$1300 Gold, and $21.50 Silver....

Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.
Lots of brokerages hedging for the next panic sale of stocks, which I'm guessing will come as soon as the Fed quits pumping container ship loads of cash into the stock markets.

At that point, gold will again drop like a rock, as they sell at any available price to keep their businesses solvent....Only to have the price begin its upward march again, as all those inflated dollars hit the streets.

See the what the prices did in '08?

24-hour Spot Chart - Gold

Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.
 
Actually the gigantic upsurge in European purchases is driving the price. If the dollar tanks the Far East and EU will see their exports and economies collapse. Because of arbitrage gold could easily hit $10K/oz.

Do you have any evidence that a very weak dollar will cause the Far East and EU to collapse?
There is no way gold is going to 10k/oz.
 
Youi're joking. When radio ads tout gold the same way they did real estate, and before that stocks then we've hit a top. When I see people standing on streetcorners advertising to buy gold, we're at a top. You don't think all the scrap is going to gun supply? When the stock market starts making new highs all that money is going to pile out of gold and into stocks. I don't know whether this is really the top, or whether it's at 1300 or 1400 or 1500 but we're very close. Gold is thinly traded so it is subject to very big moves.

I don't know where gold tops, but the anecdotes are nowhere near close to the Tech and Housing Bubbles. Gold is still miles away from the frenzy we saw in tech stocks and housing. And the monetary and fiscal stimulus is many times greater now than it was during the other two bubbles, while, as you correctly pointed out, gold is much thinner.

As for gold supply, I believe last year was the first year in ten that actual production rose (though admittedly, I may be off on that as there could have been another year when production went up). Gold supply from the miners has been falling on average by about 1% a year since this bull market began. I believe production was up ~4% in 09.
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.
Lots of brokerages hedging for the next panic sale of stocks, which I'm guessing will come as soon as the Fed quits pumping container ship loads of cash into the stock markets.

At that point, gold will again drop like a rock, as they sell at any available price to keep their businesses solvent....Only to have the price begin its upward march again, as all those inflated dollars hit the streets.

See the what the prices did in '08?

24-hour Spot Chart - Gold

Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.

Then you tell us, genius.

Whatever explanation we offer, you say "no, that can't be it."

Bottom line is something is driving it, and your logic is costing you money.

One day, you'll eventually be right.

On that day, we'll all be wrong.

And rich.
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.
Lots of brokerages hedging for the next panic sale of stocks, which I'm guessing will come as soon as the Fed quits pumping container ship loads of cash into the stock markets.

At that point, gold will again drop like a rock, as they sell at any available price to keep their businesses solvent....Only to have the price begin its upward march again, as all those inflated dollars hit the streets.

See the what the prices did in '08?

24-hour Spot Chart - Gold

Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.
The inflation is happening, it's just hidden.

Wait until the phony, pumped-up value bubble in the stock markets contracts, just like in '08...Gold prices caved back then too, as brokerages dumped their reserves for the cash to pay off panic sellers....But this time, who is going to take all that fiat cash out of circulation?
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.

Loss of confidence in fiat currencies. Most governments are systemically debasing the value of their own currencies. The US government has been doing so for much of the past decade. And since the dollar is the anchor of the global currencies, it is dragging all other fiat currencies down with it.
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.
Lots of brokerages hedging for the next panic sale of stocks, which I'm guessing will come as soon as the Fed quits pumping container ship loads of cash into the stock markets.

At that point, gold will again drop like a rock, as they sell at any available price to keep their businesses solvent....Only to have the price begin its upward march again, as all those inflated dollars hit the streets.

See the what the prices did in '08?

24-hour Spot Chart - Gold

Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.

Look, nation states are buying gold, real gold, not leased gold or fake gold that is never delivered.

Throughout most of the last century and far moreso over the last 2000 years gold has been the most important of all commodities worldwide.

There is no reason to expect the gold rally to ever end unless your entire view of the world began in 1970 and you never studied history.

It is cash that may be running out of vogue. Currency, monopoly money. Fiat paper, or worse yet debt based dollars, yen and Euros.
 
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Lots of brokerages hedging for the next panic sale of stocks, which I'm guessing will come as soon as the Fed quits pumping container ship loads of cash into the stock markets.

At that point, gold will again drop like a rock, as they sell at any available price to keep their businesses solvent....Only to have the price begin its upward march again, as all those inflated dollars hit the streets.

See the what the prices did in '08?

24-hour Spot Chart - Gold

Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.
The inflation is happening, it's just hidden.

Wait until the phony, pumped-up value bubble in the stock markets contracts, just like in '08...Gold prices caved back then too, as brokerages dumped their reserves for the cash to pay off panic sellers....But this time, who is going to take all that fiat cash out of circulation?

If it's hidden then how do you know it's happening?
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.

Loss of confidence in fiat currencies. Most governments are systemically debasing the value of their own currencies. The US government has been doing so for much of the past decade. And since the dollar is the anchor of the global currencies, it is dragging all other fiat currencies down with it.

If that were so then all currencies would be falling in value.
But they aren't. Nor is that possible since currencies trade against each other.
 
Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.
The inflation is happening, it's just hidden.

Wait until the phony, pumped-up value bubble in the stock markets contracts, just like in '08...Gold prices caved back then too, as brokerages dumped their reserves for the cash to pay off panic sellers....But this time, who is going to take all that fiat cash out of circulation?

If it's hidden then how do you know it's happening?

The phony, pumped-up stock market numbers, with no real appreciable increase of growth and/or output, is where the inflation is hidden.

Also, those trillions of dollars "sitting on the sidelines" aren't just stuffed under the mattresses of corporate CEOs.
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.

