The GOLD standard

[DavidS]

Many predicted when we reached $1000 an ounce last year we would easily be $1500 - $2000 an ounce within 6 months.

Current gold prices:

$886/ounce.

All those people who bought gold at $1000/ounce are kicking themselves right now.

 

[editec]

DAMN!

I KNEW I shouldn't have sold my shares in that buggywhip manufacturing company to invest in gold.

 

[Toro]

Gold may be putting in a double-top.

 

[manu1959]

Many predicted when we reached $1000 an ounce last year we would easily be $1500 - $2000 an ounce within 6 months.

Current gold prices:

$886/ounce.

All those people who bought gold at $1000/ounce are kicking themselves right now.

they guy that dumped the market in oct nov of 06 and sunk it in gold is looking pretty good.....

 

[Indiana Oracle]

It is hard to imagine that all of this money printing will not lead to inflation. Whether we break and hold over 1,000 any time soon, I doubt it. Also see the double top.

Once we are out of the worst part of this economic reset process, we are really going to have to worry about inflation, then rising interest rates, then what that brings. I put the start out about 2 years, but the market will anticipate before that.

 

[ItsFairmont]

Gold may be putting in a double-top.

This chart just shows how much Greenspan and Bush destroyed the US dollar after Clinton's administration built it up.


Republicans sure are bad for the U.S. economy.

 

[Paulie]

Many predicted when we reached $1000 an ounce last year we would easily be $1500 - $2000 an ounce within 6 months.

Current gold prices:

$886/ounce.

All those people who bought gold at $1000/ounce are kicking themselves right now.

No, they're not kicking themselves. They're averaging down if they're smart, because the writing is on the wall. I'd love to see someone explain to me how on god's green earth we won't be seeing AT LEAST double digit inflation in the next year or two.

The Fed and the rest of the world's central banks would have to literally pull off some kind of miracle. EVERYONE is debasing their currencies these days. Gold will inevitably be seeing a huge increase in demand all over the world at some point, the only question is WHEN.

I thought you were a little smarter than that about these kinds of subjects Dave.

 

[stekim]

I'd love to see someone explain to me how on god's green earth we won't be seeing AT LEAST double digit inflation in the next year or two.

OK. Let the new guy do it! In the short term there is little chance of anything even close to double digit inflation. Inflation is not just a function of the number of dollars in existence. It is a function of economic output, the amount of currency in CIRCULATION, and the speed with which dollars change hands. Hence, when you have an economy with lots of idled capacity the Fed can stimulate growth without encouraging inflation. Right now the economic trends are actually deflationary. Factories are operating way below capacity, unemployment keeps rising, wages are stagnant to dropping and retailers are lowering, not raising, prices. And that isn't going to get materially better any time soon. In addition, while the Fed is adding cash to the economy, the cash is not moving around very quickly. Lenders are holding on to cash and consumers are saving more and paying down debt. They are not spending. Once the economy recovers the Fed can take the currency back out of circulation. But that is a balancing act because doing that is recessionary. The best option is some (but not double digit) inflation.

 

[Paulie]

You explaining to me what the CURRENT economic conditions are is pointless, I already realize where we are NOW.

You can't possibly come up with an estimate of how much inflation there will be in the future because you have no idea how the market is going to act, and react, to what's been done up to this point.

It's only a fair guess to assume that inflation will be high, because inventories are currently high while demand is currently low. When all these new dollars enter the economy, businesses are going to be looking to unload what they're already overstocked with as it is, so the increase in money is going to chase what may very well be a DECREASE in goods.

 

[catzmeow]

You can't possibly come up with an estimate of how much inflation there will be in the future because you have no idea how the market is going to act, and react, to what's been done up to this point.

Actually, he gets paid to do exactly that.

 

[Paulie]

You can't possibly come up with an estimate of how much inflation there will be in the future because you have no idea how the market is going to act, and react, to what's been done up to this point.

Actually, he gets paid to do exactly that.

So do most people who show up on CNBC, and I don't put much faith in them either.

 

[catzmeow]

So do most people who show up on CNBC, and I don't put much faith in them either.

But Stekim is smarter than they are. Also, better looking.

 

[Paulie]

So do most people who show up on CNBC, and I don't put much faith in them either.

But Stekim is smarter than they are. Also, better looking.

Boy you just dove right in, huh?

Or do you know him from somewhere else?

 

[stekim]

You can't possibly come up with an estimate of how much inflation there will be in the future because you have no idea how the market is going to act, and react, to what's been done up to this point.

What does "the market" have to do with inflation? Regardless, when you say I cannot come up with an estimate, that is partially right. I cannot tell you it will be 1.5% or 3.0%, but I can tell you it will not be double digits. But by all means flag this post. Then we can all come back in two years or whatever and marvel at my incredible forecasting powers.

 

[Iriemon]

Many predicted when we reached $1000 an ounce last year we would easily be $1500 - $2000 an ounce within 6 months.

Current gold prices:

$886/ounce.

All those people who bought gold at $1000/ounce are kicking themselves right now.

Or if they were really smart they could have bought into gold the last time the gloom and doomers were telling us gold was the only salvation, circa 1980 when gold was at $800 an oz.

They would have had about a 0% return over the past 30 years. The Dow, even with its recent crash, is up aroun 1000% in that same period.

 

[neurosport]

just because gold and houses cannot be printed like paper doesn't mean they can't be overvalued ...