You are missing one important fact: confidence. There is none at the moment. Reduction in deficits, increased economic ouput, and rising interest rates, would raise confidence, and therefore help gold to fall somewhat. You'll never see gold below 1,000 again, though. The 300 target is a pipe dream.
He's missing a lot. It's not just that gold has history behind it. The history IS gold. the use of paper or fiat (electronic fiat included) is short and catastrophic. Gold doesn't just have some history behind it. There has never been a time when it wasn't cherished or highly sought after. I don't think there ever will be either. He thinks because something's liquid it can be money? No way. The first requirement is rarity. Liquidity is a distant secondary requirement. (gold is liquid too, btw) I don't know who in their right mind would want to own some zeros and ones that can be exploded into oblivion based on the whims of some central banker in the name of liquidity . No thanks. The only thing macroecon101 is good for is losing money trading and clamoring for bank bailouts and fiscal stimulus. QED
The Fed just said they'd keep rates low to 2013, barring some mitigating factors. A long time ago I figured out gold does best between the last time the Fed lowers rates and the first time it raises rates. The problem, of course, is knowing ahead of time two things: 1 - When are they done lowering? 2 - When will they raise? Both of those problems have been solved: 1 - They're done lowering because we're at zero. 2 - They have announced already when they will raise. So, thinking that gold is in a bubble under these circumstances is not warranted. Your thinking involves looking at the past and projecting that past into the future, but circumstances have changed. This is the first time we've been in a Depression-like scenario with the price of gold free to go wherever it wants. Therefore, you can't use the past and look at, say, 1980 even, and decide that it can't go higher than whatever the inflation-adjusted price of gold at 500, 600, 700, 800, or 850 in 1980 is today. It can go higher than that. How high is, as we used to say (and maybe still do) in the programming world, undefined.
If the US economy were to pick up and start accelerating higher, would Bernanke stick to this 2013 promise? IMHO he would not. The decreasing inventory of unsold homes keeps me from buying too much gold.
%%%%%%%%%%%%%%%%%%%%% Thoughtful points,BP. Except 1980 highs to 2007+/ years were frequently downtrends; so that maybe one reason Warren Buffet & Dave[FOX] Ramsey doesnt care about it.Dr Pat Robertson mentioned a target of $2,000, but that was with futures contracts..................... Parabolic Stop & reverse gave a sell signal on weekly candles in the $1600 area , but i hardly ever use that in a mindless mechanical way. Some sold gold ,GLD longs last week; simply because one can either sell early or sell late Nice , old ,gold uptrend, complete with higher volume bear/ volume sells................................
This echo-chamber of retardedness is too irresistible for me to quit without giving you a few hints. Like giving a troop of gorillas a rubik's cube. What is currency? What are its desirable attributes and undesirable attributes? Why did single-commodity based systems, from cocoa beans to sea shells, evolve again and again and what problems did they typically run into? How does inflation and deflation arise and behave under commodity-backed vs. fiat money? Now... what does single commodity currency behave like vs. a weighted basket commodity currency? Hint: think liquidity issues, and future-technology risk. Do you realize how much chaos there would be if someone found a solid gold asteroid? Or figures out how to cheaply extract gold from seawater? Or discovers a safe and economical way to transmute lead to gold? (It's possible with radiation.) Or discovers a really powerful use for gold without a corresponding increase in supply? What possible advantage is there, to a modern electronic age society, of a single-commodity currency over a basket of commodities? This is all macroecon 101 stuff. If you're google-incompetent, you could visit your local thrift store and probably find a textbook for $5. Of the stuff that isn't intro-level, conveniently ignored is the fact that the gold bugs were wrong for three decades and it took fucking jets flying into fucking buildings to halt that race to the bottom. As said before, this is because without the currency or fallback-currency factor there are few significant uses for gold. You had decades of proof, now you think fear alone will keep it afloat, even in the face of much better non-fiat alternatives. Astounding. Or is this entire thing shill-driven? That would make a lot of sense, actually. Oh well, done for real this time.
Put all the economic theory aside and focus on revenue opportunity. Simply Buy High and Sell Higher or Sell Low and Buy Lower. There is no magic formula and you have to be willing and capable of playing whatever the markets provide.
As previously stated, before this crisis recedes, you will be tossing your macro econ. textbook out the window. This is nothing like anything that went before, including 1980.
gld is the biggest etf now: http://www.bloomberg.com/news/2011-...sees-prices-for-metal-heading-parabolic-.html "The market capitalization of the SPDR Gold Trust, the biggest gold-backed ETP, rose to $76.7 billion on Aug. 19, according to the most recent data compiled by Bloomberg. SPDR S&P 500 ETF Trust, which had been the industryâs largest ETP since 1993, was at $74.4 billion. "