<< <i>For gold the exact opposite is true: an advance in price makes supply contract
Antal is wrong. Higher prices give the mining companies incentive to dig (print) it out of the ground, thus increasing supplies. Is it not true that almost every ounce ever mined is still here? Supply has never decreased. >>
A rising gold price from 2001-2010 did little to nothing to increase the supply of gold coming out of the gold miners. Production has basically been flat over this period.
To get the same net gold as they did in 2001 the miners now have to dig twice as much ore which can nearly double the cost of mining. The miner's incentive to dig based on a high gold price is offset by numerous factors that weigh on the bottom line (geo-political risks/nationalization, currency risks, labor strikes, mine shutdowns, shortage of skilled labor, riots, environmental permit pulling, wars and insurrections, increasing royalties and taxes to jurisdications, rapidly decreasing ore grades, mining in unforgiving environments as 3 miles deep or 3 miles high, difficulty in bringing mines on line within budget and on time, to name just a few. If anything, the bigger miners are stepping away from costly projects which will reduce future supplies. They are starting to figure out that it makes more sense to efficiently mine what they have now. Some of the biggest scheduled projects are now 4-8 yrs or more from completion....assuming they ever get built. It would probably take an extended stay above $2,000/oz gold to change this current mindset.
Gold miners have clearly not taken advantage of the rising gold price of the past 10 yrs to increase production. For all intents and purposes the miner's momentum peaked in 2004 vs. gold and has been declining ever since. The one thing that the miner's lack of production gains guarantees is a much higher gold price down the road.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The question is not mining costs. The mines print more gold everyday. Supply is not decreasing. Feteke's analogy is the same as investors in Apple. As the price went up investors were less eager to sell. This does not make aaple shares money. Nor does a rising price make gold money. Gold can be a substitute for fiat money just as can be oil, labor, salt, or Apple shares. Gild is not magical, it does not have super powers. It is an asset that fluctuates in value due to human emotion.
all assets fluctuate in value due to human emotion. gold is magical, it has the ability to counter dollar destruction.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The gold miners continue to add to above ground supplies at approx 1.6%/yr.....while M2 increases at 8-10%/yr since 1995. One of these is somewhat in tune with national and world population growths....the other isn't.
Yes, miners have lost control of project costs....as they continue to parrot the party line of $600-$800/oz "cash" costs. As long as Central Banks keep gold in their vaults, and not shares of Apple, I'll call one of them money and the other just another paper speculation. An overlooked function of money is that it needs to be able to fully extinguish debts. FRN's only increase debt. They cannot reduce debt.
<< <i>all assets fluctuate in value due to human emotion. gold is magical, it has the ability to counter dollar destruction. >>
Then any asset is "magical", because they ALL also have the ability (not guarantee) to increase in value in dollar terms.
Gold had bad mojo magic 1980-82, and was a boring/tease for 20 years thereafter. There was dollar creation from 1982-2002, was there not?
So other factors must have come into play. Alternative assets performing better, so people sold/stayed out of gold. such are investor emotions.
there's a sense of "being right" that has been true for goldbugs for the past decade, but there is apparently a little frustration the past 2 years that everyone else doesn't "get it"
<< <i>all assets fluctuate in value due to human emotion. gold is magical, it has the ability to counter dollar destruction. >>
Then any asset is "magical", because they ALL also have the ability (not guarantee) to increase in value in dollar terms.
Gold had bad mojo magic 1980-82, and was a boring/tease for 20 years thereafter. There was dollar creation from 1982-2002, was there not?
So other factors must have come into play. Alternative assets performing better, so people sold/stayed out of gold. such are investor emotions.
there's a sense of "being right" that has been true for goldbugs for the past decade, but there is apparently a little frustration the past 2 years that everyone else doesn't "get it"
maybe pray harder >>
ability to increase in value and ability to counter dollar destruction are not the same thing. this is what sets gold apart from other assets.
I pray that those that don't realize this learn to do so.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Its very intermixed eh, depending upon the individual and point of view and what one does with it and how they dispose of it?
I had the feeling when I'm buying at a great price on an unusual dip like when it was in the 1500's, that I'm making an investment. Buying at a higher price like the $1750's feels like its a hedge and stacking. Buying at today's price, I have mixed feelings. If tracking each buy to the end sale, I may look at it differently at that time. Its hard for me to keep the concept separated on each coin thrown in the safety deposit box. If I had bought 5 years ago, I would now be thinking of those buys as a good investment. Yet the stacking overall gives me a better feeling of security.
Also, I know silver is still a slightly different animal, but my mixed feelings above apply there too.
<< <i>ability to increase in value and ability to counter dollar destruction are not the same thing. this is what sets gold apart from other assets. I pray that those that don't realize this learn to do so. >>
I had the feeling when I'm buying at a great price on an unusual dip like when it was in the 1500's, that I'm making an investment. Buying at a higher price like the $1750's feels like its a hedge and stacking. Buying at today's price, I have mixed feelings. If tracking each buy to the end sale, I may look at it differently at that time. Its hard for me to keep the concept separated on each coin thrown in the safety deposit box. If I had bought 5 years ago, I would now be thinking of those buys as a good investment. Yet the stacking overall gives me a better feeling of security.
