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(Yahoo)   Experts warn that gold prices, which have skyrocketed in the last two years, might could, just maybe, be the result of a "bubble" that could burst any day now   (news.yahoo.com) divider line 113
    More: Obvious, gold prices, American dollars, The Indian Nation, devaluations, precious metals, Individual Retirement Account, sliding, INTL FCStone  
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1117 clicks; posted to Business » on 22 Aug 2011 at 2:25 PM (3 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2011-08-22 11:33:47 AM
Record gold prices may be heading for a correction of about 8 percent next month, but the safe-haven metal may also rally to $2,400 an ounce next year as investors seek refuge amid global economic turmoil...

So the price could go up, or it could go down. Gee, that's helpful.

Anyway, the only way there's going to be a decline in gold prices is if the economy actually starts recovering.

/The earliest this could possibly happen is 2013
 
2011-08-22 11:51:53 AM
I'm so excited to have THIS thread again.

/quick someone post a cop thread.
// or a legalization one.
/// Everyone drink every time someone writes fiat
/// twice if they obviously don't knows what it means.
 
2011-08-22 11:54:43 AM

Shilldog: /// twice if they obviously don't knows what it means.


I love it when Fark learns new words.
 
2011-08-22 12:00:45 PM

Shostie: Shilldog: /// twice if they obviously don't knows what it means.

I love it when Fark learns new words.


I loved it when fark learned about "No True Scotsman". That was an annoying couple of days.

Anyway, goldbugs are the Apple Fanboys of the investment community. They like gold because it is shiny, and they feel really special because they bought a piece of gold, and now it is worth ELEVENTY TRILLION DOLLARS AND GOLD HAS NEVER BEEN WORTH ZERO!
 
2011-08-22 12:02:21 PM

Shilldog: Everyone drink every time someone writes fiat


Fix it again, Tony!

/Wait... wrong Fiat.
 
2011-08-22 12:18:13 PM
The market can stay irrational longer than you can stay solvent.
 
2011-08-22 12:44:19 PM
Question for gold holders: when do you plan on selling?
 
2011-08-22 12:50:14 PM

impaler: Question for gold holders: when do you plan on selling?


When Gold 2.0 with 4G is unveiled.
 
2011-08-22 12:56:04 PM

impaler: Question for gold holders: when do you plan on selling?


First I've got to cash in my pumpkin futures. I've got a feeling they're going to peak right around January.
 
2011-08-22 01:48:09 PM
www.majhost.com
I told you so!
 
2011-08-22 02:18:28 PM

Teknowaffle: Shostie: Shilldog: /// twice if they obviously don't knows what it means.

I love it when Fark learns new words.

I loved it when fark learned about "No True Scotsman". That was an annoying couple of days.

Anyway, goldbugs are the Apple Fanboys of the investment community. They like gold because it is shiny, and they feel really special because they bought a piece of gold, and now it is worth ELEVENTY TRILLION DOLLARS AND GOLD HAS NEVER BEEN WORTH ZERO!


Honestly, if I were going to hoard all of my money into a commodity that isn't accepted in trade for goods in any standard system in the world, I'd go with Platinum. Far more useful.
 
2011-08-22 02:23:55 PM
I hope they skewer Glenn Beck's head on a stake when it does.
This whole gold thing reminds me of the big silver scam in the '80's. I think it'll end the same way.
 
2011-08-22 02:29:55 PM
www.majhost.com
Bubbles could burst into tears any day now
 
2011-08-22 02:30:38 PM
Gee, you mean the laws of supply and demand apply to gold?

I, for one, am shocked to learn of this.
 
2011-08-22 02:31:47 PM
GAT_00:

Honestly, if I were going to hoard all of my money into a commodity that isn't accepted in trade for goods in any standard system in the world, I'd go with Platinum. Far more useful.

I suppose, but the reason that a lot of bugs buy gold is because it is recognizable in jewelry and so on. They go on and on about "intrinsic value" forgetting that outside of industrial and jewelry application, there is no value to gold. It is just a hunk of metal. You can't eat it, you might be able to barter for something with it if this "economic catastrophe" they hope for comes along.

