Yea, I went though 1980 and this isn't it my friend. Same ole story "a correction" and the sky is falling or a spike and it's going to $2000. Gold will pick up in the fall as usual I just wish the M3 was still reported I think we may get a few answers from it and that's why it's no longer done.
[kitco gold forum loon]wait, what?!?! No glorious depression? Damn [/kitco gold forum loon]
seriously, I love gold, but hope it falls further just because it moves with oil and inflation moves with oil. I love having pricey gold, but it doesn't mean a thing when the gas I buy and every freakin grocery I have to buy to feed my family goes up too.
<< <i> wish I were optimistic enough to buy gold shares.
Usually when everyone is pessimistic about gold shares (like now), they are the best buy. Good producers like Goldcorp, Agnico-Eagle, and Freeport McMoran, are selling on the cheap. So are mid-producers like Yamana and Kinross. Junior shares across the board are dirt cheap and have been the whipping post of the PPT for a year now.
We're heading into the start of the fall season where historically gold starts to ascend into the following year. I'm quite optimistic about what awaits the gold shares. Even if the PPT continues to work on them, they will eventually shine. I'm not sure how much cheaper they can get especially since producers are putting out great quarterly earnings reports....while banks and other industries are showing losses. But let's not get caught up in "details."
I'm close to saying that $890 gold is history. But I think it would be more prudent to wait until $1,000 gets hit again before going there.
The above article generated some interesting questions from readers of “Information Line”. Here is one of those questions and my response.
Q. – "I read this with interest, but if I buy gold in 2008 at $1000 per ounce and now it’s 2010 and gold is $500 per ounce, why do I not feel good??? Of course, if you buy gold in 2000 at $280 per ounce and sell in 2008 at $1000 I know you feel good, but life does not always work that way!"
A. – You are looking at gold from the perspective of a trader. In other words, you assume that the only advantage to owning gold is to profit from its price swings. Gold is money, and there are also other important benefits that come from owning physical gold. These include:
No counterparty risk – When you own physical bullion, you own a tangible asset. Physical gold is money not dependent upon anyone’s promise, which is an attribute becoming increasingly important as the present financial crisis deepens. Ask anyone who had money in Northern Rock in the UK or Bear Stearns about their experience when those banks failed. Better yet, ask anyone who lived through the Great Depression to learn about the fear that arises when your wealth is reliant upon counterparty risk in a financial crisis.
Consistency in commodity purchasing power – If gold were to drop to $500 in 2010, the price of crude oil, wheat and other commodities will have also dropped. You would be able to buy gasoline at $2 per gallon again, and a loaf of bread at much less than today’s price. There is a close correlation between the price of basic commodities and gold. So the loss of purchasing power from a drop in gold’s price may be less than it seems at first glance.
>>It doesn't work that way. We will never be able to buy gas at $2 a gallon, ever again. Things fluctuate, but overall, nothing really goes down for very long. Once a price point is tested and proven, things rarely go back down. Now I know that crude oil has recently gone down a bit. But it won't ever go down to what it was before it started to go up.
Not reliant upon government decisions – The value of the dollar is dependent upon government politicians and bureaucrats. Therefore, the dollar has become a political tool, rather than what money is supposed to be, namely, a neutral tool useful in commerce available to one and all and unfettered by government interference. Government actions can undermine the usefulness of currency. Moreover, when you own dollars you are speculating that the government will not take any actions harmful to the currency. That’s not a good bet because experience has shown that governments eventually and inevitably totally destroy the currency under their management.
>>When the government recalls all the gold and forces us to empty our safe deposit boxes of our gold in front of armed guards, how is gold helpful?
Assets outside the banking system – Gold provides diversification by enabling you to place a portion of your money outside of banks, and indeed, the entire monetary system of fiat currencies. Therefore, this portion of your wealth is removed from the threat of capital controls and other government imposed restrictions. This safety you receive from gold can be enhanced further when you store gold in countries outside of where you live and where there is no history of asset confiscation by government. The above points explain why gold has value. Namely, it is useful in many different ways. But there is one last point worth mentioning.
