But keep in mind, there are just as many, if not more, commercials telling people to sell their old "useless" gold jewelry. Cash for Gold! signs are everywhere as well. Obviously, dealers are making money on the commissions from trading physical gold... so what's the net effect on the market between individual gold investors and individuals selling gold jewelry to pay their bills? Is more bought by the individual, or is more sold? I don't know.
Im sure it will end up in the 2000 range (sarcasm). If you bought gold in 1980, you would have lost your shirt till recently. 30 yrs on an investment before you make money? We have a gold bubble. It will not stay this high. Right now inflation is not that high, and if it does get up there, chances are we will get it under control....we always have.
The 80s and 90s were an anomaly. Try something more meaningful like the early 19th Century. Since then, gold has pretty much held its purchasing power. A suit you could buy with X amount of gold is about the equivalent of a suit you could buy today with the same amount of gold. Oh, and stocks aren't immune to 30 year slumps just to break even. That happened after the Depression. Or how about the Nikkei? It was almost four times the current value back in 1990.
Which by your own logic means that any rate of return greater than the rate of inflation is too high.
So, will the Federal gov't bailout bankrupt states? Who will pay for unemployment benefits when the states run out? Will the fed gov't ever cut social security and medicare entitlements because they may soon be unfunded? Will we have an additional 9 Trillion added to the debt over the next ten years? How do we service the interest payments on that debt when they eventually exceed 30% of tax revenues? How will the public pensions cover their 2 Trillion dollar shortfall? I don't have the answers. But there is one answer: This time, yes, it really is different.
Just so you know, wars cost a lot of money. We will be lucky if gold stops at the 2000 range. And why does everybody always use the peak high number to justify an investment mistake? A lot of people bought at 100's, 200's, 300's, 400's also, and after the bust they didn't lose that much; if at all.
IMO there are not many facts that justify the price of gold going up. Inflation is not that high, and the money supply is not increasing. We may get hyper inflation in the next few years that depends on whether the economy turns around, and how the blokes in Washington decide to do fiscally. At the moment the price of gold going up is based merely on emotion and platitudes. "Omg look at the deficits."...record breaking, but not a shit storm yet. "Gold is the currency of the ages...the dollar is screwed..THE APOCALYPSE.....buy some gold today." If all hell is going to break loss, I would rather buy land. A buddy of mine recently told me that Gold was going to hit 5000. I don't know how he came up with this number...maybe it was the whiskey speaking. But if it does, you can be damn sure that it is going to drop. Gold may go up quite a bit, but in the end it will be overpriced, and like a stone it will drop.
It is not so much that gold will rise or fall. Gold is more of a barometer - it tells us how much our currency is worth. It doesn't "go up" or "go down" alone... it moves with a currency's strength or weakness. What most people in the mainstream media and government don't have the balls to say publicly is this: We're F*CKED! And why do they not say this? So they don't seem erratic to their fake, captured colleagues, so they don't create a panic, so they can keep their jobs.... But what is the reality? It is so obvious... just look at the points I made several posts up. How the hell will all those issues be addressed? And they are playing out right now, and will continue to play out into the next decade. Has anyone come up with a solution to unemployment benefits shortages? Social Security and Medicare shortfalls? State budgets implosions? Rising interest servicing of the federal debt? The growing disparity between debt and gdp that more and more debt is needed to grow a smaller amount of gdp? As for the apocalypse scenario... Argentina and Zimbabwe both went thru what we will likely go through in a few years. Are you aware of gold's role in those economies during and shortly after their economic collapse? People in Zimbabwe would spend 8-10 hours a day digging to find tiny nuggets of gold to buy food with. Gold shops sprung up everywhere in Argentina where people would trade their jewelry because the paper money they had saved prior became worthless. Ask someone from Zimbabwe or Argentina what they think of gold. But you won't, because we Americans have a built in sense of arrogance.
Especially when a number of Fox personalities, including Glenn Beck, tell you to buy. Beck even invokes God into the equation, so it must be true.