11/04/09 Baltimore, Maryland – Gold gained yet another powerful ally yesterday — hedge fund icon Paul Tudor Jones. The man who famously called Black Monday in 1987 and the Nikkei crash a few years later now thinks “gold appears to be cheap.” In a note to his investors, Tudor said, “I have never been a gold bug. It is just an asset that, like everything else in life, has its time and place. And now is that time… gold’s value should increase as its scarcity relative to printed currencies increases.”
So gold is now publicly loved by armchair investors, famous hedge fund managers and central banks… even as we write, Erin Burnett is “squawking” about it on CNBC. Are your contrarian senses tingling yet?
“So many hedge fund managers and pundits are singing the same tune: long gold and short U.S. Treasuries,” our friend Dan Denning wrote in today’s Daily Reckoning. “The bond bubble could go on much longer than anyone expects. And when so many people agree on something, none of them are usually right. As a contrarian, you’d be worried about becoming a victim right about now.
“But yes, in the long term, the end of the Super Cycle in fiat money results in the remonetization of gold. That is what you’re seeing now. And it’s probably what you’ll see for a few more years. It also ought to benefit other precious metals, and, of course, precious metals shares.”
In the meantime, if you’re the charting type, this might help:
From our overly simplistic trading point of view, gold has sustained a well-defined range during its latest record rise. If it breaks outside this range, especially to the downside, traders might be quick to take profits.
Ian Mathias
Ian Mathias is the managing editor of Agora Financial’s Income Franchise, where he writes and researches about retirement, dividend and fixed income investing. Much of his work is featured in The Daily Reckoning and Lifetime Income Report – Agora Financial’s flagship income investing advisory.
Previously, Ian managed The 5 Min. Forecast, a fun, fast-paced daily look into the future of global markets and macroeconomics. He’s also worked in public relations, where media outlets like Forbes, AP, Yahoo! and MSN Money have syndicated his writing. If he’s not at work, you’ll probably find Ian on a bicycle, racing up and down the “mountains” of Baltimore County. Ian has a BA from Loyola University in Maryland.
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As soon as gold becomes money, you can bet that’s when the Federal Government, or more precisely, the Federal Reserve, will confiscate everyone’s stash of the PM.
I suspect that the latest ponzi scheme, (aka bubble), in equities and PM’s will cause more pain to the average investor once these bubbles pop.
Or, maybe the Great Recession is over and Happy Days are here again.
Nah, who am I kidding.