Here’s Something to consider

Posted by Dennis Gartman - The Gartman Letter

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Ed Note: Dennis Gartman will be speaking at the:

The Money Talks All Star Trading Super Summit
Saturday, October 24, 2009 -The Sheraton Vancouver Wall Centre

Click HERE for the Speaker Lineup and to REGISTER if you want to take advantage of this Event.


“For me, pragmatism is not enough. Nor is that fashionable word,“consensus”….To me, consensus seems to be the process of abandoning all beliefs, principles, values and policies in search of something in which no one believes, but to which no one objects‐‐‐ the process of avoiding the very issues that have to be solved, merely because your cannot get agreement on the way ahead.  What great cause would have been fought and won under  the banner “I stand for consensus”? – Lady Margaret Thatcher, 1981

The debate in the gold market is whether the public is too heavily involved… or in some instances, involved at all.  We have heard from friends in the business that the public is not nearly as involved in gold as it was back in the 80’s in the last great run up. Perhaps that is true, and we shall admit that we find it interesting that there are at least as many advertisements on television for gold selling opportunities as there are for those wishing to buy gold. We did not see that sort of thing back in the 80’s gold bull market. But gold is now the topic de jure almost everywhere, and while having dinner last evening at our club, the first question we were asked was “How much farther can gold go up?”  We were asked this by an individual that had never, ever asked our opinion on anything financial before, and the question was clearly asked from a bullish… and hopeful… perspective.

We remain long of gold in Sterling, EUR and now US dollar terms, and having added to the position in dollar terms earlier this week, we’ll sit tight.  We’d not argue, however, with those who might wish to write calls against their gold, for the premiums being offered are shockingly high. Indeed, we note that calls on gold $10 or $20 away from the current spot rate are demonstrably more expensive than are puts $10 or $20 below the current spot. This is evidence of the public’s willingness to bet bullishly of gold, and it is evidence, we thin, of an excessive speculative enthusiasm. Should gold make its way back down toward $1000-$1020, we’d be willing buyers once again; but at $1050, “Not so much:”









This brief comment from the Legendary Trader Dennis GartmanFor subscription information for the 5 page plus Daily Gartman Letter L.C. contact – Tel: 757 238 9346 Fax: 757 238 9546 or HERE to subscribe at his website.

Mr. Gartman has been in the markets since August of 1974, upon finishing his graduate work from the North Carolina State University. He was an economist for Cotton, Inc. in the early 1970’s analyzing cotton supply/demand in the US textile industry. From there he went to NCNB in Charlotte, N. Carolina where he traded foreign exchange and money market instruments. In 1977, Mr. Gartman became the Chief Financial Futures Analyst for A.G. Becker & Company in Chicago, Illinois. Mr. Gartman was an independent member of the Chicago Board of Trade until 1985, trading in treasury bond, treasury note and GNMA futures contracts. In 1985, Mr. Gartman moved to Virginia to run the futures brokerage operation for the Virginia National Bank, and in 1987 Mr. Gartman began producing The Gartman Letter on a full time basis and continues to do so to this day.

Mr. Gartman has lectured on capital market creation to central banks and finance ministries around the world, and has taught classes for the Federal Reserve Bank’s School for Bank Examiners on derivatives since the early 1990’s. Mr. Gartman makes speeches on global economic and political concerns around the world.