36 am
#144 crowdedelevatorfartz

NEVER underestimate fan-boys.

—————-

Well, I’ve made 2000% return on the stock and absolutely love my Tesla, so sure, I’ll be a fanboy.

However, technically, there are now many million-mile Teslas still on their original battery, so that’s not a concern.

Any other issues? No worries- Elon will solve them.

#157 crowdedelevatorfartz on 07.28.20 at 10:38 am

@#149 Sail Away
“Beauty is in the eye of the beholder.
Think of people with their kids.”

Ahahahahaha.
True so true.
A friend was in the Mall with his wife and newest sprog in a baby stroller.
The met a couple with a baby coming the other way. Total strangers.
The gals stopped to talk and compare babies.
The husbands started talking and my buddy said , ” “Watch what happens with MY wife when I look at your kid and scream.”
The other husband laughed and told him to go for it.
He walked over, smiled , leaned in and looked at the kid and recoiled back yelling in shock….
The women stopped, shocked…
He started laughing, “I was just kidding.”
The other lady stormed off with her smiling husband following shaking his head.
My buddy’s wife punched his shoulder so hard he couldnt carry the shopping bag for an hour. Furious.

I bought him a cold one for the great story.

#158 day on 07.28.20 at 10:39 am

page 10, cant say they didn’t warn us:

https://apps.who.int/gpmb/assets/annual_report/GPMB_annualreport_2019.pdf

#159 crowdedelevatorfartz on 07.28.20 at 10:44 am

@#155 D Tree

“Also, I have my Cybertruck preordered…..”

+++++

Channeling your inner Tonka Toy?

Good luck on the re-sale.

https://observer.com/2019/12/tesla-cybertruck-electric-pick-up-american-consumer-survey/

#160 Sail Away on 07.28.20 at 10:49 am

#153 Dharma Bum on 07.28.20 at 10:02 am

And here, yez all thought I was stoopid

————

You’re so dense, light bends around you.

You’re so dumb, you think a thesaurus is dinosaur

#161 Gravy Train on 07.28.20 at 11:12 am

#154 Flop… on 07.28.20 at 10:06 am
“[…] Someone worried about earning a regular paycheque might be better off [looking] at gaining employment in the more solid construction industry.[…]” See my comment at #154 Gravy Train on 07.27.20 at 10:19 am—or not! After all, ignorance is bliss! :P

#162 NoName on 07.28.20 at 11:12 am

Tesla and few deep thoughts…

I was never fan of their products but first models looked very sharp and better than anything on market at the time. Every so often I would see one on street and my honda would liked and feel like some contraption that came out from stone age…

What is a unique for tesla is that they introduced and adapted technologies and processes used in making low volume production of supercar to mass production for working stiff.

I am not an engineer, but as mediocre electrician what I observed is that they in tesla challenged traditional car manufacturing and product engineering with utilizing many of the thecniques reserved for other industries, and integrate in car manufacturing. Side note, Self driving forklifts existed for decades…

It’s interesting to see more talk about tesla giga Tera all batteri plants than cars. Between panasonic and teslas own battery capacity they have more than enough for teslas cars,. I wonder why is that.

Now back to deep thoughts being first with one of the kind product, doesn’t guarantee that you ll indefinitely capture biggest market share.

Does anyone knows how many times elon met trmup during election race?

So that person who sad tesla. Is not going anywhere is 100% correct, but their airplane fusalage inspired flat windshield fake uphill pulling f150 cyber truck is best and worst example what I just typed.

#163 Tbone on 07.28.20 at 11:15 am

I know the single use bolts that Audi uses to hold down th fancy seat in my car are made in Germany .
10 days delivery along with other parts they need to fix it.
They gave me an suv to use . I like cars better .
Oh and ventilated seats are a must when it’s 100 f .
It’s hot on that black leather in that suv.

#164 DystopiaNation on 07.28.20 at 11:25 am

#146 TurnerNation on 07.28.20 at 9:07 am

5G was mentioned by Faron. That’s old tech. Any technology we are told about is old, perfected, and usually was developed for the battlefield decades ago: Drones, Google glasses (They pulled those really fast off the market), and so on.