Loss of confidence in fiat currencies. Most governments are systemically debasing the value of their own currencies. The US government has been doing so for much of the past decade. And since the dollar is the anchor of the global currencies, it is dragging all other fiat currencies down with it.

even the yuan.
 
The inflation is happening, it's just hidden.

Wait until the phony, pumped-up value bubble in the stock markets contracts, just like in '08...Gold prices caved back then too, as brokerages dumped their reserves for the cash to pay off panic sellers....But this time, who is going to take all that fiat cash out of circulation?

If it's hidden then how do you know it's happening?

The phony, pumped-up stock market numbers, with no real appreciable increase of growth and/or output.

Also, those trillions of dollars "sitting on the sidelines" aren't just stuffed under the mattresses of corporate CEOs.

How are stock market numbers (and do you mean the DOw, the S&P, the Wiltshire??) phony and pumped up? Do you think people buy and sell and then get their confirms and say "no, I didnt pay that for this stock"?
Output and growth are not correlated to stock market returns.

I'm not hearing anything cogent here.
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.

Loss of confidence in fiat currencies. Most governments are systemically debasing the value of their own currencies. The US government has been doing so for much of the past decade. And since the dollar is the anchor of the global currencies, it is dragging all other fiat currencies down with it.

If that were so then all currencies would be falling in value.
But they aren't. Nor is that possible since currencies trade against each other.

Just because currencies are rising against another specific currency, doesn't preclude the fact that ultimately, governments are debasing their currencies collectively.

You just answered your own question with "nor is that possible since currencies trade against each other". That's the only thing that props up any particular currency during a time of debasement otherwise.
 
Also, those trillions of dollars "sitting on the sidelines" aren't just stuffed under the mattresses of corporate CEOs.

You gotta wonder WHAT Corporate America is doing with all that cash. I suspect most of it is held in currencies, commodities, bonds and futures. I don't really believe much of it is stored in the stock exchanges. But I could be wrong.
 
Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.

That's an easy one.

Inflation is not just a general rise in the level of prices. A rise in the level of prices is a symptom of inflation. Inflation is caused by the excess creation of money. But excess money doesn't necessarily have to flow into consumer prices. If there is significant deflationary pressure, then the monetary authorities can crank up the printing presses to keep the general level of prices stable. We have had significant deflationary forces over the past decade, first with the Internet, next with the collapse of the Tech Bubble, then with introduction of China into the global economy, and finally from the collapse of the housing bubble. In between, we had inflation that was hidden when the Housing bubble was taking off, but it didn't show up in the official statistics because of something called "owners equivalent rent," which calculated an implied rate of rent as the cost of housing based on interest rates rather than the actual cost of housing, which was soaring. The money supply has grown far faster than the nominal rate of economic growth, which is one reason why we keep having all these bubbles.

I think gold is going to become a bubble, but I don't think we have even begun to see it.

But maybe I'm wrong.
 
Can someone give a cogent explanation of why gold is going to go higher? There is absolutely no reason for it.

Loss of confidence in fiat currencies. Most governments are systemically debasing the value of their own currencies. The US government has been doing so for much of the past decade. And since the dollar is the anchor of the global currencies, it is dragging all other fiat currencies down with it.

If that were so then all currencies would be falling in value.
But they aren't. Nor is that possible since currencies trade against each other.

They are all falling in value. That's the point.

The linchpin of the global economy is the dollar. It is the global reserve currency. If the dollar falls relative to the value of real assets, then all currencies must fall with it. Otherwise, production capacity around the world would be gutted out and relocated to America.
 
Everyone has been betting on massive inflation for the last 3 years. It hasn't happened. There is no evidence of it happening, and lots of contrary evidence. 2008 isn't 2010. The gold rally has gone on for 4 years. Everyone who has thought about buying has bought. Look at every street corner with guys advertising they buy gold. This is more gold ocming in than a major new mine, and lots cheaper.

That's an easy one.

Inflation is not just a general rise in the level of prices. A rise in the level of prices is a symptom of inflation. Inflation is caused by the excess creation of money. But excess money doesn't necessarily have to flow into consumer prices. If there is significant deflationary pressure, then the monetary authorities can crank up the printing presses to keep the general level of prices stable. We have had significant deflationary forces over the past decade, first with the Internet, next with the collapse of the Tech Bubble, then with introduction of China into the global economy, and finally from the collapse of the housing bubble. In between, we had inflation that was hidden when the Housing bubble was taking off, but it didn't show up in the official statistics because of something called "owners equivalent rent," which calculated an implied rate of rent as the cost of housing based on interest rates rather than the actual cost of housing, which was soaring. The money supply has grown far faster than the nominal rate of economic growth, which is one reason why we keep having all these bubbles.

I think gold is going to become a bubble, but I don't think we have even begun to see it.

But maybe I'm wrong.

No, inflation is a general rise in the level of prices. I think that is the definition. It's cause is monetary, esp if you're Milton Friedman. Someone posted a great essay on why we haven't seen inflation even though the Fed has created trillions of dollars.
BUt there is no evidence of inflation.
You can say teh CPI numbers are wrong, and you'd have good reason. But lenders pay attention to this kind of stuff. And if they anticipated massive inflation they would not lend for 30 years without an inflation premium. And it isn't there.
It isn't there in the U.S yield curve. It isn't there in the Euro yield curve. And it isn't there in the Jap yield curve.
What there is is a good carry trade, borrowing dollars short term at 1% or less and lending them in Europe longer term at 3%. That's free money.
If the Fed tightens, gold is going to swoon very quickly. It is a volatile market since there isn't much of it. The fact that no one sees the Fed tightening is a good reason why it will.
 

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