Also, I know silver is still a slightly different animal, but my mixed feelings above apply there too.
I understand how one's cost basis affect's one's perspective. That's normal. Still, whether pms are an investment or a hedge doesn't really depend on your cost basis. pms are both an investment and a hedge, and this is more a function of practical usage than it is of cost basis.
To those who might say that pms don't generate the same type of economic activity as investing in a company and therefore are not an investment, I say "balderash". The capital that gets put into pms indeed came from economic activity, and pms are being used to store or protect that original capital.
This is especially important in this type of economic & political environment. While stocks are benefiting very well from fiat money creation and fractional reserve banking, the main difference is that the value of physical metal can't be vaporized like paper can be destroyed by fraud, sovereign default risk and counterparty risk from highly-leveraged financial derivatives in the banking system.
Q: Are You Printing Money? Bernanke: Not Literally
Gold has stood the test of time as a store of value. Even in the Bible, the calf was not made of salt, copper, rice, etc. These other things are important, but gold is money. Gold would still be money, but governments had to inflate after WWI and once they got started they could not break the habit. The US lasted until 1933, longer than the others.
ability to increase in value and ability to counter dollar destruction are not the same thing. this is what sets gold apart from other assets
Was not the dollar destroyed from 1983 to 2000? If so, then did gold counter this destruction? How about real estate during this time period? Or stocks? Or oil?
<< <i>ability to increase in value and ability to counter dollar destruction are not the same thing. this is what sets gold apart from other assets
Was not the dollar destroyed from 1983 to 2000? If so, then did gold counter this destruction? How about real estate during this time period? Or stocks? Or oil? >>
Is gold not countering dollar destruction? Are holders of gold not protecting the value of their holdings? It's quite simple - follow the central bank yellow brick road.
For the gold naysayers and their followers: markets are cyclical - eventually, like all market prognosticators, you will be right and you will be able to say "told you so" - but for now, you are wrong. Now is what matters for those whose dollars are being destroyed. Until unprecedented debt is disposed of properly the correct path remains to be the yellow brick road.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
also, not sure the expression "follow the yellow brick road" conjures up a comforting image or association for most people. Best not repeat it too much, lest someone whisk away the curtain and expose the fellow pushing the buttons and pulling the levers and ask, "why is he So insistent that I buy gold that he is selling?"
Gold is not the only thing. . .silver and platinum look promising as well. I consider most everything else to fall into the "Bernanke Bear Trap" class of assets.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Comments
And labor became money in the 2000s as unemployment was low and wages increased?
Knowledge is the enemy of fear
<< <i>For gold the exact opposite is true: an advance in price makes supply contract
Antal is wrong. Higher prices give the mining companies incentive to dig (print) it out of the ground, thus increasing supplies. Is it not true that almost every ounce ever mined is still here? Supply has never decreased. >>
A rising gold price from 2001-2010 did little to nothing to increase the supply of gold coming out of the gold miners. Production has basically been flat over this period.
To get the same net gold as they did in 2001 the miners now have to dig twice as much ore which can nearly double the cost of mining. The miner's incentive to dig based on a high gold
price is offset by numerous factors that weigh on the bottom line (geo-political risks/nationalization, currency risks, labor strikes, mine shutdowns, shortage of skilled labor, riots,
environmental permit pulling, wars and insurrections, increasing royalties and taxes to jurisdications, rapidly decreasing ore grades, mining in unforgiving environments as 3 miles deep
or 3 miles high, difficulty in bringing mines on line within budget and on time, to name just a few. If anything, the bigger miners are stepping away from costly projects which will
reduce future supplies. They are starting to figure out that it makes more sense to efficiently mine what they have now. Some of the biggest scheduled projects are now 4-8 yrs or more
from completion....assuming they ever get built. It would probably take an extended stay above $2,000/oz gold to change this current mindset.
Gold miners have clearly not taken advantage of the rising gold price of the past 10 yrs to increase production. For all intents and purposes the miner's momentum peaked in 2004 vs.
gold and has been declining ever since. The one thing that the miner's lack of production gains guarantees is a much higher gold price down the road.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
One of these is somewhat in tune with national and world population growths....the other isn't.
Yes, miners have lost control of project costs....as they continue to parrot the party line of $600-$800/oz "cash" costs.
As long as Central Banks keep gold in their vaults, and not shares of Apple, I'll call one of them money and the other just another paper speculation.
An overlooked function of money is that it needs to be able to fully extinguish debts. FRN's only increase debt. They cannot reduce debt.
<< <i>all assets fluctuate in value due to human emotion. gold is magical, it has the ability to counter dollar destruction. >>
Then any asset is "magical", because they ALL also have the ability (not guarantee) to increase in value in dollar terms.
Gold had bad mojo magic 1980-82, and was a boring/tease for 20 years thereafter. There was dollar creation from 1982-2002, was there not?
