Posted on 04/19/2006 11:08:46 AM PDT by Jim Verdolini
I believe you, I believe you.
Again, I'm not saying that will happen. Those were extreme examples, but it's the same principle with any level of inflation. Someone asked the question why and I over boiled the answer. Keynesian economics tends to devalue the $ over time and gold retains it's value in relation to the devaluation as does housing and real estate (usually).
Why? And who has enough to sell to drive the price back down to $500?
"What do you think will happen to the price of gold when there are more sellers trying to cash in than there are sellers willing to buy?"
Why do you think people will not buy? Have they ever not bought?
"Why? And who has enough to sell to drive the price back down to $500?"
So I can afford to buy. At over $600 the actual amount of gold I can buy is less than at $500. It is simply wishful thinking.
I was reading - that with all the gold ever mined *there is 2/3 oz per person. If everyone in the *united states wanted to own 1 oz, it would take almost 4 years of total world production to meet the demand. *More steel is poured in one hour that all the gold ever mined.
Because I was refering to the situation described by you and others when people buy gold today as an insurance policy against severe economic difficulties, if not economic chaos, such as the hyper-deflation that occurred in Germany during the early 1930's. If the people, like yourself, who have already brought gold as an insurance policy start cashing in their stash with dealers and jewelers, as you have described, then the price for the gold is going to nose dive unless there are sufficient buyers to boost the price or at least keep it stable. But what makes you think there will be enough people during times of severe economic crisis who will have spare cash on hand to buy gold? If there are lots of sellers cashing in on their "gold insurance policy," but very few buyers, then the price of gold will head south.
Because there are always the rich. No matter how bad things get someone always rises to the top and begins grabbing stuff. Even the commies had their elites and those elites had resources.
As far as I know there has never been an economic disaster in which gold and silver were not in high demand.
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