Will Gold Prices Double Five Years from Now ?

[SIUYA 11]

The world has excess factory capacity.

 

All the major central banks are printing money

 

Many euro nations as well as China, and until recently the U.S., have excess residential housing stock.

 

And then on top of that most of the multinationals are flush with cash on their balance sheets.

 

 

So who is left for the banks to loan to?

 

:shrug:

 

this is an ongoing debate in central banks at present - is it a demand issue or a supply issue?

Re the multinationals being flush with cash - that just reinforces that money is inefficiently allocated due to taxation issues.....in other words cash is sucked out of the economy and not used - hence people who need cash cant get it and those who have it are either sitting on it or speculating in a search for higher yields.

I think only history will tell.....

However - if this is the case (trying to keep on topic) - whats the effect on gold?

 

With rising interest rates gold is even less attractive....especially if its a crowded trade.

The search for yield seems to be the order of the day at the moment.....another derivative bubble in the happening?

[henry1000 10]

There is nothing to see. We will both be right, but at different points.

 

But, for a bull market to end, there are certain characteristics that need to be present. They are not present in equities, but they are present in many of the commodities.

 

In order for a bear market to continue, there needs to be certain characteristics as well.

 

If one knows what he is doing, then he knows what those characteristics are in each case.

 

Hello MightyMouse:

 

What characteristics need to be present for the bull market in equities to end ?

 

Henry1000

[henry1000 10]

That is the point......you are back where you started....in other words is the Fed printing money or simply underwriting what was in the economy beforehand.

With the fractional reserve banking system being what it is......and the fact that Japan has tried to do the same, shows that simply transferring from businesses/private balance sheets to the Feds balance sheet does not mean that there will be rampant inflation.

 

All we every hear about is how the Fed is printing money and the effect it will have on inflation....and yet in this day and age - what is the difference between what we experienced with the banks creating and offering credit everywhere and everyone else for that matter when they offered credit to everyone and it was all money in digital form.

 

'Supposedly' people are finding it harder to get loans, businesses are struggling etc....because the banks are not lending to the real economy.....in other words. The reduction of any money previously supplied to the economy from the banks balance sheets has simply been transferred to the Feds balance sheet....hence no difference in the money in the economy - hence no real inflation from the evil Fed, hence one less reason for why gold 'must go up' as a lot of people claim.

 

Its simply looking a bit more at the assumption that people often make that the "fed is printing money we are all doomed".

(A bit like saying "A company is investing money - therefore it will make more money down the track" or "A company is laying people off, there will be no more jobs around again" - there are a lot of factors in play that can determine the outcome)

 

 

Hello SIUYA:

 

The statement

 

"The reduction of any money previously supplied to the economy from the banks balance sheets has simply been transferred to the Feds balance sheet....hence no difference in the money in the economy etc"

 

refers to the Fed replacing toxic assets on the banks balance sheets with TBills and thus saving the largest banks and hence no increase in the money supply in that sense. You can think of it as the Fed providing deposit insurance for the banks on the FED’s buddy list. So the rich banks get richer and the poorer banks go bankrupt, Can you say bank cartel.

 

See Failed Bank List

FDIC: Failed Bank List

 

 

But Bernanke's QE program is printing money at the rate of 85 billion dollars a month, that comes to over a trillion dollars a year. So the banks aren't lending the way Bernanke expected and QE is failing, and so again inflationary effects are not felt because the banks are sitting on the money afraid to lend. Maybe they don't see any good business loan opportunities out there.

 

But how long will the Fed let the banks just sit on all of this money piling in every month. Simple logic says they will eventually have to start loaning out all that money one way or another and then we will see the QE monetary inflation result in price inflation. If you know who, thinks it's ok to make every one in the United States pay for a health care plan whether they want to or not, what's to stop him from making the banks adopt a Fed loan care program. What else are the banks going to do with all that money, give it back ?

 

Just because there is a pause or correction in the bull market for gold does not mean gold is doomed to go down. Bernanke's perpetual QE program of monetary inflation will ultimately result in price inflation. Will we see hyperinflation as a result ? I don't believe so. In any case the long term trend is price inflation not deflation which means gold will go up.

 

Henry1000

[SunTrader 10]

Dropping $700 is a pause or correction?

[henry1000 10]

Dropping $700 is a pause or correction?