>>Without the banking system, how are you going to determine how much your gold is worth?
While the future is unknowable and unpredictable, the probability of gold falling to $500 in 2010 is “slim to none”. The only way for gold to fall to that level would be for the purchasing power of the dollar to be significantly enhanced. In other words, instead of inflating the dollar, the US government would need to embark on a new monetary policy aimed at deflating the dollar, the result of which would be to enhance the dollar’s purchasing power, repeating the experience of the Great Depression. Monetary policy is aimed specifically at avoiding another deflationary Great Depression, so it is reasonable to expect that the dollar will continue to be inflated, meaning the price of gold will continue to rise.
>>I agree with this statement. However, even if gold goes down to $500, which it will because it is not tied to crude oil, you will not be able to buy the same amount of crude oil as when gold was $1000. As well, next year I will make the same amount of money I made this year. If I buy gold at $1000 and it goes to $500, I've lost $500. The $500 the gold is worth does not make me have to pay less at the grocery store or for auto gas. People pay attention to the price of gold because it is best to get in at a low price. Gold does not really "hold value" as the people trying to get us all to buy some would have us believe. Say I make $20K this year. Next year I make $20K. This year I buy gold at $900. Next year gold is at $500. Your theory doesn't hold water because I make the same amount of money next year as this year. But the gold has lost nearly half of its worth. Now, if I make $30K next year, meaning that $20K this year is worth $30K next year, then your theory would hold water, Mr. Turk
by James Turk >>
I have been a collector for over mumbly-five years. I learn something new every day.
james turk is also biased to heck and back: http://www.goldmoney.com/ . founder and wanter of people to buy gold so he can make clams for himself.
yawn. these "loonies" will say whatever it takes to make a buck. yes he is educated but as you know, people who have a vested interest in what they are spewing are never known to be the most reliable unbiased un-emotional source of information on the subject.
edited to add: what i find interesting is that as the price goes up people are willing to mine more and in less desirable places because it is economical. 75% of the worlds gold is still in the ground. (percentage i heard tossed around in several places). Once you hit 1000 dollar gold for a few years straight every monkey's uncle will be digging it out, increasing the supply and where does that lead eventually?
hmmm??
i like gold at 750-1000 price range. seems a fair price for one ounce of the good stuff dug out of the ground and refined for your viewing pleasure.
Yea, I went though 1980 and this isn't it my friend. Same ole story "a correction" and the sky is falling or a spike and it's going to $2000. Gold will pick up in the fall as usual I just wish the M3 was still reported I think we may get a few answers from it and that's why it's no longer done.
You can link to my "stats" link below to see John Williams monthly estimate of M3. The FED might not be publishing it but you can be sure they are still tracking it just as Mr. Williams is.
Manorcourtman, if you read my post I did include the possibility of gold falling under $900 as the FED and PPT have been pulling out new tricks and making up monetary law as they go...much of it illegal. It really matters little to me how we get back to $1000-$1200 only that we get there. My original post was accurate other than the current prices of the several gold miners mentioned. The financial system is bankrupt. It's only a matter of time before the public finds out there are no clothes on the FED or Treasury chiefs.
Once you hit 1000 dollar gold for a few years straight every monkey's uncle will be digging it out, increasing the supply and where does that lead eventually?
Right now, those monkey's uncles are going broke trying to mine gold with ever increasing inflation (labor, fuel, material costs) not to mention geo-political and environmental risks in foreign lands. A good mine today is nationalized tommorrow. Sorry, Charlie...hand over the keys to your shaft. Junior miners and many mid-producers are not making much money as their costs skyrocket. Even at $1200 gold I suspect that increasing inflation will cut into their margins. Considering that it takes 5-10 years to bring a mine on-line, with the majority of new ones failing, the odds of seeing any appreciable new gold over $1000 is minimal. The ride from $260 to $980 gold resulted in a decline in production. It probably won't improve much unless gold goes $2000+.
Comments
<< <i>Yep, I see support in the $880-$890 level, it should test those numbers this week. >>
Gold broke through your support level ... what's your next call?
