GATA just oozes credibility.
Posted on 12/09/2005 6:01:51 AM PST by DebtAndDelusion
The price of gold has continued to rise in Asian trading, climbing to its highest level since 1981. Gains came despite concerns that the market may be set for a correction and some analysts are now predicting that prices have even higher to go.
Precious metals have been given a boost as investors look to protect themselves against higher inflation and weakening currencies such as the Japanese yen.
Gold climbed as high as $522.70 an ounce, before falling back.
It was hovering around the $521 mark during afternoon trading in Asia.
'Dizzy high'
"There's some profit-taking now, but look at where we are," said Darren Heathcote of NM Rothschild.
"It's broken $520, the target we had yesterday... and it looks like $525 is the next target."
One broker in Tokyo said that: "Gold has been drawing very strong interest from Japanese investors, and I don't think this boom will subside in the near term."
There are a number of factors pushing the price of gold higher.
Gold is seen as a haven from inflation and weakening currencies, although historically, once inflation is taken into account, gold has not proven to be a good investment.
There is also speculation that Asian and European central banks may cut US dollar holdings in favour of gold.
There also is the year-end increase in demand for jewellery, analysts said.
The price of gold has climbed almost 19% this year and has nearly doubled during the past five.
"It's a dizzy high," said Rothschild's Mr Heathcote, but warned that "we are looking at a very overbought market".
"We're looking for a correction. It has to come at some point," he said.
See, when I was talking about blaming the Joooooooooos, I was being darkly sarcastic about paranoid anti-semitic nuttery sometimes found on the internet. That's why it's spelled that way.
You don't sound so sarcastic.
GATA has made estimates of the total short positions and associated derivatives held by the bullion banks based on the volume of Au dumped on the market at critical times when the price was rising too fast for the Central Bankers comfort. Check out www.GATA.org or ww.LeMetropoleCafe.com
GATA just oozes credibility.
I was being sarcastic too. Rubin stiffed Bill & Hill when they came to him in need of $$ for that house in Chappaqua. That was after he and his crony friends at Goldman Sachs made hundreds of millions using U.S. Treasury assets during Clinton's watch.
Or don't you know? LOL!!
Dear Axenolith,
"Property tax rise would have forced him to sell some or all of that land long before it reached 200K an acre..."
Not really. Where I live, there are folks who keep their land as agricultural land until they get ready to develop it. Low taxes. A side benefit is that you can often rent out the land in the meanwhile to folks who actually want to farm it, and derive a small rental income in the meanwhile.
But even without the ability to somehow reduce or offset the taxes, the residential property taxes where I live are low. A property with a market value of $200,000 that's been held for many years might only have taxes of $1000 - $1500 per year. Over the period of 30 or 35 years of holding it, one would have paid on average less than a thousand dollars per year.
sitetest
LOL. My counter: $623.
Better hurry up and buy, people! You'll have time to sell when it goes back down to $300!
Dear hubbubhubbub,
Thanks for making my point. Maybe gold will be $250 per ounce in five years, maybe $1,000. If it goes to $1,000 in five years, it will have appreciated in real value - the ounce of gold will buy more stuff then than it will now. If it goes to $250, it will certainly buy less.
We can treat gold in a lot of ways, but once we admit that it may vary in price wildly, it really isn't a store of value anymore. It may be a good investment at times. It maybe be a poor investment at other times. It may be little more than a commodity in which many folks are engaging in rank speculation (like, right now).
But it ain't a store of value.
Now, it's going up in price. Maybe it'll stay up. Maybe it'll go higher. Maybe lots, lots higher.
Or maybe it'll drop like a stone, again.
If it were a store of value, it would, year in and year out, buy roughly the same amount of stuff. But that isn't what one sees over the last 35 years at all. In 1980, it could buy, at least for a little while, $800 worth of stuff using 1980 dollars. In 2001, it could only buy about $250 worth of stuff, and only in 2001 dollars, which were worth something less than 1980 dollars. For TWENTY YEARS, gold DID NOT HOLD VALUE, it WAS NOT A STORE of value.
And today, it still isn't acting like a store of value.
sitetest
Gold Standard? Did you mean Gold Exchange Standard?
Most so-called Gold Standards had heavy political disincentives for transacting in gold.
No, I meant Gold Standard.
I reject the premise of your question. You are implying that in order for the economy to grow by 4% we need 4% inflation. That's total economic nonsense. Unfortunately what you are espousing is what passes for economics education nowadays.
Obviously you didn't read my post. But that's o.k., now wander off.
Maybe so, but you would have been much better off with government bonds or even cash. Your grandfather and W. J. Bryan were right --- the overwhelming majority of people benefit from a low level of inflation, whereas gold is inherently deflationary.
No, savers lose, but investors win.
Dear hubbubhubbub,
To the contrary, I read your entire post.
Most of it wasn't worth a response, but nonetheless, it made the point for me.
Thanks!
sitetest
Not at all. The money supply is not related to the growth in GDP. Your confusion about the topic shows that you don't understand the gold standard and its shortfalls and you certainly don't understand money supply or inflation.
Unfortunately what you are espousing is what passes for economics education nowadays.
You make me laugh. Please, explain what causes inflation, if you know.
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