Hell, a dollar bill has more intrinsic value if it ever were to lose all value. You could sew them into clothes, burn them to keep warm, or wipe your ass with them.

And someone above asked: "When will people holding gold sell?"

I have a feeling most won't. Because if they sell it now, and it goes up they could have made even more money. I know a guy who sold all his gold at 1400 bucks an ounce. He bought most of it years ago at 3XX an ounce, and he bought a lot.

He figured, well, it could go up, but it could go down. He had made a lot of money, and was content with what he made, got to buy himself a summer house and a boat. He isn't kicking himself now, because the way he looks at it, it could have gone down and he would be kicking himself.

/Remember folks, if someone is telling you that your dollars are worthless, so give your dollars to them, and they will give you something even better than dollars, they are full of shiat.
 
2011-08-22 02:32:28 PM
Son of a biatch, HTML fail.
 
2011-08-22 02:39:48 PM

Teknowaffle: Son of a biatch, HTML fail.


You made some bold statements.
 
2011-08-22 02:42:30 PM
gold will fall ONLY if the relative value of the US dollar rises against other currencies.
 
2011-08-22 02:43:57 PM

mr lawson: gold will fall ONLY if the relative value of the US dollar rises against other currencies.


Damn, why couldn't you have used the term fiat. We could have all had 2 drinks.
 
2011-08-22 02:45:32 PM

impaler: Question for gold holders: when do you plan on selling?


I keep adjusting my stop loss orders upwards as gold keeps climbing. So to answer your question, I'll sell when it declines 10%.

/any tighter than 10% and I'm afraid I could get out on a couple of wild fluctuations
 
2011-08-22 02:47:51 PM

impaler: Question for gold holders: when do you plan on selling?


I'm pretty well convinced that 90% of the people on Fark who are so eager to trumpet their brilliant gold investment strategy don't actually hold an investment positions at all.

It's kind of like Marketwatch threads. Most of the people arguing breathlessly over the market and various news blurbs on the site have probably never even funded their 401k to get the matching contribution, much less own any of their own investments.
 
2011-08-22 02:50:08 PM

mr lawson: gold will fall ONLY if the relative value of the US dollar rises against other currencies.


If that's true then there would be a historical correlation. Is there?

/Fiat inflation...drink.
 
2011-08-22 02:55:33 PM
3.bp.blogspot.com
 
2011-08-22 02:55:56 PM
As a holder of gold and gold ETF funds, IMHO the loss of faith in Fiat currency has resulted in a paradigm shift in global finance. Fiat currencies are on the decline and a new way of preserving wealth will emerge. Holdings of fiat currency will decline, and the ratio of fiat currency to global equity markets will be inversely proportional. Fiat.

/your welcome
//already drunk. Is happy hour yet?
 
2011-08-22 02:57:38 PM
I think the time to sell would be when other markets are showing some strength again. That's my plan at least.
 
2011-08-22 02:57:47 PM
Holy crap - I mean YOU'RE !!!
/Drunk is no excuse
 
2011-08-22 02:58:28 PM
Don't ever trust technical analysis of financials. They're staring at the television static and telling you they can see the 3D dolphin that isn't there.

The Fed has to keep printing money to keep interest rates low so that the payments on the federal debt remain plausible. This is why gold is not a bubble and will continue to rise when priced in terms of dollars. There is no Volcker coming to save us this time.
 
2011-08-22 03:00:18 PM

Shilldog: I'm so excited to have THIS thread again.

/quick someone post a cop thread.
// or a legalization one.
/// Everyone drink every time someone writes fiat
/// twice if they obviously don't knows what it means.


Fiat. An arbitrary degree, creating something with no effort or as if with no effort.

Fiat Lux. And God said: Let there be light. And there was light.

The only way gold could become legal tender is by a governmen fiat.

