Will Gold Prices Double Five Years from Now ?

[Larry1234 10]

Hi Folks,

 

This thread is created to discuss the expected value of gold 5 years down the line. I have got a very interesting questing on my mind so I have decided to share the same with you with the help TL.

 

Will gold prices double five years from now ? What do you think ?

 

Why? Shouldn't stocks be flying? Shouldn't gold be closing over $1,800...and on its way to the moon? This was on the day after the Fed announced recently the biggest program of money-printing ever undertaken by any government in history.

 

Forty billion dollars per month. Maybe forever. Or at least until the presidential election. If it continues, that's $480 billion per year. The Federal Reserve website shows current assets of $2.8 trillion. Add nearly $500 billion per year...and it will take scarcely 5 years to double the Fed's assets, which are the foundation of America's money supply.

 

So far, gold has tracked the increase in Fed assets. Broadly, both doubled over the last five years. Does this mean the price of gold will double five years from now?

[MightyMouse 12]

  Larry1234 said:

Hi Folks,

 

This thread is created to discuss the expected value of gold 5 years down the line. I have got a very interesting questing on my mind so I have decided to share the same with you with the help TL.

 

Will gold prices double five years from now ? What do you think ?

 

Why? Shouldn't stocks be flying? Shouldn't gold be closing over $1,800...and on its way to the moon? This was on the day after the Fed announced recently the biggest program of money-printing ever undertaken by any government in history.

 

Forty billion dollars per month. Maybe forever. Or at least until the presidential election. If it continues, that's $480 billion per year. The Federal Reserve website shows current assets of $2.8 trillion. Add nearly $500 billion per year...and it will take scarcely 5 years to double the Fed's assets, which are the foundation of America's money supply.

 

So far, gold has tracked the increase in Fed assets. Broadly, both doubled over the last five years. Does this mean the price of gold will double five years from now?

 

Everything seems to have tracked the increase in assets on the fed balance sheet. It is faulty reasoning to conclude that A went up because B went up and to then conclude that as long as A goes up, B will continue to go up.

 

Gold prices have been falling for 2 years. Assets on the fed balance have increased over the last 2 years and continue to increase. So, then, we can also make the faulty conclusion that sometimes increases in fed balance sheet assets increase the price of gold and sometimes it decreases the price of gold.

[Patuca 13]

In five years gold will probally be trading 3 times or more what it is now.

[Larry1234 10]

  MightyMouse said:

Everything seems to have tracked the increase in assets on the fed balance sheet. It is faulty reasoning to conclude that A went up because B went up and to then conclude that as long as A goes up, B will continue to go up.

 

Gold prices have been falling for 2 years. Assets on the fed balance have increased over the last 2 years and continue to increase. So, then, we can also make the faulty conclusion that sometimes increases in fed balance sheet assets increase the price of gold and sometimes it decreases the price of gold.

 

It is absolutely correct on your part that Gold prices have been falling for 2 years and at the same time Assets on the fed balance have increased over the last 2 years and continue to increase. But if you take the long term horizon (15 - 20 years), it can be easily concluded that there is a positive relationship between the Gold price and the assets on the Fed balance sheet. Whenever we try to find out the relationship, we always prefer to take the longer term horizon to reduce the impact of short term fluctuations.

[Larry1234 10]

  Patuca said:

In five years gold will probally be trading 3 times or more what it is now.

 

So you agree on my belief that increase in Fed assets will lead to increase in the gold price, may be double five years down the line.