 

Hello SunTrader:

 

A $ 700 move is meaningless without any context. But if you look at the chart below

you can clearly see that gold is making a healthy correction. Nothing goes up forever with out making any corrections. Large impulse swings can have large corrective swings. Have we reached the end of the correction ? Possibly. I think gold will have a $ 700 move up before it has another $ 700 move down.

 

Henry1000

[SunTrader 10]

Well price can go up to infinity, but it can only go down to 0.

 

Do the math. $1200 minus another $700 equals panic for a lot of folks. Much more than we have seen already.

 

But keep in mind trend is determined by the timeframe you trade.

 

If you have been in a trade since Gold was $35/oz good for you.

 

If not it is not relevant.

 

Take a look at chart from when the most recent bull market - started Oct'08 and ended Sept'11 - and you plainly see it has retraced 61.8% of the move or more than 35% overall off the high price. Bear markets are anything more than 20%.

 

Perma bulls always have a hard time accepting reality.

 

That is why this downtrend has been so brutal and sustainable.

[henry1000 10]

Well price can go up to infinity, but it can only go down to 0.

 

Do the math. $1200 minus another $700 equals panic for a lot of folks. Much more than we have seen already.

 

But keep in mind trend is determined by the timeframe you trade.

 

If you have been in a trade since Gold was $35/oz good for you.

 

If not it is not relevant.

 

Take a look at chart from when the most recent bull market - started Oct'08 and ended Sept'11 - and you plainly see it has retraced 61.8% of the move or more than 35% overall off the high price. Bear markets are anything more than 20%.

 

Perma bulls always have a hard time accepting reality.

 

That is why this downtrend has been so brutal and sustainable.

 

Hello SunTrader:

 

When I bought or sold gold makes no difference as to what is relevant, the correction is clear on the chart I showed. On shorter time frames of course it would not necessarily be relevant.

 

If you want to start your chart at Oct'08, then you could also say Oct'08 to Sept'11 in Elliott terms was a wave 1 impulse wave and the 61.8% correction off the high is a typical wave 2 corrective swing and therefore does not constitute a bear market. In other words your chart, if that is all you want to look at, shows that we are still in a bull market not a bear market.

 

I never heard of the rule “Bear markets are anything more than 20% off the high”. Do you have a source ? Is 20% off the low a bull market ? I wonder then how do people analyse new stocks. A new stock could be switching from bear market to bull market pretty fast with that rule. Just wondering.

 

Being a Perma bull in any market can be problematic that's for sure.

 

This last move down looks to me more like a panic move down taking out a bunch of stops. The weak hands get shaken out and the strong hands move in. This fast move down is not sustainable and I would not be surprised to see gold turn up from here.

 

Henry1000

[bobcollett 10]

 

But how long will the Fed let the banks just sit on all of this money piling in every month. Simple logic says they will eventually have to start loaning out all that money one way or another and then we will see the QE monetary inflation result in price inflation.

 

Henry1000

 

Hi Henry

Where did you get this info. from.?

Google Goldman Sachs Financials

Cash and equivalent + money markets

2009 $22bil

2010 $56bil

2011 $12bil

2012 $6bil

Cash balances are getting smaller

The banks are not sitting on money. They are buying equities and it looks like they have NO money to loan.

Heres another anology The market had a big correction in 2010 .Cash went up. No bank buying.

Now go and google a British bank like Barclays and check their cash

Kind regards

bobc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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[henry1000 10]

Hi Henry

Where did you get this info. from.?

Google Goldman Sachs Financials

Cash and equivalent + money markets

2009 $22bil

2010 $56bil

2011 $12bil

2012 $6bil

Cash balances are getting smaller

The banks are not sitting on money. They are buying equities and it looks like they have NO money to loan.

Heres another anology The market had a big correction in 2010 .Cash went up. No bank buying.

Now go and google a British bank like Barclays and check their cash

Kind regards

bobc

 

Hello bobcollett:

 

There are lots of sources. It is widely known amongst the inner circle. Welcome to the inner circle.

 

Btw Bernanke is an idiot if he really thinks printing money will bring wealth and prosperity to America. I am just amazed that intelligent well educated people in the developed world believe this non sense.

