it's just algebra.
it's gold is selling off, I'd be inclined to buy it all the way down to where ever.
...and yet there were several posts here at FR in the last week predicting this price drop.
Except, perhaps, more people are beginning to realize that, except for some specialized industrial uses, gold isn’t good for much of anything.
‘is this the end of the gold rush?’
pretty simple question. are they making the dollar stronger... or weaker? let’s see...
the ‘budget’ is around $4 trillion on revenues of $2 trillion with a debt of $16 trillion.
to bring that down to terms everyone can understand.... if you made $50k/yr but spent $100k while holding $400k on your visa... you’d wouldn’t just be considered a very bad risk... you’d be considered a deadbeat and jailed
therefore... is the dollar getting stronger? not only no, but HELL no.
hence... gold will continue to go up, excepting for obvious price manipulation which can only last so long
Ping.
Could be time to BUY!!!
Obama is still there.. and might be THERE for 4 more years..
Romney will be so easy for Obama to kneecap.. eye poke.. and provide vicious SLAPPS..
Zerodamus has Not even STARTED to really campaign YET...
He can AND will BBQ Willard..
Wrong question (in the article).
The right question: Will the USA continue to spend and borrow and print dollars on a massive scale?
If the answer is yes, then the right question becomes: Will the dollar’s value continue to drop in value vs. the value of real assets?
Many other countries understand the the US is abusing the reserve currency status of the dollar, and understand that they can start engaging in international trade without going through the dollar as the exchange currency. Although the dollar may look better than the Euro and the Yen for a while longer, it is only a matter of time before there is a dollar exodus, interest rate hikes and a time when other countries refufse to buy US Treasury debt.
In 2011, the US Federal Reserve bought 61% of debt issued by the US Government. This is monetizing our debt. This will continue massively. It is false to assert that this is not QE... plus we’re ignoring the fact that Operation Twist - currently going on - is also QE in the form of the Fed buying more US debt...
Gold will hold its real value over time, but with these facts, the dollar will not.
They don’t call them SeeBS for nothing.
Sometimes gold needs to become food. Yield realized on sale, to a greater fool. Make sure you have one when hunger hits.
Future inflation has been setup - some trillions of $ generated without any production or value supporting them. When the flood is released by the FRB, when and if economic activity picks up, inflation in more than food, fuel, and services will rear up.
Leave it to CBS to ignore the obvious facts.
March was the largest Investment redemptions month since 2009. Must be because the economy under Obama is going gang-busters, right?
The sheeple are bailing from the markets, and need the money to BUY GAS to get to their new minimum wage Obamajobs.
Volume in the markets has been at, or near historic lows as retail investors have largely pulled out. the Trading Houses are selling gold to cover redemptions and market shorts.
As soon as Helicopter Ben mentions the phrase “QE3”, gold will SKYROCKET.
I’m a “fan” of gold without being religious about it. I sold 1/3rd of my gold at $1750. and don’t plan to ever be all the way out of it. It has come a long way. Although I will buy a few hundred bucks of silver almost any time if I can get a good price relative to spot, I believe gold may have some resting to do. I could see $1350 as an interim low point for gold, but more likely about $1530. I believe that those who are looking to buy should wait to see how gold behaves should it lose $1600.
If you buy the inflation argument, which I do, to some extent but only after some further interim deflation of major assets, I believe stocks are going to be better for pure capital gains. Meaning, they rise, then you sell them. Many investors are not into gold for that activity. Capital gains are not easy to capture in gold, physical gold. Gold is not easy to time selling and buying, and of course the spreads are punitive. Right now, the metals charts look like pure crap. I’d be in no hurry to buy at this exact point. We enter a traditionally weaker time of the year soon and IMO you just wait up to 60-90 days and watch. I have a very low basis in my silver with an average price of about $13 but not so for gold.
I also think that if interest rates rise, gold could be punished. I’m kind of sitting on my hands at this juncture.
Evidence that we are not far from a bottom in the gold price.
Gold seems to be coupled with the stock market for now. We are still seeing a lot of wealth destruction in this country as evidenced by home foreclosures, stagnant housing prices, stagnant wages with rising prices of staples such as food and energy. Our current environment of wealth
destruction is also depressing gold. However, gold has historically performed well even in the most dire times such as the Dark Ages. There is simply too much paper out there that will eventually have to be reconciled with something of value. But what will do the reconciling? A barrel of oil? Farmland? The company with the latest and greatest gadget, that is supplanted by the company with the latest and greatest gadget? Some investments are hard to liquidate and others are difficult to predict. Bet on the historical record which has been precious metals.
The other strategy is to bet against the dollar with long term treasury shorts, TBT
Only an idiot would believe that inflation is under control. It hasn’t even started yet. When inflation is over 20% Holders of gold and silver will think about selling. That would be when silver is over $100 and gold is near $5000. Yes it sounds impossible but so did $1900.
If and when the economy heats up the inflation will go to the moon faster than a Gingrich colony. Our economy is sick, very, very sick.
Fiat currency has most of the attributes of money, but it does not act as a store of value. After a few years a dollar bill has only a fraction of its original buying power. However an oz of Gold from (e.g.) the time of the Incas retains its buying power.
Something that has the attributes of money is valuable because it has those attributes. Would-be barterers can use money to overcome the otherwise insuperable problem of discovering a Coincidence_of_wants .
Trade requires money. Let's examine this vital function of money with respect to the coincidence of wants:
Chicken farm example:
You run a chicken farm, and you need to buy a great many things to keep your farm and family going.
In a given month you need - for instance - to buy chicken feed, to hire someone to repair your generator, to buy a nailgun to allow you to mend chicken barn #9, to hire a midwife to help give birth to your widowed daughter’s baby, to buy milk and bacon - and so on.
Some of these resources will be buyable with chickens or eggs. And some of them will not - there's no coincidence of wants if the midwife or the nailgun owner don't want chicken meat or eggs.
But all or most of these resources will be buyable with money - with Gold or Silver. Because offering money in a transaction vastly improves the chance of a coincidence of wants
Chicken farm example - continued:
You’ve had a successful month at the farm, and you now have loads of chicken meat and/or eggs to sell.
100 people line up to buy what you’ve got.
* 50 of them have horribly devalued fiat money, food-stamps and a bad attitude
* 40 of them have plans for barter - some of which are better than others. One is willing to work on your farm for food: another is willing to sell you their body, another has a stack of AA duracell batteries, another has some miniature bottles of scotch - and so on, with dozens of variations. You have to gauge each transaction on its own merits - an exhausting process - and half of the barter offers are simply going to be unworkable.
* 10 of them have Gold and/or Silver.
Which customers will you prefer selling your produce to? They all want what you've got - but do you want what they've got? Again: real money vastly increases the chance of a coincidence of wants.
Only Gold and Silver fulfill all of the prerequisites of money. This gives them inherent value - useful (for instance) in a survival situation.
(Of course Fiat currency can also be used to run a chicken farm - but historically it breaks down the moment that price inflation reaches ~50% a month).
Hope this was helpful.
With $16 trillion in debt now, no prospect of staunching further accumulation and already $100 trillion in off books unfunded liabilities The BenBernank has no way out but to inflate. Problem is, the banksters, keynesians and politicians have all become addicted to debt, the “painless” tax. They will fight tooth and claw to keep gold from rising but it will, it must. As has been said, buy the dips.