[Patuca 13]

  Larry1234 said:

So you agree on my belief that increase in Fed assets will lead to increase in the gold price, may be double five years down the line.

as the fed "prints" or rather so called "creates" more money that will have a devaluation affect on the dollar thus leading to inflation at some point..(but temporarily a weak dollar stimulates the economy) nevertheless when inflation cranks up it takes more dollars to buy the same product..so, people hedge against inflation by buying gold....so, yes an increase in fed assets can lead to an increase in gold prices as people see inflation coming from too much dollar printing. So they hedge. However, when the fed thinks gold is getting out of hand and is going to drive folks away from the dollar then gold prices are manipulated down ( because gov needs investors to buy our debt) and shake out the investors and traders out of gold so they will see the dollar as the safe haven..this is what happened to gold and silver as i write.. Prices have been manipulated down by massive paper selling. And investors are flocking to the dollar thus it is gaining strenght. However, this cannot be allowed to continue too long either...so the dollar will be weakened in the near future by more asset buying (have to prop up the economy remember..). The asset buying fuels the stock market at the expense of coming inflation. But it is an artificial explosive growth not based on real growth. When the fed announced the tapering of QE it plunged the markets. However, gold and silver were manipulated down. So...what is going to happen?

 

Well the fed may or may not temporarily end QE but even if they do end it they will soon start it right back up BIGGER THAN IT WAS to fuel the economy again. Why? because they economy is sick..sick..and cannot stand on it's own. Then gold will take off again. This time around there may be no stopping of gold prices escalating. But even if gold does explode the banks are loaded with it as they are presently stocking up on gold during this manipulated down gold prices. So, they will come out smelling sweet..if they took advantage of the opportunity.. The fed is going to look out for the banks..count on that!

 

Why will QE continue or resume if stopped at all? I really suspect they won't stop it but will in fact increase it.. But, if they stop it they quickly resume it. Why? Because the economy is sick and has nothing real about it to indicate it can grow on its own. It is addicted to propping of by the Fed. Just the talk of ending Qe plunged the markets. Imagine what will happen when it really is ended.

 

The fed walks this tightrope of weaking the dollar to stimulate the economy..but not weakening too much to avoid driving too many investors out of the dollar into P.M. If they weaken the dollar too much the risk is finding people willing to buy our debt. If they make to too strong it kills the economy..gold was messing this tight rope walk up and shaking the cable so fed had no choice but to hope or somehow sort of ...well..make ....gold look weak and dollar strong or the cable would shake too much and whole thing would topple off into the grand canyon.......

 

Of course... this is my opinion and could be a load of B.S. which wouldn't surprise me in the least as i am a BS maker.

 

Bottom line when fed resume feeding the addiction in even greater quantities i.e. a bigger QE not a smaller QE.. Then gold will suddenly come to life and soar.. Mighty mouse you might want to consider having your golden golf club purchased by then...the smart banks will be set either way for they will have loaded up on gold because the chicken shit investors got it wrong again and have dumped gold and the strong hands are buying it.

 

Again, this is my bullshit opinion and it could be entirely wrong so do not count on it being right but it is my 2 pennies worth of BS...time will tell..you might want to bookmark this thread and my post:rofl: :rofl: :helloooo::applaud:

 

P.S. i did say the indices were soon going down..in the threads "gold price in 3 months" and in "need help on pattern expanding triangle thread". I said count on it heading south..soon.. Nobody said thank you patuca so i had to thank myself...ungrateful lot......:rofl: :rofl:

[Patuca 13]

  Larry1234 said:

So you agree on my belief that increase in Fed assets will lead to increase in the gold price, may be double five years down the line.

as the fed "prints" or rather so called "creates" more money that will have a devaluation affect on the dollar thus leading to inflation at some point..(but temporarily a weak dollar stimulates the economy) nevertheless when inflation cranks up it takes more dollars to buy the same product..so, people hedge against inflation by buying gold....so, yes an increase in fed assets can lead to an increase in gold prices as people see inflation coming from too much dollar printing. So they hedge. However, when the fed thinks gold is getting out of hand and is going to drive folks away from the dollar then gold prices are manipulated down ( because gov needs investors to buy our debt) and shake out the investors and traders out of gold so they will see the dollar as the safe haven..this is what happened to gold and silver as i write.. Prices have been manipulated down by massive paper selling. And investors are flocking to the dollar thus it is gaining strenght. However, this cannot be allowed to continue too long either...so the dollar will be weakened in the near future by more asset buying (have to prop up the economy remember..). The asset buying fuels the stock market at the expense of coming inflation. But it is an artificial explosive growth not based on real growth. When the fed announced the tapering of QE it plunged the markets. However, gold and silver were manipulated down. So...what is going to happen?