6G is where it’s at. We’re talking Avatar. The tech companies have gathered data on us for 20 years – and in real time more than we can believe. Which is why a real name or photo ID is a requirement to create a Facebook account. Which is why you can Like and other reactions on FB. All feed into the real time avatar they have for you.

Another hard night mining the depths of paranoia… That’s gold, Jerry.

#165 Ron on 07.28.20 at 11:26 am

#143 YouKnowWho

————-
GDP is a measure from a past age.

It does not capture value created in a deflationary economy.

Again, as long as an economy is producing value then debt can expand in order to 1. Finance more value creation and 2. Compensate for loss of income where outdated modes of labor cease to produce value (eg. UBI / welfare states).

I would argue that the value that Canada ‘produces’ is a stable society which is attractive to immigrants who bring their labor and capital. Place like Lebanon don’t produce anything and have very little value to offer the world.

#166 Faron on 07.28.20 at 11:29 am

#151 Captain Uppa on 07.28.20 at 9:47 am

I am getting so tired of hearing about gold from every single person I know. It’s like they just discovered that it existed

Kinda like how everyone and their dog talks about real estate? One of many signs of a bubble…

#167 El presidente on 07.28.20 at 11:45 am

It’s HCQ happy pill day… get them while you still can! They silenced my son ….but el presidente will not be muzzled.

I LOVE GOLD… im plated in the stuff….to the moon.

#168 Lambchop on 07.28.20 at 11:53 am

#160 Sail Away on 07.28.20 at 10:49 am
#153 Dharma Bum on 07.28.20 at 10:02 am

And here, yez all thought I was stoopid

————

You’re so dense, light bends around you.

You’re so dumb, you think a thesaurus is dinosaur

_______________

https://mobile.twitter.com/RichieLuvdup/status/570199347238993920/photo/1

#169 eddy merckx on 07.28.20 at 12:05 pm

People bashing gold

Cant eat gold. Has anyone tried to eat a dollar?

No dividend, no income from gold – how much income/dividend do you get from a dollar? Interest rates are about 0%. Bonds are at historic lows.And going lower. Plus you cant eat bonds.

Gold is a barbarous relic, only crazies investment – The BIS says gold is a Tier 1 asset. Equivalent to cash. I guess the bankers are the crazies now.

Everyone wants their investments to go up in pieces of paper. Yet there are more pieces of paper made every day. More pieces of paper = me rich. More pieces of paper = everyone poor.

Why doesn’t anyone think that the pieces of paper are the problem?

An ounce of gold doesn’t change, a bushel of wheat doesn’t change. a barrel of oil doesn’t change.

The pieces of paper change. Keep chasing the pieces of paper. Cause in the end they will not be worth anything. And we will be left with nothing.

Goldbugs are extremists. Many, I surmise, will never wake up. – Garth

#170 BillyBob on 07.28.20 at 12:22 pm

#148 YouKnowWho on 07.28.20 at 9:36 am
#144 crowdedelevatorfartz

NEVER underestimate fan-boys.

I’ve said it before, and I’ll say it again – Electric cars are definitely a better option to hybrid, but both are stop gaps.

Electric CAN work, but the premium must not be so much higher than internal combustion engine (ICE). Also, these batteries need to last longer. It can’t be a 7 year proposition. We have the technology to allow 500,000 cycles on batteries – yet Tesla or no one else for that matter is using it. The form factor of batteries is not fixed and standardized. The battery pack is not easily switchable. This needs to all be addressed. WE CAN do it. We just don’t want to, because everyone wants to own their own proprietary design and form factor. And so they will continue this path instead of standardizing and bringing true economies of scale and proper technology on electric cars.

Until we have that fast charging, long life, many charge cycles, easily to recycle standard form factor simplicity – Electric car won’t go.

Of course there is the whole issue of charging still and source of that electricity. What’s the latest on Molten Salt Reactors by the way?

===============================================

BIL and sister have a Tesla. They participated on our weekly family Zoom call while sitting in it somewhere in Northern BC at some rest stop for an hour and and half waiting for it to charge. They had decided to do an extended road trip to test just how practical the range is.

Pretty funny to hear them go on about earnestly how it was actually kind of nice to have to slow down, how it gave my BIL a chance to go for a run (or perhaps didn’t want to face the whole family). I didn’t even have the heart to throw a “told you so” at them.

