But they're printing new dollars a <i>little</i> faster than they're mining new gold. If one does devalue 80% against the other, do you really think your fiat paper slips will be the winner against my gold? A revolutionary new mining technique would be the only way such an event could even be possible.
May I add .... Gold is up due to inflation / weak USD Gold is sure to go even higher in case of inflation / weak USD
"The S&P 500 doesn't look any better, even though the downward movement has not progressed as fast as the Japanese market. The US market is still holding up because the Fed, while there is dissention among its policy board members, is trying to repair the damage to market confidence, and investors, while skeptical, still are not emboldened enough to fight the Fed._ Meanwhile, funds continue to pour into bonds and gold at the expense of equities. Thus it still looks like the only places to hide are in bonds, volatility, gold and cash. While there is concern about a possible "bubble" in bonds, the whole object of QE I was to get rates down, and if you think they are low now, wait until you see QE II. The experience of Japan, where rates went from 1.27% as QE was implemented to a mere 0.44%, gives an indication of how low 10-year yields can go given continued QE and deflation. " From The Japan Investor
While I do not want to go into detail, you might be partly right with your short trade as you can read in this article almost every investment bank out there is bullish on Gold : http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=azdOhjbZk0w8 That makes me think : hum. Especially, since our friendly neighbourhood bank GS is involved...
Gold Rallying to $1,500 as Soros's Bubble Inflates http://www.bloomberg.com/news/2010-...-for-analysts-as-soros-s-bubble-inflates.html
Preps for internatinal trip, been busy as heck but will try to keep up with things the best I can ... Gold could go my way if 4H close < 1234. To show that bonehead, bone, a thoroughly likeable fellow, that PRICE can be read, errors/mistakes notwithstanding ... here's the logic or illogic behind my < $1234 premise ... (1) nice 4H uptrendline from July 28 (upwave is high odds a terminal wave) - if broken could be the start of the short call. (2) Weekly Gold from October 2008 low is showing a decent 5-wave upmove. (3) The massive drop into the October 2008 low is a wave 4. (4) The universe that bone and I live in, delivers no more than 5 waves per move on a fractal basis - trick is to read the fractal right. All of the above will no doubt irritate the heck out of bone.
doomsday is coming! my forecast shows S&P 500 bottom around 450-550 before spring 2011. That equal to 1300-1400 gold.
Deadbroke: Please be advised that I sincerely hope Gold goes down to zero by next week. It won't improve my opinion about Elliot Wave Counts, but I desperately wish for you to declare victory and close this Godforsaken thread. As for me, I have no idea if Gold is going to go up to $1500 or down to $900. But it will. I'm not a market timer, and in fact claim no expertise in the matter. It's not so much the direction part as it is the time horizon and capital allocation parts of the strategy that would make it tough for me at least.