 

Well the fed may or may not temporarily end QE but even if they do end it they will soon start it right back up BIGGER THAN IT WAS to fuel the economy again. Why? because they economy is sick..sick..and cannot stand on it's own. Then gold will take off again. This time around there may be no stopping of gold prices escalating. But even if gold does explode the banks are loaded with it as they are presently stocking up on gold during this manipulated down gold prices. So, they will come out smelling sweet..if they took advantage of the opportunity.. The fed is going to look out for the banks..count on that!

 

Why will QE continue or resume if stopped at all? I really suspect they won't stop it but will in fact increase it.. But, if they stop it they quickly resume it. Why? Because the economy is sick and has nothing real about it to indicate it can grow on its own. It is addicted to propping of by the Fed. Just the talk of ending Qe plunged the markets. Imagine what will happen when it really is ended.

 

The fed walks this tightrope of weaking the dollar to stimulate the economy..but not weakening too much to avoid driving too many investors out of the dollar into P.M. If they weaken the dollar too much the risk is finding people willing to buy our debt. If they make to too strong it kills the economy..gold was messing this tight rope walk up and shaking the cable so fed had no choice but to hope or somehow sort of ...well..make ....gold look weak and dollar strong or the cable would shake too much and whole thing would topple off into the grand canyon.......

 

Of course... this is my opinion and could be a load of B.S. which wouldn't surprise me in the least as i am a BS maker.

 

Bottom line when fed resume feeding the addiction in even greater quantities i.e. a bigger QE not a smaller QE.. Then gold will suddenly come to life and soar.. Mighty mouse you might want to consider having your golden golf club purchased by then...the smart banks will be set either way for they will have loaded up on gold because the chicken shit investors got it wrong again and have dumped gold and the strong hands are buying it.

 

Again, this is my bullshit opinion and it could be entirely wrong so do not count on it being right but it is my 2 pennies worth of BS...time will tell..you might want to bookmark this thread and my post:rofl: :rofl: :helloooo::applaud:

 

P.S. i did say the indices were soon going down..in the threads "gold price in 3 months" and in "need help on pattern expanding triangle thread". I said count on it heading south..soon.. Nobody said thank you patuca so i had to thank myself...ungrateful lot......:rofl: :rofl:

[Larry1234 10]

  Patuca said:

as the fed "prints" or rather so called "creates" more money that will have a devaluation affect on the dollar thus leading to inflation at some point..

 

P.S. i did say the indices were soon going down..in the threads "gold price in 3 months" and in "need help on pattern expanding triangle thread". I said count on it heading south..soon.. Nobody said thank you patuca so i had to thank myself...ungrateful lot......:rofl: :rofl:

 

Thank You Patuca.

 

This seems to be a complete analysis on why an increase in Fed assets will lead to an increase in Gold price.

 

Probably this is the good time to make an investment in Gold and the time horizon for the same should be 5-6 years.

[Patuca 13]

  Larry1234 said:

Thank You Patuca.

 

This seems to be a complete analysis on why an increase in Fed assets will lead to an increase in Gold price.

 

Probably this is the good time to make an investment in Gold and the time horizon for the same should be 5-6 years.

thanks..

 

I can't think of a better time to buy physical gold ....price is low..my opinion

[SunTrader 10]

Think the thread should have been titled

 

Will Gold Prices Slice in Half from Alltime High set in Sept '11?

 

Looking more and more likely.

[Beansforme 10]

Forget opinions and just let price tell you which way it wants to go. Look at all the idiots they trot out on CNBC on a daily basis giving their opinions, and yet how poorly the mutual fund industry performs overall. No one knows the price of any instrument five years from now, or even five days from now, and you don't need to know to make money.

