Gold at $250 an ounce?
If I had the money I would buy a pound of it at the price.
BTFD
Shiny metal worth something for 6,000 years versus promissory notes on green paper issued by an insolvent central bank? No contest.
I think we’ll see 2,000 before 200. Long before.
Here’s the problem... they’re both a little right. Gold will go lower. Why? Simply because it has priced in the end of the monetary system. People hoarded gold expecting the end of the world (since 2003). The problem is that gold will be worth what everything else is worth in that scenario. In a real, global crisis, gold will not have the demand it has now. It will be worth a sandwich to most people because someone who has a pile of gold in his living room will quickly come to the place where he will gladly trade with his neighbor for a sandwich. If you truly expect the end of the economic system buy a farm... have a food source, a water source, fuel and shelter... and ammunition to defend it all. Failing that... gold isn’t your savior. Like everything else, the price of gold depends on supply and demand.
However, gold does have intrinsic industrial and wealth-preservation value. Although the value should fall from current levels, I don’t think it will go south of $700/oz.
I also think we are in deflation but gold is not going to go to $250. Our currency is likely to degrade and we may lose our reserve currency status. That will make gold very attractive.
Sure, gold will be $200, when the fed starts burning dollars by the kiloton.
Betting is the whole point, isn't it?
As the saying goes: “That's what makes a market.”
I've begun to think that the historical relationship between “inflation-deflation” and “monetary policy” has begun to de-couple.
I think the World Wide Web is the primary reason.
First, the average person now has instant “price discovery.”
If even 10% of customers are well informed about prices, that can exert downward pressure on prices all over the world.
Second, the World Wide Web has allowed business owners and business managers to instantly locate highly profitable parts of the economy where prices are rising, or supply is limited.
That means that business vs. business competition now begins much more quickly for those high value customers, which, once again, puts downward pressure on prices.
I agree that debasing a currency creates some inflationary pressure.
But, well informed business managers do not borrow money and build new capacity just because money is cheap.
Business managers now understand that most industries have very little pricing power, so they are not expanding.
Consequently, most of the “free” money that has been printed is loaned to governments, or it just sloshes around in the world's financial markets where speculators borrow it.
Deflation will only exist while there is excess inventory in storage. That will be followed by significant inflation. (IMHO)
I am trying to live long enough to see a Harry Dent prediction come true
There is a good reason why the word “fools” is often associated with the word “gold.” Gold is not an investment. It is a hedge against nothing. Gold, by itself, does not produce dividends or income, and if not for demand resulting from conservative talk radio and other marketing BS, industrial and commercial demand is below supply.
If so I am hoarding as much as I can get my hands on.
Goldbug ping.
Deflation, inflation, is a meaningless term.
Because what happens is worse: you have deflation of assets like homes but inflation of needed products like oil and food.
I haven’t personally experienced any DEflation.
Isn’t gold a supply-demand type commodity? I would think that the only things that could drive it down that far would be (A) if nobody wanted it any more(ain’t gonna happen)or (B) if it became common as, say, tin. Maybe a cheap way of refining it from seawater, for instance, or huge previously unfound deposits easily mined.
Where am I going wrong?