 

And even if this were true:

“The banks are not sitting on money. They are buying equities and it looks like they have NO money to loan. ”

 

those stock holding would be assets which can be converted to money which can be loaned. Banks are not suppose to be stock funds. Sure doesn't sound like that was part of the plan that was explained in the QE promotional brochure I got the other day.

 

First a definition:

“Quantitative easing is a euphemism for an inflationary strategy of monetary policy pursued by central banks. The bank adds money to its balance sheet ex nihilo (out of nothing), and uses the new money to purchase government securities, thus increasing bank reserves, raising the prices of government securities, and lowering their interest rates. It is equivalent to simply printing additional legal tender.”

Quantitative easing - Mises Wiki

 

Here are a few sources:

 

The Federal Reserve vs. Widows

by Gary North

The Federal Reserve vs. Widows by Gary North

 

See this paragraph in the above source:

"Is this America's future? It could be. That decision is in the hands of commercial bankers for as long as the FED allows banks to pile up excess reserves at the FED. If the FED finally decides to place a penalty fee on excess reserves, the banks will lend, M1 will rise, the M1 money multiplier will rise, and prices will rise."

 

 

 

Massive Misconceptions About Where the Bernanke Fed's Money Explosion Went

by Robert Auerbach - Professor of Public Affairs, The University of Texas at Austin

Posted: 06/25/2013 12:47 pm

Robert Auerbach: Massive Misconceptions About Where the Bernanke Fed's Money Explosion Went

 

See above source:

"There is a massive misconception about where the Bernanke Fed's stimulus landed. Although the Bernanke Fed has disbursed $2.284 trillion in new money (the monetary base) since August 1, 2008, one month before the 2008 financial crisis, 81.5 percent now sits idle as excess reserves in private banks. "

 

 

QE4 Is Here: Bernanke Delivers $85B-A-Month Until Unemployment Falls Below 6.5%

12/12/2012 @ 12:48PM |36,646 views

QE4 Is Here: Bernanke Delivers $85B-A-Month Until Unemployment Falls Below 6.5% - Forbes

 

 

Excess Reserves of Depository Institutions (EXCRESNS)

Excess Reserves of Depository Institutions (EXCRESNS) - FRED - St. Louis Fed

 

 

Henry1000

[SIUYA 11]

so Henry - the question still remains.

What is the difference between the Fed printing it and the banks printing it when it comes to digital money?

regardless of where it goes.....

This is the point - on one hand we hear the banks are sitting on excess cash, on the other hand they are deficient in their capital ratios and dont have enough shareholder capital.....people cant make up their mind.

 

If the banks are reducing their balance sheets - because they effectively printed money in the past by using and offering more leverage then is there simply a transfer from the banks to the Feds balance sheet. ...and also that golds run was it merely catching up with previous inflation caused by this and any inflation that it lagged behind, when the banks printed the money during the 2000-2010 - helped with the fear buying of gold as well as the asset allocation decsions by funds to go to gold ETFs.

 

If so - at some stage if the Fed keeps buying, the balance tips, OR the banks start lending again - then there will be more inflation, and gold will likely rise again (no surprises there).....but gold will only rise relative to other currencies and if it holds its value just in regards inflation only then there is no real gain in real terms. You are just keeping up with inflation....because for many years gold has been a poor inflation hedge.

So if there is inflation gold will likely go up....so will any real asset.

If there is inflation and your wages go up in step with this, then cash is still ok.

 

This is always the dilema of many wealthy families - how to hang on to it. (I discount funds here as they have different incentives)

 

There real issue is how the Fed gets out of QE - how the banks take up the slack again and the effects on the economy......

BUT the point is - every gold bull blindly rattles off that QE is printing money, the Fed is going to cause inflation and we are all doomed......

 

The reality is so far, they have been wrong recently - gold has corrected, and even if they are right gold can be shown to be a poor reflection of inflation except over the very long term, making money is different to simply holding onto wealth and maybe, just maybe the assumption of money printing is completely incorrect.

 

Over the long run - gold will probably go up - but if you are a permanent bull or bear in anything you are simply deluding yourself that you are looking for reasons to justify your own beliefs as opposed to looking at what is happening.

