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Outdoorsman and Hunter
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I came across an article in the WSJ today discussing that the price of gold, which just reached a new record of over $1,600 per ounce isn't done yet and probably won't be for a long time. Here is a link to the article, but I am not sure you will be able to access it without an online subscription, but give it a try...

http://online.wsj.com/article/SB10001424053111904233404576458491177513486.html?mod=WSJ_hpp_sections_personalfinance&_nocache=1311438196689&mg=com-wsj

If it doesn't work here are the main points of the article...

  1. China, India and Asia both have inflation problems and are using gold to hedge against inflation. Those areas have accounted for 58% of the purchases in worldwide in the 1st quarter.

  2. Serious uncertainty in both in the U.S. and Europe for years to come have people betting the value of the dollar (Euro) will be shrinking and hence or hedging with gold.

  3. Because of points 1 & 2 you have large amounts of speculators who are in the market driving the cost up even farther.

The article basically said none of these factors are likely to go away anytime soon so gold is going to continue to rise. One very important thing I read in the article...

Basically this is saying when you see people stop using gold like it is real money (which it is) and start treating it like a simple commodity again to be used in production that the run up and possibly reduction in the price of gold is imminent.

My question, does anyone really see the attitude of people NOT treating gold like the real money it is going away...ever again?
 

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Maximus
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Basically this is saying when you see people stop using gold like it is real money (which it is) and start treating it like a simple commodity again to be used in production that the run up and possibly reduction in the price of gold is imminent.

My question, does anyone really see the attitude of people NOT treating gold like the real money it is going away...ever again?
I am a complete gold-bug. I love the stuff. I think that gold is a good measure for trade also. But I will be honest here. I feel that what the article says is true. Gold (like oil and silver) is "Run up" at the moment. I am also sure that the current "price" of gold is imminently going to fall. Now by how much... that is the question.

Now as to your question... the people having the attitude of "gold being treated like real money" has ALWAYS been there. It is the AMOUNT/PERCENTAGE of people that feel that way that is in question. As gold goes up in price and economy does worse, this percentage will continue to rise. But as gold falls in price, you will see this feeling go downwards. So when the gold mini-bubble breaks... you will loose a lot of people using gold as a measure of trade. Now this can take 1-20 years... who knows. There will always be people who will use it though.
 

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Semper Fi
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My thinking is that there's no such thing as a gold bubble. Not in physical gold anyway. Since gold is traded in dollar amounts world wide, if we continue to increase the dollar supply(inflation/devaluing currency) by monetizing debt via the federal reserve, there's going to be very little TPTB can do to control the price of gold. So what I'm saying is there's nowhere but up to go for the price of gold unless the government makes it illegal to own.

Of course I'm no professional. Below is a pretty good article on the topic, though.

http://endoftheamericandream.com/ar...-high-is-that-going-to-push-the-price-of-gold
 

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Gold will rise with other commodities like oil, food, textiles, etc.

When global economic stability improves, prices should stabilize. We are a long way from that right now.
 

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Free Your Mind
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I can understand relative newbies asking these questions, but to have "seasoned members of SB" ask these questions and post uneducated responses is what I see as most disturbing. Geez... gold and silver are pretty metals, or PMs are in a bubble and currently over priced, or do people see PMs as "money".

Gold and silver WERE money before the U.S. government and the FED (private bank) changed our currency into "fiat paper money". Circa 1913. Since then, PMs moved from being considered as money to "commodities" and are still considered as commodities. Are you out there buying your day-to-day essentials with gold or silver? NO!

PMs have always been considered as a store of wealth, and NOT an investment. Although "their monetary value", in FRNs, has been manipulated for over 40 years by the FED and subordinate banksters (JPM and others) to keep their value down versus the U.S. dollar.

The WSJ and their article is just another "cheerleader" BS editorial attempt to sway the masses (sheeple) in the ponzi (scam) game called the fiat FRN. As pointed out by a few... gold and silver WILL CONTINUE to rise as the perceived value of the U.S. dollar continues to fall (inflation). Gold and silver DON'T CHANGE in value! It's the "value" of the fiat currencies that change!
 

