21 December 2011
"Gold again proves it is not the safe haven many had hoped for, breaking the 200-day moving average, the first time since 2009 and signalling that prices may drop to US$1400/ounce."
Shelley Goldberg
Roubini Global Economics
December 14, 2011
This was the "soul destroying" opening of the restricted access article on the website of Roubini Global Economics. The fact that the article has restricted access is perhaps its one redeeming feature.
Shelley Goldberg's boss, the famous Nouriel Roubini, is just as dangerous. He was the man who back in May 2010 declared that "gold has no intrinsic value"and that "if anyone is concerned about inflation they would be better off buying spam."
Spam? Did I hear Spam? Back in May 2010 I was just as upset with his "Spam" pronouncement so I penned a piece titled "Gold, Spam and Professor Roubini". In all humility I wish to announce that I have been proven correct and Professor Roubini totally wrong.
The average price of gold in May 2010 was $1,205 per oz. At the current price of $1625 per oz, that works out to a return of 34.8% over 19 months. And this result is despite the recent serious correction we have seen. I ask you dear readers, did Spam do as well?
And all this comes from a man who heads a firm that was reported in October as being up for auction with a current year loss of $2 million on revenues of $14 million.
People who pay $14 million for advice are no fools. They must also have some very serious wealth they need to protect. Let us assume that the price they paid for the advice was 1/1000th of their total assets. Therefore, their total assets would be 1000 x $14 million which comes to $14 billion.
Gold since January 1, 2011 has risen by around 15%. And so I ask you, did the US or European stock markets rise by 15%? Did oil rise by 15%? Did cash in the bank or government bonds return 15%? The answer is NO!!
Hypothetically, had they read any of my articles or those of so many much more learned and qualified commentators they would have turned their $14 billion into $16.1 billion this year alone. In other words they may have lost a potential $2.1 billion.
Did Professor Roubini advise them to buy gold? Of course not. Spam is a better investment in his books.
We also know from press reports that Professor Roubini's Global Research Economics firm with its 85 employees is for sale.
Professor Roubini will you be buying Spam with the proceeds or will you take advice that is 5000 years old and buy gold?
So the 200-day moving average was broken. So what? How about gold's 5000-year moving average?
If any of you over there in the USA or Europe want to sell your gold and silver then go ahead. You will no doubt be cashing in on some very handsome profits. But in my mind you will be vacating the castle to take up residence in the moat. And in that moat reside banksters and governments amongst other reptiles.
I have nothing personal against the Professor Roubini's or Nadlers or other gold bashers of this world, but how many times can losing horses be allowed to come last in the Kentucky Derby before being sent to the abattoir ?
Gold is not an algorithm or some rocket which goes up in a straight line or some predictable pattern. It is a barometer that reflects the sum total of human actions and perceptions and the realities that flow from these two.
If you want to follow the advice of the fiat money printers, the fiat news press and spam salesmen, please feel free to do so. Any complaints however should be directed to the Spam Department of Roubini Global Economics.
If you don't want to end up having the same fate as policemen, teachers and firemen who have had their fiat pensions and benefits slashed, you had better buy some gold and silver. Gold and silver at least have a standard. Bankers, governments and their fiat currencies have been proven not to have any.
Happy Christmas and a Happier New Year !!
Peter Souleles
Sydney Australia
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