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Gold price to drop 16% to $1,500 in 2022, 2023 doesn't look any better - ABN AMRO

OPAOPA Posts: 17,103 ✭✭✭✭✭
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
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Comments

  • It probably will tank when they start raising rates. Guess I'll have to dollar cost average. I'm in it for the long haul so no biggie. Timing my buys makes me feel like a day trader though. :lol:

  • streeterstreeter Posts: 4,312 ✭✭✭✭✭

    The Fed has painted itself info a corner. Real interest rates, real employment, real income tell a different story.
    The Fed, AKA the banking system, is paying so little for it's cost of funds right now, why would they want to change that?
    Answer: They don't.

    Have a nice day
  • derrybderryb Posts: 36,010 ✭✭✭✭✭
    edited December 20, 2021 10:50AM

    gold spot prices (what ABN AMRO references) will likely see the disconnect from physical prices that silver did in 2021. What you pay at (or sell) the pump is what matters.

    Spot price disconnects from reality will continue and premiums over spot will grow.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • ctf_error_coinsctf_error_coins Posts: 15,399 ✭✭✭✭✭

    @RobM said:
    Does anyone think that the Fed will raise rates by more than a token amount, say 25 to 50 basis points before the next easing cycle? I bet they won't.

    Maybe 75. But that would still be historically low rates B)

  • dcarrdcarr Posts: 7,879 ✭✭✭✭✭

    @crito_is_baaack said:
    It probably will tank when they start raising rates.

    Maybe. But note that in the 1970s gold was spiking upwards at the same time that interest rates were also rising rapidly.

  • The 70's were completely different. As I recall it, it was the OPEC oil crisis that really sparked the panic buying of gold. You kind of have to look at the whole geopolitical picture.

    In any case, it'll probably rebound when their tiny first rate hike has little to no effect. After that who knows... your guess is as good as anybody else's.

  • derrybderryb Posts: 36,010 ✭✭✭✭✭

    gold will rise faster than rising rates.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Raising rates stands a chance of crashing the whole system. It's only a question of degree before something stops working.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • derrybderryb Posts: 36,010 ✭✭✭✭✭

    Raising rates reduces borrowing. reducing borrowing reduces spending. reduces spending reduces prices.

    Reducing the amount of borrowed money does no good when free money is plentiful. We are depending on bankers to solve a problem currently being caused by a different group of culprits.

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    If rates rise and there's less free money, who's going to float all those zombie corporations whose business models have never made a cent?

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • OPAOPA Posts: 17,103 ✭✭✭✭✭

    @jmski52 said:
    If rates rise and there's less free money, who's going to float all those zombie corporations whose business models have never made a cent?

    Risk takers, Today's so called "Zombie " corporations, could be tomorrows big winners. Past history will identify those that came out on top, big time....i/e Amazon, Google, Apple, Microsoft, Intel...and the list goes on. Unfortunately, my conservative upbringings, negated that type of risk while I was young :/

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • dcarrdcarr Posts: 7,879 ✭✭✭✭✭

    @crito_is_baaack said:
    The 70's were completely different. As I recall it, it was the OPEC oil crisis that really sparked the panic buying of gold. You kind of have to look at the whole geopolitical picture.

    In any case, it'll probably rebound when their tiny first rate hike has little to no effect. After that who knows... your guess is as good as anybody else's.

    In the mid to late 1970s the bills for the Vietnam War were finally coming due.
    Now we have the bills for Afghanistan etc coming due.

    In the mid 1970s there was a significant gasoline shortage.
    Now we have shortages on a lot of things and fuel prices are very high.

    In the late 1970s there was a lot of money printing going on to cover government expenditures.
    Now we have a lot of money printing going on to cover government expenditures, AND a lot of artificial stimulus from the Federal Reserve buying large amounts of bonds etc.

    The more things change, the more they stay the same ...
    It feels like 1975 all over again right now.

  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @dcarr said:
    It feels like 1975 all over again right now.

    I wish. That was probably the best year in the last 50 to buy assets of all type.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • OPAOPA Posts: 17,103 ✭✭✭✭✭

    @cohodk said:

    @dcarr said:
    It feels like 1975 all over again right now.

