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Rest in Peace
 United States
9104 Posts |
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Gold is stable if bought at fair value. It is NOT at fair value right now. They you should have the courage of your convictions and be shorting gold hand over fist. After all, according to your thesis, you WILL make a ton of money that way. Gold is overpriced. Whether you can hold out on a short until it corrects is the problem. Fred's technical chart analysis: Over time, most stocks, PM or other investments rise in price in a reasonably straight line. If that line suddenly looks like a mountain instead of a slope odds are something is wrong. The item is overpriced, for whatever reason. Over time, sometimes five years, sometimes five weeks, the price falls, and almost always the new price lines up with the original line. |
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Rest in Peace
United States
9104 Posts |
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Anyone ever think the price of gold reflects the weakness of the dollar ? Inflation is the same thing. I wouldn't blame the price of PM on a bubble as quick as I would blame a weakening dollar. Who said there can only be one bubble at a time? Both dollar and PM are bubbles that happen to be related. OK, so the $ went down 20%. That doesn't justify gold going up 400%. |
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Rest in Peace
United States
9104 Posts |
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There may be a lot of historical evidence on what gold and silver bought LONG before 1974. Not really, since the gold price was fixed by the gubmint. IOW, your comparisons will be correct, but they'd apply to gold or silver or greenbacks, since they were interchangeable at par. |
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Pillar of the Community
United States
2764 Posts |
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Gold is overpriced. Whether you can hold out on a short until it corrects is the problem.
Fred's technical chart analysis:
Over time, most stocks, PM or other investments rise in price in a reasonably straight line. If that line suddenly looks like a mountain instead of a slope odds are something is wrong. The item is overpriced, for whatever reason.
Over time, sometimes five years, sometimes five weeks, the price falls, and almost always the new price lines up with the original line.
Fred, so you are saying the price of gold should be in the range of $1500 to $1700 to be "in line".... just like the Sept 2008 correction that brought gold from $1000 down to $800? Edited by SA4H
09/01/2011 1:55 pm
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Pillar of the Community
United States
4008 Posts |
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OK, so the $ went down 20%. That doesn't justify gold going up 400%. It does to the people who believe that they are seeing the slow train wreck of a dollar in collapse. If the dollar were to fully collapse, then even the most strident of the paper asset collectors would be forced to admit that they were wrong and gold buyers were right. Paper dollars would drop to near zero value, requiring a huge number of them to purchase any amount of value-retaining gold. I'm not saying that this will happen or even that it is likely to happen, only that it could happen and that extra high gold prices we now have are the result of this possibility. |
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Pillar of the Community
Canada
3692 Posts |
I think bigfred brought this up: about historic gold prices only going back to 1974. Before that (up to 1971) gold WAS money, so it was a flat line. If you want to see that line again today you have to tilt your head to the left and say, "that's funny".
If I had it my way I would use seashells as money, or pounds of peanuts. The idea of money has really removed us from our land. Look around your property and see how much of it you can actually turn into something of value once you've worked on it. Today money "solves" all of those problems and you don't need property. (Sarcasm) We're moving into a cyborg's world.
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Valued Member
175 Posts |
Remember how bad inflation got for Germany I wanna say during world war 2 I could be wrong but german citizens carried their money in wheel barrels and people would tip over the wheel barrels leave the money and steal the barrels lol. A dollar collapse is more realistic than one might think.
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Pillar of the Community
United States
667 Posts |
It was in 1924 ,ore than a few years prior to WWII. There are also some factors that were unique to Germany at that time. Those comparing the US to the hyperinflation of Germany miss these facts or not aware of them. That is why we can't or have a very high possibility of never seeing the same thing.
It is fact that those people who saw the problem coming bought gold early and were able to survive this period of time.
First, American central bankers have learned enough from the German experience to delay and extend the consequences of printing too much fiat money.
Second, Germany was a small state isolated from the rest of the world, a pariah nation of sorts following WWI. As a result, it had a difficult time finding a market for its government bonds. German deficits had to be financed internally -- a difficulty which greatly accelerated the printing of fiat currency.
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Rest in Peace
United States
9104 Posts |
Quote:
Fred, so you are saying the price of gold should be in the range of $1500 to $1700 to be "in line".... just like the Sept 2008 correction that brought gold from $1000 down to $800?  See the reasonably straight line from jan75-jan96, and the mountain from dec78-dec82? Extend that line, and you should have been buying jan86-jan06, and selling on the current mountain. |
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Rest in Peace
United States
9104 Posts |
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It does to the people who believe that they are seeing the slow train wreck of a dollar in collapse. A slow train wreck isn't enuf. Prices doubling, doubling again, and doubling again is enuf to justify gold increasing 400%, and the time for the increase is then, much like not paying 20-year-ahead money for a baseball rookie card. If you want to prepare way ahead of the curve, you can, but there's likely to be a drop to $1000 or lower before prices are justifiably like today. In the meanwhile, you can buy back in and double your stash, or make money elsewhere. |
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Pillar of the Community
United States
4008 Posts |
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A slow train wreck isn't enuf. Maybe not for you, Fredd, but maybe it IS enough for them. They are, after all, putting their money where their convictions are... which is what people should do in a free market. Not that the gold market is free but perhaps that is another discussion. Quote:
If you want to prepare way ahead of the curve, you can... Thanks, Fredd, I appreciate your approval.  I'm also thinking of millions of my fellow citizens who are not prepared at all, let alone ahead of time. :-/ Quote:
...but there's likely to be a drop to $1000 or lower before prices are justifiably like today. In the meanwhile, you can buy back in and double your stash, or make money elsewhere. Always possible. We all know that PMs are subject to considerable volatility. The paper markets have been whip-sawed by volatility for some time now so we should not expect less of the PM markets. So... does this mean that you are preparing for $1000 gold? If so, what are you doing to capitalize on this? One final thought... gold went from about $260 an oz. in 2001 to about $1886 an oz. today. This is more than a 7x increase. Is there anything stopping gold from doing this again? In most systems, anything that happens once CAN happen again because the same factors that allowed it to happen the 1st time are still there. |
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Pillar of the Community
United States
1450 Posts |
The rise in gold we are seeing is not just a concern for the dollar,there are no stable currencies out there as safe havens(except maybe the Aussie and Canadian dollars). Europe is about to come apart at the seams and the ripple effects of that will be felt worldwide. Banks in Europe and the US are in serious trouble also and with bond yields as low as they are gold and silver are the only"safe havens"that act like currencies. Gold prices really reflect the conditions of economies and currencies worldwide. Apparently,that is enough to drive the price to where it is. Historically it may not make sense,but we have never been here historically!
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Pillar of the Community
Canada
1502 Posts |
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but we have never been here historically Exactly! |
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Rest in Peace
United States
9104 Posts |
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So... does this mean that you are preparing for $1000 gold? If so, what are you doing to capitalize on this? Of course. Building up cash flow to spend at lower prices. Quote:
One final thought... gold went from about $260 an oz. in 2001 to about $1886 an oz. today. This is more than a 7x increase. Is there anything stopping gold from doing this again? One final reply... gold went from about $850 an oz. in 1980 to about $260 an oz. in 2001. This is almost a 70% decrease. Is there anything stopping gold from doing this again? ($581). |
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Pillar of the Community
United States
511 Posts |
A $1 FRN is equal to 3 cents in 1913 spending power. Those who claim that inflation (decline in the value of the currency) has been minor aren't paying attention. Sadly, it's going to get much worse in the not too distant future.
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Replies: 47 / Views: 3,915 |
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Posted 09/01/2011 05:02 am