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I can understand relative newbies asking these questions, but to have "seasoned members of SB" ask these questions and post uneducated responses is what I see as most disturbing. Geez... gold and silver are pretty metals, or PMs are in a bubble and currently over priced, or do people see PMs as "money".

Gold and silver WERE money before the U.S. government and the FED (private bank) changed our currency into "fiat paper money". Circa 1913. Since then, PMs moved from being considered as money to "commodities" and are still considered as commodities. Are you out there buying your day-to-day essentials with gold or silver? NO!

PMs have always been considered as a store of wealth, and NOT an investment. Although "their monetary value", in FRNs, has been manipulated for over 40 years by the FED and subordinate banksters (JPM and others) to keep their value down versus the U.S. dollar.

The WSJ and their article is just another "cheerleader" BS editorial attempt to sway the masses (sheeple) in the ponzi (scam) game called the fiat FRN. As pointed out by a few... gold and silver WILL CONTINUE to rise as the perceived value of the U.S. dollar continues to fall (inflation). Gold and silver DON'T CHANGE in value! It's the "value" of the fiat currencies that change!
The value of silver will increase, as the supply decreases and the industrial demand increases. Gold will remain the same as it is largely stockpiled and not consumed.
 

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If and when a debt deal is passed, In the short term, we should see a strengthening of the USD and a subsequent decline in gold prices. But once the MSM euphoria wears off and folks realize nothing has really changed, gold will once again rise. Just my humble opinion.
 

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If and when a debt deal is passed, In the short term, we should see a strengthening of the USD and a subsequent decline in gold prices. But once the MSM euphoria wears off and folks realize nothing has really changed, gold will once again rise. Just my humble opinion.
If a deal is done, the dollar will be devalued by $2 Trillion dollars.

Precious metals will have a appropriate rise in value to account for this further dilution of the US dollar buying power, not a fall in value.

If they do not have a deal done on time. The default will shake the confidence of the US dollar and send prices of PMs even higher.

There isn't a scenario where PMs fall here. Only rising a little versus rising a lot.
 

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If a deal is done, the dollar will be devalued by $2 Trillion dollars.

Precious metals will have a appropriate rise in value to account for this further dilution of the US dollar buying power, not a fall in value.

If they do not have a deal done on time. The default will shake the confidence of the US dollar and send prices of PMs even higher.

There isn't a scenario where PMs fall here. Only rising a little versus rising a lot.
I agree with your assessment, if the ceiling is raised, it implies we continue to spend using borrowed or more likely printed dollars (QE3 is quaranteed). So yes, this is completely bullish for metals. I do however believe we may see an initial knee jerk reaction of a spike in the USD. Again, very short term.
 

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If a deal is done, the dollar will be devalued by $2 Trillion dollars.

Precious metals will have a appropriate rise in value to account for this further dilution of the US dollar buying power, not a fall in value.

If they do not have a deal done on time. The default will shake the confidence of the US dollar and send prices of PMs even higher.

There isn't a scenario where PMs fall here. Only rising a little versus rising a lot.
This makes good sense, but....( always gotta be a "but" ;) ) I'm betting that they will come out with a deal before the deadline,( politicians being the self-serving,pragmatic whores that they are) and the masses will predictibaly ( and falsely) percieve this as a positive sign for the USD, and gold will fall quickly ( though not by a large percentage, or for very long.)
 

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Free Your Mind
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This makes good sense, but....( always gotta be a "but" ;) ) I'm betting that they will come out with a deal before the deadline,( politicians being the self-serving,pragmatic whores that they are) and the masses will predictibaly ( and falsely) percieve this as a positive sign for the USD, and gold will fall quickly ( though not by a large percentage, or for very long.)
I agree with both you and Sundsvall on these points. There will be a likely PM "correction" to the short side. But again... only another maneuver by the banksters to create a false sense of confidence in the FRN. It will quickly evaporate as the scam becomes more apparent. Our "friends" in the Far East understand our fiat manipulation and "our" inflationary pressures have now "moved" to their economies. Why are they now the largest "buyers of physical PMs"?
 

