[sourcery]

FYI

[headsonpikes]

A worthwhile read.

[Billy_bob_bob]

BTTT

[RippleFire]

bump

[ClearCase_guy]

It could be true that Gold had an annual return of 19.4% between 1968 and 1981, but maybe there's more to that story. I seem to recall Gold being restricted until 1973, and the price being regulated at $35 an ounce. After deregulation the price (predictably) jumped up.

The article might be right in some respects, but Gold is not going to be de-regulated this time, so it's performance in the next 10-20 years is unlikely to match its performance from 1968 to 1981.

[RobFromGa]

bump for later reading.

[lelio]

Doug Casey says fair value for gold right now is $700 an ounce. And he expects it to go to $3,000.
Oh come on. That reminds me of a caller to a real estate radio program saying that based on the past 3 years of housing price increases in the Puget Sound area, a $310k house today will be worth $3M in a 30 years (back of the envelope says that's a 9% increase every year).
What he failed to take into account was that prices going up at 9% only occur in certain markets. Its a lot higher in sub $100k houses but not near that in $1M+ ones.
And secondly, he doesn't take into account that paying 3M for a three bedroom house in Tacoma is just insane. Its just an okay house after all. Likewise with gold. Its just something you dig out of the ground. If it ever hits $500 an ounce someone's going to think about new ways of obtaining in, or look for a big deposit in a remote area.
The price of anything is governed by this: its insane to think that anything will go for $3000 when its 1/10th of that today. The market will find ways of finding a reasonable level.

[arete]

Like John, I'm sure we'll find a way to muddle through. In the end - even if there's more deflation in the short term - our government will end up monetizing its debts. Greenspan and others at the Fed have already mentioned they're prepared to buy large amounts of long-dated Treasury bonds. Retiring Treasury obligations with dollars the Fed prints will cause a weaker dollar. That means, sooner or later, inflation will be back -- and in a big way.

Yep, that's pretty much the way I see it. Deflation now and then hyper-inflation later. Be prepared. It's coming.

Richard W.