Keep telling yourself that.
Posted on 09/19/2005 9:45:28 AM PDT by AdamSelene235
SAN FRANCISCO (AFX) -- Gold futures climbed to a high of $472.40 an ounce, a level not seen since 1988, according to monthly charts. December gold was last at $471.10, up $7.80, or 1.7%. Prices found support as rallying energy prices sparked worries over inflation
This story was supplied by MarketWatch. For further information see www.marketwatch.com
If you don't like gold you prefer ... the magic machinations of the mysterious Federal Reserve Board of Governors?
Central bankers are not infalable. Vis: 1929. Lots of smart indivduals out-thought the Fed then, and lots will do it again now. Arguably anyone who bought gold at $400-$440 has out thought the Fed this week.
I'm sure they are quite aware of the problem. Happily I don't have a billion angry peasants who are waiting to kick my butt in the event an export based economy goes tits up.
They're all being fooled into losing huge amounts of money by purchasing our debt?
They have decided the costs of maintaining the status quo are lower than the transition costs of leaving a dollar based global economy.
Does this mean gold reserves are feared declining and/or refineries are max'ed out at peak production?
It's Bush's fault.
And arguably not even before the 1933 confiscation as we had a gold exchange standard not a gold standard. It was mostly used for settlements between nations. And if imbalances grew too large, well then, it was poor form to ask for bullion.
The local Fed Bank has closed their lobby to mere citizens. You can't even go buy their paper from them anymore.
Never said they were. The bond market however, is smarter than all of them and will accurately determine what is truly going on in the economy. T-bills at 4.2% says inflation is tame. The fact that 30-year mortgages remain at around 6% means that the future expectation of inflation is very low as well.
Arguably anyone who bought gold at $400-$440 has out thought the Fed this week.
Yeah, and the gold bugs who told me to buy the metal in 1980 are still sucking wind. Since then, the value of Gold has declined more than 50% while the S&P has increased more than 900%, not counting dividends. Can't get any of those with the yellow metal.
Like I said, those people who know the real rate of inflation, and can outsmart all the smart people who buy and sell bonds, should all be incredibly wealthy individuals indeed.
It depends how large your position was. If you were the Bank of the US asking for payment from the Bank of the UK you might find yourself pressured to reconsider.
Try The History of Money and Banking by Rothbard.
The money game is ALWAYS ALWAYS rigged. After all, there is infinite incentive to do so.
Yeah, the bond market thinks Fannie Mae is safe despite the fact they are incapable of stating their earnings for, oh, the last 5 years.
Since when has China ever been concerned about angry peasants? I suppose if they really cared about what their people think, they'd do something to correct their looming banking meltdown before it results in huge losses for large numbers of their population.
What's Japan's reason for losing huge sums of wealth buying our debt instruments? How about the Caribbean banking centers?, Korea?, OPEC?, Germany?, Taiwan?
They have decided the costs of maintaining the status quo are lower than the transition costs of leaving a dollar based global economy,
You don't think China has designs on establishing the Yuan as a currency of influence in Asia? Their recent conversion to a "basket" of currencies has put that process in motion. The Islamic Development Bank long ago said they wanted to supplant the dollar for oil exchange as early as 2006.
Keep telling yourself that.
I have seen angry Chinese mobs forcibly remove tax collectors from their markets. They are concerned.
I suppose if they really cared about what their people think, they'd do something to correct their looming banking meltdown before it results in huge losses for large numbers of their population.
Central Planners have an impossible task. That's why I don't trust their judgements of interest rates.
What's Japan's reason for losing huge sums of wealth buying our debt instruments?
Propping up the only healthy part of their economy, the export sector.
How about the Caribbean banking centers?, Korea?, OPEC?, Germany?, Taiwan?
Korea is heading for the door.
You don't think China has designs on establishing the Yuan as a currency of influence in Asia? Their recent conversion to a "basket" of currencies has put that process in motion.
Bout time.
The Islamic Development Bank long ago said they wanted to supplant the dollar for oil exchange as early as 2006.
Right, with the Islamic Gold Dinar.
Timing is everything. It's what separates you from Jesse Livermore, for example.
WOW!!!!!!!!!!
The question isn't whether gold is a better growth investment than the highest flying stock you can think of, or even of the Dow over a long period of time.
The question is whether it holds it's value better than fiat currency. The example above shows it does.
BTW: The above example assume zero nuministic value for the gold currency.
Gold refineries are running at about 1/3 production capacity currently. Known reserves are growing year over year and quite adequate, and the "whisper numbers" for the real reserves (as opposed to published reserves) are an integer factor larger than published. The cost of producing an ounce of gold is falling year over year in current dollars.
An interesting fact is that a very significant chunk of gold mining production in a given year does not come from published reserves. In a nutshell, there is no shortage in supply or refinery capacity, and the reserves are significantly understated. There will be no real gold shortage for the foreseeable future.
And this differs from paper currency (or account balances at a bank) in some way?
Here's the difference: Price is a function of supply versus demand. Increasing the supply of gold takes a lot of resources; increasing the supply of fiat currency requires a few keystrokes at a computer console. That makes gold a far better store of value, and far better unit of account, and a far better way for price to serve as the signalling mechanism in a free market economy. Why? Because value is determined by the marginal utility of adding or removing one more unit of whatever is being priced (which is why air is essentially free, and gold isn't, even though you can't live without air for more than a few minutes, but can live a whole lifetime without gold.)
Funny, that means its been less than that since 1988... yea, nows the time to buy.... NOT.
"nuministic"
Numinosity is symbolic representation, which would be more representative of a fiat currency, rather than a gold-backed currency. Are you sure you don't mean numismatic?
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