    I wish. That was probably the best year in the last 50 to buy assets of all type.

    And I had a CD paying 15%

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    And I had a CD paying 15%

    Yeah, but that's when the markets were actually real. What do you think would happen if rates went above 10% these days?

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • taxmadtaxmad Posts: 960 ✭✭✭✭

    @jmski52 said:
    And I had a CD paying 15%

    Yeah, but that's when the markets were actually real. What do you think would happen if rates went above 10% these days?

    All the gains that make some commenters think they are investing geniuses would fade away like a fart in the wind (watched Shwashank again - that is such a great movie)

  • rte592rte592 Posts: 1,381 ✭✭✭✭✭

    @tincup said:
    " The more things change, the more they stay the same ...
    It feels like 1975 all over again right now."

    Just don't restart the disco craze.....

    I was only a young pup in 75.
    Wasn't thinking much about work...to busy gathering used old abandoned bike parts to assemble my first 20" bicycle.

  • OPAOPA Posts: 17,103 ✭✭✭✭✭

    @taxmad said:

    @jmski52 said:
    And I had a CD paying 15%

    Yeah, but that's when the markets were actually real. What do you think would happen if rates went above 10% these days?

    All the gains that make some commenters think they are investing geniuses would fade away like a fart in the wind (watched Shwashank again - that is such a great movie)

    I know it's tuff to pronounce, but the correct spelling is: Shawshank ;) Excellent movie with superior acting performances by all the cast members.

    "Bongo drive 1984 Lincoln that looks like old coin dug from ground."
  • thefinnthefinn Posts: 2,652 ✭✭✭✭✭

    The big difference now is that this is more global, and there isn't any more dry powder. If someone tried to pull a Volker and raise rates to 20% then all hell would literally break loose.
    As Twain said, "History doesn't repeat itself, but it often rhymes." This time is similar to the mid-'70s to the early '80s, but cannot be fixed like Paul Volker did it.

    thefinn
  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @jmski52 said:
    And I had a CD paying 15%

    Yeah, but that's when the markets were actually real. What do you think would happen if rates went above 10% these days?

    Asset prices would drop, the economy would slow, then asset prices would rise and the economy would improve. Still wouldnt be the end of civilization. Fortunes would be made and fortunes would be lost. Just like in the olden days

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • thefinnthefinn Posts: 2,652 ✭✭✭✭✭

    @cohodk said:

    @jmski52 said:
    And I had a CD paying 15%

    Yeah, but that's when the markets were actually real. What do you think would happen if rates went above 10% these days?

    Asset prices would drop, the economy would slow, then asset prices would rise and the economy would improve. Still wouldnt be the end of civilization. Fortunes would be made and fortunes would be lost. Just like in the olden days

    Just the end of civilization as we know it. The Empire of the United States will cease to exist and a new one will take the stage. It happens over and over again - the fall of the British Empire, the Holy Roman Empire, Rome, Greece, the Byzantines, etc. As Jasmine sang, "A whole new world..."

    thefinn
  • derrybderryb Posts: 36,010 ✭✭✭✭✭

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • charlesf20charlesf20 Posts: 384 ✭✭✭

    Well when you are not sure of what you are doing just resign and don't do it.

  • dcarrdcarr Posts: 7,879 ✭✭✭✭✭

    @cohodk said:

    @jmski52 said:
    And I had a CD paying 15%

    Yeah, but that's when the markets were actually real. What do you think would happen if rates went above 10% these days?

    Asset prices would drop, the economy would slow, then asset prices would rise and the economy would improve. Still wouldnt be the end of civilization. Fortunes would be made and fortunes would be lost. Just like in the olden days

    You left out a part:
    A LOT of debt would be defaulted on.

    Also, the government "printing presses" would be working over-time to service all the government debt at 10%.

    But this is only academic. The the global human population number leveling off means that there is not as much demand for borrowing money as there used to be when the population was growing faster. So interest rates can't reach 10% in a free market with demographics as they are.

