gold up 1.5% overnight in Asia

User Forum Topic
Submitted by scaredycat on December 2, 2009 - 1:00am

Is it possible this thing could melt upwards?

I am getting greedy. Bad sign.

On the other hand, i've been predicting chaos for so long, I have to be right sometime.

‹ Should I get back in the market now? Somalian pirates open stock exchange... ›
I am starting to say it's all
Submitted by Nor-LA-SD-guy on December 2, 2009 - 6:51am.

I am starting to say it's all good,

I kind of would like to see it hit 3K an oz the higher the better,

I think this could bring employment to those who need it most.

Congrats to those who were
Submitted by Adebisi on December 2, 2009 - 7:50am.

Congrats to those who were able to take advantage of the Holiday sale in gold we saw on Friday and Monday morning.

I like the steady advances we are seeing in gold. It doesn't feel like a bubble to me. We are seeing the occasional pullback followed by nice, steady, reasonable gains. At the top of a bubble, you will typically see more volatility than is currently exhibited by the price of gold.

The demand for gold from the U.S. mint was up 75% this year and the Fed is planning to destroy the dollar, so gold seems the logical place to be for the foreseeable future.

I've been thinking about the following quote from that great opponent of central banking, Thomas Jefferson:

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

I think ol' TJ had it almost right. To more accurately describe what is happening today, the quote should probably be changed to '...first by asset inflation, then by wage deflation...'. The Fed is inflating assets using ridiculous zero-or-near-zero-down government-backed (FHA, Fannie, Freddie, etc) loans while wages are continuing to fall. Essentially, the Fed is creating debt that can never be repaid. In that kind of environment, the dollar is going to continue to collapse and fiat-money substitutes are going to continue to go up.

TJ was right about the kids too, what with 25% of American kids currently on food stamps. So long as the Fed exists, Americans who hold dollars will continue to get robbed of their wealth.

people everywhere actually
Submitted by scaredycat on December 2, 2009 - 7:56am.

people everywhere actually are gold mining. they are mining for scrap gold in their homes and dutifully bringing it to the mall where BUY YOUR GOLD kiosks harvest their yield. They happily march off with fresh paper federal reserve notes. i suppose those kiosks provide employment.

Well, we have past peak
Submitted by Arraya on December 2, 2009 - 8:34am.

Well, we have past peak gold..

http://europe.theoildrum.com/node/5989

Quote:
The question regarding the reasons for the "bell shaped" Hubbert Curve has been around for a long time. Is the curve something that is only associated with crude oil? Does it hold for all fossil fuels? Or is it characteristic of all non-renewable resources? With time, evidence has accumulated that the Hubbert Curve is a very general phenomenon that occurs for all cases where a resource is exploited in conditions of free or nearly free market. The curve is observed also for renewable resources, when the rate of production is much faster than the replacement rate. It is, however, a typical characteristic of non-renewable mineral resources.

In the case of energy resources, the Hubbert Curve is directly related to EROI or EROEI (energy return of energy invested). Declining values of the EREOI reduce the producers' profit and, eventually, lead to a reduction in investments on exploration and development. In the more general case of mineral resources, the curve is still related to energy but, in this case, to the increasing need of energy for exploiting progressively lower grade ores. The case of gold is especially interesting since it deals with a resource whose extraction rate would be expected to be dominated by market prices rather than energy constraints. Indeed, the historical gold production curve is best interpreted in terms of multiple production cycles, each one following a Hubbert Curve. Nevertheless, it is still possible to interpret the curve in terms of an overall Hubbert behaviour which, therefore, appears to be a nearly universal phenomenon in resource exploitation.

Part II

http://europe.theoildrum.com/node/5995#c...

sometimes it looks like a
Submitted by scaredycat on December 2, 2009 - 8:49am.

sometimes it looks like a nation of drug addicts, rummaging for scrap gold to pay their debts. All this scrap gold, where is it ultimately going? fort knox. or china?

Old shut mines will probably
Submitted by Nor-LA-SD-guy on December 2, 2009 - 11:23am.

Old shut mines will probably restart and can turn profit with less yield, new mines in new places with less yield now turn profit, new prospectors etc...

New mine speculative development money coming on line etc...

This was meant for possible Job creation if Gold does get to 3K per OZ,

Personally I don't need gold myself and cannot imagine that it will ever become important to me unless there was a Job involved.

Tell me if this sounds
Submitted by sdduuuude on December 2, 2009 - 11:31am.

Tell me if this sounds crazy.

I'm expecting some badness next year in the stock market, maybe as late as Fall 2010, as we head back into recession.

In 2008, as the market tanked, gold came down hard with the market for a while, but recovered early. With the pain of the market dropping, margin calls and such, supposedly people were selling gold to cover losses in other areas.

I think the same will happen in late 2010. Gold will plod along until then, drop with the next negative stock market event, creating a buying opportunity, then continue upward.

I wouldn't say it is in a bubble, but I'm not sure it is going to continue steadily upward for much longer.

This is a SWAG, not a researched opinion.

sounds crazy. ok, not
Submitted by scaredycat on December 2, 2009 - 12:04pm.

sounds crazy.

ok, not crazy, but gold and the stock market don't necessarily correlate. the correlation camp probably says, well, there's all this money floating around that has to land somehwre, and when losses amount from leverage, people sell whatever they can to pay the losses.

true enough. if it's people that do the buying.

but if this is a seismic shift, if governments are going to be sucking up huge amounts, if big funds are going to step in and try to preserve assets with a gold-not-stocks theory, then there is no reaosn gold canot decouple from stocks.

gold is as valuable as you beleive fiat money to be worth less. i'd say it's a good bet over the next 3-5 years. and impossible to time.

stocks are limited in some sense by earnings. IMHO maybe not sucha good bet over the next 3-5 years.

deflation will kill stocks, but not necessarily gold...

I agree, they don't
Submitted by sdduuuude on December 2, 2009 - 12:22pm.

I agree, they don't necessarily correlate, but when the market went bad, it took lots of stuff with it for a few weeks.

what will climb out of the
Submitted by scaredycat on December 2, 2009 - 11:29pm.

what will climb out of the wreckage?