 

Personally - I think gold was simply a crowded trade, it became 'over valued' as fear subsided and i hope it overshoots on the downside to create more opportunity.....what that downside is who knows? (note how i try not to worry too much about fundamental justifications )

[SIUYA 11]

slightly off topic - maybe - ....but here is a good description of what happens at a basic level regards banks, balance sheets, leverage and what they can and cannot and will try and get away with.....and why it is relevant to the ideas of inflation and the FED and banks printing digital money.

 

U.S. Should Show Some Ambition on Bank Leverage - Bloomberg

 

The banks probably are sitting on extra cash reserves because they should reduce their leverage....and contrary to popular opinion some of these things take years to reduce....

 

If my thoughts on printing digital money is right then the only reason why the fed is full of idiots is because they dont make money from their printing (or will they?), while the banks did....or does it means the banks are full of idiots as well because they simply printed money.....and blew up the economy before the Fed.....

 

So back to gold.....

maybe the banks should be forced to hold a certain percentage of real assets like gold.....maybe rather than central banks holding gold, investment/retail banks should.....??? silly.....or if you believe in manipulation you think they already do.

 

I still blame the accountants for the make believe creative accounting that plagues the world. :haha:

[SunTrader 10]

......

I never heard of the rule “Bear markets are anything more than 20% off the high”. Do you have a source ? Is 20% off the low a bull market ? I wonder then how do people analyse new stocks. A new stock could be switching from bear market to bull market pretty fast with that rule. Just wondering.

.......

 

Don't have time right now to go further into it but when I don't know something I google it:

 

Bear Market Definition | Investopedia

 

Definition of 'Bear Market'

A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Although figures can vary, for many, a downturn of 20\% or more in multiple broad market indexes, such as the Dow Jones Industrial Average (DJIA) or Standard & Poor's 500 Index (S&P 500), over at least a two-month period, is considered an entry into a bear market.

[MightyMouse 12]

Hello MightyMouse:

 

What characteristics need to be present for the bull market in equities to end ?

 

Henry1000

 

A long term direction ends when there is a lot of supply or a lot of demand. When there is a lot of supply, the market moves down until that supply is gone. The market moves up when there is a lot of demand. You need to develop tools to identify when either is present.

[henry1000 10]

so Henry - the question still remains.

What is the difference between the Fed printing it and the banks printing it when it comes to digital money?

regardless of where it goes.....

This is the point - on one hand we hear the banks are sitting on excess cash, on the other hand they are deficient in their capital ratios and dont have enough shareholder capital.....people cant make up their mind.

 

If the banks are reducing their balance sheets - because they effectively printed money in the past by using and offering more leverage then is there simply a transfer from the banks to the Feds balance sheet. ...and also that golds run was it merely catching up with previous inflation caused by this and any inflation that it lagged behind, when the banks printed the money during the 2000-2010 - helped with the fear buying of gold as well as the asset allocation decsions by funds to go to gold ETFs.

 

If so - at some stage if the Fed keeps buying, the balance tips, OR the banks start lending again - then there will be more inflation, and gold will likely rise again (no surprises there).....but gold will only rise relative to other currencies and if it holds its value just in regards inflation only then there is no real gain in real terms. You are just keeping up with inflation....because for many years gold has been a poor inflation hedge.

So if there is inflation gold will likely go up....so will any real asset.

If there is inflation and your wages go up in step with this, then cash is still ok.

 

This is always the dilema of many wealthy families - how to hang on to it. (I discount funds here as they have different incentives)

 

There real issue is how the Fed gets out of QE - how the banks take up the slack again and the effects on the economy......

BUT the point is - every gold bull blindly rattles off that QE is printing money, the Fed is going to cause inflation and we are all doomed......

 

The reality is so far, they have been wrong recently - gold has corrected, and even if they are right gold can be shown to be a poor reflection of inflation except over the very long term, making money is different to simply holding onto wealth and maybe, just maybe the assumption of money printing is completely incorrect.

 

Over the long run - gold will probably go up - but if you are a permanent bull or bear in anything you are simply deluding yourself that you are looking for reasons to justify your own beliefs as opposed to looking at what is happening.

 

Personally - I think gold was simply a crowded trade, it became 'over valued' as fear subsided and i hope it overshoots on the downside to create more opportunity.....what that downside is who knows? (note how i try not to worry too much about fundamental justifications )

 

Hello SIUYA:

 

“so Henry - the question still remains.”

