Lonestar1

The End of Gold, Part Two

Although this is a little too harsh, but it's true the article does not add anything new to the discussion on gold.

Both deflation & inflation threats are real. It is economic destruction vs money printing. We are living in a warped world, in which actions of central banks are causing great confusion to our sense of wealth while asset prices are destroyed.

What else would we want to hold if it is not tangible? Gold is tangible. It is real money, pure without stains.


On Feb 01 12:10 PM aw4000 wrote:

> The author needs his head examined!

Will Gold Break Its Downtrend?

To be fair, TA has its merit and frame work. But can you call this an article? I share Larry House's sentiment.

U.S. Dollar Strength and Implications for Gold

There is only one one question:

why when the Fed fails, gold price has to go down?

This is only a assumption.

Five New Forces to Drive Gold Higher

There is no argument that $ has never been in such precarious state in its entire history. The break from the gold-peg did not cause a catastrophic collapse of $ was due to the fact that the west, including Japan, has to stay united to defeat a more pressing threat, i.e., the Soviet Union's expansionary policy. Instead, the $ is allowed to slide gradually and became "your problem" for the west. It was a small price to pay.

Today's world is different. $ is anchored to nothing. Or perhaps it is fair to say that $ is now pegged to a mix of Chinese yuan and Japanese yen, not the other way around as popularly manifested. Its strength in 2008 was derived from these two sources, in my mind. This is strange, because credit should be offered by producers, not the buyers.

And Europe is not threatened by anybody. That's why they were so itchy on G20 meeting in November. That is not to say they will have any chance to be successful. Indeed, they will have no chance.

I agree with the point 1 that this zero yields angered China and Japan. However, it is inconcieveable they would unwind their $ holdings, but there is no assurance that other lesser "stakeholders" wouldn't do so. Turbulance to come, for sure.

Gold is not an anti-$ trade. It is when all currencies are in question, which is clearly the case still unfolding given all the printing of paper money around the world, inlcuding China. How this is going to settle is wide open.