28 June 2010

Rory Robertson - Gold Hater

Michael Pascoe is at it again in this story reporting on Rory Robertson's (Macquarie Bank interest rate strategist) most recent article:

"Rather than worrying about US Treasuries or Australian house prices (he doesn't see a bubble in either of those assets for fundamental reasons), punters should be sceptical of gold around US$1,250 per ounce"

"Robertson admits one has to be careful about bagging gold bugs because for a decade they have been right - gold has been a standout performer"


  1. Someone a) doesn't understand that gold is a hedge against government stupidity or b) that governments around the world have and continue to do stupid things.

    My random wanders around the internet have come up with a general assessment that gold as the wealth container is rationally valued at between $10k and $20k per oz, and that to cause it to flow adequately to function as a wealth transfer mechanism (i.e to get it to flow adequately for the balancing of international trade) may require a market value of ~5x that.

    Currently, gold coins are legal tender nominated at a deep discount to the market value of gold - simply as I understand it to provide a degree of additional security.

    I asked the other day what making gold coin legal tender by weight would achieve. I suspect not much, at least not quickly.

    Nominate it as legal tender by weight, at a flow based valuation, and the effect would be far more profound.

    e.g: Issue 1 oz coins with AUD$50,000 nominal value, rather than $100.

    Other weights would be weight proportional to in nominal value that.

    Be an interesting way of carrying out 'quantitative easing' if nothing else.

  2. ...and when all that have shot through the moon and beyond the reach on many, silver could be next.

  3. Good old Rory,

    I wonder if he will honour his bet with Steve Keen and do the walk from Parliament House to the top of Mt Kosciusko if house prices fall in the next few years.

    (BTW The seminar, where the wager was sprung on Keen, was taped so there is no doubt as to the terms of the bet despite Rory's claims to the contrary.)

    Gold vs Aus Residential RE, I think I'll opt for gold.

  4. The amount of gold bars needed to buy a house in 1970 ($50/oz vs. median $20,000) is lesser than the amount needed today ($1,430/oz vs. median $500,000). Those huffing and puffing about Oz RE... shouldn't it be at least double the amount of gold bars needed if the value had indeed gone up?

  5. Re the above comment, of course it's a typo. It actually costs less (gold) to buy today than it was back then when measured in gold grams.

  6. The words "gold ignorant", "gold challenged" or "paper lover" might be more appropriate than "gold hater";)

  7. I suppose gold could be seen as a bubble waiting to pop, but it needs to inflate first.
    Troy Ounce,
    Pascoe is definitely a gold hater.

    He is also a bank lover. He frequently brags about buying more Westpac shares for his super fund. Banks are of course highly reliant on the housing bubble. Hence the misdirection to gold.