So other factors must have come into play. Alternative assets performing better, so people sold/stayed out of gold. such are investor emotions.
there's a sense of "being right" that has been true for goldbugs for the past decade, but there is apparently a little frustration the past 2 years that everyone else doesn't "get it"
maybe pray harder
Liberty: Parent of Science & Industry
<< <i>
<< <i>all assets fluctuate in value due to human emotion. gold is magical, it has the ability to counter dollar destruction. >>
Then any asset is "magical", because they ALL also have the ability (not guarantee) to increase in value in dollar terms.
Gold had bad mojo magic 1980-82, and was a boring/tease for 20 years thereafter. There was dollar creation from 1982-2002, was there not?
So other factors must have come into play. Alternative assets performing better, so people sold/stayed out of gold. such are investor emotions.
there's a sense of "being right" that has been true for goldbugs for the past decade, but there is apparently a little frustration the past 2 years that everyone else doesn't "get it"
maybe pray harder
ability to increase in value and ability to counter dollar destruction are not the same thing. this is what sets gold apart from other assets.
I pray that those that don't realize this learn to do so.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I had the feeling when I'm buying at a great price on an unusual dip like when it was in the 1500's, that I'm making an investment.
Buying at a higher price like the $1750's feels like its a hedge and stacking.
Buying at today's price, I have mixed feelings.
If tracking each buy to the end sale, I may look at it differently at that time. Its hard for me to keep the concept separated on each coin thrown in the safety deposit box. If I had bought 5 years ago, I would now be thinking of those buys as a good investment. Yet the stacking overall gives me a better feeling of security.
Also, I know silver is still a slightly different animal, but my mixed feelings above apply there too.
<< <i>ability to increase in value and ability to counter dollar destruction are not the same thing. this is what sets gold apart from other assets.
I pray that those that don't realize this learn to do so.
Buying at a higher price like the $1750's feels like its a hedge and stacking.
Buying at today's price, I have mixed feelings.
If tracking each buy to the end sale, I may look at it differently at that time. Its hard for me to keep the concept separated on each coin thrown in the safety deposit box. If I had bought 5 years ago, I would now be thinking of those buys as a good investment. Yet the stacking overall gives me a better feeling of security.
Also, I know silver is still a slightly different animal, but my mixed feelings above apply there too.
I understand how one's cost basis affect's one's perspective. That's normal. Still, whether pms are an investment or a hedge doesn't really depend on your cost basis. pms are both an investment and a hedge, and this is more a function of practical usage than it is of cost basis.
To those who might say that pms don't generate the same type of economic activity as investing in a company and therefore are not an investment, I say "balderash". The capital that gets put into pms indeed came from economic activity, and pms are being used to store or protect that original capital.
This is especially important in this type of economic & political environment. While stocks are benefiting very well from fiat money creation and fractional reserve banking, the main difference is that the value of physical metal can't be vaporized like paper can be destroyed by fraud, sovereign default risk and counterparty risk from highly-leveraged financial derivatives in the banking system.
I knew it would happen.
These other things are important, but gold is money. Gold would still be money, but governments had to inflate after WWI and
once they got started they could not break the habit. The US lasted until 1933, longer than the others.
Was not the dollar destroyed from 1983 to 2000? If so, then did gold counter this destruction? How about real estate during this time period? Or stocks? Or oil?
Knowledge is the enemy of fear
Liberty: Parent of Science & Industry
<< <i>ability to increase in value and ability to counter dollar destruction are not the same thing. this is what sets gold apart from other assets
Was not the dollar destroyed from 1983 to 2000? If so, then did gold counter this destruction? How about real estate during this time period? Or stocks? Or oil? >>
Is gold not countering dollar destruction? Are holders of gold not protecting the value of their holdings?
It's quite simple - follow the central bank yellow brick road.
For the gold naysayers and their followers: markets are cyclical - eventually, like all market prognosticators, you will be right and you will be able to say "told you so" - but for now, you are wrong. Now is what matters for those whose dollars are being destroyed. Until unprecedented debt is disposed of properly the correct path remains to be the yellow brick road.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
how about two years from today? five? ten? What if gold goes down to $1400 and an alternative doubles?
No one is saying gold is not a thing. But rational people will admit it is not the ONLY thing.
Liberty: Parent of Science & Industry
Liberty: Parent of Science & Industry
<< <i>So, if one year from today gold is $1670 (unchanged from today) while an alternative store of wealth is up say 10%, you will still be "right"?
how about two years from today? five? ten? What if gold goes down to $1400 and an alternative doubles? >>
What if a frog had wings? My ifs are still pointing to PMs.
<< <i>No one is saying gold is not a thing. But rational people will admit it is not the ONLY thing. >>
I'll bet all the rational people here would disagree with you immediately
Gold is not the only thing. . .silver and platinum look promising as well. I consider most everything else to fall into the "Bernanke Bear Trap" class of assets.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
it does?
Liberty: Parent of Science & Industry
I think thats called rigor mortis.
Knowledge is the enemy of fear