Mr.G

Gold Bugs Beware

Adam -
lets say in march 08 I bought all of my gold at 1000/ounce without dollar cost averaging - with that one ounce at the time(march 08) I could trade it in for 364 gallons of unleaded gasoline(gas was 2.75/ gal nymex mar 08)- Today I could sell the same ounce at $720.00 and buy 497.55 gallons at 1.45 a gallon.you get pretty much the same result across the board -wheat -oil- nat gas-copper -silver- Thats value in a deflationary situation
my point being price doesnt matter to a gold bug as much as him maintaining his purchasing power - is he upset prices arent acting better in the current situation ? absolutely , but the preservation of purchasing power outweighs it and risk is at a minimum (if no leverage)- the strong dollar- yen could turn in 24 hours or 10 weeks but it will happen very quickly who wants that risk?

Gold Bugs Beware

Your analysis is great -except for one thing. You dont take into account the goldbug(just as many permabears in equity markets think the dow should be at much much lower levels fundamentally speaking but fail to take bulls into account) -The goldbugs are true bulls -many are dollar cost averaging and the price whether up or down, it signals buy -buy- buy . I think you may ruffle some of their feathers with this article-being they are goldbugs - The spread between physical prices and paper is where you will here it most

Wednesday Outlook: Commodities, Emerging Markets

I dont think the govt will actually purchase stocks to stop the slide -but it wouldnt surprise me if they closed markets at this point while they fix some seriously screwed up fundamentals - at the same time closing banks across the nation and limiting ATM withdrawals -
If they do it they will load the deck for a rally when the market reopens