For almost a hundred years, up until FDR, twenty dollars would buy a one once gold coin. Now it takes a thousand dollars to buy that same coin. That is, 4,000 percent more dollars.
Yeah, trust the government to protect your property, or savings. BS!
Posted on 02/23/2009 9:48:37 PM PST by Lorianne
SINGAPORE: Gold is rapidly becoming the only welcoming port in a sea of uncertainty as worries rise over other traditional safe havens, including Why invest in Gold now?
And with few signs that the world's worst economic crisis since the 1930s is close to bottoming out, wrung-out investors will keep on pumping money into gold-backed securities as insurance against financial Armageddon.
"Gold is an investment you hope you never make money on. If you do, it means other markets have lost," said Stephen White, director at Sydney-based treasury advisory firm Noah's Rule.
Gold's gains are being powered by two forces -- the risk that the greenback may collapse under the trillions of dollars Washington is injecting into the economy, and that the European Central Bank's more hawkish stance will lead to debt default in the eurozone
"(There is) the guy who has the helicopter loaded and is on route to currency debasement, versus those who can't touch the printing press, fueling sovereign risk and possible collapse from within," said Alan Ruskin at RBS.
The first view is represented by Federal Reserve chairman Ben Bernanke, nicknamed "Helicopter Ben" for talking about helicopter drops of money to jumpstart an ailing economy, and the other by European Central Bank President Jean-Claude Trichet's oft-repeated mantra of vigilance.
Ruskin added that even with prices for spot gold near $1,000 an ounce, just short of a record high of $1,030.80 struck last year, it was hard to argue against long gold, short every commodity tied to the real economic cycle.
SOVEREIGN, BANK DEFAULTS
Iceland and Ecuador have defaulted on government bonds, and worries about the health of the banking sector in a host of countries across Europe, including Ireland and the United Kingdom, persist.
Other nations, including Turkey, Latvia, Hungary, Ukraine and Serbia, have reached out to the International Monetary Fund for help in recent months.
"Eastern European banks -- if they default further then it will trigger the second wave of the sub-prime crisis," said Akhi Kamkolkar, Head of Futures at Halifax investments in Sydney.
"(Gold) is the only true safe haven. The dollar is just about worth the paper it's printed on and if they keep on printing, there is really only one place for it to go."
Even U.S. treasury bonds are considered a risk. The cost of insuring against default on 5-year US Treasuries is now 90 basis points -- it was nothing just over a year earlier.
"Gold could be preferable to currencies if there are concerns about the credit quality of the issuer of the paper currency. The increasing correlation between gold prices and measures of sovereign and financial risk default clearly suggests that gold
has become the 'currency of last resort'," Goldman Sachs said.
And investors are listening. The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust , said holdings hit a record 1,028.98 tonnes last week, making the fund the world's seventh biggest holder of bullion, just behind Switzerland.
Average 2009 daily trade volume for the fund is 19.7 million, 38 percent above the average for 2008, while the increase in stocks held by the fund this year already exceeds that for all of last year.
"Just buy gold," was the advice from Mark Pervan, senior commodities analyst at ANZ Bank.
"The exchange traded funds are driving prices. The investment community just wants to find somewhere to park its money."
“Gold is $1000 an ounce and all I have is this lousy T shirt”
Silver is doing well.
- Nothing can be in a bubble unless it is well past the previous inflation-adjusted all-time high
- It is almost a commodity, yet supply is not readily available. That's a supply shortage, not a bubble.
- Boiler-room companies (i.e. cash4gold) are begging the masses to sell to them, not to buy from them
- CNBC is still bashing goldbugs instead of worshipping them
- We haven't seen a TIME or Business Week magazine cover with a cartoony John Q. Public engaging in borderline-sexual acts with Lady Liberty from the Saint Gaudens Double Eagle
- Nobody you know, knows what Lady Liberty from the Saint Gaudens Double Eagle looks like
- You don't know what Lady Liberty from the Saint Gaudens Double Eagle looks like
- Hollywood hasn't yet made gold-related TV shows, movies, etc.
oops I don’t mean you personally.
Dow 14,000: I'm skipping the party.
I remember the CNBC celebration as the day I knew it was time to head for the hills.
Because Internet Stocks are so 1999.
For almost a hundred years, up until FDR, twenty dollars would buy a one once gold coin. Now it takes a thousand dollars to buy that same coin. That is, 4,000 percent more dollars.
Yeah, trust the government to protect your property, or savings. BS!
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Gold: The investment you hope won't pay off 24 Feb 2009, 0953 hrs IST
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SINGAPORE: Gold is rapidly becoming the only welcoming port in a sea of uncertainty as worries rise over other traditional safe havens, including
government debt. |
Excerpted. READ MORE: http://economictimes.indiatimes.com/Bullion/Gold-The-investment-you-hope-wont-pay-off/articleshow/4180711.cms
Gold will likely bubbleize and pop at some point, at much higher prices. The action in gold the past couple of months is that of a healthy bull market. We go up, we consolidate the gains, retreating some before a next surge up. Daily gains of 1%-3% in gold are far from bubble territory.
When the bubble mentality or mania finally hits, it will be at quite a bit higher prices than what we have now. When the chart goes parabolic and daily gains on the order of $100 or more are recorded for a prolonged period, that’s when we’ll be in a bubble. When the chart resembles the 1998 Nasdaq Composite parabola, then we’ll be in the bubble.
Good list.
Also, we aren’t hearing people at beauty salons and shoe-shine stands exchanging tips on where to buy their gold for the best price, or where to store it.
“Bubbles” typically occur when speculation-fueled markets run out of buyers for the goods. Gold is nowhere near that, as very few ordinary people have invested in any.
at least until cartridges become the currency of last resort.
Not doin’ so hot today. It’s still worth a lot, but not as much as yesterday. Off by about 5%
Very scary, very intimidating to think what is happening to currencies.
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