[bobcollett 10]

Hi Larry,

If you have to wait 5 years, who's paying the rent?

regards

bobc

[henry1000 10]

For most people buying gold as an investment or for speculation is a losing proposition if they have a short term get rich quick point of view. Gold is more of a long term store of value measured in years not weeks or months. Buying gold is a way of preserving your assets to protect your self from the effects of monetary inflation. Monetary inflation will drive the price of gold up over time just like it has in the past. The central banks will do every thing in their power to prevent deflation from happening which means the money supply will be increased at higher and higher rates. As confidence in the future purchasing power of their dollars declines faster and faster more and more people will turn to gold which has been a reliable store of value for several thousand years. How reliable a store of value is the dollar ?

 

The central banks can make as many dollars as they want with a few taps on their computer keyboards. Gold is not so easy to produce. Five years from now how much more gold will there be and how many more dollars will there be ? If you expect the number of dollars to be the same five years from now then gold will go no where. If you expect the economy to be significantly better five years from now and if you expect a better standard of living, high employment and much improved purchasing power of the dollar because the central banks’ QE programs were such a brilliant solution to our economic problems then the price of gold will be lower.

 

Diversifying at least some of your assets in to gold, preferably physical gold as opposed to a paper claim on gold would seem prudent given current economic conditions.

 

Some one said “The market can stay irrational longer than you can stay solvent.” What the central banks are doing to fix the economy is completely irrational and so the markets are following suit.

 

So where gold will be five years from now is any ones guess but I won't be placing any shorts on gold in the next five years.

 

Henry1000

Edited June 28, 2013 by henry1000

[Patuca 13]

  henry1000 said:

For most people buying gold as an investment or for speculation is a losing proposition if they have a short term get rich quick point of view. Gold is more of a long term store of value measured in years not weeks or months. Buying gold is a way of preserving your assets to protect your self from the effects of monetary inflation. Monetary inflation will drive the price of gold up over time just like it has in the past. The central banks will do every thing in their power to prevent deflation from happening which means the money supply will be increased at higher and higher rates. As confidence in the future purchasing power of their dollars declines faster and faster more and more people will turn to gold which has been a reliable store of value for several thousand years. How reliable a store of value is the dollar ?

 

The central banks can make as many dollars as they want with a few taps on their computer keyboards. Gold is not so easy to produce. Five years from now how much more gold will there be and how many more dollars will there be ? If you expect the number of dollars to be the same five years from now then gold will go no where. If you expect the economy to be significantly better five years from now and if you expect a better standard of living, high employment and much improved purchasing power of the dollar because the central banks’ QE programs were such a brilliant solution to our economic problems then the price of gold will be lower.

 

Diversifying at least some of your assets in to gold, preferably physical gold as opposed to a paper claim on gold would seem prudent given current economic conditions.

 

Some one said “The market can stay irrational longer than you can stay solvent.” What the central banks are doing to fix the economy is completely irrational and so the markets are following suit.

 

So where gold will be five years from now is any ones guess but I won't be placing any shorts on gold in the next five years.

 

Henry1000

Finally! Somebody that understands what will..shall...must..happen.

[Patuca 13]

  bobcollett said:

Hi Larry,

If you have to wait 5 years, who's paying the rent?

regards

bobc

you short paper gold:rofl::rofl::rofl: and go long physical gold:rofl::rofl: that way you make $ both ways!!! :missy: pay the rent with the paper shorts and buy the house in the future with the physical longs:helloooo:

[Patuca 13]

DOUBLE DOG WARNING! watch out for Mits over there on his "beyond taylor thread"..he is in a really bad mood.....

[bobcollett 10]

  Patuca said:

DOUBLE DOG WARNING! watch out for Mits over there on his "beyond taylor thread"..he is in a really bad mood.....

 

I saw, and hes got you associating with Mexican women :haha::haha::haha:

Well ,if you're a Mexican, thats normal.

