Follies Of The Human Mind
Oh the follies of the human mind – what a tangled web we weave when we are trying to convince ourselves of something. In other words – whatever the status quo may currently be, we find ways to justify its continuation. Take for instance our favorite precious metal – GOLD – the pure mentioning of the word continues to inflict a roller coaster of emotions on the average investor.
Almost exactly a year ago when it touched 700 it was the bitch boy of the investment community – everyone KNEW that it was going to zero (except of course the intrepid gold bugs led by Jim Sinclair). And now you simply can’t go wrong putting your money into gold – heck, in Europe they’re even selling it in vending machines to the public.
What really cracked me up was an article posted over at ZeroHedge today titled ‘Why Gold Is Very Very Cheap‘. The discussion is actually quite enlightening but its parting message is that one would be foolish shorting gold and betting ‘against Bernanke’. Say what? Wait a minute – just until a few months ago I kept seeing a flurry of angry articles making the point that Gold was competing with the Dollar and that massive gold manipulation was a scheme by the PPT and Ben Bernanke’s crew to keep it competing with our fiat currency – the ole’ buck. Deepcaster was particularly prolific on that subject and particularly his takes on why gold was tantamount to Charlie Brown’s football and Ben Bernanke as Lucy pulling it away just as it was trying to kick higher.
Now gold is going exponential and of course the mental masturbation of the past has been replaced with brand new mind constructs. Let’s just review the sentiment change across the past year:
Okay, at around 700 nobody wanted to have anything to do with the shiny stuff. And at 800 it was still too expensive. It was getting ‘cheaper’ and more desirable at 900 and now at 1140ish it’s suddenly a steal! Can someone explain me this – because I just don’t get it. But I’m a certified pain in the ass contrarian – so perhaps I constantly have this elitist urge to tell everyone else they’re wrong – admittedly I’m a lost case.
For the record – I insisted all along that it would drop like a rock – and on that one I was completely wrong. I still do believe we’re going down down down – but my timing – well, let’s not talk about it. And yes, we might go higher here as futures have a tendency to extend before they turn – a blow off top is definitely possible. My point here is however that jumping into gold now – after it’s rallied over 60% in the past year might not be the best idea.
Okay, I got to run, have to buy some ‘supplies’ – ahem – does anyone know where I can get 2nd hand mining equipment? But wait – I’m a mole after all – never mind! Plus I get 200 jack asses as part of the one time offer above. Heck, what am I going to do with even more retail traders in my evil dungeon? Time to start a sweat shop I guess. Gold rimmed tube socks anyone?