<< <i>1980,here we come again. >>
Yea, I went though 1980 and this isn't it my friend. Same ole story "a correction" and the sky is falling or a spike and it's going to $2000. Gold will pick up in the fall as usual I just wish the M3 was still reported I think we may get a few answers from it and that's why it's no longer done.
seriously, I love gold, but hope it falls further just because it moves with oil and inflation moves with oil. I love having pricey gold, but it doesn't mean a thing when the gas I buy and every freakin grocery I have to buy to feed my family goes up too.
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<< <i>
<< <i>Gold will likely hit $1000 soon... Cheers, RickO >>
Soon.....We've heard that a lot lately!! Not likely!! More like $850-900. >>
The gold bugs are hopelessly clueless. $850 here we come as I called it
<< <i> wish I were optimistic enough to buy gold shares.
Usually when everyone is pessimistic about gold shares (like now), they are the best buy. Good producers like Goldcorp, Agnico-Eagle, and Freeport McMoran, are selling on the cheap. So are mid-producers like Yamana and Kinross. Junior shares across the board are dirt cheap and have been the whipping post of the PPT for a year now.
We're heading into the start of the fall season where historically gold starts to ascend into the following year. I'm quite optimistic about what awaits the gold shares. Even if the PPT continues to work on them, they will eventually shine. I'm not sure how much cheaper they can get especially since producers are putting out great quarterly earnings reports....while banks and other industries are showing losses. But let's not get caught up in "details."
I'm close to saying that $890 gold is history. But I think it would be more prudent to wait until $1,000 gets hit again before going there.
roadrunner >>
WRONG!!
<< <i>Putting the Gold Price in Perspective
snip>>
Putting the Gold Price in Perspective – follow-up
The above article generated some interesting questions from readers of “Information Line”. Here is one of those questions and my response.
Q. – "I read this with interest, but if I buy gold in 2008 at $1000 per ounce and now it’s 2010 and gold is $500 per ounce, why do I not feel good??? Of course, if you buy gold in 2000 at $280 per ounce and sell in 2008 at $1000 I know you feel good, but life does not always work that way!"
A. – You are looking at gold from the perspective of a trader. In other words, you assume that the only advantage to owning gold is to profit from its price swings. Gold is money, and there are also other important benefits that come from owning physical gold. These include:
No counterparty risk – When you own physical bullion, you own a tangible asset. Physical gold is money not dependent upon anyone’s promise, which is an attribute becoming increasingly important as the present financial crisis deepens. Ask anyone who had money in Northern Rock in the UK or Bear Stearns about their experience when those banks failed. Better yet, ask anyone who lived through the Great Depression to learn about the fear that arises when your wealth is reliant upon counterparty risk in a financial crisis.
Consistency in commodity purchasing power – If gold were to drop to $500 in 2010, the price of crude oil, wheat and other commodities will have also dropped. You would be able to buy gasoline at $2 per gallon again, and a loaf of bread at much less than today’s price. There is a close correlation between the price of basic commodities and gold. So the loss of purchasing power from a drop in gold’s price may be less than it seems at first glance.
>>It doesn't work that way. We will never be able to buy gas at $2 a gallon, ever again. Things fluctuate, but overall, nothing really goes down for very long. Once a price point is tested and proven, things rarely go back down. Now I know that crude oil has recently gone down a bit. But it won't ever go down to what it was before it started to go up.
Not reliant upon government decisions – The value of the dollar is dependent upon government politicians and bureaucrats. Therefore, the dollar has become a political tool, rather than what money is supposed to be, namely, a neutral tool useful in commerce available to one and all and unfettered by government interference. Government actions can undermine the usefulness of currency. Moreover, when you own dollars you are speculating that the government will not take any actions harmful to the currency. That’s not a good bet because experience has shown that governments eventually and inevitably totally destroy the currency under their management.
>>When the government recalls all the gold and forces us to empty our safe deposit boxes of our gold in front of armed guards, how is gold helpful?
