E.D. Hart

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  • Gold - Not the Safe Haven People Think it Is
    The US dollars value is purely psychological, and only accepted as valuable because it is backstopped by the "full faith and credit of the US Government." In short, the ability of our government to tax and borrow.

    Every paper currency ever created has reverted to its intrinsic value given enough time.


    Gold has had value in every society ever discovered, from tribes in the Amazon, the Egytians, the Macedonians, Greeks, Romans, and Byzantines. Gold has 10,000 years of history as a store of value.

    To say golds value is purely irrational and psychological begs the question: compared to what?
    Dec 10 13:55 pm |Rating: +1 0 |Link to Comment |View article
  • Who's to Blame for the Commodities Boom?
    The authors article is dead on. People are protecting their wealth by buying the commodities boom.

    What is a speculating anyway?

    Someone who thinks they know where the price is going to be at a point of time in the future. It has always been thus.

    I own 80% of my portfolio in long commodity based equities, and I'm outperforming the market, plus a few ETF's that are long silver and gold.

    Is this specualtion? Of course it is.

    Do I contribute to the problem? Incrementally, yes.

    Is it rational, right, and legitimate to do so? Well according to some yes, others no.

    The US government, and the current neoconservative cabal is anticonservative in the cpaital markets in ways that no other group has been in American history.

    Without commodities in my portfolio, I believe strongly that great wave of inflation currently hitting our economy would prevent me from ever retiring, or preserving my wealth.

    If the worlds average Joe is the one bearing the cost, well, diversify your portfolio friend.

    Unhappy about the price of gas? Buy oil/gas stocks with good growth profiles: DVN, CNQ, and PWE are a few of my favorites.
    Apr 16 15:09 pm |Rating: 0 0 |Link to Comment |View article
  • The 7 'Golden Rules' of Picking a Gold Stock
    Goldcorp fits your seven rules nicely. I own GG.
    Apr 16 14:49 pm |Rating: 0 0 |Link to Comment |View article
  • Systemic Financial Crisis and Its Implications for Gold
    We will see inflation and deflation over the next five to ten years.

    Debt assets,real estate, banks and debt paper will deflate, and real assets will inflate.

    Foreigners are net sellers of US treasuries and the US dollar will continue to decline for several years as the Dollar loses its reserve hegemony, and is replaced by gold and baskets of currencies held as reserve.

    This process will be take decades. The IMF is a political organization as much or more than a financial one--it will lose money on the sales.


    Finally, Visa does have debt exposure--as fewer people use their cards, and bankruptcies increase, transactions will not materialize as expected.
    Apr 07 20:29 pm |Rating: 0 0 |Link to Comment |View article
  • How Cheap Are Gold Stocks Relative to Bullion?
    Actually, I didnt win it, rather I own it. My largest position.
    Mar 28 16:46 pm |Rating: 0 0 |Link to Comment |View article
  • How Cheap Are Gold Stocks Relative to Bullion?
    I won GG and notice that UBS came out with it as their top pick among the majors for precisely the reason of higher margins, and lower costs, as well as that their gold is located in politically stable countries. I would continue to add to GG at the right price.
    Mar 28 16:45 pm |Rating: 0 0 |Link to Comment |View article
  • Commodities: Is It All Over?
    A few ideas to consider:
    1) Most major industrial countries are growing their money supply at between 12-21% per year. This is not only a US dollar story.

    2) Growth in money supply at a higher rate than productivity and economic growth is inflationary.

    3) We are in a rising inflationary environment that is global in scale, and likely to continue for ten to fifteen years.

    4) Commodities are a proven asset class in a rising inflationary environment. (but tend to do poorly in a stable or falling inflationary environment)

    5) The average of assets allocated to commodities in major accounts of high net worth individuals (according to a recent survey) was 3%.

    6) The asset allocation recommendation by a recent (2006) PIMCO study (analysis done by Ibbotson and Associates) recommends between 12-29% of assets in a portfolio should be allocated to commodities for minimizing risk, and maximizing return.

