drbagel

Decoupling Of Physical Gold And Paper Gold Prices

Secmaven is right on. When gigantor investors buy gold they buy enormous bars at low markup. Now, as they dump their bars, small investors are scrambling to pick up small size bullion items (krugerrands...etc.) Hence the heavy markup in coins.

It may be that fiat money is eventually doomed, but that doesn't mean it's doomed in the immediate future. This is just one man's opinion, but I really think a lot of small time gold investors are going to take a bath on this one.

Gold Speculators Rushing In?

Small investors are buying gold coins while huge sales of gold bars and futures are occurring. Thus the shortage in coin. They always say that small time investors get in too late and take a beating just when something peaks. Maybe we are witnessing that right now.

The International Gold Rush: Bulls May Soon Be Rewarded

fiddle,Nero, fiddle

'Gold as Money' Means a Potentially Massive Rise in Valuation

The problem with discussing the gold standard, is that almost nobody remembers how it works anymore. A fractional gold standard like Bretton Woods fixes the value of a currency, say the dollar, to a specified amount of gold. Since gold is scarce, heavy, and earns no interest, most people want to hold notes or paper investments which represent a specific value and will do so as long as they know they can exchange it any time. This results in most currency circulating as paper. This is similar to fractional reserve banking where deposited money is available on demand as long as most people don't demand it simultaneously. This allows currency in circulation to far outnumber gold in reserve. A Bretton Woods like standard is about fixing the VALUE of money to gold, not the 100% backing discussed in the article above.

Gold as an Investment? Think Again

This is a well written article. A true gold bug plans to earn the big bucks as everyone else crashes and burns. While it is true that all paper currency regimes have ended and that gold is the final common medium of exchange, going long on catastrophe is a piss poor long term strategy.

The Myth of Gold as an Inflation Hedge

Gold is money. It is the final common money in our society. It will always be accepted and it will always have value. That does not mean, however, that it will always maintain its value or appreciate in a given time period. Investing in gold has a cost. The opportunity cost of missing out on going concern investments, driven by profit margin and adapting to the economy as it changes. In such, a long term bet on gold is a cash position and an overall bet against the financial markets. I'm not sure I want to take that bet. I will use it as a hedge, though.

WSJ's One-Two Gold Punch

Or maybe this is the kiss of death. Gold is now firmly in the main stream. Perhaps a front page article in the WSJ represents a top.