"cavelamb" wrote in message
...
F. George McDuffee wrote:
On Thu, 08 Oct 2009 18:23:42 -0500, cavelamb
wrote:
snip
It worries me, George, that people would buy gold at the
highest price it has ever been - as a hedge against dollars
losing value.

Isn't that kind of a cause/effect/cause loop?


It makes no sense.


Richard
========
It makes perfect sense when you consider the gfold buyers [not
investors] are looking at this from a capital preservation
perspective rather than as a capital investment, which is
expected to increase in real value.

The gold buyer in physical possession of the metal [not
"investor"] may indeed lose a percent of their investment, but
never 100%, and substantial price declines do not seem likely,
given current economic/fiscal conditions. Gold also has the
added advantages of not being [currently] registered, legal to
own, it is small and compact, thus easily hidden and significant
amounts of wealth can be easily carried on the person. It also
cannot be created and its value does not depend on the current
credit rating of the country of issue/coinage but only on the
actual metal content.

For all its fluctuations in price the value of gold has never
gone to zero, totally wiping out the people holding it as
occurred with "investments" [stocks and/or bonds] in Lehman
Brothers, Texaco, GMC, Washington Mutual, World Com, Enron,
Global Crossing, Conseco, etc. etc. [soon to include CIT and
quite possibly GE Capital]
http://money.cnn.com/galleries/2009/...une/index.html


Unka' George [George McDuffee]


If makes no sense at all, because it looks like the latest in a
long line of expensive bubbles!

One week?
Two?

Probably not a bubble. People are worried about inflation and there will be
inflation with the overspending and printing paper to cover the excess
spending. Most of the price rise of gold over the last 20 years is
inflation driven.