Speaking of compatibility. Forget the batter packs, what about the charging adapters? Apparently they actually were well within the range of some BC Hydro charging stations but they didn’t have the required $700 adapter to use them?

Pardon me while I go fill up my tank with dead dinosaurs, I have things to do…

#171 not 1st on 07.28.20 at 12:31 pm

Garths view aside, I think a lot of people are going to be shocked once the fed bankrupts itself and then Ft Knox is opened and audited and the US returns to a partial gold backed currency.

Why are India, China and Russia increasing their stocks if its so useless?

2020 is the yr of things that will never happen in our lifetimes.

And a return to the gold standard is one of them. If we had such a system during an event like this pandemic, the economy would go into a decades-long Depression since it would be deprived of the quick creation of healing credit. You have no idea what you are writing about. – Garth

#172 Gold Cows on 07.28.20 at 12:57 pm

#91 Cow Man on 07.27.20 at 7:25 pm

Yes stay away from the precious metal sector. Poorly performing ETFs like HEP, covered call gold miners. 5 year average return, 17.21% with an annual yield of 4.35 %.

There are at least two other similar Canadian ETFs. Not as long a history though.

Risk rating low. Sure would not want anyone investing in anything like HEP.
….

Amazing, it was $100 a few years ago.. and is $40 now…. wow that’s gold!

#173 mike from mtl on 07.28.20 at 1:01 pm

Dear, the gold bugs are like flies to hot excrement.

No, gold is not money any more than a pile of scrap steel or cleaned copper. In fact if it was not for the jewellery trade it would be priced far less, and yes it is traded and manipulated more so than even fiat currency.

I’ve been through a real crisis (ice storm) and only physical cash CA$ or US$ is the way to purchase gas, food, water, propane, kerosine and so on. Nobody would even entertain accepting Au or Ag.

#174 NoName on 07.28.20 at 1:07 pm

Addendum

Over the weekend some dude rear ended my wife and my son. So on a Monday I took car to repair place and insurance gave me a rental, guess what this car have similar to cyber truck, 4 flat glass windows and 1 flat rear windshield, front windshield is haveing some bend to it, car or what ever this thing is, is also ugly as cyber truck.

#175 Sail Away on 07.28.20 at 1:10 pm

For Faron: as you are yet a neophyte investor, I’ll try to help you out. Add this to your dbag portfolio. ASR.TO. Purchased 2.21 in June 2014, currently 10.64. That’s… oh, I don’t know… pretty good.

I’ll sell 50% pretty soon but not until the frenzy subsides.

You’re welcome.

Here’s a bit of backup from a while ago:

“#214 Sail Away on 05.09.20 at 8:40 am

The gold mine company I hold is Alacer. They’re overpriced now, but may be worth putting on your watchlist.”

#176 MF on 07.28.20 at 1:14 pm

As soon as I read the blog post I knew garth would be busy responding to the tons of uneducated people on this subject who saw some grainy YouTube videos and think they are experts.

Return to some gold standard in 2020? Lol totally ignorant of history and the economic chaos the gold standard actually brought. Hint: look up issues of convertibility. Or what happens when inflation rises and falls and gold needs to be converted to dollars and vice versa…quick.

Not always, but most gold bugs usually fall into 2 main categories: alarmists, or anarchists. Alarmists think always think the world is ending, and the anarchists are just selfish and frustrated at the current system (for any reason under the sun) and want it to fall (so they can capitalize..nevermind if everyone else’s life savings is ruined). A small percentage of gold bugs use it as a hedge, but I reckon they are a minority.

Prices will collapse like they always do soon. Heed the advice and sell if you are up IMO.

MF

#177 Peter on 07.28.20 at 1:38 pm

Alrighty, the USD is falling, why because US bond interest rates are almost negative. So you disparage gold, yet praise the stock market which has gone up significantly since March…due to oversold stocks, but more importantly, due to very low interest rates! And what will happen if interest rates were to begin rising (Stagflation)? Both stocks and gold will fall. Look at the historical chart for gold. Aprox every 10 years since 1975 gold has had a good run. Why because gov’t induced economic expansion (stimulus/low rates) runs out of steam. Is gold a buy and hold forever? No, but it can be a good investment for a period of time.