The fiat would either attach an arbitrary price to gold (for example the $35 American that was the "official" fiat price of gold from the creation of the gold standard until well after WWII), in which case the vagaries of supply and demand of gold would be arbitrarily ignored and the gold to dollar conversion rate fixed by fiat, or gold could be made legal tender, in which case the nominal price of gold in the currency would be allowed to rise and fall freely, while the gold in the currency would be "priced" accordingly.

Assume a gold coin contained one ounce of gold with a fiat value of $500. If the real price of gold rose, then the value of the gold in the gold would be greater than the face value, and coins would be hoarded or melted down. If the real price of gold fell, the value of the gold would fall, which mean that the coin's gold content value would be less than its nominal value and people would try to dump them (in accordance with Gresham's Law: bad money drives out good).

Thus, the Government would be forced to mint more coins when gold was costly (to replace those hoarded or defaced or melted down for their gold content), while it wouldn't be able to push its coins on banks without a premium of some sort unless it forced them by law to take them despite their fiat or nominal face value being higher than the real value of the coins.

In short, the real and the nominal value of gold coinage tends towards, but seldom reaches, equilibrium.

Another thing: coins wear in usage or can be clipped in various ways. Old coins are not worth as much as new coins. The mint generally sets the sovereignage rates to reflect this, compensating the bank or mint for taking in old coins at their face value and issued new coins that contain more gold than they are nominally worth.

Unlike a fiat paper currency, gold currency has a real value and a nominal value. A gold currency is thus like a pegged currency--it's nominal value is pegged but its real value moves freely. In order to keep gold in the country, many countries are forced to legislate to prevent coins from being shipped out of the country and sold by weight. Smuggling makes a mockery of this when the nominal gold value of coins is much lower than their real value in gold
Smuggling has always been successful when the gap between nominal gold value and real gold value is greatly different.

Thus gold is no guarantee of currency stability. As long as gold is a commodity whose demand and supply is set in a global market, a country's coinage can cause imbalances in the outflow or inflow of coins and the gap between nominal and real exchange value.

Thus, an American coin might legally contain $35 of gold (one gold ounce at the official rate), but really contain $500 worth of gold (1 gold ounce at market rates) and have a face value of $100.

In any case, all governments have tended to debase the currency except for particularly responsible and favoured states, such as the UK. Yes, the UK debased its currency, but it also restricted its export and tended to maintain a fairly stable economy, financial system and central bank policy. This is what established the credit of the British pound (which was silver and not remotely related to a real pound of sterling most of its history).

Credit is always a fiat value. You can put all the gold and silver into coinage that you want, but nobody can stop you from issuing too much or too little, from debasing it with base metals, from regulating the flow of coins, or from screwing up your economy, your banking system, or your coinage in a thousand ways.

Thus paper currrency is pure fiat currency, while all other currencies are fiat currencies with a commodity of some sort attached. For the ancient romans, it was copper that was the measure of value, for the British, silver, and for other countries, gold, or gold and silver. The commodity which was used to make currency but which was not itself currency (in the UK, copper coins and gold coins) were linked to the value of the currency more loosely, but suffered from the same inconveniences as the metal standard itself, namely rising and falling in real and nominal value at different rates, while not matching the face value of any particular coins or issue of coins except in an arbitrary fashion.

All in all, gold and silver imparted some reserve value in times of inflation, but not as much as you would think, because gold and silver were commodities first and currency second. It was quite possible for gold to lose its value, as for example, when the treasuries of Mexico and South America were opened to the Spanish and the Portuguese.

The value of silver fell for a couple of centuries, which meant more and more rich and middle class people could dine off of silver plate rather than pewter, wood, china, ceramics, etc.

All this gold and silver wrecked the economies of Spain and Portugal, although there were other factors, such as too many priests and religious orders, and a tyrannical Court, that put a heavy burden on the merchants and peasants in those countries which was much lighter in France, say, or England, or Sweden.

