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To: Porterville

We have had a tremendous amount of wealth destruction resulting in reduced demand which is the only thing that could keep gold down long term. Short term, a GOP all around win in 2012 could free up a lot of money in gold ETFs, mining companies, to flow back into equities.


6 posted on 09/05/2011 7:23:26 AM PDT by grumpygresh (Democrats delenda est)
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To: grumpygresh
which is the only thing that could keep gold down long term.

Gold prices are governed by supply and demand of the free market (like tulip bulbs in 16th century Holland), not by cartels like oil and diamonds.
What will keep gold prices down long term is the fact that gold can be produced, marketed and sold profitably at $400 per oz and that excess profits will eventually bring in ever more producers and eventually gold prices will reflect the highest incremental cost of producing and marketing gold plus a reasonable profit for return on investment for the producers and sellers of this commodity.
That's how a free capitalistic market operates.
That speculators are presently willing to pay 400% - 500% more than its long term intrinsic economic value is simply the next greater fool theory in operation.
Just don't be holding the bag when this bubble bursts..

7 posted on 09/05/2011 7:38:21 AM PDT by Riodacat (And when all is said and done, there'll be a hell of a lot more said than done......)
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