Safehaven | Fast Money Has a Laugh at Gold

April 16, 2008

Fast Money Has a Laugh at Gold
by Gary Tanashian

Even as the US and global paper economies come apart at the seams, the grizzled, authentic looking traders on CNBC's Fast Money are still serving up the standard and conventional fare that casual market watchers love; stuff like "is it time to buy financials?"... "have the homebuilders bottomed?"... "are commodities a short?" (yes, they talk about shorting on this show because after all, these are grizzled traders and you should be in awe of their well rounded prowess.

Check out the video replay on this page as they talk about gold. Woo hoo! Do these guys and gal give the barbarous relic a righteous spanking?! They articulate well what everybody has been conditioned to know by the secular bear market that ended 7 years ago. The people laughing along with them will be the holdout fuel that propels the most dynamic stage of the bull market. People who cannot think for themselves get what they deserve in the end.

Some good news and some bad news for gold bugs. The good news is that as you can see, gold was literally laughed off the Fast Money set. These pros wouldn't trifle with such a relic. They will leave gold to the gullible likes of you, the tin foil hat wearing segment of the public. The reason this is good news is that the likes of CNBC is nowhere near signaling a peak in the metallic inflation barometer, although Larry Kudlow has been getting more and more hot under the collar about the subject, even publicly fantasizing about a coordinated G7 USD support statement that drives gold "down $200 in a day". No, these people are nowhere near ready to begin asking questions like "just what is money, anyway?" (see previous post about my friend Chris Martenson - he's asking the question and providing some clear answers).

On the negative side, this Fast Money poll asking whether gold has topped indicates that 80% of respondents (so far) see new highs for the metal. That may argue for continued corrective activity for the near term. This is one asset for which it is never that easy and many of you simply must be bled off before the next leg. As I have often written, the play on gold and contraction is that if it does decline at all, it will do so much less than positively correlated commodities. This is where the gold miners come in as would-be leveraged plays. But in a world where gold is outperforming all major currencies on monthly (big picture) charts, one must wonder at some point whether it will indeed decline in any meaningful manner beyond the current correction which, by the way, remains in force by my eye.

The short term correction is a time where the door is open for TV personalities to ridicule this secular bull market, stocks to outperform as they complete their anticipated Fibonacci retrace of the hard down vs. gold and for patient people to keep emotion to a minimum as they position for a future that, as Chris Martenson has observed in his excellent Crash Course, will not be anything like the recent past.

Edit (4/16 @ 7:00 am) The results of the gold poll are now more bullish for the metal in the short term. Bulls are now down to 66%. Curiously though, at this moment the poll shows 350 respondents whereas yesterday when it was at 80% there were 800+ responses. What gives?

Gary Tanashian
http://www.biiwii.com/

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