Thus, a fiat making gold the only legal tender and making paper fully convertible is no panacea. Even without full convertibility (in which case the currency and thus the gold are unlikely to go abroad unless the government or smuggling allows it), gold is no magic power. It is a dense, soft yellow metal of little use except as an ornament or in some technical applications.

Sadly, if gold and paper were bound together again in an arbitrary manner, bi-metallism would raise its ugly head.

Despite many of the gold bugs being relatively poor or middle class indviduals, gold is the money of rich men. Poor and middle-class men have no use for $1,000 bills, let alone $1,000 coins. The silver bugs, based on the theory that the gold standard favoured the rich, sought a silver or bi-metallic standard. I expect this was a misunderstanding, just as fiat currency and gold are misunderstood.

There is no simple solution to the problems of economics. The problem of economics is that economics is a social science based profoundly in human psychology and behaviour.

People are the problem, not lumps of rock or metal.
 
2011-08-22 03:04:58 PM
Or, if they think that they can cause enough of a panic, they may be trying to short it, instead?
 
2011-08-22 03:06:44 PM

Larofeticus: Don't ever trust technical analysis of financials. They're staring at the television static and telling you they can see the 3D dolphin that isn't there.

The Fed has to keep printing money to keep interest rates low so that the payments on the federal debt remain plausible. This is why gold is not a bubble and will continue to rise when priced in terms of dollars. There is no Volcker coming to save us this time.


This is why I've maxed out my credit cards buying gold. As gold keeps rising, the credit card debt shrinks. You're all going to be sorry when you see how rich I get.
 
2011-08-22 03:12:05 PM

impaler: Question for gold holders: when do you plan on selling?


Answer: Ha! Ha! When it's too late, because we are born suckers!

No, seriously. It has occurred to me that many of the people shilling for gold know damn well that they are conning millions of foolish people out of their money but they haven't got any better way to con people at the moment, so they are doing it Old School, by selling worthless coins and fear and funny money ideology.

These are the same people who pumped and dumped during the housing the bubble, the stock bubble, etc. They make their living polishing turds and selling them as boutique chocolate.

All the way up a bubble's expansion, people tell themselves: the bubble must burst but don't let it burst until I have sold my over-priced bubble goods to a greater fool than I!

It's a ponzi scheme, all right, but the Government isn't running the Ponzi--they are trying to fix an engine while it is running (albeit in park or idle). The gold bugs are exploiting your fear to divert even more of your money from your equity to their pockets.

This is the way con artists work.

They find a gull and pluck him.

They then tell him that he has been plucked, but if he only tries this or that, he can get his money back, with a big profit this time.

They they pluck him again.

When the gull has been plucked of everything, they sell his name on to a second story con artists. Being a different con artist, the gull believes him because, after all, how likely is it that you'll run into two monsters in a row?

So the second con artist gets the gull to borrow from friends, family, sharks or whoever.

Then they pluck him again.

They'll keep plucking until they've stripped the gull to his bones and then they'll sell the bones to a fertilizer company.

You will have, by your folly, ruined yourself, your partners, your friends, your family, your employers--whoever is foolish enough to try to help you by co-signing for you or giving you money they can't spare.

And you will never ever cease being a fool. They'll just have to try each key on the ring until they find a new one to open your pocket book or bank vault.

I hope for the sake of everybody concerned, that a steamroller runs over the gulls before they exhaust their means.

Better to leave a house with a legitimate but underwater mortgage to your children than to saddle them with debts that are so heavy it drives them into the arms of the insanity that ruined their fathers.
 
2011-08-22 03:12:32 PM
I can't believe these goldtards.

They actually think that just because something has been perceived as valuable for the last several thousand years, it will continue to have value now.

What idiots.
 
2011-08-22 03:13:43 PM
Gold is a rich man's toy.

Like an umbrella, you should never buy a metal you can not afford to lose.
 
2011-08-22 03:16:45 PM

relaxitsjustme: impaler: Question for gold holders: when do you plan on selling?

I keep adjusting my stop loss orders upwards as gold keeps climbing. So to answer your question, I'll sell when it declines 10%.

