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Old 10-16-2008, 10:13 PM   #1
silverman
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Exclamation Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

Excellent article!



http://www.gold-eagle.com/gold_diges...ein101208.html
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Old 10-16-2008, 10:27 PM   #2
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

Warned people I did that fall gold would

Happened before in the eighties

Its a good thing for the people bad for Gold Speculators

It may even mean the end to gloom and doom for 20 years...

As I said Happened before
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Old 10-16-2008, 10:51 PM   #3
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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Warned people I did that fall gold would

Happened before in the eighties

Its a good thing for the people bad for Gold Speculators

It may even mean the end to gloom and doom for 20 years...

As I said Happened before

No way!

You can't compare with the eighties. The debt situation and financial crisis is so much bigger than the problems we had at that time.

Fact is there is no physical gold and silver available anymore all over the globe. And when something is not available anymore and people still continue to try buy but don't get it, there is no logic behind, that in the same time such a price goes down, definitely not like this!

We will run out of gold and silver within the next 15 to 25 years....$

SO PEAK-GOLD and PEAK-SILVER

When all the rescue plans fail, people will start loose confidence in governments and currencies like USD and EURO.

By the way: Goldprice in EUR reached new all-time-high last week and Goldprice in YEN is at its highs as well.

The thing today is, that there so much bullsh.....g and manipulation going on, that just because the goldprice is trading below 800 today this does not mean that the truth is reflected in this price!

Lets wait until COMEX goes default, or those manipulation gets investigated.

And look, they want to come up with a new Dollar called AMERO! Investors will only have trust into AMERO, if it will be gold-backed like in the good old times before Nixon!

Cheers, silverman
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Old 10-16-2008, 10:58 PM   #4
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

There are two markets in Gold, the real one and the fake one.

The fake one, is paper based, the real one is Gold based.

When the paper market in gold unfolds (as it looks like it might soon) you will find that real physical Gold is worth its weight, um, in Gold

Meanwhile, in the interim, if you have some money free, and you know someone who has physical gold in stock, buying a few coins off them might not be a bad idea.

A..
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Old 10-16-2008, 11:30 PM   #5
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

You guys are missing two important points:

1. The United States commands a lot of power in the world, so at the end of the day, people will rally around its dollar, as is happening now. The psychological factor is MORE important than anything.

2. Almost every other country in the world that has money right now, has it in Dollars (China, Saudis, Russia, etc, etc). All these countries have been selling Resources to America in return for Paper Dollars, which currently have worth.

The simple fact is, if they start dumping dollars, it will cause a chain reaction that will collapse the dollar and all their wealth. America will still have what they bought, but those other countries will be out those resources plus the wealth they thought they had.



The bottom line is, the US is just the safest form of currency right now and everybody is cought in its grasp and can not offload that currency because doing so would screw them as much as the US.

As for the Euro, it will devalue even more in the future due to poor economics in those countries. Too much socialism and uncompetitiveness will hurt it more than it does America.
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Old 10-17-2008, 12:00 AM   #6
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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Originally Posted by Knightbk View Post
You guys are missing two important points:

1. The United States commands a lot of power in the world, so at the end of the day, people will rally around its dollar, as is happening now. The psychological factor is MORE important than anything.

2. Almost every other country in the world that has money right now, has it in Dollars (China, Saudis, Russia, etc, etc). All these countries have been selling Resources to America in return for Paper Dollars, which currently have worth.

The simple fact is, if they start dumping dollars, it will cause a chain reaction that will collapse the dollar and all their wealth. America will still have what they bought, but those other countries will be out those resources plus the wealth they thought they had.



The bottom line is, the US is just the safest form of currency right now and everybody is cought in its grasp and can not offload that currency because doing so would screw them as much as the US.

As for the Euro, it will devalue even more in the future due to poor economics in those countries. Too much socialism and uncompetitiveness will hurt it more than it does America.
Oops, I believe you missed some chapters or you just came back from a one years holiday!

But I have an excellent exercise for you: If you are in the US

- can you please buy me some lets say 1'000 1-Ounce-Silver-US-Liberty coins?
- As soon you found an official dealer, willing to sell lets say @ USD 15 (which is a premium of >50% to the Silver spot price)....
- and the 1000 ounces will be shipped over to Switzerland (the dealer shall take care of this)
- I will give you my contact details you give to the dealer, and I will pay you USD 1 per ounce which makes USD 1'000

- If all this runs smoothly and you can get even 10'000 1-Ounce-Silver-Liberty-Coins we do the same business again!


Deal?

Cheers, silverman


Last edited by silverman; 10-17-2008 at 12:02 AM.
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Old 10-17-2008, 04:33 AM   #7
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

[QUOTE=silverman;53839]Oops, I believe you missed some chapters or you just came back from a one years holiday!