Assets outside the banking system – Gold provides diversification by enabling you to place a portion of your money outside of banks, and indeed, the entire monetary system of fiat currencies. Therefore, this portion of your wealth is removed from the threat of capital controls and other government imposed restrictions. This safety you receive from gold can be enhanced further when you store gold in countries outside of where you live and where there is no history of asset confiscation by government.
The above points explain why gold has value. Namely, it is useful in many different ways. But there is one last point worth mentioning.
>>Without the banking system, how are you going to determine how much your gold is worth?
While the future is unknowable and unpredictable, the probability of gold falling to $500 in 2010 is “slim to none”. The only way for gold to fall to that level would be for the purchasing power of the dollar to be significantly enhanced. In other words, instead of inflating the dollar, the US government would need to embark on a new monetary policy aimed at deflating the dollar, the result of which would be to enhance the dollar’s purchasing power, repeating the experience of the Great Depression. Monetary policy is aimed specifically at avoiding another deflationary Great Depression, so it is reasonable to expect that the dollar will continue to be inflated, meaning the price of gold will continue to rise.
>>I agree with this statement. However, even if gold goes down to $500, which it will because it is not tied to crude oil, you will not be able to buy the same amount of crude oil as when gold was $1000. As well, next year I will make the same amount of money I made this year. If I buy gold at $1000 and it goes to $500, I've lost $500. The $500 the gold is worth does not make me have to pay less at the grocery store or for auto gas. People pay attention to the price of gold because it is best to get in at a low price. Gold does not really "hold value" as the people trying to get us all to buy some would have us believe. Say I make $20K this year. Next year I make $20K. This year I buy gold at $900. Next year gold is at $500. Your theory doesn't hold water because I make the same amount of money next year as this year. But the gold has lost nearly half of its worth. Now, if I make $30K next year, meaning that $20K this year is worth $30K next year, then your theory would hold water, Mr. Turk
by James Turk >>
//////////////////////////////////
Almost nobody believes it.
I KNOW it.
SHORT more, on ANY strength.
so he can make clams for himself.
yawn. these "loonies" will say whatever it takes to make a buck.
yes he is educated but as you know, people who have a vested
interest in what they are spewing are never known to be the most
reliable unbiased un-emotional source of information on the subject.
edited to add: what i find interesting is that as the price goes up
people are willing to mine more and in less desirable places because
it is economical. 75% of the worlds gold is still in the ground. (percentage
i heard tossed around in several places). Once you hit 1000 dollar
gold for a few years straight every monkey's uncle will be digging it
out, increasing the supply and where does that lead eventually?
hmmm??
i like gold at 750-1000 price range. seems a fair price for one ounce
of the good stuff dug out of the ground and refined for your viewing
pleasure.
You can link to my "stats" link below to see John Williams monthly estimate of M3. The FED might not be publishing it but you can be sure they are still tracking it just as Mr. Williams is.
Manorcourtman, if you read my post I did include the possibility of gold falling under $900 as the FED and PPT have been pulling out new tricks and making up monetary law as they go...much of it illegal. It really matters little to me how we get back to $1000-$1200 only that we get there. My original post was accurate other than the current prices of the several gold miners mentioned. The financial system is bankrupt. It's only a matter of time before the public finds out there are no clothes on the FED or Treasury chiefs.
Once you hit 1000 dollar gold for a few years straight every monkey's uncle will be digging it
out, increasing the supply and where does that lead eventually?
Right now, those monkey's uncles are going broke trying to mine gold with ever increasing inflation (labor, fuel, material costs) not to mention geo-political and environmental risks in foreign lands. A good mine today is nationalized tommorrow. Sorry, Charlie...hand over the keys to your shaft. Junior miners and many mid-producers are not making much money as their costs skyrocket. Even at $1200 gold I suspect that increasing inflation will cut into their margins. Considering that it takes 5-10 years to bring a mine on-line, with the majority of new ones failing, the odds of seeing any appreciable new gold over $1000 is minimal. The ride from $260 to $980 gold resulted in a decline in production. It probably won't improve much unless gold goes $2000+.
roadrunner