Please explain to me the reasoning behind "inflation adjusted" prices in gold. If gold is priced in USD, how can inflation not be fully represented in its price? Cheers.
I tend to agree, and now even the Fed has acked they are creating asset bubbles. How much more of a warning does one need? The ride down should be even more fun than watching it go up.
bling bling ? makes no sense to see people crowding into treasuries and gold like they have to be there I remember a few yrs ago gold could and did drop mucho in a day or in a week now its not doing anything but that looks like my call was wrong as new highs were made and seasonally gold has done well into year end http://s650.photobucket.com/albums/uu225/cardiganally/hip hop/BlingDollarRingGoldIceLg.jpg
Well, US paper currency is also priced in USD, but its value has gone down over time due to inflation.
Guessing price targets is a fools game. Fiscal stimulus -> no end Loose monetary policy -> extended period of time
And it takes many more dollars to buy products/services. Yet GC is not at the number the GC/inflation folks think it should be at. This conversation is me and a colleauge of mine who runs money and is the most succesful investor I personally know. He has been a GC holder for a long time. And was also NET short into the crisis...truly gifted trader. I posed the GC/inflation question after reading this thread : ----------------------------------------------------------------- me : I truly donât understand the "inflation adjusted price" argument. If gold is priced in USD, how is inflation not reflected directly in its price at all times? him : $1,000 was the critical resistance. Keep in mind that based on 1980 high of $850, and using U.S. Government C.P.I. figures, equivalent price is over $2,300. Alternate inflation figures equate to over $6,000. Higher interest rates turn everything; very simple. How does that happen? From 1/80 to now, gold has gone from $850 to $1,180, or +39%. Cumulative inflation per U.S. Government over that period has been +170%. $850 + (170% x $850) = $2,300 To rephrase it: If the 1980 high price of gold kept up with the C.P.I., it would be $2,300. --------------------------------------------------------------------------- Gold is clearly not reflecting as rapid a debasement of the greenback as many think. And if it hasnt tapped these levels during the deepest recession/financial crisis/multiple wars(decade of hell???) in decades what makes anybody think it has much higher to go? I know nothing. Move like a jellyfish with the tide. Not short nor long gold. Just speculating mentally.
You never take the historical high of something as a basis. It reached that height on sheer speculation.
When a trader that stomps the averages for 25 years tells you something, you dont cherry pick. You listen to it all and if you`re lucky you digest it properly and come away better for it. I wasnt going to tell my friend the previous high was on ferver. He knows that. He also knew that the 2000 bottom was a once in a lifetime oppurtunity.