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...Its not if you adjust for inflation.
With the price of gold at record highs, presidential candidate Rep. Ron Paul wants to make sure the U.S. gold bars at Fort Knox are really there. Paul called a congressional hearing Thursday to grill federal officials about his bill to audit and inventory all of the gold reserves at Fort Knox, Ky., West Point, N.Y., and Denver, even though Treasury officials insist that the gold is audited annually and is all there. During the hearing, Paul suggested that the Federal Reserve of New York, which has 5% of the U.S. gold reserves, has the ability to secretly sell or swap gold with other countries without anyone knowing.
"The Fed is pretty secret, you know," said Paul, who leans Libertarian. "Congress doesn't have much say on what's going on over there. They do a lot of hiding." Paul, a Texas Republican who wants to convert the U.S. monetary system to one based on the gold standard, says the federal government owes it to taxpayers to make sure U.S.-owned gold is safe. "This is one of the few legitimate functions of government: To check our ownership and be fiscally responsible and find out just what we own and whether it's really there," said Paul, who is among those running for the Republican presidential nomination.
Audits by the Treasury Department and Government Accountability Office are based on samples. Paul wants to open up Fort Knox and other reserves and count the bars manually. "We know where it is. We know how much there is. We know it's there. None of it has been removed," said Treasury Inspector General Eric Thorson.
In September, Treasury completed its latest audit, showing that U.S. gold reserves total 9,300 tons with a market value of $320 billion, Thorson said. The recent run-up in gold prices -- the precious metal is trading at about $1,515 an ounce -- puts the market value at $340 billion as of Wednesday, according to Thorson's testimony. He added that each gold bar weighs about 27 pounds and is worth around $500,000.
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Fear is high and investors are fleeing to gold. Amid a volatile stock market, Europe's debt woes and concerns about a weak U.S. economy, gold touched a new high above $1,800 earlier this week. It has fluctuated since, and is now back down around $1,750. Nevertheless, the surge was shocking, considering just earlier this year, the precious metal traded at about $1,400 an ounce. Five years ago, gold cost less than $500.
Granted, the gold market is small compared to stocks or bonds, so it can be dramatically influenced much more easily -- but the numbers can't be disputed -- a gold rush is on. Wary of the debt crisis debates in July, weak economic data and S&P's credit rating downgrade of the United States, investors have turned to the yellow metal because they perceive it as a tangible safe haven compared to paper currencies, bonds and stocks.
In the last week, traders bought 121,336 contracts for gold futures and options in the Chicago Mercantile Exchange. As of the end of trading Wednesday, investors held 951,623 contracts on COMEX gold, nearing an all-time high of 979,800 contracts in November 2010, according to figures tracked by the Commodity Futures Trading Commission. Meanwhile, exchange traded funds linked to physical gold had their fourth best week on record, as measured by the dollar amount flowing into those funds.
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...Its not if you adjust for inflation.
Nice to have this fact being brought out, thanks.
What this is saying is that since 1980, a comparison of prices of gold and everything else show that gold is now worth less than everything else.
If that were true then we'd all be seeing more inflation now than we saw when the price of gold was lower. We don't so it isn't. What I'm getting is the same people that lost half their life savings on real-estate a few years ago are now telling me how happy they are with their gold "investment".The reason why the gold boom is different than other booms is because gold has always been where cash moves to for protection during times of inflation...
If that were true then we'd all be seeing more inflation now
The average London PM gold price for 1970 was $35.94, the cpi's gone from 38.8 to 223.7 which makes 1970 gold $207....at $34 in 1970 and a 7x CPI inflation rate gold should be priced at $200/ounce now?
If that were true then we'd all be seeing more inflation now than we saw when the price of gold was lower. We don't so it isn't. What I'm getting is the same people that lost half their life savings on real-estate a few years ago are now telling me how happy they are with their gold "investment".The reason why the gold boom is different than other booms is because gold has always been where cash moves to for protection during times of inflation...
Gold, these days, is like oil (or any commodity for that matter) - made of paper, numbers, and electronic inputs.
In June 2008 oil was $134/bl. Now it's $83. Of course when it comes to money I like to talk numbers, while most posters on these threads ramble on about how they're so smart they never have to even think of numbers.Maybe you didn't notice the price of gas and food lately.......If that were true then we'd all be seeing more inflation now than we saw when the price of gold was lower. We don't so it isn't...