    7) Assets allocated to commodities in portfolios invested globally are likely far from 12%, and much closer to 3%. Most people I talk to have 0% allocated to commodities.

    8) The past is not the future. The future is not the past. We are over and through the tipping point and a tectonic change has occurred that has changed the economic landscape. People worldwide will be experiencing higher inflation going forward--and they will seek protection with commodities. 1980-2002 was a bad time to be a gold investor, in general due to stable or falling inflation. Going forward, its a different story for commodities.

    9) The popular press has the story wrong--they report "the bursting of the commodity bubble", but completely ignore the change in economic fundamentals--which drive the investment returns. The story should be: "Correction in commodities presents investment opportunity"

    10) Think for yourself.
    Mar 21 14:12 pm |Rating: 0 0 |Link to Comment |View article
  • Thursday Outlook: The Inflation Con Game
    I'll stay away from the political banter and focus on something else the media almost all get wrong.

    For the record: Shadow stats is a legitimate and respectable website that I have much confidence in. In the governments cpi figures:none

    Humor me and estimate something: how much have prices increased--for real--since 1980? Then apply this back of the envelope calculation to gold, oil, silver.

    First: Look at the shadow stats graph of inflation for 1980 through 2008. Look at the SGS alternate line blue) and estimate inflation over that 28 years.

    I get 7% if I'm generous,(give or take, no?)

    That means, roughly, that prices double every 10 years.

    Second, take the high for Gold in 1980 ( chose 850, or 875).

    Third, project, (always dangerous) to the end of 2009. Thats 30 years from 1980 to 2009.

    30 years divided by 10 years to double and you have three doublings which equals--up by a factor of 8. Yikes!

    Fourth, take 8 times 850 and you get $6800 for gold/ounce or if you prefer 8 times 50/ ounce for silver and you get $400.

    I don't pretend to predict what will happen--I'm aware of multiple faults in my methodology--I'm merely stating what is possible, given the current environment. People aren't panicked because theyve been lied to, and the media isn't savvy or courageous enough to report it.

    But the tsunami of dollars that are circulating in the world will eventually hit our shores (as US Dollar loses its reserve status ever so gradually) and we will see much higher inflation for a decade or more. That is a prediction.

    Interesting eh?
    Feb 21 19:30 pm |Rating: 0 0 |Link to Comment |View article
  • Undervalued Vista Gold May Present a Buying Opportunity
    Vista gold is a company I owned for a while and then dumped for a small profit. I have followed the company for ten years. I think the author is onto something. They have something like gold in the ground at approximately $9.11 market cap/oz. assuming a 165 million market cap, and 18 moz resource base. It is a company to watch. see: money.cnn.com/news/new...
    Feb 07 21:02 pm |Rating: 0 0 |Link to Comment |View article
  • The GATA Gold Rally
    A little (never?) mentioned fact of the current commodity cycle is that gold, when adjusted for inflation (using credible inflation numbers, not the US Government's) you get to approximately $4000 per ounce. This figure is approximate, but assumes $850 high in 1980 (spot) and 6% inflation, and rounding down because of poor precision. Why 6% inflation? Everyone knows that inflation has been under control and about 2-3% the last two decades...why 6%? Because more careful calculations of inflation, not relying on bogus governmental fudge factors such as hedonics calculations and the like, yield a more realistic calculation of inflation of 6-8% inflation annually since 1980. I used 6% as a conservative number.

    Historically, you can expect gold to match the inflation number over long enough time periods. I expect the catch up factor that gold needs to appreciate to $4000/ oz to reach roughly its historical relationship with inflation. Gold will be in bubble territory when it trades significantly above $4000/oz, but I would be a seller of half my position there.

    The media consistently misrepresents the gold story as one of a flight to a safe asset class during times of global turmoil, and this is half right. Its common to read that gold will reach its old inflation adjusted high when it surpasses approx. $2000/oz, which is all wrong.

    There is no gold bubble, there is a brewing global inflation trend that will last another 8-12 years and bring all commodities much higher. With vicious corrections along the way.
    Jan 30 20:00 pm |Rating: 0 0 |Link to Comment |View article

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