 

Your post looks more like a 10 part question to me.

 

"What is the difference between the Fed printing it and the banks printing it when it comes to digital money? regardless of where it goes.....

This is the point - on one hand we hear the banks are sitting on excess cash, on the other hand they are deficient in their capital ratios and dont have enough shareholder capital.....people cant make up their mind."

...

 

I will try and answer the first part question even though I am not quite certain what you are really asking in the above line. What is the difference between paying cash and paying with a credit card. To the seller nothing really except an added charge from the credit card. And if you pay off your credit card in time it makes no difference to you. What if you pay online (digital money ?) instead of in person ? Money is money once it leaves the source. It is the same to the buyer or seller.

 

If you mean what is the difference between the way the Fed makes money out of thin air and the way the banks make money out of thin air. Then that is a different question. For the Fed it mainly has to do with writing checks for government IOUs like Treasury notes. The government issues a bunch of Treasury notes the Fed buys them by making some entries on a keyboard. The Fed does not have the money to buy these IOUs it simply creates it out of thin air. It then tells the government they have that amount of money in their account. The government can now spend it. This new money ultimately ends up in banks as deposits who because of the fractional reserve system can loan out some multiple of the new deposits of the new money and thus create money out of thin air in that way. If the Fed changes the reserve requirements of the banks they can change the amount by which banks can expand the money supply.

 

See

How the Fed Rules and Inflates

Mises Daily: Friday, December 14, 2012 by Murray N. Rothbard

https://mises.org/daily/6320/

 

A lot of the uncertainty in the economy is caused by the whole monetary system we have now which is inherently inflationary which creates economic inefficiencies by causing malinvestments.

 

 

"There real issue is how the Fed gets out of QE - how the banks take up the slack again and the effects on the economy......"

 

 

Do you mean how does Ben Bernanke get out of QE ? He should just quit. The whole philosophy of QE, namely printing money to stimulate the economy in to prosperity is brain dead and he should know better.

 

Why - see my post # 8 and # 13 at

Re: Will Quantitative Easing Be Japan's Savior?

http://www.traderslaboratory.com/forums/market-analysis/16222-will-quantitative-easing-japans-savior.html

 

please read the suggested reading list. Austrian economics, which is what the reading list is about will answer a lot of your questions.

 

Here are some more answers to the rest of your post:

 

Gold is a better inflation hedge than cash and I consider it mainly a store of value as I have said in my previous posts here.

 

And you are right being "a permanent bull or bear" is not a good idea.

 

Banks lending more or less in the past or future and why they will or will not or should. See my previous posts.

 

In another post you say:

"If my thoughts on printing digital money is right then the only reason why the fed is full of idiots is because they dont make money from their printing (or will they?), while the banks did....or does it means the banks are full of idiots as well because they simply printed money.....and blew up the economy before the Fed...."

 

Are you saying you don't know if the Fed "makes money from their printing". Of course they don’t make money from their printing, every one knows the Federal Reserve is a non profit organization, right up there with the Red Cross and the Salvation Army.

 

Just kidding. They collect interest on loans and charge for their services just like any other bank. But their customers are sitting at the front of the plane and so they get charged a little more for their first class service.

 

Calling the Fed idiots is not what I meant. What I meant is that if some one like Bernanke actually believes printing money will bring wealth and prosperity to America then he is an idiot. Why won't printing money make America great again. See the suggested reading material. The short answer is that in a free market people vote with their dollars, and industries grow and wither, start up and die accordingly. When the government injects stimulus money (monetary inflation) in to the economy this supply-demand relationship is distorted because the favored businesses that first received the stimulus money will now buy products and services that were not in demand before. This creates jobs but the jobs are artificially created. Once an injection of money has run its course the market seeks equilibrium, meaning that the market will try and reestablish the relative value of goods and services based on real supply and demand. But if the government sees a market sector or companies failing again and it decides it needs to be bailed out again it will take a larger injection of money to get the same effect. The short term result is more jobs for the people in those targeted businesses and less jobs in areas where there is real demand. So people's standard of living declines because there are less goods and services they would otherwise be receiving. And of course there is an inflation tax caused by all this new money which further erodes the cost of living.

 

This QE inflationary policy is more like Robin Hood in reverse. Those at the head of the money food line get richer. But it hurts the people on fixed incomes, the people who save money, and the poor who see the price of the basic necessities of life going up.