But I have an excellent exercise for you: If you are in the US

- can you please buy me some lets say 1'000 1-Ounce-Silver-US-Liberty coins?
- As soon you found an official dealer, willing to sell lets say @ USD 15 (which is a premium of >50% to the Silver spot price)....
- and the 1000 ounces will be shipped over to Switzerland (the dealer shall take care of this)
- I will give you my contact details you give to the dealer, and I will pay you USD 1 per ounce which makes USD 1'000

- If all this runs smoothly and you can get even 10'000 1-Ounce-Silver-Liberty-Coins we do the same business again!


Deal?

Cheers, silverman




Add me to the list.

Just check-out Ebay for the prices of physical gold/silver. Its waaay above the paper - cyber values the markets show.

The few bullion traders that I have been following ran out of silver months ago and recently have no gold bullion left.
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Old 10-19-2008, 01:01 PM   #8
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

=
=

Interesting post by Jim Sinclair about Gold and COMEX:


Quote:
Posted On: Sunday, October 19, 2008, 12:10:00 AM EST
The Bullion Market Versus The Paper Gold Market - An Explanation
Author: Jim Sinclair

Dear Friends,

1. It is axiomatic that the most leveraged gold market most often (95 percent of the time) sets the price of any cash market. First derivatives (listed futures) commands price.
2. This remains true as long as the COMEX warehouse of gold is NOT meaningfully depleted by long gold contracts by taking delivery from the exchange warehouse.
3. As long as an exchange maintains a warehouse that historically overwhelms historical demand for delivery the first derivative, The COMEX listed gold future, will be the primary cause of price.
4. Taking delivery from the COMEX warehouse is not an easy process as the system is designed not to violate your contract but to be a world-class pain in the ass.
5. The COMEX requires re-assays, assuming you wish to re-deliver. This then places another raving pain in the ass in your way.
6. The COMEX market is effectively an international 24-hour market as there is no location where you cannot buy or sell a COMEX clone.
7. Cash bullion gold as opposed to the semi cash markets that non-USA banks trade is the only totally private means of buying and selling gold.
8. As currency problems increase, first the knowledgeable public such as you clean out the coin market.
9. This is the first time that the international coin markets have been cleaned out everywhere. This did not happen globally in the 70s.
10. Large gold bars are still available in major markets but the backup inventory is getting low.
11. As long as the COMEX warehouse remains adequate and large bars still are available, the paper market, the leveraged COMEX market, will rule the price.
12. Only with a decline in COMEX warehouse inventories and a run down in large bar supplies of the cash market will the cash bullion market command the price of the COMEX futures market.
13. It was not the buying by the Hunts that caused silver to move above $30 into the $50 area, but rather the universal belief that they would take delivery, which would deplete or exceeded the COMEX warehouse supply.
14. The War between paper gold and bullion gold is a war to determine which will take command of the price of gold, nothing more, nothing less. There will be no two markets trading at different prices. All this battle is about is IF the bullion gold market is going to take the lead in making the singular price away from the traditional axiom that the most leveraged market makes the price. I believe the bullion, in these most unique conditions, will command the one gold price making it hard to impossible to manipulate the gold price via the paper gold market, as is the practice every day.

Link: http://www.jsmineset.com/

=
=
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Old 10-19-2008, 02:55 PM   #9
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

bravo, i enjoyed reading. How long would you assume til it hits the fan?
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Old 10-19-2008, 05:24 PM   #10
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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bravo, i enjoyed reading. How long would you assume til it hits the fan?
Quicker'n you can say, "Duck!"
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Old 10-19-2008, 05:47 PM   #11
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Exclamation Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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Originally Posted by FrostyMcunicron View Post
bravo, i enjoyed reading. How long would you assume til it hits the fan?
hey if u watch goerge greens 42 minute interveiw on projeect camelot it will

give u a good idea of wen this is all gonna happen if u listen carefully youll

realize hes already been right of a few of the things he was talkin about
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Old 10-20-2008, 06:05 AM   #12
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

It's got to hit soon, silver below $9.00 an Oz. and all the dealers are out of stock. It makes no sence at all, the last big precious metal boom was in late 70's early 80's and silver hit close to $80.00 an oz (if memory serves correctly) and you were still able to buy physical bullion.

PTB are with out a doubt buying up precious metals and loading the market with paper to hold down the value.

