Why gold could hit $5,000
llafoe
Posts: 7,220 ✭✭
On MSN Money... Just think how much those circulated St Gaudens will sell for... 
Why gold could hit $5,000
Why gold could hit $5,000
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Wrong forum btw.
<< <i>I predict that gold will indeed one day hit $5,000 per ounce. >>
I agree. With Asian communities getting wealthier, their demand for gold is only going to rise. The Indians are notorious gold hoarders and Chinese have similar interests in the precious metal. Back when I lived in Boston and was going to the Bay State coins shows, the Chinese ladies from China town would flock to that show to buy gold coins. For some dealers their purchases made up often made up a substantial portion of their sales at the show, and those dealers looked forward to seeing them, usually on Saturday morning.
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Same trend for a long time now.
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<< <i>Actually gold prices will stay about the same a always, just the doller will buy less of it.
Same trend for a long time now.
You have a point. At the Baltimore show one of my dealer friends said, "Gold has not been going up; it's just keeping pace with the decline in the value of the dollar."
BTW, I have gold, but don't care.
Your friend may want to recheck his math. The dollar index has fallen from a peak of 121 back in 2001 to the current value of 74......39% drop.
Gold in that time has increased form $255 to $1519.........a 6 fold increase. Clearly, much more at work here than the published price of the dollar.
Even since the end of January, gold is up 16% and dollar down 6%. What gold really responds to are net interest rates and total sovereign debt.
The dollar is more a side show because it merely reflects the average price of other depreciating fiat currencies that aren't backed by anything but faith.
The dollar index could stay here at 74 as every currency in the index loses 10% per year for the next 5 yrs. The index would never change....the purchasing
power of that dollar certainly would as well as the price of gold.
Gold at $5,000 in 20-50 yrs is one thing. Gold at $5,000 in 3 to 7 yrs is entirely different.
In any case, at $5,000 gold, circ $20 Saints would probably be selling for $4850 each.
roadrunner
<< <i>Just like the Dow will hit 30,000... it's just a matter of time. Whether it's 5 years or 50 years, it's going to happen.
- Ian >>
exactly
<< <i>Yes, it scares me when there's talk about gold $5,000. It was late 90's that talk of DOW 30,000 started popping up... >>
If you put your savings in gold and not dollars the fear somehow disappears.
<< <i>Actually gold prices will stay about the same a always, just the doller will buy less of it.
Same trend for a long time now.
You have a point. At the Baltimore show one of my dealer friends said, "Gold has not been going up; it's just keeping pace with the decline in the value of the dollar." >>
Gold value will stay about the same. The fact that it takes more dollars to buy it means the price is going up. With a devaluing dollar Gold value doesn't go up, Gold prices go up.
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<< <i>Why care? I mean really.
BTW, I have gold, but don't care. >>
Gold goes up because the value of the dollar goes down.
The reason people should care is because most people are on a fixed income that does not match the true rate of inflation which is climbing exponentially.
There will be $7 a gallon for gas and the price of EVERYTHING will climb and most people's pay check will not keep up.
Gold and silver will at least help you keep some of your wealth now.
The good part is you'll be easily able to pay off your credit cards and loans with cheap dollars in the future. LOL, so it's not all bad.
<< <i>Gold is the unchanging standard of value. Fiat currencies rise and fall. >>
Precisely. Wait til the price of gas catches up to the three silver dimes value - the range it has historically been in for over 90 years. $9 a gallon gas anyone?
And yes the great majority of the time gasoline prices are in concert with PM's.
<< <i>
The good part is you'll be easily able to pay off your credit cards and loans with cheap dollars in the future. LOL, so it's not all bad. >>
Not if you do not have insurance in the form of PM's. Your wages are sure not going to keep up with inflation - a lot of people are going to be in for a real sticker shocker come this summer with food prices.
<< <i>
<< <i>
The good part is you'll be easily able to pay off your credit cards and loans with cheap dollars in the future. LOL, so it's not all bad. >>
Not if you do not have insurance in the form of PM's. Your wages are sure not going to keep up with inflation - a lot of people are going to be in for a real sticker shocker come this summer with food prices. >>
Here's an example.
You go into debt for say $100k. Maybe you buy gold, or a house or some real assets.
The dollar goes into an exponential fall (inflation takes off like a rocket.)
That $100k in the future will be like $1 now. You sell something like one of your low end widgets or some piece of junk laying around your house on e-bay and pay off that debt.
Sounds insane but I don't know why it wouldn't work with exponential dollar collapse. There will probably be a short time where this window would be open for people to do this before they move to a global currency and save the money lenders.
From what I hear, the dollar will be dead by the end of 2012. Who knows the exact date but it's unavoidable with the current money system that the demise will happen and $5000 gold is just an indicator.