TheBoyPlunger Posted January 25, 2009 Author Posted January 25, 2009 The price of a particular entity is determined by how rare/abundant it is. There is only so much Gold in this planet' date=' but currency is different. All you need to devalue a currency totally is buy a couple of more printing presses and print a couple of trillion Dollars more, which is what the Fed is doing now to finance this bailout.[/quote'] So what happened between 1980 to 2000? The Dow/Gold went from 1 to 43, ie, with only so much Gold in the planet. It's the same 'commomly accepted truth' that real estate never goes down. We are today taking one section of price behaviour, ie, 2000 to 2008 and then extrapolating it forever. Yes, in the current bearish scenario, Gold is definitely the aset class to be in. But that does not mean it will be always. It all depends on the price you have paid and the trend of the aset class.
TheBoyPlunger Posted January 25, 2009 Author Posted January 25, 2009 Wouldn't you expect the total opposite' date=' since the govt is going to "stimulate" the economy by pumping money into the market ? Like trillions of dollars as stimulus ? Wouldn't that cause inflation instead ? Also, super low lending rates will contribue to it.[/quote'] I think deflation will happen, in the near term, for 2 reasons - over capacity and the lack of credit. The Fed did in take on close to 2Trillion of bad assets on its balance sheet but the credit bubble that burst was close to 50 Trillion. Massive deleveraging has taken place and it will happen for some more time. That explains why goose said that Gold will consolidate for a couple of years. Once that is over, you should see massive inflation, from all this printed money.
TheBoyPlunger Posted January 25, 2009 Author Posted January 25, 2009 U.S. Dollar: The Curious Case of a Strengthening Currency By Vadim Pokhlebkin Tue, 20 Jan 2009 16:45:00 ET Email | Print | RSS | My Updates Bookmark and share It! The financial market is a mysterious beast. Like something out of Greek mythology, the market is half-man, half-giant-walking-stick-made-of-charts. And although armies of well-educated economists seem to be able to tame it, their theories come up short again and again. Take the U.S. dollar, for example. How many times in the past year have you heard opinions that, given the severe problems of the U.S. economy, the dollar should collapse? More than once, I bet. As you can see by the dark blue line, the Fed has ballooned its balance sheet from $900 billion just five months ago, to a current size of $2.14 trillion, by swapping the pristine credit of U.S. T-bills, notes and bonds for the questionable debt held on the books of troubled banks, brokerages and insurance companies. Look at the U.S. dollar’s behavior through most of this monetary expansion – it’s soared. One of the strongest held beliefs at present is that the U.S. dollar is on the verge of an imminent collapse… because of the very reason you see on this chart – the Fed’s irresponsible expansion. Yet as our chart shows, the opposite is occurring, just as Conquer the Crash* predicted. Why? As we’ve long argued, the systemic build-up of total market credit is so large, currently about $52 trillion, that its implosion will swamp the Fed’s attempts to inflate. …[C]reating just over $2 trillion in the face of a contracting pool of $52 trillion in total credit market debt is just not going to get the job done… And as Conquer the Crash discusses, the remaining dollars…will increase in value. The thirst for cash will be insatiable relative to all other assets. Clearly, the forces of deflation have been far more successful than the Fed's efforts, so far. As for the lesson in all this, it's simple: All too often, what seems like the only possible course of action for a market (based on "the fundamentals") turns out to be another false belief.
Ram Posted January 25, 2009 Posted January 25, 2009 So what happened between 1980 to 2000? The Dow/Gold went from 1 to 43, ie, with only so much Gold in the planet. It's the same 'commomly accepted truth' that real estate never goes down. We are today taking one section of price behaviour, ie, 2000 to 2008 and then extrapolating it forever. Yes, in the current bearish scenario, Gold is definitely the aset class to be in. But that does not mean it will be always. It all depends on the price you have paid and the trend of the aset class. I am not saying sell all your assets and invest all of it in Gold. All I am trying to convey is that it is almost suicidal to hold all your wealth in real-estate and its important to diversify into other asset classes. And Gold, traditionally, has held its value much better than other class of assets, be it currency, real-estate or private equity.
goose Posted October 6, 2009 Posted October 6, 2009 The yellow shiny stuff making fresh all time highs minutes ago...$1037 per oz.
goose Posted November 3, 2009 Posted November 3, 2009 $1085... another all-time high. Meanwhile, Reserve Bank Of India announced today it's purchase of 200 tonnes of gold from the IMF. That's half the IMF's entire holding. They have been advised well.
Malcolm Merlyn Posted November 3, 2009 Posted November 3, 2009 $1085... another all-time high. Meanwhile, Reserve Bank Of India announced today it's purchase of 200 tonnes of gold from the IMF. That's half the IMF's entire holding. They have been advised well. i iz very happy.......gold going up up up up
kabira Posted November 12, 2010 Posted November 12, 2010 well Gold is good But picture this, I bought DSP Blackrock Mid Cap equity fund at 8 Rs. 5 Lakh Rs Investment about 18 months back.. Right now its over 20 Rs. Beat that!!!
Ram Posted November 12, 2010 Posted November 12, 2010 As long as the economy is sluggish and the fed continues to devalue the dollar with it's frankly outrageous polices of 'quantitative easing', gold will probably continue to be strong. But i think a correction is only a matter of time.
Mamu Posted November 12, 2010 Posted November 12, 2010 Wouldnt be surprised at that 18' date=000 number. No-one is moving into Detroit today, everyone is moving out. Heck they have been doing so for almost decade and a half now. The only shining light(for me) is Detroit Airport. It was one of the busiest airports in the world during the glory days of Big 3 Auto Makers. It obviously has infrastructure in place to support it. These days not too many people fly through Detroit Airport and so for the people who do fly through Detroit International it is a breeze. You fly through a fantastic airport without much crowd and hassles. xx :hello: aapun bee ek hai But that 18,000 is a little bit exaggerated. When they say Detroit, they are absolutely talking about just the City of Detroit, not taking subsurbs. City of Detroit -- well if anybody knows about it -- is an absolute f@@king wreck. I have travelled far and wide in US and will put Detoit and Cleveland as the worst cities in the country. But nice to see auto industry reccovering! Hopefully this is the start of many things to come. I will be very very slow. No question about it.
Mamu Posted November 12, 2010 Posted November 12, 2010 well Gold is good But picture this, I bought DSP Blackrock Mid Cap equity fund at 8 Rs. 5 Lakh Rs Investment about 18 months back.. Right now its over 20 Rs. Beat that!!! OK Kabira -- tell us what to buy now !:cantstop:
kabira Posted November 12, 2010 Posted November 12, 2010 ^Send me the money I will invest it for you.
Recommended Posts