/any tighter than 10% and I'm afraid I could get out on a couple of wild fluctuations


I'd suggest that you research exactly how a stop-loss works. I'd also suggest that you research the relatively recent flash crash and how stop-loss orders worked there.

Hint, your order doesn't guarantee you a price, your order just guarantees you'll sell.
 
2011-08-22 03:19:14 PM
The St. Louis Fed's spin on the rise of commodity prices at rates well faster than retail price inflation is here. They don't discuss gold in detail, but most of the arguments apply to gold as a commodity.

TLDR: As far as the Fed can tell, negative supply shocks (like poor harvests) and greater demand in the developing world for commodities (like foodstuffs and oil as well as gold) explain the current run-up in commodity prices better than notions of an inflationary US monetary policy (prices have risen in terms of all major currencies) or of a speculative bubble. The rise in commodity prices isn't something developed world central bankers charged with controlling retail pricec inflation need to worry about much---yet.

Somewhat longer summary:

There are good reasons for commodities in general (not just gold) to see a permanent rise in their prices in real terms. Growing demand in emerging markets (i.e. China and India) as they race towards Western living standards is probably the most important for gold and silver. For some others (like foods) negative supply shocks (i.e. poor harvests) also have played a role.

USD monetary expansion, the US government's debt problems, and the higher inflation expectations resulting from both (especially in the USD zone outside the US, where retail price inflation is much higher than in the US itself) may tell some of the story of gold'shiatting record highs, but it can't tell it all. The St. Louis Fed point out that commodity prices (including gold) have risen in terms of practically all major currencies (not just the USD) in the past several years, including in terms of "commodity-based" currencies such as the Canadian or Australian dollar.

They are also skeptical of the reality of a "bubble" driven purely by speculation. Citing and OECD study on the issue, they hold that there are

both logical and factual inconsistencies within the argument for a speculation-induced bubble in commodity prices. Logical inconsistencies include a tenuous link between speculative inflows and demand for the underlying commodity and doubt over the extent that index fund investors could artificially increase futures and cash prices while only participating in the futures market and not the spot market, where commodities are sold for immediate delivery. Factual inconsistencies are numerous. For example, inventories should have risen between 2006 and 2008 according to the bubble theory, but they actually fell. Other reasons for discounting this theory include:

---arbitraging index-fund buying is fairly easy due to its predictable nature,
---commodity prices rose in markets with and without index funds,
---speculation was not excessive after accounting for hedging demand, and
---price impacts across markets were not consistent for the same level of index fund activity.


They conclude that "the mere correlation of commodity price increases with loose U.S. monetary policy, without any convincing empirical evidence or theoretical mechanisms for this avenue, is not enough to determine that U.S. policy decisions should factor in economic conditions from Latin America to Europe, from Asia to Africa."
 
2011-08-22 03:20:27 PM

brantgoose: Gold is a rich man's toy.


And the poor man is the dollar's slave.

/the copper in a pre-83 penny is now worth 2.6 cents
//nickles, 6 cents.
///how low can we go?
 
2011-08-22 03:23:42 PM

impaler: Question for gold holders: when do you plan on selling?


I always followed the strategy of never having more than 5% or so of ones investments in commodities, so I'll never be totally out of gold. I also realize it could be wiped out, so I don't invest more than I'm willing to lose 90% of.

It is part of my investment rebalancing every quarter - too much of an increase beyond my target, and I sell. Falls below that target, and I buy. I

Diversification is always best. I won't hit any home runs, but I'm happy with a nice string of singles for the long run.
 
2011-08-22 03:37:04 PM

impaler: Question for gold holders: when do you plan on selling?


When fark greenlights a pro-gold headline

Gold's up $230oz in two weeks, 18% last 30 days, 54% y-o-y, and fark still won't greenlight anything from the experts who correctly called this market years ago.

-or-

When the market forces that caused gold to rise in the first place change.

