I’m the featured interview in this week’s Financial Sense Newshour:
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I keep getting reader requests for more podcasts. As long as others want to listen to my nasal drone, I’m game . . .
"Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy." —Groucho Marx
Initial Jobless Claims totaled 614k, 1k less than expected but the prior month was revised up by 3k to 630k. Continuing Claims fell by 53k from last week and was 38k less than expected. There has been a big discussion of late over the expiration of unemployment insurance and how the recent drop in Continuing Claims is due to people losing it rather than finding a new job. While there is no question benefits are expiring without one finding a job, as evidenced by the rising exhaustion rate, many losing those benefits now started getting them when initial claims were...
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November 1st, 2008 at 2:56 pm
BR,
Financial Sense, way to go!~ OOC, do you have much of a background with those boys? I’ve long thought they’re some of the Best..
Also, worry not about “my nasal drone”, you only hear that kiddingly, or from pro-haters. Peeps into the Truth/Honest Opinion, care not the messenger, but the Message..
November 1st, 2008 at 3:15 pm
Great interview. Astute comments about forced liquidation and the ensuing vacuum behind it. Too many points to point out but could not agree more about your observations about deflation and inflation. Way to go. Been listening to financialsense.com for years. Very pleased to see you there. That site has amazing coverage.
November 1st, 2008 at 3:37 pm
You state, “as long as others want to listen to my nasal drone, I’m game . . .”
I am not sure we always want to hear what you have to say, but we all need to hear it.
Keep up the good work.
David
November 1st, 2008 at 5:20 pm
Lately I laugh tragically every time I listen to the Financial Sense podcast. These guys’ sole mission in life these days is to pump gold in any way they can think of. They must have lost a LOT lately with how far it and the miners have fallen. And of course, much of Jim Puplava’s credibility lives and dies by gold movements.
But Eric King, who interviewed you today, sounded one step away from the “loony bin” in his desperation to have the gold price go up. I got the sense he would have given you his first-born son if you’d have only helped him pump gold.
But I thought you handled it perfectly, not giving in to Eric’s desperation, but simply laying out the trading and macroeconomic situations as you see them, all the while giving him enough “down the line gold may rally a lot in an inflationary environment” to keep him from looking silly. Good stuff.
November 1st, 2008 at 5:36 pm
Interesting discussion, Barry, particularly the final third, in which you had to stand in as a personification of the gold market and absorb a blast of truly righteous indignation: How DARE you not reflect a doubling of the money supply! They can’t keep gold on the shelves! Mark my words, they will close the exchanges! Strong stuff, and perhaps correct. But I wonder.
It seems to me that gold is a key indicator for this crisis. Perhaps it’s too neat to point it out, but gold stopped participating in the commodity bubble right after the Bear Stearns collapse, and it has been making a series of lower highs and lower lows ever since in the face of low rates and the expectation of lower rates, to say nothing of general upheaval and worry. How is that not immediately uber-bullish for gold? I really wonder if all of it can be blamed on a panic-selling distortion.
I have no special insight or training in finance or economics, but I don’t take a one-year doubling of the money supply, by itself, as a guarantee of immediate or even imminent inflation. Money not only has to be made available, but it has to move, for an increase to be inflationary. Right now, money seems to be disappearing (through write-downs and realized losses on garbage that will never reattain its former value) faster than the Fed, Treasury and their foreign counterparts can replace it, and that which is available is hoarded on balance sheets rather than multiplied through the economy by way of expanded credit.
As long as the idea of financial institutions meaningfully expanding their offering of credit seems as laughable as it does now, I don’t see how inflation is our problem, and by extension how gold can increase in value.
It seems to me that when you stand a step back, review what has brought us to this point and what is taking place now, you see nothing more than an enormous Capital Destruction Machine in high gear. The capital extended by the government to the largest banks can barely, if at all, replace capital lost on crazy loans and leveraged investments. Even if it did replace that which was lost, it couldn’t be multiplied (i.e., inflated) to the same degree until leverage of similar degree (netted for the increase in money supply) came back into vogue, or so it seems to me.
