[n-tres-ted]

Folks, gold hitting $700 an ounce is not good news. You are certainly correct. The value of gold does not change, and the supply is so large (since gold is not consumed and does not waste) that supply/demand does not importantly affect the price. Therefore, the price of gold is a very accurate signal of the spot value of the dollar. Unless the Fed can get the price of gold back down (and assuming the gold price goes no higher than $700/oz), the U. S. can expect general prices to rise 50% during the next 10-15 years. The Federal Reserve is being run by demand-side economists from the universities, who do not understand the necessity of keeping the dollar's value honest and stable.

[BeHoldAPaleHorse]

The value of gold does not change, and the supply is so large (since gold is not consumed and does not waste) that supply/demand does not importantly affect the price.

Wrong.

Supply and demand are in play here, because a lot of young men across Asia (a) now have money in their pockets, (b) are courting the affections of various young ladies, and (c) discovering that sweet young things tend to like receiving shiny adornments.

The worldwide demand for jewelry has simply skyrocketed in the past couple of years, and the remaining slack in supply has now been taken up.