Trader, economist and Gartman Letter publisher Dennis Gartman knows when he is wading into a hostile crowd. He brought up gold in his keynote address to the New York Hard Assets Investment Conference this week and immediately acknowledged his contrarian views:
“What should money be doing?” he asked.“You’ll not like me for this. Don’t put it in gold. It’s not going up any more. It was a great trade for three years. It was a wonderful, ebullient, beautiful, marvelous trade for three years. Ain’t been so good now for the last year and a half. It sucks. There’s a really insightful economic perspective. It’s making new lows, doesn’t make new highs, keeps falling, everybody you know wants to buy some. It’s not a safe harbor. And I object when I hear people – they actually interviewed me on TV today and said, ‘Mr. Gartman, what do you think about gold? Is it a safe harbor?’ I said, ‘It never was.’ Safe harbors don’t move three and four and five and eight and 12 and 15 percent a year up and down. Safe harbors are safe. Gold ain’t safe. It’s a currency. It’s something you trade. Sometimes it goes up, sometimes it goes down. But to get married to it is ludicrous and is wrong. Don’t fall for that. Right now if you look at a chart of gold each low is lower. Each high is lower. It will continue – mark this down – until it stops. But right now anybody who‘s bought gold in the past 15 months feels horrid about it. Don’t buy gold.
Where should you go? Who are the beneficiaries in the modern world. It’s simple: English speaking currencies … Whether you like it or not, people are going to still tell you the United States dollar will cease to be the reserve currency of the world sometime in the future. Yes, it will – 150 years from now. I’ll be long dead. I don’t care, at that point. But who does the reserve currency status always inure to? Who is the reserve currency country through history? No question, always is the same thing: the dominant military power. Period. End of discussion. And we are, we are now, we shall be, and as far as the eye can see we will continue to be the dominant military power.”
Gartman departed after his keynote address to the conference without taking questions while wishing his audience “good luck” with their trading.
But his view came back later when analysts gathered for a “Bulls and Bears Debate” keynote panel.
“It was wonderful to see the anger, angst and depression through the room,” said panel moderator Rick Rule, founder of Global Resource Investments Inc, a unit of the Sprott Group. “I always enjoy a speaker who makes an impact on the audience, irrespective really of the nature that impact. So who of you wants to be the anti-Gartman. I know for sure who’s going to take the Gartman case, so I’ll ask him later but who would like to be the ant-Gartman, any of you?
Ian McAvity, editor of Deliberations on World Markets: … I’m as bullish as can be, in large part because I’m seeing such extraordinary negativity and I’m also seeing the speculation as having been wrung out of not only gold but also silver and the mining stocks …The only missing ingredient that we’ve had is what I call a diaper change moment in the S&P that lets the margin clerks butcher the stocks down to what I think will be the buying opportunity the likes of which we haven’t seen since the fourth quarter of 2008,
Rule: I have two questions for you. We’ve just been through our own mini diaper change moment. What would you say about the fact that we’ve experienced ours and they haven’t experienced theirs yet;
McAvity: By a diaper change moment I’m talking something on the order of a thousand point down day in the Dow. We haven’t seen anything like that volatility yet.and the only question in my mind is whether it’s originating from the potential evaporation of the euro or from somebody dropping some nasty stuff in Iran.
Rule: I take it then – before I turn Paul loose on you – that the part of the thesis that Mr. Gartman propounded which was in some fashion recovery is nigh is not something you have any particular truck with.
McAvity: Well the economic recovery only shows up in two data series I track. That’s the issuance of food stamps and the growth of the national debt. If you look at housing starts and unemployment there is no evidence that Joe Sixpack is experiencing a recovery.
….read page 2 HERE
