Bad Dog

Gold: The Only Remaining Bubble?

Gold is constant. Everything else goes up and down. When gold looks like it is appreciating, it's just that everything else is weakening. People who are buying gold are betting that the dollar will become much weaker. Is gold shooting up? No, it's appreciating modestly as it should in line with the increased risk of owning stocks, bonds and cash. That's pretty much all there is to it. People are becoming very scared, as opposed to worried, which they were a few months back. Now they are scared. Wake me when they get to terrified.


On Feb 18 01:41 PM Randy_H wrote:

> Gold is not a "hard currency". It is a store of value, of sorts,
> but not a currency. It's also a commodity with commercial and industrial
> application. It's also a vehicle for speculation and hedging.<br/>
>
> All currencies are fiat in the end. Even gold coins with a silhouette
> of the king stamped on them. Beyond a kingdom of a few thousand
> subjects, currency is necessarily authorized and regulated. Thus,
> fiat. If a new king comes along, you can't melt your old gold and
> put the new king's face on it (without paying tribute to your monarch)
> without losing your head for counterfeiting.
>
> People keep confusing Gold, Commodity-indexed fiat currency systems,
> Floating exchange-based fiat currency systems, and barter. I get
> the sense what most are hoping for is a total breakdown of currency
> and a reversion to barter.
>
> Be careful what you wish for.

The End of Gold, Part Three

How will it accomplish this 50% devaluation?


On Feb 11 12:46 PM lance sjogren wrote:

> I don't subscribe to the hyperinflation scenario.
>
> I believe the US will devalue the dollar about 50% over the next
> 4 years, and then work extremely hard to strengthen the dollar so
> that it doesn't fall further.
>
> A 50% devaluation of the dollar will wring out a lot of excesses
> in the system. The mountain of debt of different forms (govt, consumer)
> that the US currently has is far too big to pay off. There are two
> alternatives, one is for the US simply to default, the other is to
> devalue the dollar to the point where our debt burden becomes manageable.
> The latter is the obvious course. That is the cours the treasury
> and Fed are embarked on even if they probably would never say so
> and may not even be aware that is what they are doing.
>
> Gold should do well over the next 3-5 years. Once the dollar stabilizes
> at its lower level then gold will probably flatten out or decline
> slightly.