Bravekind

Gold on Its First Top-Ten Run of the Year

I have a hard time believing that the US will continue to sit idly by and let gold rise so quickly, if they have any way to prevent it from doing so. These last nine days are hammering nails in the dollar coffin in a very public way. I expect some intervention to give us a sharp pullback. A 'not so fast' from Uncle Sam. However, In the long term, I don't think it is stoppable.

Option Trader Friday Outlook: Is the Dollar Going UUP?

I repeat - gold is a dependable STORE of value. The dollar is not. The following helps to clarify this. Professor Siegel makes the mistake of lumping gold against investments. But what he proves instead is gold's reliability as a store of value versus the dollar. This would have been clear had he included the fact that a $1.00 from 1802 is worth just Five Cents today.
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According to University of Pennsylvania finance professor Jeremy Siegel in his seminal book Stocks for the Long Run, here's what a dollar invested in various things would have grown to, from 1802 to 2001. (Amounts have been adjusted for inflation.)

•Stocks: $599,605
•Bonds: $952
•Bills: $304
•Gold: $0.98
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Option Trader Friday Outlook: Is the Dollar Going UUP?

Thanks for your thoughts. I understand your point about much of the money simply repairing the damage, that is covering bad debt, and so NOT increasing the domestic money supply however, the money we use for oil, and for buying other foreign goods, and for paying interest of the debt does continue to flow into the reserves and accounts of other countries, so on a global purchasing scale, dollars continues to pile up and thus lose value.

This is precicely the reason to buy gold. The most solid of currencies, if you want to park cash.

The argument above, comparing gold to stocks, is comparing apples to oranges. Stocks are investments in a company, in production. Stocks entail risk, and so enjoy a reward premium (or loss!). You used for your example a successful stock. There are stocks in which you would have lost all your money. Gold (like the dollar is suppose to be) is a store of value, the best one available to us.

Roubini Hates Gold: Is He Wrong Again?

In March 2008, gold was $1,000.
In March 2009, gold was $1,000.
Seven months later gold is $1,050.00
This does not look like a bubble - but a stabilization before the next leg up.
I agree with the comment that eventually all currencies will be seen as inexhaustible paper and so unreliable as a store of value. The only way out of the financial crisis is trust in a stable currency and thus a return to the gold standard. Until then currencies will continue to be inflated as needed.
BK

Oil Price Moves (February 11 - April 9)

Yes, thanks for the summary. Hope springs eternal. No doubt long term oil will be in short suppy but short term it looks to be in over supply.

Attention Gold Bugs: Hyperinflation or Deflation?

Interesting discussion, and getting more interesting everyday! Which way did gold go in the last deflationary period in terms of dollars?

From Ben's speech in 2002

"Closer to home, massive financial problems, including defaults, bankruptcies, and bank failures,
were endemic in America's worst encounter with deflation, in the years 1930-33--a period in which (as I mentioned) the U.S. price level fell about 10 percent per year."

And the Price of gold:

Average yearly gold price.
1930: $20.65
1933: $26.33

If past is prologue, best to stick with the gold, even in deflationary times.