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For the Gold nuts

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Not applicable
I just finished reading an atricle on lessons from the crisies thus far.... Many varying ideas and thoughts but one I thought very provoking was this comment:

".... is a criticism of gold. The yellow metal failed to perform its perceived function of protecting against risk through the crisis. It behaved the same as other commodities, collapsing as the world collapsed.

Gold has not maintained its value through the years. In 1940 an ounce of gold bought 30 barrels of oil, now it buys around 12. It took 40 ounces to buy the average house, now it costs 187 ounces. A possible disruption to gold's "commodity" performance is central bank buying."

This I guess ties in with I think Kwagga mentioning that the gold rush has not hit the streets and when it does the **** will start.
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16 REPLIES 16
SimonPB
Valued Contributor
gold lost its value when nixon took the US off the gold standard .. now it's just like a glass bead ..
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Not applicable
LoL Simon.....tis actually the dollar that became a glass bead when Nixon uncoupled!
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SimonPB
Valued Contributor
huh, interesting angle .. will have to roll it around my head, could both have become glass beads ??
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Not applicable
Glass is good for the environment it can be recyled and made into anything else, so can gold and the dollar so maybe we should trade in silica rather
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Not applicable
gold requires substantial energy to find it, drill, refine....hence coupled with limited geographic location and supply as well as being portable gives it lots of intrinsic value. No energy required to add a dollar digit on a reserve bank balance sheet is there?...hence it was coupled to gold to anchor it to some degree of value. Once the anchor was cut, theres no limit to the amt of dollars created....hence inflation....hence tis merely a belief system now with no intrinsic value!! Funny how the couple worked well during the prosperous manufacturing 50's and 60's but when the 70's crises hit, the only way was to print their way out, hence they had to cut the gold anchor....which is what lead to the massive 70's inflationary spiral that only Paul Volker could stop with a massive increase in rates (to quell the supply)...
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Not applicable
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NJ_1
Frequent Contributor
Something doesn't necessarily have intrinsic value because it is hard to find or harvest. It has intrinsic value because there is a demand for it. The practical uses that gold can be put to - electronics, jewelery, dentistry, etc - do not warrant the small mountains of gold that are carefully stashed away underground.
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Fredsed
Super Contributor
IMO: The bull for $-gold is firmly established, the bull for R-gold needs disconnect of the $-R see-saw. The bears need to have their way with general equities, thats all it will take. Indications appear to be pointing that way. Now the word is that further $ weakness will be inflationary for $ dependants. Take that as a double whammy effect. The entire gold equity market cap is same as Walmart, less than Microsoft. Not a lot to share. The FED need to increase interest rates to stop this truck, but they are committed not to do this.
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Not applicable
and IMO it looks as if we have started disconnecting
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Fredsed
Super Contributor
The techies here have targeted TOP40 from the double-bottom pattern at 26,070. I am watching the gap narrowing here, then I will be more confident.
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SimonPB
Valued Contributor
The entire gold equity market cap is same as Walmart, less than Microsoft you got a source for that ??
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Fredsed
Super Contributor
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SimonPB
Valued Contributor
hmmm, big difference between gold industry and the actual yellow metal total value .. I am looking for the value of all above ground gold ..
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Fredsed
Super Contributor
Thats about $5 trillion, also not so much in comparison with intervention values. A related chart in this article...http://www.safehaven.com/showarticle.cfm?id=14994
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SimonPB
Valued Contributor
tx, that puts it into perspective .. gold is a penny stock ..
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Fredsed
Super Contributor
At present I suppose. Who knows. It pays to be sceptical about black swan predictions. If something worthwhile happens, we will see. Anything that looks to have some price momentum potential is a candidate for a punt.
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