jarco

Winmill: Don't Be Surprised By $2,400/oz Gold

Insightful comments. Sounds very similar to Tom Freidman's take on recent Charlie Rose interview. Did you watch? Regrettably, few heard; fewer yet grasp the issue.


On Nov 21 05:50 PM The Recusant wrote:

> What is pushing the price of gold up on a steady climb without spikes
> is the realization of more and more investors, be it retail or fund
> managers, that the dollar is a goner and a good dose of inflation
> will be hitting us in a year or so. And as that dreadful situation
> approaches closer with each month of rising unemployment, loan defaults,
> dollar devaluation, and more stimulus, the price of gold will climb
> higher. We may see one big dip when they try to artificially boost
> the value of the dollar, but as more countries divest themselves
> of greenbacks in favor of hoarding "the precious stuff", the signs
> will be clearer that it's time to get back to basics and buy commodities
> and safe havens to protect one's wealth.
>
> Until the U.S. Government can rid itself of favoring the financial
> and military establishments, we will continue on a slow spiral toward
> inflation and if not corrected, default on government notes. We need
> to start making radical changes to the way our representatives in
> D.C. do business before it is really too late. Reform the lobbying
> regulations, get business out of government, change the term limits,
> reduce spending and money printing, revise entitlements, and the
> list goes on and on. What can WE do, let your congressmen and senators
> know what YOU think. The U.S. is the most important country in the
> world, let's not blow it.

What's Shaping Gold Price

Last I looked, gold is consumed/saved as follows:

60% - Jewelry
30% - Industrial/Dental
10% - Invest/hoarding

For 2008, Jewelry dropped significantly while investing and industrial increased in proportion. With all three on the rise with an improving albeit slow economy, it difficult not to conclude gold mining and ETF stock are the place to be for up to 10% of ones portfolio.