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Not only can rates not go above 10%, I'd be surprised if the stock market values stayed at half of what they are now if rates even hit 5%.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @dcarr said:

    @cohodk said:

    @jmski52 said:
    And I had a CD paying 15%

    Yeah, but that's when the markets were actually real. What do you think would happen if rates went above 10% these days?

    Asset prices would drop, the economy would slow, then asset prices would rise and the economy would improve. Still wouldnt be the end of civilization. Fortunes would be made and fortunes would be lost. Just like in the olden days

    You left out a part:
    A LOT of debt would be defaulted on.

    And what happens when debt defaults?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @jmski52 said:
    Not only can rates not go above 10%, I'd be surprised if the stock market values stayed at half of what they are now if rates even hit 5%.

    What analysis have you done that leads you to that hypothesis?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,010 ✭✭✭✭✭

    @cohodk said:

    @jmski52 said:
    Not only can rates not go above 10%, I'd be surprised if the stock market values stayed at half of what they are now if rates even hit 5%.

    What analysis have you done that leads you to that hypothesis?

    Floccinaucinihilipilification?

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    What analysis have you done that leads you to that hypothesis?

    Without massive liquidity injections and bank bailouts, rates wouldn't have trended lower for the past 40 years.

    All of those zombie corporations that you think have value - are dependent on bailouts and low cost debt to maintain their business models.

    They are dependent on more low interest rates, and when rates rise, those business models all go sour, their IRR goes deeply negative and they simply won't be able to meet payrolls as many of their divisions won't be making any money. Gov.com can print money, but corporations and small businesses can't.

    When that happens, the stocks of those companies will crash and the negative psychology will probably drive more stock market liquidations, and probably in a panic mode.

    It's not rocket science. The business cycle hasn't been allowed to function normally since about 1981.

    The only way out is more debt and more money creation, and that puts us into negative rate territory which creates a whole new set of disincentives to work or to save for the future - but that's a topic for another day.

    My contention is that we're at an endpoint in the debt cycle and that the numbers for more debt creation simply don't work anymore. That doesn't mean that they won't try real hard to kick the can down the road, but it isn't working now. Real price inflation is here, along with wage inflation as well. It's a worldwide phenomenon that's unsustainable.

    There's not been a suspension in either math or physics yet, only in medical science. Got bullion?

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭
    edited December 23, 2021 4:45PM

    @jmski52 said:
    There's not been a suspension in either math or physics yet, only in medical science.

    Interesting. I and most others see an acceleration of medical science.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    I and most others see an acceleration of medical science.

    I see an increase in something, but it's not science.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @jmski52 said:
    I and most others see an acceleration of medical science.

    I see an increase in something, but it's not science.

    This is when derryb would tell you to open your eyes.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    This is when derryb would tell you to open your eyes.

    You would do well to actually read some science.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @jmski52 said:
    This is when derryb would tell you to open your eyes.

    You would do well to actually read some science.

    Lol....if you only knew.

    But just for giggles....plesse tell me what science you read so i may be enlightened.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    tell me what science you read so i may be enlightened

    PM me your email and I'll send you a link.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • pcgscacgoldpcgscacgold Posts: 2,594 ✭✭✭✭✭

    I would welcome a drop in gold to $1200 an oz or even lower. I don't see it happening though. I dream of 2002-2003 when MS Liberty Double Eagles were $400-500 at the Heritage auctions. Fun times. Of course, the market has done much better but gold coins are fun to hold and look at.

  • derrybderryb Posts: 36,010 ✭✭✭✭✭
    edited December 25, 2021 9:09AM

    @jmski52 said:
    What analysis have you done that leads you to that hypothesis?

    Without massive liquidity injections and bank bailouts, rates wouldn't have trended lower for the past 40 years.

    All of those zombie corporations that you think have value - are dependent on bailouts and low cost debt to maintain their business models.

    They are dependent on more low interest rates, and when rates rise, those business models all go sour, their IRR goes deeply negative and they simply won't be able to meet payrolls as many of their divisions won't be making any money. Gov.com can print money, but corporations and small businesses can't.

    When that happens, the stocks of those companies will crash and the negative psychology will probably drive more stock market liquidations, and probably in a panic mode.

    It's not rocket science. The business cycle hasn't been allowed to function normally since about 1981.

