Posted on 10/18/2007 6:07:42 PM PDT by bruinbirdman
Ok, point made. Sorry about that.
Hats off to anyone meaningfully in gold the last two years, and I know would actually agree, that 1000 on gold is not just possible, but probably will happen. The chart would indicate that the next few months will be very strong. But after that.... the chart is very similar to many bubble charts, same type of volatility moves, steeper up as she goes.
A chart like gold, usually is one that cannot endlessly be sustained. Ok, help me out, where does gold price belong, 1000, 2000? And like any financial instrument that gets rolling, you don’t think it eventually goes beyond the real price, as speculators take over, run it way beyond the norm? What, that cannot happen to gold?
LOL! Trying to show the value of gold over US currency by posting a plot of USD/oz vs year isn’t logical. Gold is simply an object subject to demand. It is not currency anymore than gravel is. They are both trade items. Your valuation is given in dollars, because otherwise you’d have no unit to value it in, other than tons of gravel, ect..., which also have an equivalent dollar measure.
The gold folks here though, might point out that the value of gold cannot only be explained by currency. It has far exceeded that exchange.
But, I’d suggest that what gold is doing, is based a whole bunch on demand outracing supply, due to a number of factors. I’d assume speculators are turning towards it, investors for the long haul, and maybe even large investments by foreign govts as a way to invest their current windfall, especially some of the in favor emerging markets?
It has an inherent demand as a fundamental component of ornamentals and electronic parts. That keeps it's value stable. Any other commodity that has an inherent demand could and does serve the same purpose.
It has a mysitique which speculators can take advantage of, that extends the magnitude of volitile swings. Since the swings are usually larger, more $s can be made selling the stuff on an upswing and during it's return to a rational price.
I should have said, "keeps it's rational value stable".
Believe that at your own peril. No skin off my back
LOL! Doom, gloom and peril are all part of the various cons promoted and perpetrated by arosing fear in the mark. In order to counter what I said, logic is required.
Coffee at $10 a cup shows you who is nuts. The market is hugely distorted right now. If the seller of the $10 per cup of coffee can buy 4 cups of same coffee in the US for the same $10, it is irrational. The Europeans must be making some big bucks if they are willing to pay the equivalent of $10 per cup.
100% agree
Another enlightened one. Which is exactly why FDR made the following rather extraordinary decree in 1933.
“I, as President do declare that the national emergency still exists; that the continued private hoarding of gravel and bricks by subjects of the United States poses a grave threat to peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interest of our people. Therefore, pursuant to the above authority, I hereby proclaim that such gravel and brick holdings are prohibited, and that all such coin, bullion or other possessions of gravel and bricks be tendered within fourteen days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe deposit boxes in banks or financial institutions have been sealed pending action in the due course of the law. All sales or purchases or movements of such gravel and bricks within the borders of the Untied States and its territories, and all foreign exchange transactions or movements of such rocks across the border are hereby prohibited...” - Proclamation by President Franklin D. Roosevelt, April 5, 1933
That is basically a worthless chart, in that it’s not corrected for dollar inflation (depreciation).
Adjusted, the gold bull has only begun to run, and must pass $2,000 to reach the 1980 top.
yitbos
It's not logical to base a monetary system on a commodity. The value of the commodity usually gets fixed artificially and both the money and commodity are valued in terms of each other in an arbitrary fashion. The "extrordinary degree" was given as part of a remedy, to replace an illogical system with a rational monetary system.
"politicized inflation... shadow govm't statistics...
Nice chart there. The 1-800 # guys at the trading desk need to smile again, like they did around '79-'80. They sure helped folks weather the hard times of the '80s, '90s, and '00s.
Only $1300 more to go to get back to it’s inflation adjusted high!
And it will get there soon.
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