Is It Time To Take Gold Profits?

Puts are protection, like insurance. It won't prevent a tree from falling on your house, but will pay to make you whole again.

The profit on the put counteracts the loss on the physicals.

Lunch is doable.

You could sell SOME of the gold, then buy silver with it. The gold/silver ratio right now is 40 to 1, considerably different from 60 to 1 a few months ago and 16 to 1 in 1979.

Silver could easily get back in the range of 30 to 1 or better. If so, then your underlying value would increase over time. On the downside, silver could fall, but any long term fall (not likely) would mean gold would crash. Gold could crash harder than silver.

Even if you don't do anything now, you might want to watch the gold/silver ratio. If it gets back to 50 to 1 or worse, you might want to move half of your gold to silver.

Historically, the ratio is too high at 40 to 1. At 50 to 1 I would put all new money in silver. At 60 to 1 I would dump gold and buy silver.

I am sorting my silver and gold (1/2 ounce First Spouse) for auction to pay for some bills.

You are right Silverhawk,I have been standing pat for several months now because I don't see any obvious directional changes. I am just waiting to see what happens come September when I believe we will see QE3.

You're right on the money with that, Hawk. Only death and taxes are sure things in this world... although, the love of a good woman HAS to be in there as well.



I also am standing pat until mid-late Sept. Rest assured that when QE3 comes, it will not be called that by Uncle Ben. He knows that there is a stigma attached to that kind of a name, so he will come up with some other name for what is basically the same thing. This will be just like it was several years ago when no politician would mention the word "recession", so they made a joke of it and called it a "banana" instead. Everyone KNEW what they meant, though.

QE3 or whatever it is called has about an 80-20 chance to occur, IMO. If it does, then it will be bullish for the stock market and investments there should do well. It is also likely to be very good for PMs and they should do well too. Inflation will worsen in this scenario, so practically everything will rise in price, Uncle Ben's calculations and denials notwithstanding. This will not be a good time to hold a lot of cash, although holding some for our day to day needs will be OK. The bulk of our wealth should be in stocks, foreign bonds, and PMs. Energy, agriculture, and mining company shares should be especially good.

The time period that has me most concerned will be in 2014-15. It is likely that this is when we will finally find out the true nature and scope of the financial problems in Europe and the US and whether or not they can be solved.

Uncle Ben needs to check the price of rice.

He needs to check a lot of prices.

I was selling steel for $65 per ton in 2007. In the 80s and 90s prices fluctuated between $45 and $90 per ton. Last week I sold at $300 per ton. That is almost a 500% "increase" in "value" in 4 years. And, of course, those numbers are not reflected in the fictitious CPI.

Normally steel prices crash going into summer. This year they are holding steady. Normally they rise going into winter from their annual lows in July. July is over and we are still near record highs, so I am expecting maybe as much as $500 per ton steel this winter.

Historically, steel prices hit an annual high around Easter. The fall and winter prices in the 40 years I have been in the steel market have NEVER exceeded the annual highs. This year they WILL.

This will be the first summer in over 40 years that I won't be lowering buying prices in anticipation of lower selling prices. If anything, competition is forcing me to raise buying prices when usually the competitors disappear for 3 summer months.

So much for the value of Uncle Ben's prognosis.