February 2015, Week 3 Edition
Gold had a flat week, but gold is still up more than stocks so far in
2015. News of the possible Greek exit (‘Grexit’) from the Eurozone continue to
lift gold and depress the euro. On Monday, when the U.S. gold and stock markets
were closed, gold rose in most global markets. With the euro trading at $1.13 to
the dollar (down from $1.37 at the start of 2014), gold is up 10% so far this
year in terms of the euro.
Two Noted American Authors Bash Gold
It may be a sign of the times, but two best-selling authors not noted for
their expertise in gold have bashed the yellow metal needlessly. This gratuitous
slap at gold may be a sign that gold is about to stage a rally.
Last year, best-selling author Harry Dent said that gold will fall to
$250 to $700. Specifically, he said “around $700 per ounce is a certainty
in gold by 2015 to 2016, and $250 is a possibility well down the line by
2020-2023.” He bases his prediction on his assumption that “deflation” will
prevail over the next decade or so – ignoring the fact that gold performs well
in historical deflations, including the 1880s and 1930s in America and during
the current deflation in Europe. (Gold is up sharply in euro terms.)
He blames “gold bugs,” as a group for “not understanding the financial and debt
crisis,” when it is the gold bugs who primarily saw the 2008 financial crisis in
advance and warn about its resumption today.
Harry Dent is not noted for his market timing prowess. You might even say that
his predictions are the Kiss of Death to major trends. In 1998 and 1999 he wrote
“The Roaring 2000s” and “The Roaring 2000s Investor” right on the brink of the
peak of the 1990s bull market and the beginning of a “lost decade” in stocks
from 2000 to 2009. Then, after the big crash of 2008, he wrote “The Great
Depression Ahead” in 2009 and “The Great Crash Ahead” in 2011, right before
stocks made their biggest moves since the 1990s.
The other best-selling author to take a swipe at gold is Joe Queenan. In
the February 7-8 weekend edition of The Wall Street Journal, he wrote a piece
called “My Gold Rush – Away from the Stuff,” in which he wrote “Gold is the
world’s stupidest metal. It has been disappointing people or getting them killed
since the dawn of history. Gold is always experiencing stratospheric rises and
then collapsing overnight…”
Actually, the same could be said of oil, copper, the euro and the U.S. stock
market, as well. Gold mining shares have been especially erratic. (Queenan would
have made far more sense – and sounded funnier – if he had lampooned gold mining
shares instead of gold.) All markets go up and down in big waves, but gold has
been more stable than most other major investments in the last year and over the
last several decades. Recently, we did a study comparing the gold market to
inflation and the stock market over the last 10 to 100 years. We found that gold
beat inflation in every major time frame, while gold and stocks each performed
well, sometimes one beating the other, but both being part of a well-balanced
portfolio.
This is par for the course for Queenan, who positions himself as a cynic about
nearly everything. His book titles include “Malcontents: The Best Bitter,
Cynical and Satirical Writing in the World.” In one book, he positions himself
as a “Hatchet Man Critic.” He is famous for belittling almost everything that
some people hold sacred, so it’s no surprise that he turned his attention to
bashing “gold bugs” this time.
New Type III Double Eagle Book Desired by Dealers
My new book on Type III Double Eagles, to be released by April 2015, should
increase demand for coins in this series. In 2000 my first edition about this
popular series received the Numismatic Literary Guild Investment Book of the
Year Award further boosting interest in double eagles. There will be some
gorgeous photographs and innovative tools in this new edition that should
greatly help collectors, investors and dealers who participate in this popular
series. At a recent California convention some major dealers asked me for
boxes of these books as soon as possible.
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