Posted on 09/18/2009 2:33:53 PM PDT by h20skier66
One-thousand Federal Reserve Notes per troy ounce! This past week gold edged over $1000 to close at its highest levels ever witnessed. This much-maligned investment has nearly quadrupled since its secular bull's humble beginnings in April 2001, a fantastic 297% gain compared to the S&P 500's pathetic 7% loss over this 8+ year span.
With gold being the best-performing major asset of this decade, and now surpassing the once-unthinkable $1000 mark, many investors are growing wary of its future prospects. Is gold too high today? Are $1000+ levels unsustainable? Is gold's secular bull nearing its end after this metal's epic run? These first tentative steps over $1000 are really fanning the flames of doubt.
One major reason is the financial media's coverage of gold's all-time-record-high closes. Most investors know enough about contrarian theory to be instinctively nervous about any price hitting its highest levels in history. A price that soars to extremes soon comes back down. And gold's recent closes have edged above its previous record from March 2008 of $1005, not to mention January 1980's famous $850 that held for a whopping 28 years before being exceeded.
While this week's $1018 was indeed gold's best close ever, the media's insinuation from this true statement is pretty misleading. Comparing prices today with prices in the past is certainly not a clean apples-to-apples exercise. Due to the Federal Reserve's relentless and endless expansion of the US money supply, the dollar yardstick for measuring nominal prices is perpetually changing.
(Excerpt) Read more at commoditynewscenter.com ...
>Due to the Federal Reserve’s relentless and endless expansion of the US money supply, the dollar yardstick for measuring nominal prices is perpetually changing.
Whereas with a gold-backed dollar the “yardstick” is constant.
The dollar continues to lose ground.
Should I sell? I have 22 lbs of it, or should I weight
you should melt it into a bust of obama
When one looks at price inflation in other areas, gold does not really seemed to have rocketed. One thousand dollars is not really a great deal of money - if you want to go out and buy something useful.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.