Of course we'll see $500 gold again. It's a comodity. It's cyclical like all others. Don't get so caught up in short term thinking. That's why most of you didn't buy when it hit 260. The masses always buy when things go up in value, always sell as it's falling. Human nature. The way it is. The masses always think short term.
In the '80s I was the purchasing agent for Sears Construction here in Houston.
I could buy 1/2" CDX plywood in bundles for $3.35 per sheet. Retail was only around $5 and there were special sales for even less.
Along came Al Gore and out of 7 plywood factories in the US, only 2 remain since around '94. Never mind that we've got more lumber/forests than we had in 1776. Pine trees are a very renewable resource as well.
You will NEVER see 1/2" CDX at the prices we once had. Now you're looking at around $20 retail and the quality isn't near what it was.
There are a few similarities here, more than you might see at first glance.
NO, gold will never drop to $500 in current US dollars. A year from now, you'll be happy to find it for $1,000 an ounce.
You're never going to see gasoline at 39.9 cents a gallon again either.
Just get used to it, invest accordingly and hold on.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
I don't know where they're getting their info for this article. It does not cost $600 for the standard United States open pit gold mine to produce an ounce of gold. Perhaps in the extremely deep mines of South Africa, but not in the US. Even when mines are running .02 oz per ton of ore when they're working the main vein, the combined costs of labor, trucks, fuel, crushers, cyanide leaching and recovery probably work out to no more than $300 an ounce, even under today's high gas prices. In the placer operations of Alaska, to costs to produce an ounce of gold are substantially lower.
<< <i>Of course we'll see $500 gold again. It's a comodity. It's cyclical like all others. Don't get so caught up in short term thinking. That's why most of you didn't buy when it hit 260. The masses always buy when things go up in value, always sell as it's falling. Human nature. The way it is. The masses always think short term. >>
Although the long tern trend is up, the market price is determined on the margin (those wanting to buy or sell at a given time). I agree $500 is a definite possibility. The differences in opinion on this post (reflecting a willingness to act on that opinion) are what makes a market.
My guess (and real money bet) is up to and beyond $1000. If inflation like 79 - 80 returns, all bets are off.
The Golden Rule: Those with the gold make the rules.
Just as good as them dipping down to a $1 like they did in the 90's for several months. I would have never thought that would happen.
Just remember that gas prices in the 1990's were based on approx half the money supply we have today. Hence gas prices retreating back to $1 would be quite unlikely based on current dollar value. The rest of the world has increased money supply at similar or higher rates as well. And we certainly have not doubled the population in that same period.
I would agree that an Amero-like currency is headed our way to help sweep and hide the current mess under the rug. And unless the Amero has some sort of tangible and finite backing, it won't get very far. I'd like to hear a plausible scenario of how we could get back to $500 gold from today in the next 3-5 years considering our current economics (and mining asteroids or alchemy are not plausible imo). For this to happen, paper equity/currency confidence has to soar to astounding levels where all commodities are tossed out the window once again. Anyone see any positive signs that we are headed in that direction?
I bought my First Ounce of gold coin at $300 soon around September 2001. Those were differenet times. It is hard to go back home. Home now seems near $800 and next door to $1000.
I remember when gold was $35 per ounce and I bought my first high grade saint for $47. Those days are long gone.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Comments
People said it would hit $1000 in 1980, and instead gold made a long downward trend to below $300.
Of course we'll see $500 gold again. It's a comodity. It's cyclical like all others. Don't get so caught up in short term thinking. That's why most of you didn't buy when it hit 260. The masses always buy when things go up in value, always sell as it's falling. Human nature. The way it is. The masses always think short term.
I could buy 1/2" CDX plywood in bundles for $3.35 per sheet. Retail was only around $5 and there were special sales for even less.
Along came Al Gore and out of 7 plywood factories in the US, only 2 remain since around '94. Never mind that we've got more lumber/forests than we had in 1776. Pine trees are a very renewable resource as well.
You will NEVER see 1/2" CDX at the prices we once had. Now you're looking at around $20 retail and the quality isn't near what it was.
There are a few similarities here, more than you might see at first glance.
NO, gold will never drop to $500 in current US dollars. A year from now, you'll be happy to find it for $1,000 an ounce.
You're never going to see gasoline at 39.9 cents a gallon again either.
Just get used to it, invest accordingly and hold on.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>I read somewhere that the avg. cost of production was around $629 an ounce, so $500 is unlikley.
Update with Reference. I was off by $29 ;>
Link on Cost to Produce >>
I don't know where they're getting their info for this article. It does not cost $600 for the standard United States open pit gold mine to produce an ounce of gold. Perhaps in the extremely deep mines of South Africa, but not in the US. Even when mines are running .02 oz per ton of ore when they're working the main vein, the combined costs of labor, trucks, fuel, crushers, cyanide leaching and recovery probably work out to no more than $300 an ounce, even under today's high gas prices. In the placer operations of Alaska, to costs to produce an ounce of gold are substantially lower.
<< <i>Of course we'll see $500 gold again. It's a comodity. It's cyclical like all others. Don't get so caught up in short term thinking. That's why most of you didn't buy when it hit 260. The masses always buy when things go up in value, always sell as it's falling. Human nature. The way it is. The masses always think short term. >>
Although the long tern trend is up, the market price is determined on the margin (those wanting to buy or sell at a given time). I agree $500 is a definite possibility. The differences in opinion on this post (reflecting a willingness to act on that opinion) are what makes a market.
My guess (and real money bet) is up to and beyond $1000. If inflation like 79 - 80 returns, all bets are off.
Just remember that gas prices in the 1990's were based on approx half the money supply we have today. Hence gas prices retreating back to $1 would be quite unlikely based on current dollar value.
The rest of the world has increased money supply at similar or higher rates as well. And we certainly have not doubled the population in that same period.
I would agree that an Amero-like currency is headed our way to help sweep and hide the current mess under the rug. And unless the Amero has some sort of tangible and finite backing, it won't get very far. I'd like to hear a plausible scenario of how we could get back to $500 gold from today in the next 3-5 years considering our current economics (and mining asteroids or alchemy are not plausible imo).
For this to happen, paper equity/currency confidence has to soar to astounding levels where all commodities are tossed out the window once again. Anyone see any positive signs that we are headed in that direction?
roadrunner
"Bongo hurtles along the rain soaked highway of life on underinflated bald retread tires."
~Wayne
<< <i>
<< <i>Absolutely!
But gasoline has to go to $1.50 a gallon average price in the US first!
The chances of that happening?
Just as good as them dipping down to a $1 like they did in the 90's for several months.
I would have never thought that would happen.
Yes, gold can go back to $300 too.
Jerry >>
I remember when I bought My Dodge Quad Cab Pick up Truck in 1999. I Filled it up for $19.00 and gas here in Charleston SC was $0.87 cents per gallon.
It was such a shock when it zoomed up to $1.25 per gallon in 2000. Ah... the good old days.
Box of 20
Those were differenet times. It is hard to go back home. Home now seems near $800 and next door to $1000.
Miles
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Hell, I don't need to exercise.....I get enough just pushing my luck.