If you bought gold in 1980 for 850 an ouncr

Gold would need to reach 2336.93 dollars an ounce for you to break even taking into consideration annual inflation.


http://www.usinflationcalculator.com/

 

Accordingly, housing was going up at more than double the inflation rate calculation.

 

Why do people love to use the highs of 1980 to prove a point? It was like the one month in entire history of the world where gold was priced too high and people always use that example and say "See!! Gold is a bad investment!"

But basically anyone can do that with anything. You can look at MSFT and say "Oh if you had bought in DEC of 1998, you would still be down even with stock splits & dividend payments.

Anyone who panic bought gold in 1980 at $850 is NOT holding onto it still waiting for it to come back. I would bet my gold on it.

 

the only people that bought gold in 1980 were the shorts who thought it was too high at 400.

 

I can point to a lot of stocks that aren't nearly as high as they were in 1999/2000, and have no prospect of ever getting that high again. So nobody should ever buy a stock, I suppose.

 

Retail usually get it wrong. The first hint is all the tv and radio ads touting gold, even telling people to roll thier entire iras into gold.

When the media pundits start pushing a specific investment instrument it usually spells trouble.

No one pushed gold when it was trading in the 300s but during that time everyone was pushing the overvalued dotcoms.

And retail was snapping up those dotcoms.

 

If you bought in 1970 you are up + 4000%....

 

===============
Nothing quite like a long term commodlty trend;
not exactly my favorite time frame,
but excellant'' golden oldie'' point

Gold is uptrending again;
not a prediction, actually I am glad i exchanged my 1974 gold ring, many years ago..............................................................

 

This number 2336 or there abouts (2200 to 2500) is an important target. It was the first "outrageous" target to be set as gold was making its ascent in the middle part of the last decade. Just as silver hit 50 again, I believe gold will get into this range before we see the first correction on the yearly chart for this gold bull. It could happen this year. 11 straight years of yearly highs seems a bit too much already. But 5000 or higher will come eventually when the US economy suffers its inevitable hyperinflantionary spike.

 

I too have been pondering the US suffering from hyperinflation, but I just can't see it happening whilst private debt levels are so high and home equity is falling. 0 and QE however many can't inject the spending into the economy that would be required to cause hyperinflation.

That being said, gold's correlation to equity markets could see it reach those levels, but for different reasons. I'm really not sure personally, my only take on it was here:

www.pimmtrading.blogspot.com