What Happens To Gold And Silver Next? Look Out Below?

I think I read that our country gives incentives for non US citizens to purchase RE.

That really is the sad part. When you put all your eggs in one basket you better be sure youre right. Unfortunately in this case either way you really lose. Either everything falls apart and life is miserable and youre proven right or you lose money.

Its real easy to lose perspective on things and get real negative when times are down. Its great to have some pms but not all in. If you have a desired outcome to your analysis its easy to pick things apart to come to the desired conclusion




Hes taken an absolute beating on his net worth, he has something like over 60% of his investments in gold. Unless hes quietly sold things over hes down over a million in recent months.

Industrial and Commercial, mostly Retail.

@ WJL: Commercial real estate is doing very poorly in my metro area as well. Anyone should have seen it coming because during the bubble commercial developers were putting up new strip malls right across the street from half empty strip malls. Developers built a new outlet mall on the opposite side of town even though the existing malls were not fully occupied and one was completely closed. A lot of the larger projects were simply developers pitting municipalities against each other to see who would offer the biggest bribes, I mean "incentives", for businesses to stay or relocate. So we ended up with a musical chairs of retailers moving the same brands from one shopping center to another chasing every lower levels of taxes. (One of the craziest was the city giving the owner of the local McDonalds franchise $150K in cash and $425K in tax breaks not to relocate.) The current market is what basic laws of supply and demand predict should happen and the retail space will be cheap for some time until growth catches up with the glut of supply.

The weak real estate market does nothing to explain why gold shouldn't return to pre-crisis levels as big investors look for someplace to make money. In fact if they can purchase real estate for pennies on the dollar with the money they are cashing out of gold it may actually help the real estate market. There is a huge difference between timeframes for cash buyers and debt buyers. The developer that builds a new shopping mall with borrowed money needs a high level of renters to make those debt payments. On the other hand the cash buyer that buyers the property for half price without a loan can get by or make money with a fraction of the renters and patiently wait for the market to continue to improve.

@allspice

Well, there's no doubt in my mind, based again, on the price action and the volume, that institutions have been, are and will be selling out of their heavy long gold and silver positions. Again, as a trader I am looking for the technical picture because price doesn't lie, its direction is never wrong. There has been clear liquidation and distribution of PMs.

That is why we have seen the selling getting intense as the price drops, holders of gold and silver, from lower levels where they are holding, have made commitments, their line in the sand, where if the price gets lower, they exit and take profits. No one in the financial markets knows exactly where it will stop, therefore trailing stops and price points are used as areas to sell out and book profits.

Make no mistake, the funds and institutions will not be the last ones in line to get out, holding the bag, they leave that to the public. That is why I am making my contribution to my fellow collectors, even if they don't like it, to warn constantly, to be careful and use their purchase money wisely. As it is, dip buying and averaging in a losing position is not wise, you don't put the probabilities on your side.

therefore, the best I can do is to be constantly warning, I would rather you dislike me and call me a troll, and have one single person say, "yea I can see what hes saying" and get the most out of their dip buying as opposed to buying every single dip and then having buyers remorse.

If you have profits, depending on where you are at, I would take some profits, then be patient and watch... I know that's hard, but its better to have the cash and profit in hand rather than have remorse and say, "oh I had it at that price and I did not sell".

I would, again, be patient and resist the urge as much as possible to buy. Why? because again, we have not see the lows yet. Furthermore, we have no idea on the direction of PMs going forward. Are we looking at 5-10 years of churn and just going no where? Are we looking at record lows? No one knows, at all. All that can be done is watch key levels, look for accumulation and volume on the buy side and sell side.

Folks, going forward, we could have a year just seeing PMs grind lower or more as an example. There's so many scenarios. So even more valuable than gold and silver at this stage is PATIENCE.

"The weak real estate market does nothing to explain why gold shouldn't return to pre-crisis levels as big investors look for someplace to make money."

Some of the smaller properties didn't default from cash flow. They simply didn't have permanent financing. But that's not even the problem with the economy. It was the jobs that resided there that are gone. The difference and part of the attraction to gold I beleive is that gold costs much less to maintain. A big problem is that these properties cost a lot of money to maintain and they simply aren't being maintained, and then you have the local gov'ts. Its really a multi-faceted problem and is far from over. There are opportunities here and there. Some of it was being turned into medical space but it seems all the changes to healthcare have slowed that down now too. Many of the smaller buinesses saw their healthcare go higher than their facility costs and simply shut down. As for the buyers they are mostly Europeans and suprisingly many of them expect the dollar to decline against the Euro so they are looking at and leasing or buying industial property. I don't beleive this is particularly healthy because if they are wrong, then these properties are the sell side of their hedge, but any business is good business for the poor chumps who got stuck, I suppose.

I think speculators should sell their gold, as should people of limited means if they are heavily invested. But if you have cash coming in and don't know what to do with it, I would accumulate gold. Any decent speculator or fund manager dumped their gold a long time ago as both gold and particulary silver have been in a funk for quite a while now. I accumulate small amounts usualy 3 times annually. Usually q1 , 2, & 3. However upon a 25% decline( and they don't hapen too often) I will sell other assets and buy gold. I am wiling to accept the downside risk upon a 25% decline. That rule applies only to gold.

Another problem is that diversification requires rebalancing. This presents a problem for RE as most REITS can't provide the laser sharp focus and smaller scale that would be conceivably successful. Even undiversified portfolios need rebalancing quite often these days particularly with regard to cash. This is what happens when you have negative real rates. Bonds at one time provided cash, they still do but in the form of liquidity, not income. Thats why QE will never end. For once it does, gold, and not bonds become the new liquidity. QE is what makes bonds liquid. THE PURPOSE OF QE IS TO INHIBIT CENTRALBANK BUYING OF GOLD BY KEEPING THE BONDS MARKED UP. This ends one of two ways, both gold positive, either you end QE and rates go up and gold gets marked up against the bonds or you continue and eventually the dollar gets absolutely crushed. But be warned its a game of attrition and most people will lose to the central banks. If gold were go to 10K or higher things would likely get really bad and people would sell long before it reached its potential.

If you are poor than perhaps your best bet may be borrowing as much as you can and defaulting. Sort of like QE for the little guy, I suppose.

Another good way I played this was to hedge with DUST on the theory that whats bad for gold is double bad for its producers. Its really a win win because as gold falls their costs rise and they are mining lower and lower grades. As the mining companies get destroyed, it only further serves to restrict supply of gold. Therefore everyone who owns gold should be short mines, not long. I could never undertand why people and especially funds who you would think have better sense, buy gold and mines, it would seem to me that the two cancel each other out. Go figure.

I think gold investors and speculators would be best served by the gold mining industry going away. That looks like it might be happening and that's Very bullish for gold. If that industry was in better shape, I'd be much less optimistic on gold. It would be logical that if they really wanted to drive gold down, they would simply subsidize the mining industry, just as they do the residential RE lending industry. But the fact of the matter is they want to drive it up, just not now, but when no one is willing to hold the bonds except the CBs and their constituent banks.