Jubilee Prosperity

First Day of AutumnToday we give two seminars on the Big Picture with the benefit of our 1400+page economic history, The Gift.

While the prevailing belief is history never repeats itself exactly the same way, we agree with George Santayana that Those who cannot learn from history are doomed to repeat it.

We also agree with Arthur Schopenhauer: Newspapers are the second hand of history. This hand, however, is usually not only of inferior metal to the other hands, it also seldom works properly.

We have found we can make good money fading headlines or cover stories in and from government monopoly media.

In other words, popular sentiment can be a valuable contrary indicator.

Consider inflation and gold, almost a belief of religious faith for many.

Sentiment is pretty bullish with Barrick Gold committing $5.6 B to cover its shorts and China buying and deciding not to export gold after being number one producer in the world the last few years.

Aren’t most headline stories full of bullish articles on gold over $1000 and inflation?

Few stringers are successful traders for their own account.

But what about the most successful traders, the insiders who know their company and industry?

ABX for instance, just sold $3.5 B of stock, the largest stock sale by a non-financial company this year. Officers and insiders hardly seem bullish here on ABX profits from gold, or they might have borrowed the money to buy back their gold hedges. Gold loans from central banks cost less than 1% these days.

If we look at the COTBig4, the biggest 4 traders are 28.6% short and 15.3% long net open interest, hardly bullish on gold.

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This entry was posted on Tuesday, September 22nd, 2009 at 10:50 am and is filed under Money doctor and Counselor. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.