Of course, if one wanted to hedge the thesis, the investment implication of your observation on the miner-metal spread certainly seems to make GDX a much smarter way to go than GLD.
Until the inflation/deflation question can be answered, measured and timed, it’s hard to see any investment as truly safe. Good times.
November 1st, 2008 at 5:40 pm
Barry: Just about to listen to it. I have been checking the old site and there doesn’t seem to a general notice sending vistiors over to the new site, only the “comments can be made here line.” I suggest putting something prominent in the header of each story.
November 1st, 2008 at 6:16 pm
Excellent Interview! I guess Eric King needs GOLD to go higher near-term? Oh well. Get back on there with Jim Puplava, and maybe a “tagteam” with your boy Panzner.
PS Dude, your not THAT nasal…
November 1st, 2008 at 6:18 pm
I laughed at loud at your explanation that man really can at times be just a monkey in a suit, as emotional and irrational as that… Awesome work. I also loved how you tactfully addressed the gold bugs’ full court press. I too believe, the end game is clear but the stops along the way isn’t clear (gold at $300 or $900)
First time I’ve heard you, thats how I ended up on your blog to comment. Would love to hear more of your interviews and thoughts.
November 1st, 2008 at 6:45 pm
Haven’t listened yet, but I was going to ask “Did they ask about how HIGH gold is go-go-going?” I see from the comments they did. More power to ‘em, but they’ve been long since $275 or something. Telling people to get in now during the Great Deleveraging seems irresponsible at best.
Also, Barry, please cut out at least on row of images from your header. It’s too tall! What’s your screen resolution?!
November 1st, 2008 at 10:30 pm
Barry’s thoughts on on gold make perfect sense to me, at least. When there’s a lack of liquidity, gold gets dumped too. You can’t pay with gold an obligation stated in USD.
I’ve started looking around at gold and google brought me to this interview with the manager of a gold fund which more or less seconds Barry’s views: when institutions are dumping to raise cash, gold is part of the mix. He later has to talk his own book.
Gold’s Fundamentals: ‘Extremely Appealing’
Big question is: how to know when to buy in? And what to buy?
Barry: Did you ever resolve your issues with Seeking Alpha? I haven’t been there since the trouble, except for clicking on this link.
Comment on the site: a drawback I see is that there appears to be no preview feature. I’m trying a link to see if it works, but the lack of that feature doesn’t let me correct it. Also, I’m a terrible proofreader and the reformatting in the preview let me catch a lot more typos than you could imagine, considering how many slipped through.
November 2nd, 2008 at 12:43 pm
Onviously Eric King is about neck deep in losing commodity trades and either can’t or won’t comprehend the concept of an irrational market. It was almost painful to hear him try to rationalize why his timing should be correct. Not someone who I would want managing my money. Yikes!
November 2nd, 2008 at 12:47 pm
Mike,
Gold should be moving into the trading cycle low probably this week. I would expect a move down to the 200 week moving average at $650 before a strong rally. It will probably be a counter trend rally though. The 9 year cycle in gold isn’t due to bottom until sometime in 09. I expect a retracement back to at least the 62% level at roughly $500-550 before the next phase of the gold bull starts.
November 2nd, 2008 at 9:33 pm
Barry,
As a gold bug since 2001, your interview with Eric King was LITERALLY the first one I’ve ever heard where I was on the side of the guy saying gold could go down! While I hope you’re wrong for my own selfish reasons, your argument was sound, and your humility was refreshing. You weren’t even saying it would go down for good, but even THAT was too much dissent for Eric to take! When you tried to explain this is what you thought MIGHT happen, and you could be wrong, even THAT wasn’t enough for the guy! Clearly, he took your opinion very personally, which is either an ode to how highly he thinks of you, or (and?) he’s got a lot of money in the line in the short term, and he doesn’t want to hear it. Either way, it was very unprofessional of him, but very entertaining. Great job.
November 2nd, 2008 at 9:35 pm
Here’s a good interview with Marc Faber discussing gold and commodities. Basically supports position that gold will be good long term, but could drop a good bit first.
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vd0Dq_d8mCjA.asf