    The only way out is more debt and more money creation, and that puts us into negative rate territory which creates a whole new set of disincentives to work or to save for the future - but that's a topic for another day.

    My contention is that we're at an endpoint in the debt cycle and that the numbers for more debt creation simply don't work anymore. That doesn't mean that they won't try real hard to kick the can down the road, but it isn't working now. Real price inflation is here, along with wage inflation as well. It's a worldwide phenomenon that's unsustainable.

    There's not been a suspension in either math or physics yet, only in medical science. Got bullion?

    careful, speaking the truth will get you labeled a gloom and doomer by the Karens B)

    "Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black

  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @jmski52 said:
    tell me what science you read so i may be enlightened

    PM me your email and I'll send you a link.

    Why not share your resources with everyone?

    Ii asked because i thought peer reviewed journals, independant research and corporate reports would be enough. Apparently i need to be put on a spam email list to get the truth.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    Why not share your resources with everyone?

    Because I'm not willing to get drawn into a political debate with you here on this venue. If anyone's interested, they can PM me, including you.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • taxmadtaxmad Posts: 960 ✭✭✭✭

    @cohodk said:

    Fair enough. If your reading in medical science does take your on a political journey then i would suggest alternative sources.

    The advancements we've made in medicine are truly incredible.

    Most - if not all - medical science reporting has been a political journey over the last two years

    I agree on your last point

  • jmski52jmski52 Posts: 22,263 ✭✭✭✭✭

    If your reading in medical science does take your on a political journey then i would suggest alternative sources.

    For the record, you have not found yourself willing to PM me for the references I would provide. Who's closed-minded here?

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭
    edited December 27, 2021 5:05AM

    @jmski52 said:
    If your reading in medical science does take your on a political journey then i would suggest alternative sources.

    For the record, you have not found yourself willing to PM me for the references I would provide. Who's closed-minded here?

    Actually i did send you a PM but i think i hit the "new message" button and it didnt send. And i do have a genuine interest n your reference.

    Regarding the closed minded comment....it is true that my mind is not open to misinformation. So what ya got?

    So send a link via PM...you dont need my email.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @derryb said:

    @jmski52 said:
    What analysis have you done that leads you to that hypothesis?

    Without massive liquidity injections and bank bailouts, rates wouldn't have trended lower for the past 40 years.

    All of those zombie corporations that you think have value - are dependent on bailouts and low cost debt to maintain their business models.

    They are dependent on more low interest rates, and when rates rise, those business models all go sour, their IRR goes deeply negative and they simply won't be able to meet payrolls as many of their divisions won't be making any money. Gov.com can print money, but corporations and small businesses can't.

    When that happens, the stocks of those companies will crash and the negative psychology will probably drive more stock market liquidations, and probably in a panic mode.

    It's not rocket science. The business cycle hasn't been allowed to function normally since about 1981.

    The only way out is more debt and more money creation, and that puts us into negative rate territory which creates a whole new set of disincentives to work or to save for the future - but that's a topic for another day.

    My contention is that we're at an endpoint in the debt cycle and that the numbers for more debt creation simply don't work anymore. That doesn't mean that they won't try real hard to kick the can down the road, but it isn't working now. Real price inflation is here, along with wage inflation as well. It's a worldwide phenomenon that's unsustainable.

    There's not been a suspension in either math or physics yet, only in medical science. Got bullion?

    careful, speaking the truth will get you labeled a gloom and doomer by the Karens B)

    Arent Karens the ones who always whine and cry about things being rigged and manipulated and unfair?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 18,491 ✭✭✭✭✭

    @taxmad said:

    @cohodk said:

    Fair enough. If your reading in medical science does take your on a political journey then i would suggest alternative sources.

    The advancements we've made in medicine are truly incredible.

    Most - if not all - medical science reporting has been a political journey over the last two years

    Only if you watch TV or AM radio.

    https://newsroom.clevelandclinic.org/2020/10/06/cleveland-clinic-unveils-top-10-medical-innovations-for-2021/

    https://www.healthline.com/health-news/5-medical-innovations-you-probably-didnt-notice-happened-in-2020

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

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