Consider Gold's Price Increase as a Currency Event

Video below seemed appropriate with Gold topping $1020 Wednesday.

Note: A currency crisis is not a matter of "if" - it's more a question of "when". Gold is your personal hedge against this future event.

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Regarding a rising gold price: Don't think of gold as going up in value (its value should remain somewhat constant), think of the price increase in gold as more of a currency event - the dollar going down in value requires more "devalued" dollars for the same tangible asset (gold - or silver - or even a gallon of gas or case of rum for that matter).

Food for thought and your key take-away point for the day: Though many have tried, no country in the history of the world has EVER been able to print its way to prosperity - and the outcome for this US attempt will be no different.

All fiat currencies eventually return to their intrinsic value - that of toilet paper.

Interesting perspective below at link - record gold prices here to stay?

The Golden Staircase

Comments

[doubleguns:]

Obviously you have not noticed that it is going up in other currency's too.

Currency may have a position on the team here but demand is the quarterback right now. IMHO

Sep 21 10:40 AM

[Mad Hedge F...:]

cft Brace yourself for the impending gold shortage. Gold shortage? Yup. With the launch of the eighth gold ETF this yesterday, the ETFS Gold Trust (SGOL), total ETF holdings of the barbaric relic reached 54 million ounces worth $55 billion, more than total world production in 2008. Last year, South Africa suffered its steepest decline in gold production since 1901, falling 14%, to a mere 232 tons. It now ranks only third in global production of the yellow metal, after China and the US. Severe electricity rationing, a shortage of skilled workers, and more stringent mine safety regulations have been blamed. Choked off credit has frozen the development of new capital intensive deep mines, as it has for everybody else. Rising production costs have driven the global breakeven cost of new gold production up to $500 an ounce. In the meantime, the financial crisis has driven flight to safety demand for gold bars and coins to all time highs. Last year, the US Treasury ran out of one ounce $50 American Gold Eagle coins, now worth about $980. Competitive devaluations by almost every central bank, except Japan, mean that currencies are not performing as the hedge that many had hoped. It all has the makings of a serious gold shortage for the future. Could last year’s downturn be a blip in the eight year bull market? Now that we are solidly over $1,000, kissing $1,025 last night, the match could hit the fuel dump at any time.

Sep 21 01:34 PM

[bkdc:]

The World Gold Council estimates that the amount of paper gold exceeds the amount of physical gold on the market by 70 times.

Get PHYSICAL!

Sep 21 06:41 PM

[deuxsous:]

seeking alpha is declining in quality and usefulness as this article demonstrates vividly.

Sep 22 12:00 PM