-The Fed stops printing money

-The housing market recovers

-Western governments realistically address their deficits

-Interest rates on quality bonds returns more than taxes and inflation take away

-Central banks finish diversfying out of dollars

-Central banks stop buying gold

-Economic indicators show sustained positive trends

I don't see any of that happening before the 2012 election or while Bernake is around.

-or-

You might also see a major tramatic event. There is far more paper gold created by swaps, derivatives, leasing, and futures contracts than can ever be delivered.

If the holders of that gold paper panic and demand delivery, then you could see a major exponential melt up in the price which would be a good time to exit.

Right now it's probably better to buy into good junior mining companies that are candidates for aquisition. Mining stocks are a better value and give you more leverage as the price rises, plus the tax bite is far less. But they require more research to find the good ones.

(Hedge funds have been long gold-short gold mining stocks, pushing down stock prices.)

It's probably a good time to start researching the next big thing to invest in though. I'd say you can still double your money (before taxes) in the next two years. After that, you'll probably get better percentage returns elsewhere. The market will get more and more unstable, so you should be positioned to exit quickly, and have a plan for what's next.

I'd say the bond bubble will pop, then gold will go parabolic, then paper gold will pop,
causing physical gold to go exponential and then crashing. But there's still a couple of years at least before that happens.

I've been pro gold for years in these threads, and I must admit the rise in the price in the last two weeks has got my attention.
 
2011-08-22 03:40:12 PM
Impaler As with any currency speculation or investment, you sell when you need dollars, unless you are really good at picking 'tops'. Or, are you asking where the gold bugs think the top will be ?

Question for shareholders: When do you plan on selling ?
 
2011-08-22 03:40:52 PM
For society, gold is a sucky investment.

If I build a factory turning out widgets I employ people and generate goods and revenues (possibly worldwide) for investors.

If I start a design and marketing company (ala Apple) I employ a smaller number of people in this country but generate revenues world wide for the investors.

If I buy a thousand pounds of gold I might employ a few people watching it. I won't generate revenues for investors. In fact, it costs money to hoard gold.

No doubt someone will have a rebuttal to this idea. I need to go look into the nature of bubbles to figure if they actually take capital out of an economy when they burst or if they just redistribute it.
 
2011-08-22 03:41:20 PM

impaler: Question for gold holders: when do you plan on selling?


I'll sell it when I need the money, so either an emergency or during retirement. I'm under 30 so not much concerned about the risk of a crash. I don't consider it an investment, just a store of value, and a safety net in the event of hyper-inflation, which I believe to be a real possibility within my lifetime. Considering the alternative risks of stock and bond market volatility, plus real estate prices, it's a pretty attractive alternative.

So I'll sell when:

1. The dollar fails and I need to pay rent, so I'll go to a coin shop on the first of the month, get my wheelbarrow of paper, and go pay all my bills.

2. I'm Eighty years old and want to bounce gold coins off a strippers ass like a boss.
 
2011-08-22 03:51:20 PM
Impaler One general rule of thumb is the DOW / Gold ratio. If the dow drops to oh, let's say $4,000 and gold rises to $4,000 then you sell your gold and buy the DOW.
 
2011-08-22 03:57:03 PM
I predict they will go down after Dec 13, 2012. Until then, it is apocalypse mania, people! Get ready for the volume to begin to go derp. I mean up.
 
2011-08-22 04:05:57 PM

impaler: Question for gold holders: when do you plan on selling?


No doubt, 10 minutes after I buy.

/for a small fee I can let you all know when I buy and the bubble will burst shortly thereafter.
//no, my investments aren't that bad but some days it feels like it.
 
2011-08-22 04:07:45 PM

brantgoose: Fiat Lux.


I used to have a Fiat Lux. Ironically, the damned headlights kept burning out.
 
2011-08-22 04:07:46 PM
MasterThief 2011-08-22 11:33:47 AM Record gold prices may be heading for a correction of about 8 percent next month, but the safe-haven metal may also rally to $2,400 an ounce next year as investors seek refuge amid global economic turmoil...

So the price could go up, or it could go down. Gee, that's helpful.
-=========================================================

No, the price will go 10% down but then rerally next year. That's what that means.

