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Naam, on 2012-05-17 04:23:41, said:
Jayman, on 2012-05-16 19:54:56, said:
Naam, on 2012-05-16 18:56:29, said:
stop denying and face reality that gold has been going down for the last 32 years because it's "intrinsic" as well as its fluctuating market value could not match inflation. period!
You better hurry and sell all yours before it's completely worthless. Or are you banking the 32 year bear market is coming to an end soon?
When are you going to face reality that "inflation" is just a cover up word for "your paper money is being devalued" and is "worth less" than before (ie. has less value)?
If anything is worth less, it's paper money. To deny that is not facing reality.
normally i wouldn't waste a minute to discuss any economics and/or investment with such a person. but this is a public forum where quite a number of people look and ask for advice as well as information. that's the main reason why i am exposing bullshit, wet dreams and wishful thinking by stating facts which can be verified.
facts:
-the inflation adjusted 1980 peak gold price of $ 800/ounce is equivalent to 2,324 (800*1.035^31) "2011 US-Dollars" using a very conservative and benevolent meager inflation rate of only 3.5%
-even though everybody is aware that these 3.5% are the product of lying and bullshitting politicians and their central bank cronies who are political appointees, that rate can be used for demonstration purposes.
-comparing the calculated $2,324 with the 2011 peak of 1,900 the result is a loss of -22% respectively -18% depending whether calculated down/up or up down.
-when using the prevailing gold price of $ 1,540 the result is -51% respectively -34%
no bla-bla can change the afore-mentioned facts. period!
During those years the party was still going and more debt was created to keep it going, the value of main currencies was not in question because everyone thought such debts were managable. Now we are seeing these debts are no longer as managable thus the potential for defaults, mass devaluing of currencies etc. I think this is what makes gold an attractive safe haven now depending on your circumstances and exposure.
You point out that gold if it kept up with inflation the price should be higher. Rather than pointing it out as a bad investment over the past 30 years (which indeed it was) in todays climate your figures point out that it needs to rise a further $800 to reach the inflated dollar. Now with further rampant inflation likely, golds time has come as somewhere to preserve net worth. Rampant inflation will need (eventually no matter how many people cry about it) higher interest rates Higher interest rates (which have been kept too low for far too long) will be bad for real estate and for the stock market, and no doubt money in a savings account will get paid a lot lower than is required to keep up with inflation.