#178 gold member on 07.28.20 at 1:45 pm

> Remember the UK govt. selling it’s holding for $400/oz 20 years ago? Not going o happen today.

Also known as “Brown Bottom.”

Gold is going up because fiat money is looking less and less viable by the day. 10 years ago it looked like CBs would overshoot, so inflation expectations were high. Now it looks like they are helpless, which is different.

Garth hints at increased taxation rather than inflation, if I understood that comment correctly. The gov can’t collect $300 billion in additional taxes every year. Print and borrow they will, for another 2-3 years. Ultimately inflation will pick up and that will be the end for many debts and assets.

#179 not 1st on 07.28.20 at 1:53 pm

I said partial Garth, something less tamper proof that the printer at the CB. You cannot have a sound money system is inflation is your goal and there is nothing anchoring it. That would be like putting your entire net worth in the stock market.

The world just pumped in some 20T in CB stimulus into this CB system. Do you think wages and salaries are going to keep up this time? Because that would be a first.

#180 TurnerNation on 07.28.20 at 2:00 pm

Look at the MICs on the TSX fly today. The UPPA class is still buying the RE.

#181 Heart of (Fools) Gold on 07.28.20 at 2:37 pm

DELETED

#182 Faron on 07.28.20 at 2:53 pm

Two days ago:

#4 Sail Away on 07.26.20 at 1:06 pm

Sounds like a fine time for more Berkshire.

Today:

#175 Sail Away on 07.28.20 at 1:10 pm

…Add this to your dbag portfolio. ASR.TO. Purchased 2.21 in June 2014, currently 10.64. That’s… oh, I don’t know… pretty good.

I’ll sell 50% pretty soon but not until the frenzy subsides.

You’re welcome
.

There’s a lot to unpack here and will happily do so if you ask nicely. But, in short, no. Thanks for the brag though.

#183 tom black on 07.28.20 at 3:15 pm

I read the first chapter and thought heck this is all happening as we speak…

Is Garth finally softening toward pet rocks??

20% of your portfolio in PM, it’s a beautiful thing.

Tblack

#184 Sail Away on 07.28.20 at 3:31 pm

#181 Faron on 07.28.20 at 2:53 pm

There’s a lot to unpack here and will happily do so if you ask nicely. But, in short, no. Thanks for the brag though.

—————

Horse, water, leading…

Just trying to gently lead you to success. I can’t help it. Giving selflessly to others is inherent.

#185 Kevin on 07.28.20 at 3:51 pm

This is a timely article, thanks Garth. I am a holder of some precious metals (CEF, physical silver) and have lost a lot of money in the past decade, but hoping to break even. I agree with your sentiments largely, but I still can’t resist holding some. This is an interesting article I read recently from Ritholtz Wealth Management , might be of interest:

https://thereformedbroker.com/2020/07/27/sad-old-man-rocks-making-new-high/

#186 Heart of (Fools) Gold on 07.28.20 at 4:34 pm

I’ll delete this one myself.

Apparently pointing out that the artistic community is rabid about defending their rights to their own property while supporting people who wreck other peoples property is now a deletable offense.

Go find a blog that cares. – Garth

#187 DON on 07.28.20 at 9:14 pm

@Ace

I am loving the social distancing.

#188 DON on 07.28.20 at 9:23 pm

What TurnerNation is talking about is the slippery slope as generations always seem to repeat…less we forget.

Perhaps we are in the final stages in cycle of corruption.

Everything happens in increments and if you are not paying attention liberties can be lost a little bit at a time.

#189 Carter on 07.28.20 at 9:33 pm

Ask people is Zimbabwe or Venezuela if they would r
Like to have some gold right now.
Are you saying that paper money has any significant use?

#190 Doug in London on 07.29.20 at 2:00 pm

If you want to buy into a yellow metal, forget about gold and think of bright yellow uranium oxide. The company Cameco, after a recent rally, that mines this stuff is on sale again.

#191 Gravy Train on 07.29.20 at 4:03 pm

#154 Flop… on 07.28.20 at 10:06 am
“[…] Why so dark?” When it’s dark, you can see the stars! :P