It's more than likely horseshiat, though.
 
2011-08-22 04:09:17 PM
Impaler Hell, after Google went public years ago, I bought in at something like $260 per share and sold out at over $600 per share, then it went down and back-up again.
 
2011-08-22 04:10:40 PM

sarek_smile: Impaler One general rule of thumb is the DOW / Gold ratio. If the dow drops to oh, let's say $4,000 and gold rises to $4,000 then you sell your gold and buy the DOW.


Snert. Yeah, except that will never happen. The gold bubble will pop well before gold/dow parity is reached.

I've read many goldbugs dismissing the obvious lack of fundamental rationale for the spike in gold prices by claiming that it isn't gold that has increased in value, but rather that the dollar has decreased.

We haven't seen inflation rates nearly high enough to justify the huge gold price increases, and with another recession on the horizon its very difficult to foresee and demand based inflation in the near term. But goldbugs may dismiss official inflation figures or beleive that while currently tame, future runaway inflation is inevitable.

My question is this: if the current gold price is justified based on monetary debasement and future inflation, shouldn't all real assets be rising in line with gold? It isn't the only item that can supposedly retain it's real value over time. Shouldn't land increase in line with overall inflation as well? We'll always need land and housing, no matter what happens to inflation, right?

But house prices are relatively flat to declining over the past year - shouldn't a prudent investor, who foresees future hyperinflation, be borrowing as much as possible at today's low rates to buy as much house as possible in anticipation of hugh inflation caused price increases? Why wait 10 years to buy a house for $1.5m, borrowing at 25% interest per year, when you could buy that house for $500k today at 4.5%

Moreover, wouldn't a prudent play be shorting gold, which already has hyperinflation priced in, and going long land which clearly hasn't been affected by hyperinflation expectations?

Even acknowledging that the housing market is coming off its own bubble it's pretty easy to see it as a great investment opportunity if one truly believes hyperinflation is coming.
 
2011-08-22 04:11:37 PM

wildcardjack: For society, gold is a sucky investment.

If I build a factory turning out widgets I employ people and generate goods and revenues (possibly worldwide) for investors.

If I start a design and marketing company (ala Apple) I employ a smaller number of people in this country but generate revenues world wide for the investors.

If I buy a thousand pounds of gold I might employ a few people watching it. I won't generate revenues for investors. In fact, it costs money to hoard gold.

No doubt someone will have a rebuttal to this idea. I need to go look into the nature of bubbles to figure if they actually take capital out of an economy when they burst or if they just redistribute it.



There is no rebuttal as you are right about gold's limited worth to an economy. Personally, I feel gold's greatest worth is that of an independent financial commodity, free of borders and measurable against other currencies. A gold standard is not a magic bullet as many gold bugs would like to believe. A return to a gold standard would make all of our personal debt payable in gold which would force suffocating deflation on the world economy. The real beneficiaries being the bankers and Rothchilds of the world.

The key to understanding markets is that capital flows like water, to the lowest spot. In finance, the lowest spot means the lowest risk. Right now, because of the European sovereign debt crisis and questions about the solvency of European banks, that means both the dollar and gold are considered the lowest risks at the moment.

If you want a healthy sane view on gold consider reading Martin Armstrong's writings. His writings can be a little disjointed but he not a writer he's finance guy who's handled big big money. His perspective on the world in simply invaluable and his knowledge of history impeccable. Don't get too wrapped up in his charts and predictions at first till you understand how he thinks. By listening to the people here in this thread derailing gold, it will only hold you back and limit your options. The only thing you need to concern yourself is protecting your family and your wealth not adhering to some misguided notion what gold is or isn't.
 
2011-08-22 04:13:23 PM

dittybopper: brantgoose: Fiat Lux.

I used to have a Fiat Lux. Ironically, the damned headlights kept burning out.


I bought that car to replace my Heisenberg Runabout, which I sold because the speedometer stopped working after I installed a GPS.
 
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