 

Are we doomed ? Yes but I expect it will be a slow death just like the way it is now. A continued decline in the standard of living, more government defaults, more unemployment, more hours of work for less pay, more states defaulting unable to pay their debts. See Detroit or Japan if you want a preview. Or move to Greece if you to see some real doom. And no I don't think the United States will end up as bad as Greece. After all we can create our money out of thin air, the Greeks can't.

 

Btw does any one knows where the nearest Kinkos is ? I want to print some money and stimulate the local economy.

 

Henry1000

[Larry1234 10]

Hello sergso:

 

I'm curious. What do you think could replace gold as an inflation hedge/safe haven soon ?

 

 

You can buy Treasury Inflation - Protected Securities (TIPS) to hedge the inflation.

 

For more info, check below link -

 

Treasury Inflation Protected Securities (TIPS) Definition | Investopedia

[SIUYA 11]

Hello SIUYA:

 

“so Henry - the question still remains.”

 

Your post looks more like a 10 part question to me.

 

"What is the difference between the Fed printing it and the banks printing it when it comes to digital money? regardless of where it goes.....

This is the point - on one hand we hear the banks are sitting on excess cash, on the other hand they are deficient in their capital ratios and dont have enough shareholder capital.....people cant make up their mind."

...

 

I will try and answer the first part question even though I am not quite certain what you are really asking in the above line. ...................

If you mean what is the difference between the way the Fed makes money out of thin air and the way the banks make money out of thin air. Then that is a different question.

 

Henry - the concept is fairly simple in relating it to this thread...its 1 q....but with lots of consequences.

 

Everyone blames the Fed for printing money - but - have the banks effecitively been doing the same thing independently for many years using credit and digital money?

 

Now if its simply that the banks are using less of it in the real world, the Fed is stepping in - and OVERALL there has been no net increase in the economy - hence the inflationary fears from gold bulls maybe unfounded. and the

 

..........

Does printing money by the Fed have the same inflationary effect as providing digital credit in the form of the derivatives markets that banks have been doing for years?

....................

Now extending from this

- if the Fed is idiotic, then that would make the banks also idiotic.

- printing money is bad, underwriting an economy and ensuring stability is that such a bad thing.

- getting hooked on the crack of stimulus is not great

- maybe the real cause of the problems is those who spend it - the politicians, those who vote them in and ask them to spend it - the people, and those who do everything to avoid helping pay for the spending - the companies - take this as my idiotic solution.

 

Simply parroting that the government should keep entirely out of the economy and using the Austrian economists arguments is old hat....and it does not answer the question I have.....you dont even seem to understand what question i am asking and then throw back a heap of information.....thanks for nuttin

 

....but back to gold.....

Edited July 2, 2013 by SIUYA

[Patuca 13]

light bulb time.....since the dollar is no longer pegged to gold instead of fed or treasury printing piles of money ...digital or otherwise ..and giving to the bankers who invest instead of loaning lets convince the gov to:

 

print 15 million for each citizen of the US and lets make them al kind of rich. they will spend this money on houses..cars...RV's..hotel..food...vacations...and many will invest in stocks...etc so the economy will be stimulated...somebody has to build all those house...cars...etc..jobs will be created...stocks will surge..remember the investments...and everyone will be happy. why give the printed..created money to the banks to make them richer..give it to the people and all will become richer.:helloooo:

[Patuca 13]

PS why should anyone work 8 hours per day for xx amount of dollars? lets vote to ban work only for american citizens.. and increase imports. then print money and helicopeter ben it out day and night to the american public...they just get up in the morning and gather the dollars up and race down to the stores which are run..owned..and staffed by foreigners since american citizens don't work...and buy the imported goods with helicopter ben dollars.

 

as the world sees this NEW and prosperous economic order they will become envious of the americans..as they already are anyway .... and say sh$t I too ain't working no mo. So the world will take to the streets and demand the american form of prosperity for their own country...gov's will be overthrown..the new world order will be set in place..no one will work and the world. finally we will al die..form diseases..no docs remember..from..lack of food ..no farmers remember...no cars..no oil or gas for cars..no clothes..so world is back to wearing fig leaves as nature rebels and continue to WORK producing goods...in the end nature survives and we humans disappear and the monkeys take over and we have The Planet of The Apes!!