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I agree with both you and Sundsvall on these points. There will be a likely PM "correction" to the short side. But again... only another maneuver by the banksters to create a false sense of confidence in the FRN. It will quickly evaporate as the scam becomes more apparent. Our "friends" in the Far East understand our fiat manipulation and "our" inflationary pressures have now "moved" to their economies. Why are they now the largest "buyers of physical PMs"?
Right, so now that the Chinese and Indians public are the largest buyers of PMS. Shouldn't their consumption dictate the price? Maybe, maybe not.

We know that the Chinese Govt, Chinese traders, JPM and HSBC all benefit when PM prices fall precipitously. The Chinese have "covered" short positions. JPM and HSBC have "naked" short positions covered with a printing press.

So the real question is, at what price does the mines, mints and distributors all run out of stock. Because after that, you can't push the price down any more.

I just know that the US physical metal consumer represents way too little by way of buying power. There are only 3 million in the physical PM realm.

If every one of those 3 million sold their precious metals, it doesn't guarantee a fall in the prices. If the 3 million bought physical precious metals it doesn't guarantee a rise in price.

Now if the US physical buying market grew to 100 million people, then we would have a much larger impact. Right now, we are all betting on what happens with Wall Street and Asia, pure and simple.
 

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Outdoorsman and Hunter
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Discussion Starter · #17 ·
Now as to your question... the people having the attitude of "gold being treated like real money" has ALWAYS been there. It is the AMOUNT/PERCENTAGE of people that feel that way that is in question. As gold goes up in price and economy does worse, this percentage will continue to rise. But as gold falls in price, you will see this feeling go downwards.
Very good observation! I should have pointed that out. Gold has ALWAYS been money and I didn't mean to imply otherwise, my post was really just paraphrasing the article. However you assume the economy will get better and I am not sure that is true. It may get a *little* better here and there, but this to me is akin of the terminal cancer patient having occasional "good days" his/her overall condition is still terminal, but until they get there they may have a few "good days" along the way.

The question is to extent PM's rise more than food, fuel, health care, and everything else.
This really only matters if you view PMs as an "investment" where you intend to change the metal back into fiat paper at some point and have enough of it to say you had a return. However for many of us, me included, I don't look at this as an investment. I look at this as a way to secure my purchasing power in the future regardless of how much they deflate the dollar by. For example in 1920 a man could use a $20 gold piece and buy a very nice set of clothes, shoes, tie, hat, etc. At that same time he could have used a $20 bill and done the same thing. Today a man would be laughed out of the store for trying to buy a nice suit with a $20 bill, but if you had that same $20 gold piece you could buy a very nice suit and all the accessories today.

That is how I feel, if PMs allow me to buy exactly the same goods 30 years from now that I can buy today and not one thing more it will have served its purpose to me.

It will quickly evaporate as the scam becomes more apparent.
And just so it is stated one more time in the open for all to see. The scam is the tax increases will be real, larger than originally advertised, and immediate. They will affect everyone and not just the "rich". The "cuts" will be imaginary, vague, to be determined at some unspecified future date, not affect any government program and never actually happen; but damn does it sound good in a campaign speech.

The debt ceiling will rise by another couple of TRILLION dollars the credit rating agencies will still downgrade our debt and we will be told this doesn't really matter because with the new deal we have assured that America will be on firm financial footing for decades to come and most of the Americans who were *barely* paying attention to all of this in the first place will be lulled back into their usual oblivious sleepy state...

"hush little baby, don't you cry the government is going to buy you a new social program and if that social program don't work government is going to buy you another worthless program..."
 

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Maximus
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Very good observation! I should have pointed that out. Gold has ALWAYS been money and I didn't mean to imply otherwise, my post was really just paraphrasing the article. However you assume the economy will get better and I am not sure that is true. .
You are right, it may not ever get better and in fact it may implode. But what I assume (as long as there are enough people in the world) is that another economy will take its place.
 
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