Thursday, October 8, 2009
Gold Keeps Chugging
Dang! As of 12:30pm EST, gold is up 1.17% this session. Right now the (future) contract is trading at $1056.60 / ounce.
Comments:
So are equities ... I'm assuming that you think we'll see a decoupling when the market tanks?
Or are we witnessing the destruction of the dollar in the equities markets also?
Or are we witnessing the destruction of the dollar in the equities markets also?
# posted by 
: October 8, 2009 at 1:32 PM
: October 8, 2009 at 1:32 PM
I should expound on my comment:
The common theme is that equity markets have been trading up in lock step with gold both of which are moving in inverse proportion to any dollar index.
I think the question to answer is: Why won't the dollar strengthen when the bottom falls out of this cheap money induced equity bubble?
This should, in turn, put serious downward pressure on the price of gold.
If we think of inflation and deflation in terms of demand for dollars, demand will increase when equities tumble which in turn will put downward pressure on prices.
The only way this doesn't happen is if the movement in the equity markets happens in conjunction with the realization that the dollar is worthless (and has been for years). This would cause people to move to safer currencies (if there are any) and metals. In this scenario Gold priced in euros remains relatively constant (as it has for some time now); however, priced in dollars it will continue to rally.
Thoughts?
The common theme is that equity markets have been trading up in lock step with gold both of which are moving in inverse proportion to any dollar index.
I think the question to answer is: Why won't the dollar strengthen when the bottom falls out of this cheap money induced equity bubble?
This should, in turn, put serious downward pressure on the price of gold.
If we think of inflation and deflation in terms of demand for dollars, demand will increase when equities tumble which in turn will put downward pressure on prices.
The only way this doesn't happen is if the movement in the equity markets happens in conjunction with the realization that the dollar is worthless (and has been for years). This would cause people to move to safer currencies (if there are any) and metals. In this scenario Gold priced in euros remains relatively constant (as it has for some time now); however, priced in dollars it will continue to rally.
Thoughts?
# posted by : October 8, 2009 at 2:16 PM
: October 8, 2009 at 2:16 PM
M4Liberty, I'm not going to speculate on the exact sequence, but my medium- and long-term prediction is that everything quoted in dollars (including stocks) will be higher, but that stocks will lose relative to real estate and especially commodities.
Gold is the best investment instrument in the world. You will never going to lose your investment. The price of gold is increasing continuously. This is the safest investment instrument.
vitamine b-
You're kidding right? You sound like one of those cash-for-gold commercials:
You will never going to lose your investment.
Right, but it could be worth $0.01 per ounce. True, it's never been worth nothing. 1 cent is not nothing.
The price of gold is increasing continuously.
Right, until it doesn't. How did that logic work for you in the late '70s / early '80s?
Gold is prone to bubbles and mispricings just like every other asset class.
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You're kidding right? You sound like one of those cash-for-gold commercials:
You will never going to lose your investment.
Right, but it could be worth $0.01 per ounce. True, it's never been worth nothing. 1 cent is not nothing.
The price of gold is increasing continuously.
Right, until it doesn't. How did that logic work for you in the late '70s / early '80s?
Gold is prone to bubbles and mispricings just like every other asset class.
# posted by : October 9, 2009 at 11:18 AM
: October 9, 2009 at 11:18 AM Subscribe to Post Comments [Atom]
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