[SIUYA 11]

Patucca - whats your view on the creation of paper money that was effectively a result of the excessive leverage from the banks etc; 2000-2007 (and still continuing....)

Given that its all just numbers in an account because the the nature of the fractional reserve banking system.....does it matter if the Fed creates it...or others create it?

[SunTrader 10]

  henry1000 said:

For most people buying gold as an investment or for speculation is a losing proposition if they have a short term get rich quick point of view......

 

 

So then I guess you are an investor and not a trader?

 

Or if you are a trader why treat Gold any different than any other market.

[MightyMouse 12]

  SIUYA said:

Patucca - whats your view on the creation of paper money that was effectively a result of the excessive leverage from the banks etc; 2000-2007 (and still continuing....)

Given that its all just numbers in an account because the the nature of the fractional reserve banking system.....does it matter if the Fed creates it...or others create it?

 

Thanks for adding confusion to an otherwise deterministic day.

[henry1000 10]

  SunTrader said:

So then I guess you are an investor and not a trader?

 

Or if you are a trader why treat Gold any different than any other market.

 

Hello SunTrader:

 

Traders can treat gold just like any other market. Regardless of what the the long term trend is there are certainly going to be tradeable moves in gold in both directions. And yes I am more of a long term investor in gold and not a trader.

 

Henry1000

[Patuca 13]

  bobcollett said:

I saw, and hes got you associating with Mexican women :haha::haha::haha:

Well ,if you're a Mexican, thats normal.

mr bob i am not mexican but have many mexican people i know....do you suppose mits does not like mexicans? Don't know many asians as don't travel that part of the world. Know many blacks, whites, north and central american indians...i was making remarks about harvard english...mits....well...pushed the envelope dragging race into it....at least it seems like it. Maybe he didn't mean it?? He tends to get upset and flies off the cuff from time to time i have noticed. Edited June 29, 2013 by Patuca

[Patuca 13]

  SIUYA said:

Patucca - whats your view on the creation of paper money that was effectively a result of the excessive leverage from the banks etc; 2000-2007 (and still continuing....)

Given that its all just numbers in an account because the the nature of the fractional reserve banking system.....does it matter if the Fed creates it...or others create it?

Um .. For one it will end in a devaluation of the said money. more dollars in an economy lessens the value of those dollars. simple supply and demand. Then you factor in peoples perception of value of a currency and that affects its purchasing power. all this results in inflation of goods and services...i.e. because the currency has less value it takes more to buy the same good or service...now, unless, i suppose, they just flip the computers off and make all these digital dollars ..disappear...thus taking them off the market :rofl: :rofl:

[bobcollett 10]

  Patuca said:

Um .. For one it will end in a devaluation of the said money. more dollars in an economy lessens the value of those dollars. simple supply and demand. Then you factor in peoples perception of value of a currency and that affects its purchasing power. all this results in inflation of goods and services...i.e. because the currency has less value it takes more to buy the same good or service...now, unless, i suppose, they just flip the computers off and make all these digital dollars ..disappear...thus taking them off the market :rofl: :rofl:

 

Hi Patuca

We are all importing deflation by buying cheaper and cheaper goods from Asia.

Cheaper goods improve our lifestyle but corrode our manufacturing jobs.

And it will get worse

The easiest way to raise GDP is to print more money, thus causing inflation.

The FED WANTS inflation.But everyone else caught up and inflation never happened

Now the FED has a new trick. .... a very strong dollar

The strong $ will increase the price of imports and maybe bring the jobs back home.

How they will ever pay off the debt is another story.Your idea of making the dollars disappear is not so far fetched.In 1932 Germany chopped off 9 didgets and saved their economy. The middle class lost everything so a little war was a nice distraction.

I think I will have to store some silver coins somewhere. :2c:

regards

bobc

[bobcollett 10]

Oh Dear

My analysis is wrong

A stronger dollar makes imports cheaper. More job losses.

So the strong dollar is not a FED initiative

Back to the drawing board

sorry.

bobc