On a thread last week some people were laughing about gold. They talked about how it doesn't pay a dividend and you have to pay storage costs. Why would anybody pay someone else to hold their gold? The dividend it pays is peace of mind when paper money is losing value every day.
Gold has been money for thousands of years. Dollars, sorry I mean Federal Reserve Notes, are a relatively new phenomenon. Sort of like Russian World War I bonds or Confederate money they will have their moment of favor. Let's just hope everybody doesn't try and hit the exit at the same time. Because if that happens then all of the Asians and Islamics won't sell us their gold for any price.
And then how would we get our gold?
HG
I shoulda bought some gold back in '00.
Yeah, it will be interesting to see if the western "powers that be" are able to continue the manipulation/suppression of the gold market for much longer, given the increasing interest and involvement of the foreign buyers who aren't playing their game.
Melt down your family's teeth.
No storage cost to hold gold in ETFs.
Let's see how long it takes the anti-gold bugs to crawl out and accuse you of trying to sell your gold to them at these "inflated" prices! ;-)
"The Asians and Islamics are buying all the gold!"
The rise is now in the hands of the speculators. They have taken over. There is not practical reason for a rise this big in gold right now.
I want the price to drop a few hundred bucks, I only have half of what I want and the new prices are begining to bite.
It's time to put some serious money in alchemy once again. That Florida company has already reamed the phony value of DeBeers diamonds by creating them from carbon. Diamonds will have no value in the near future. Now its time to create gold and wreck that market as well.
Both of them are heading into overbought territory, and might pull back and consolidate before heading up again. But there's also a chance that they will explode upward in the next week or two, before doing some major consolidating in January and February. The jury is out which will happen.
The bears have been staying out of the action for the past couple of weeks, but it looks as if they may have given the market a knock on the head toward the close today.
The same way we've always gotten it. Go over there, kill them and take it. If you've got enough (and big enough) guns then you don't need gold.
We won't see a collapse of the economy back to a barter system in our lifetime. Just isn't going to happen. And if we don't go to a barter system then gold is just a pretty metal and a good conductor.
The Japanese are the ones who are primarily buying gold, with the recent changes in their economy and the fact that for the first time in over a decade they are facing the threat of (low) inflation.
The economy in Japan is slated to expand for the next year, probably to a greater extent than any other industrialized nation.
"The Asians and Islamics are buying all the gold! It looks like it might have hit as high as 540 early today before pulling back. Somebody is buying all the gold!"
Yes, people who didn't have a pot to urinate in a few years ago. Now that they have some money, they're buying gold. More demand plus a relatively constant supply equals higher prices. (This paragraph brought to you by the Invisible Hand of Adam Smith, LLC. All rights reserved.)
Almost all of the demand increase is driven by jewelry. What happens when a young man gets some money in his pocket? He starts looking for a young lady, and then discovers that attracting the interest of young ladies involves shelling out a great deal of money for various shiny trinkets.
"Because if that happens then all of the Asians and Islamics won't sell us their gold for any price."
Fine. Let them find out whether or not gold is edible. (Hint: it isn't.)
"And then how would we get our gold?"
Two ways come to mind:
1. The old-fashioned way: earn it.
2. The new-fangled-twist-on-the-REALLY-old-fashioned-way: tell the Islamics and Asiatics "Just hand over the gold, and nobody gets nuked!"