2009: The Bull Market in Gold

Discussion in 'Economics' started by naufal, Dec 31, 2008.

  1. cvds16

    cvds16

    How would you know ? there has never been a deflationary period since Bretton Woods ... duh !
    Gold is now like any other commodity. Commodities don't rise in deflation. period.
     
    #11     Dec 31, 2008
  2. What percentage of Gold is used in Jewellery, Industry and Investment?
    Around 70% of gold demand is jewelery, 11% is industrial (dental, electronics) and 13% is investment (institutional and individual, bars & coins).

    http://www.gold.org/faq/answer/94/w..._is_used_in_jewellery_industry_and_investment
     
    #12     Dec 31, 2008
  3. Then why is gold up year to date in what as been described also in this topic as a period of "record deflation"?

    A glitch?

    Might want to compare gold VS CRB.

    Deflation? Gold is money so it gains in purchasing power.

    Inflation? Gold is a hedge against monetary debasement.

    Financial/geopolitical crisis? Gold is good regardless of inflation/deflation.
     
    #13     Dec 31, 2008
  4. cvds16

    cvds16

    spoken like a true gold bug: you always have to buy gold ! Inflation, deflation, no matter what ...
    slight problem gold bugs always forget: in the long run gold is always one of the worst investments ...
     
    #14     Dec 31, 2008
  5. cvds16

    cvds16

    and for the record: deflation started only a few months ago for the biggest part of the world: exactly the months gold has been going down ...
     
    #15     Dec 31, 2008
  6. No, you can have periods of low inflation and geopolitical stability where gold is indeed one of the worst investments out there.

    Although you could view such periods as the perfect buying opportunity indeed.:D

    Gold in euro:

    09/01/2008 566.6140

    12/29/2008 620.5880

    Gold in USD:

    09/01/2008 831.20

    12/29/2008 880.480

    Gold in GBP:

    09/01/2008 456.6230

    12/29/2008 598.0130
     
    #16     Dec 31, 2008
  7. Well put, and I concur.

    IMHO the debt deflation and demand destruction issues are so significant that they are dwarfing the otherwise 'hyper' inflationary money supply growth as a result of TARP, bailouts, whatever. Print at 20% but destroy at 25% you are still down 5%.

    I am still surprised that gold has maintained its value well in this period, making me suspect that we are not near the end of this yet (still too much liquid cash around).

    The main problem is 'overshoot' - what happens in 2011, 2012 and onward. But that's too far off for prognostication, so you are just best off reacting and making some moderate preliminary plans.
     
    #17     Dec 31, 2008
  8. Are you stupid or have just been in a cave for the last year?

    Did you miss the bailout news? 7 trillion dollars to be injected, close to a trillion has already been put to work.

    Let me see some deflation on food prices, meesdical & electricity. You won't find any. Because the printing press are working overtime, and those new printed dollars will find their way to key goods regardless of banks restricting liquidity. Just cause Joe Blow is not getting the easy credit anymore, does not mean it's not going around.

    Hoarding cash is a sucker move right now, plain and simple. It never makes sense to save worthless inked paper.
     
    #18     Dec 31, 2008
  9. Your basic math skills need serious help.
     
    #19     Dec 31, 2008
  10. lrm21

    lrm21

    Add to the fact that deflation will be perceived if capital is being moved out and exchanged for other currencies.

    Not everything has to be dollars to gold

    Deflation as perceived by the U.S. consumer is here for 09.

    Also, too many people group all prices into one lump, either up or down. There

    Yes Inflation from an Austrian view is occurring, but I think the deleveraging forces are so powerful right now, and this process will take time before the excess liquidity takes place.

    Unless the govt starts mailing checks for $500,000 to every american, it will be a while before this liquidity hits the lower levels. Right now all the capital is being held by the powers that be.

    Also too many assume the govt will just keep printing, that they wont remove the liquidity at some point. Thats also niave. High Inflation yes, but Wheimar or Zimbabwe highly unlikely.

    Still even a 30 % devlaution of the dollar will be painful.
     
    #20     Dec 31, 2008