{"id":37326,"date":"2013-04-05T15:54:23","date_gmt":"2013-04-05T19:54:23","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=37326"},"modified":"2013-04-05T15:54:23","modified_gmt":"2013-04-05T19:54:23","slug":"bitcoins-and-gold-i-would-short-them-both-if-i-could","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/04\/05\/bitcoins-and-gold-i-would-short-them-both-if-i-could\/","title":{"rendered":"Bitcoins and Gold: I Would Short Them Both If I Could"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

It is truly a digital age: gold bugs have gone virtual.<\/p>\n

I\u2019m talking about Bitcoin, of course.\u00a0 I realize that Bitcoin is not gold and has nothing to do with gold; it is a true cyber currency made of nothing but ones and zeros.\u00a0 But its popularity is driven by the same forces that have caused investors to run to gold over the past decade: fear of inflation and a general mistrust of the global financial system.<\/p>\n

Five years from now, I have my doubts as to whether Bitcoin will still be around.\u00a0 In order to be taken seriously, it has to reach that tipping point where it becomes a viable medium of exchange accepted by mainstream retailers and not merely a pet project for ideological anarcho-libertarians and other assorted malcontents. \u00a0It could happen; but I\u2019m not betting on it.\u00a0 It\u2019s taken more than a decade for Paypal to be accepted at non-internet cash registers, and Paypal is denominated in a recognized currency.\u00a0 I don\u2019t see retailers spending the money to update their payment systems any time soon, and before they do I would see this little fad fizzling out.<\/p>\n

But I digress.\u00a0 Today, I have no recommendation to short Bitcoin.\u00a0 As tempting as it is, it\u2019s dangerous to short anything that is in the middle of a parabolic move.\u00a0 (And, alas, I\u2019m not sure if it\u2019s even possible to short Bitcoin at this time, unless there are derivatives I am unaware of.)<\/p>\n

Instead, I recommend shorting Bitcoin\u2019s far older predecessor, the barbarous relic itself: gold.<\/p>\n

Gold has been in virtual free far since October.\u00a0 In that time period, we\u2019ve seen six months of aggressive QE Infinity from the Federal Reserve, an inconclusive Italian election with the potential to plunge Europe back into crisis, a botched Cyprus bailout that threatened to set off a bank run, and the most aggressive monetary stimulus in modern history coming out of Japan.<\/p>\n

If none of these developments can spark interest in gold, then it\u2019s hard to see what will.\u00a0 After a great decade-long run, it appears that the gold bull market has run its course.<\/p>\n

Action to take: Short gold.\u00a0 The easiest route is to short the SPDR Gold Trust (NYSE:$<\/span>GLD<\/a>)<\/strong>, though if you want to throw a little gasoline on the fire, you can instead buy the Proshares Ultra Short Gold ETF (NYSE:$<\/span>GLL<\/a>)<\/strong>, a leveraged inverse ETF.<\/p>\n

Gold is a volatile commodity, and you should be careful when shorting it.\u00a0 I recommend something along the lines of a 10% trailing stop.\u00a0 Within 1-2 years, I expect gold to be trading back in the $1,000-$1,200 range.<\/p>\n

Disclaimers: Sizemore Capital currently has no positions in any security mentioned.<\/p>\n

The post Bitcoins and Gold: I Would Short Them Both If I Could<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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