4 Sept 2011 (Gold versus Silver versus USAGX versus Nasdaq)

 

It seems that USAGX has broken out from its range.

A commenter pointed out that I'm one of the few people still following the stock market due to HFT, manipulation, etc, and that I should just buy physical gold and silver.  I do think this is wise, and I already do own the metals.  

The main reason I play the stock market is I think that "this time" is likely never different.  This will be extremely painful and it already has been in the ongoing depression.  Eventually the sun will rise again, and HFT will end up making no more difference trading the market than when people started using computers to do it.  The people living during the times always think it is different, and maybe it will be, but as far as I can tell the game is to get as much fiat money as possible and then convert it into something real while it is still possible.  As far as I can tell by checking APMEX, I can still buy real stuff fairly easily.  Maybe not tomorrow, who knows.

So the reason I play stocks is that most good individual stocks at the right times are much better inflation hedges than the metals themselves - see USAGX in the chart above.  See RIC, GOLD and EXK the past few months.  As far as I can tell, owning those has been a better trade than owning physical gold...so far. 

Just saying that we shouldn't limit ourselves by always believing in destruction.  Going through life assuming everything is going to fall apart actually defies almost everything we can see in the world around us.  I know entropy, I get it.  I also see weeds sprouting through concrete against all odds.  Life wins.  Just a perspective thing.

Good luck and keep your eyes open.