Have you heard the term "nominal high" ?

Yes the concept is correct. Based on inflation, Gold has a LONG way to go to get to it's all time high.

 

Yes, that's how I look at it. It has to be adjusted for inflation and there's a formula to calculate it. Now what I don't know the answer to is, was the US in worse shape back then when gold was at its all time high? I was in kindergarten so I have no idea.

 

Here is a website that lets you punch in inflation numbers

http://www.westegg.com/inflation/

 

So what does that do to the theory that gold, silver, and other PM's are a hedge AGAINST inflation?

Seems somewhat oxymoronic to claim they hedge against inflation, then talk about the price not being adjusted for inflation doesn't it?

Just curious...

 

No, that's the definition of inflation. The guy who had $10 in gold in 1913 (the year they created the Federal Reserve) and still has the gold has lost nothing. The guy who traded his gold for fiat currency that year has LOST almost all of it to inflation. He still has $10, but that $10 is only worth $0.35 of its original value.

 

In 1913 if the man made a return of 4.4% he would still have the value of the gold. If i had to guess he would have made around 10% over that time. He should be able to buy twice as much gold to bad it took 97 years lol.

 

I'm just learning about gold and I understand the principle that it's value reflects purchasing power, ie. when gold was $200, you could buy a suit for $ 200 and when gold reached $ 400, that same suit would cost $ 400. But where do you factor in the speculator (fear) activity? As gold recently went from $ 1,000 to $ 1,400, surely no goods have appreciated like that. It seems that a portion of the $ 1,400 reflects the change in real purchasing power and a portion reflects the anticipation of future purchasing power. So how do you figure the true purchasing power of gold today? I ask this because it would seem that as fear comes and goes and the speculative portion of the price increases & decreases, that is the value where gold should really be. Where am I wrong?

Mike

 

Gold is still a commodity. The price is not set in stone. If you bought gold in the 80's during the high you would still be "losing" money.
If you bought a winchester rifle for 1 oz of gold 90 years ago and bought the same rifle for 1 oz today i would say you got ripped off. The cost of making that rifle today 1/10 what it used to be. We should be getting twice or more in materials as we used too.

Where do we take into account we have mined over 65% of the gold on the planet in the last 50 years. Thats a lot of "gold inflation".

 

I think that when the SHTF, all that gold will be better off melted down to the size of ball bearings and used in a slingshot. What good is a brick of gold going to do someone when it's worthless?

 

Uhh yeah because gold was last worthless when?

As soon as civilization was formed, gold had value. Do some reading before you get on the financial forum and say stuff like that.

 

What is there to think about? It is a fact. Same for silver. Silver reached in inflation adjusted price of about 120$ in 1980.

Just goes to show you that gold hasnt reached its peak yet.

Also know that it dropped back down to 300 an ounce about 10 years after that when things stablized.

 

most people understand the basic fact you can't eat gold

Someone just shoot me now.

 

cry somewhere else.

 

As long as there is stability certain commodities will reflect the true value of currency. But imagine apocalypse as being shipwrecked on a desert island. You have some gold coins, I have a candy bar...

 

Imagine I have both! I stocked up on candy bars before I backed them up with gold coins.

 

I've read many books on commodities. He's right. Gold has much less "value" (read: a lower price) than it used to!

I think it will go up over $2,000 in the next year or so. But this current rally is likely DOA. The only thing that could push the price even higher right now, would be a stock market or USD$ CRASH. And nobody wants that to happen again.

 

Every thread in the financial section should start with: "you can't eat gold".

 

Most the people on this forum can't do anything else with it. All you guys can do is hope someone else has some use for it. When they dont have any use for it all you have is some pretty coins.

Most of the silver/gold i own is for "industrial" or in grain because i have a use for it outside of looking good. Shtf i will still need it and my guess is i will be trading most of you a mre per oz of gold lol.

Becoming almost worthless all depends on how hungry you are.

After 3 days they're going to be very hungry.

 

The numb nuts scribbler at the new york slimes doesn't understand Gold either.

Gold doesn't go up or down, the phony funny paper does so he should have said the dollar is not at its all time low.

 

Gold is what middle class prepers buy when their wives will not let them stockpile food and other real preps. They can buy more cirtificates without her knowing about it.

That is even more suitable since then they have neither preps or real gold, only promises.

 

Tell ya what...you invest in Levis & leave the PMs to the rest of us & we'll see who is further ahead in the next year.

 

I invest in rare matierals not "pm". Metals and chemicals I invest in you wouldnt even know what they're used for but when shtf when everyone has worthless metals that can't be used without mine i will be "further ahead".

 

So what are these "rare materials" you speak of that no one knows what they are used for?

 

Don't forget his rare metals & chemicals that no one knows what the use is.

 

Yes, fighting on the internet is like masturbation sure you get all worked up, some may even get off on it but really what's the effin use.

I just wanted to clarify what I stated in my earlier post. Since I guess written English cannot be understood by some and misconstrued to their convenience.

 

I would like this thread to get back on topic.