 

all because we printed money...ungirded the economy..rewarded laziness..promoted dependence..on helicopter ben..and subsidized poverty..

 

have you ever noticed what ever the gov subsidizes simply INCREASES. LOL :rofl: :rofl: :rofl:

[Ammeo 10]

If we compare the gold liquidity and the stock market liquidity we will see that the same percentage price move in gold could be done with much smaller capital than the same move in the US stock market alone. The size of the gold market is probably 1% of US stock market and that is why I think this correlation is a bit speculative. There is much bigger correlations with national debt instruments like bonds and notes and the stock market, but not as much between stocks and commodities. All commodities including gold, even it is not only commodity but investment too are subjected to price fluctuation due to physical demand and supply and the China problems are real treat to them, but we will see how the situation will develop in the future.

[Ammeo 10]

Personally thinking 2015 and onwards are going to be the mean reversion (+/- inflation) years for Gold when it'll try to get back to the 1500+ region..

[Larry1234 10]

light bulb time.....since the dollar is no longer pegged to gold instead of fed or treasury printing piles of money ...digital or otherwise ..and giving to the bankers who invest instead of loaning lets convince the gov to:

 

print 15 million for each citizen of the US and lets make them al kind of rich. they will spend this money on houses..cars...RV's..hotel..food...vacations...and many will invest in stocks...etc so the economy will be stimulated...somebody has to build all those house...cars...etc..jobs will be created...stocks will surge..remember the investments...and everyone will be happy. why give the printed..created money to the banks to make them richer..give it to the people and all will become richer.:helloooo:

 

Did you mean FED should give loan directly to individuals ? very funny:confused::rofl:

[Larry1234 10]

IMO the second comings for Gold is gonna to be start soon.

 

Gold must be getting close to a bottom. No one has anything nice to say about it. The pundits and prognosticators are more pessimistic than in any time in recorded history. Gold miners are getting wiped out.

 

There's 'More Carnage Coming'. If you thought things have been ugly for gold, then you haven't paid attention to the gold miners, which have just been decimated.

 

As the price of gold declines further, gold will fall below the cost of production for these companies, resulting in years of negative cash flow.

 

Gold has declined by 37% from its highs in 2011. Therefore, I believe the myth that gold is a low risk "store of value" has been exposed for what it is to the latest generation of investors. Now, I fear that as understandably dissatisfied investors exit the market, selling could beget selling and send the gold price well below the cost of production. IMO this risk is not discounted in gold equities valuations. I believe an asset that declines by 37% in value doesn't qualify as a "safe haven" or "store of value." And, it never should have. Gold is a commodity whose price can rise or fall.

 

In conclusion, while I'd like to believe the carnage in the group is over. With short reserve lives, rising costs, rising political risks and a stagnant commodity price, I believe an argument could be made that gold equities should trade at valuation discounts to other resource equities. Instead, they continue to garner valuation premiums.

 

Surely, we must be getting close to a Second Coming...another great opportunity in gold.

[SunTrader 10]

Yes with each dollar lower we are getting closer to a bottom.

 

How close is anyone's best (or many times worst) guess.

[Ammeo 10]

Gold is precious and precious always is precious.. , it has to get to that 1500+ level if in a couple of years bt it should in a period of 5 years...what if someone invests a hundred thousand dollars today in it may take out half a million to a million in a 5 years time.....

[SIUYA 11]

Gold is precious and precious always is precious.. , it has to get to that 1500+ level if in a couple of years bt it should in a period of 5 years...what if someone invests a hundred thousand dollars today in it may take out half a million to a million in a 5 years time.....

 

riiiiiiiighttttttt, if i follow you correctly......so a price move from 1200 to 1500 while investing 100k will make 500k+

 

given that a 25% move will make 5x your money your leverage is what???

Approx 20x or 100k controls 2mil.

 

......and then tell us what price gold will be when your account is closed due to a margin call.......

approx 5% move down given you are 20x leveraged.

1200 to 1140 ----

 

so in other words your advice is to take a bet that gold will go to 1500 before it goes to 1140 because its 'has to' as gold is 'precious and precious is always precious'....thanks Lord of the rings.

 

.........I might be neither a gold bull or bear but this is crazy talk