cavelamb wrote:
F. George McDuffee wrote:
On Mon, 30 Nov 2009 08:00:14 -0600, Ignoramus2298
wrote:

On 2009-11-30, cavelamb wrote:
I still think it's a fools game.
I think so too. Rising gold may make gold bugs smart for a while, but
I personally will not join the fray.

i

You can't eat gold (or script).

But ammo and MREs aren't going to keep the ladies happy.
Better lay in a 12 year supply of Charmin too!

===============
Owning some gold is like a fire sprinkler system. We hope it is
never needed but it is the prudent thing to do.

Much of the recent run up in the price of gold does not appear to
indicate any increase in the "value" of gold, but rather a steep
fall in the "value" of the fiat currency used to purchase it.
http://www.telegraph.co.uk/finance/p...-an-ounce.html

http://www.telegraph.co.uk/finance/c...-weakness.html

http://www.telegraph.co.uk/finance/n...-runs-out.html



There are at least two reasons for US citizens to own gold.

(1) Speculation -- you think the price of gold is going up and
you will be able to quickly resell at a profit; and

(2) Asset protection where you think the value of fiat paper
money will drastically drop and you wish to protect at least some
of the value of your assets. FWIW -- the Chinese used to call
this "coffin money" in that it at least insured a decent burial
at the end of life.

Remember that almost all the U.S. currency currently in
circulation is *NOT* issued by the U.S. government, but by a
quasi-private, highly secretive organization called the Federal
Reserve with absolutely no backing of any kind (other than "in
god we trust").

Central bank actions worldwide appear to indicate the
implementation of a scheme to inflate the current debt overhang
away though currency devaluation. This is not to say there is
some international plot, just that inflation/devaluation is the
traditional governmental response to "debt troubles," and goes
back to at least Roman times when the Emperors removed the gold
and silver from the coins. A major exacerbating factor is the
international inflation spiral resulting from the attempt by
nation after nation to gain a competitive export advantage by
devaluing their currency internationally to reduce their export
prices.

Note that there are two types of inflation: (1) internal, where a
given quantity of currency buys less within the issuing country;
and (2) International, where the relative prices of exported
goods and services become cheaper because of the exchange rate.

During the depression, U.S. citizens/residents were required to
surrender their "monetary" gold to the U.S. government.(Executive
Order 6102)
http://en.wikipedia.org/wiki/Executive_Order_6102

== Now for a question to the group==
*WHEN* not *IF* an Executive [presidential] Order is issued or a
law enacted, possibly under "public domain," mandating the sale
of "monetary" gold and/or silver to the U.S. government, how many
will comply this time?



I dunno, George. About the root cause, I mean.
(but not disagreeing with what you described)

I've been watching these two things...
Price of Gold verses price of oil.

http://www.kitco.com/images/live/gold.gif
http://www.wtrg.com/daily/oilandgasspot.html

Gold is skyrocketing, but crude has sort of stabilized.

If this were just internal inflation, wouldn't ALL commodities
be on the rise as fast as gold?

To me it looks like rich-guy-panic syndrome.
Gold has always been the traditional hedge against inflation.
So that's what they buy when things get tight.

But it looks like a set-up... a big gold bubble...
and it's going to pop at some point.

I suspect that will happen the same as all the other bubbles -
when the buyers suddenly realize they have more dollars invested
in it than it's really worth and have to sell at a loss.
(Under Executive Order ???)

But as long as people think it's worth the price (ANY price?)
it will keep on inflating...

Interesting times, huh?

I agree, looks like a bubble.
I look for the U.S. economy to rebound and gold to drop again, hopefully
before Gunner's prophesied apocalypse

When it gets back under $1000/oz I'll likely buy in.