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14 Trillion expansion...


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#1 NAV

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Posted 29 October 2017 - 11:33 PM

...in the big central banks' balance sheets since 2009. And yet Gold fails to takes off !. The only long term investment i have is physical gold and silver to hedge the central bank madness and the hedge has not delivered so far. Whoever says markets are efficient needs some real-life lessons in markets, investing and trading !

 

I am not surprised by the S&P strength. That's normal. I won't be sursprised if rates takes off. But i really am surprised by Gold's flaccidness. And a pseudo-currency likes bitcoing is going nuts. I love markets.


Edited by NAV, 29 October 2017 - 11:35 PM.

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#2 Douglas

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Posted 30 October 2017 - 06:26 AM

NAV, it appears to me that gold has gotten way ahead of itself due to fear of the future. 

 

When I was a kid back in the stone ages, gold sold for ~$50/oz and I made $1.65/hour working in a train door factory.  Today gold sells for $1266/oz up by a factor of ~25 and similar factory workers today would be lucky to make $20/hr up by a factor of only 12. 

 

For lunch back in the good old days I might have a McDonalds hamburger, fries and a Coke for the princely sum of $0.49 excluding taxes.  Today that lunch will cost roughly $5.75 up also by a factor of almost 12. 

 

Gold is currently priced not for the inflation that has occurred, but for some nasty future inflation that has yet to manifest itself.  If that dire future fails to unfold soon, that fear factor should come out of  gold forcing it to settle down to somewhere near 12 x $50 or $600/oz.  The same goes for silver coins which were in circulation when I built those doors.  Back then one dollar bought one ounce of coin grade silver.  Today on EBAY coin silver sells for about $16/oz, 64% of the price expansion of gold. 

 

It appears to me that Gold is expensive unless inflation makes a big step change or all heck breaks loose relatively soon.

 

Regards,

Douglas



#3 LarryT

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Posted 30 October 2017 - 10:26 AM

NAV, it appears to me that gold has gotten way ahead of itself due to fear of the future. 

 

When I was a kid back in the stone ages, gold sold for ~$50/oz and I made $1.65/hour working in a train door factory.  Today gold sells for $1266/oz up by a factor of ~25 and similar factory workers today would be lucky to make $20/hr up by a factor of only 12. 

 

For lunch back in the good old days I might have a McDonalds hamburger, fries and a Coke for the princely sum of $0.49 excluding taxes.  Today that lunch will cost roughly $5.75 up also by a factor of almost 12. 

 

Gold is currently priced not for the inflation that has occurred, but for some nasty future inflation that has yet to manifest itself.  If that dire future fails to unfold soon, that fear factor should come out of  gold forcing it to settle down to somewhere near 12 x $50 or $600/oz.  The same goes for silver coins which were in circulation when I built those doors.  Back then one dollar bought one ounce of coin grade silver.  Today on EBAY coin silver sells for about $16/oz, 64% of the price expansion of gold. 

 

It appears to me that Gold is expensive unless inflation makes a big step change or all heck breaks loose relatively soon.

 

Regards,

Douglas

Agree with that, my situation when Gold as 50 per oz salary has only advanced by factor of 10.85 for the job I had back then.


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#4 MDurkin

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Posted 31 October 2017 - 07:25 AM

I think that bitcoin was a generation giving the finger to the old order. Just shows you when so many are looking at one thing...Gold...another takes off. The question is the next down turn will the old order have the last laugh...probably. Bitcoin the short of a lifetime during the next recession???



#5 Data

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Posted 31 October 2017 - 09:03 AM

You don't get the money going into commodities so much if you push up the dollar.   So they shift from printing dollars to printing euros and yen as well as setting negative deposit rates.  Also, the primary channel for funneling the money is through the banks and pension funds.  As an example, the giant GPIF pension fund increased its allocation to 40  percent foreign bonds and stocks, and cut its allocation of domestic assets.  Gold wasn't affected.


Edited by Data, 31 October 2017 - 09:03 AM.