Finally, a dear reader offers this comment:
“I greatly enjoy The Daily Reckoning and have bought more things than I could possibly need from you over the years and made some money from them despite you not knowing anything about anything. Notwithstanding the fact that you don’t know anything, I bought gold at under US$300 and more at under US$400 at your recommendation and I’m sure that you have no idea when I should sell this poor investment that has barely doubled my money in two years.
“However, when you talk about the UK housing bubble (compared to the United States), is it really like with like, when you consider available land and future housing requirements?
“I know you don’t know and I certainly wouldn’t take your advice if you did know. I have a house and I don’t care if it goes up or down, as house prices are (or should be) of academic interest only to people who already have them.
“PS: What piece of America shall I buy with all my dollars when I sell this gold? Hang on though, you won’t know this either…”
Our writer is a shrewd observer: ‘Never take advice from a man who claims to know what he is talking about,’ is his message.
In that sense, you are safe with us, dear reader. We know nothing.
The beginning of our ignorance dates back to 1980. Before that, we knew everything. But then gold began to fall. We couldn’t believe it. We assumed it was temporary. Everyone we knew back then expected the price of gold to keep going up. We were more sure…we knew it was going up. But it didn’t go up. It went down…and down…and down – for the next two decades.
And with each dollar gold declined – from above US$800 to under US$300 – some of what we knew for certain disappeared. By the time it reached US$275…our head was completely empty.
But what we lost in certain knowledge, we gained in humility. As our gold stocks went down, our stock of humility went up. The more we lost, the more we gained. What we paid in tuition, we earned in wisdom…or so we’d like to think.
Of course, we’d rather have the money. But you have to make the best of what you have. And now, we have a full tank of humility. In fact, we’re about the most humble financial commentator we know. Whatever they claim not to know, we know even less.
But we notice that gold is finally coming back. It is still below the record set 27 years ago…but considering all that has happened in the intervening years – the invention of the CDO, the explosion of hedge funds, the global liquidity glut, Warhols that sell for US$72 million, Alan Greenspan, George W. Bush – we wouldn’t be surprised to see this cycle carry it well beyond the high set in January 1980.
But what do we know?
The Daily Reckoning Australia