Kamikaze Kooks

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Well, since the day ends in “Y”, precious metals are continuing to plunge………


What’s irksome to me (besides not having the entirety of my portfolio dedicated to being short various miners) is the excuses the Kooks trot out (particularly over in Tyler-land) about Why It Doesn’t Really Matter. Off the top of my head, here are a few:

  • It’s just JP Morgan and Citibank manipulating the paper market. Really? So you’re saying that even though the ETF value is plunging, the actual commodity itself is still really valuable? Let’s test that theory out by trying to sell some bullion at your local metals dealer.
  • Demand for physical has never been higher. Again: really? Last time I checked, economics 101 tells us that surging demand pushes prices higher, not lower. The notion being offered here seems to be, once again, a false dichotomy between the GLD ETF (which silly rubes trade) and honest-to-God phyzz (which clever sharpies stack with abandon).
  • And, my perennial favorite – My stack isn’t any smaller. Which is the equivalent of saying the width and height of the paper my Pets.com stock certificate is printed upon hasn’t changed one iota. True. But the exchange rate with those ridiculous little federal reserve notes has, in fact, changed.

I was convinced enough by the non-stop preaching of the kooks to buy some bullion (about .5% of my assets), so a soaring or plunging precious metals market really doesn’t help or hurt me, but I still must say, the insistence from the mightiest kooks that the price doesn’t really reflect the price gets annoying after a while.