This realy bothers me, what most don't understand is that the post civil war U.S. was built on silver and not gold. When there is no silver, this leads me to believe that we have paid someone off with our silver reserves.
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Old 10-20-2008, 06:43 AM   #13
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

Any of you ever traveled in the East? Here in Thailand, as throughout Asia, there are gold shops aplenty, even the smallest town will have a few. At these shops you can buy gold jewelery or bars of various weights. It's an easy, quick transaction. Even more amazing is that these shops have no security: no security bars, no guards, no security cameras - one of the clearest indication you could hope for that this is a low crime environment. Whenever Thai people need some cash they sell a necklace or bracelet. There is NO SHORTAGE here at all. Interestingly enough necklaces can be broken down into individual links and you could use these to pay for small amounts. People know the value of each link. Small rings and bracelets too can be used for minor payments. Much easier then carrying coins around - how do you cut up a coin for a small payment? All this talk about coins really makes me laugh, very impractical system I think.

Silver jewelery is also readily available - either sterling (96%) or Karen hilltribe (99%) purity. You can also go to specialist shops and buy lab grade (99.99%) to your heart's content. Again NO SHORTAGE at all.
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Old 10-20-2008, 06:48 AM   #14
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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Originally Posted by JSErwine View Post
It's got to hit soon, silver below $9.00 an Oz. and all the dealers are out of stock. It makes no sence at all, the last big precious metal boom was in late 70's early 80's and silver hit close to $80.00 an oz (if memory serves correctly) and you were still able to buy physical bullion.

PTB are with out a doubt buying up precious metals and loading the market with paper to hold down the value.

This realy bothers me, what most don't understand is that the post civil war U.S. was built on silver and not gold. When there is no silver, this leads me to believe that we have paid someone off with our silver reserves.

Not just your silver reserves !....................... I bet Fort Knox has got the odd empty shelf!
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Old 10-20-2008, 07:01 AM   #15
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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Originally Posted by Knightbk View Post
You guys are missing two important points:

" Almost every other country in the world that has money right now, has it in Dollars (China, Saudis, Russia, etc, etc). All these countries have been selling Resources to America in return for Paper Dollars, which currently have worth."


China for one, over the last 18mths or so has been buying all the non-ferous metals it can get it's hands on. Originally put down to an expansion boom in construction.

NOT SO! no sir, China has been spending it's dollars, big time!
Lead, Copper, Zinc, Aluminium. They Know the $ is gonna crash, they want something which will have a value and if worst comes to worst, they can either control the market or use the metals.

Only my view, but wait and see.
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Old 10-20-2008, 07:48 PM   #16
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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Originally Posted by shokdee View Post
Any of you ever traveled in the East? Here in Thailand, as throughout Asia, there are gold shops aplenty, even the smallest town will have a few. At these shops you can buy gold jewelery or bars of various weights. It's an easy, quick transaction. Even more amazing is that these shops have no security: no security bars, no guards, no security cameras - one of the clearest indication you could hope for that this is a low crime environment. Whenever Thai people need some cash they sell a necklace or bracelet. There is NO SHORTAGE here at all. Interestingly enough necklaces can be broken down into individual links and you could use these to pay for small amounts. People know the value of each link. Small rings and bracelets too can be used for minor payments. Much easier then carrying coins around - how do you cut up a coin for a small payment? All this talk about coins really makes me laugh, very impractical system I think.

Silver jewelery is also readily available - either sterling (96%) or Karen hilltribe (99%) purity. You can also go to specialist shops and buy lab grade (99.99%) to your heart's content. Again NO SHORTAGE at all.
no offense but you cannot compare thailand to america. the average person there doesn't have the means to buy a large amount of gold or silver. the economys are totally different and the expendable wealth for the average person there is about what a homeless person here is. so there is undoubtably no run on precious metals there like there is here.

Namaste'
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Old 10-21-2008, 12:36 AM   #17
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Originally Posted by TAXMASTER View Post
no offense but you cannot compare thailand to america. the average person there doesn't have the means to buy a large amount of gold or silver. the economys are totally different and the expendable wealth for the average person there is about what a homeless person here is. so there is undoubtably no run on precious metals there like there is here.

Namaste'
Well the average US citizen has definitely more debts, more credit cards not working anymore, negative saving rate....so the average US citizen might feel materialistically feel rich or richer than a Thai but net-net after all debts...I am not sure if the average Thai is not a bit richer or at least less poorer than the average US citizen.....

But what concerns Gold, yes, the few Gold and at this point it does really not matter where it is...but any quantity reported so far doesn't convince me there is enough physical silver or gold...it makes me big time laugh all these stories..."woooh I know some stores somewhere on planet earth...they still have plenty of Gold"....listen:

In Switzerland there is bank, which is called

Name of Bank: Zürcher Kantonalbank
Street: Bahnhofstrasse 9
ZIP: 8002
City: Zurich
Country: Switzerland

Recent statement of the precious metals trading of the bank: "Right now we sell 3 to 5 tons of PHYSICAL Gold per day!". Ok this sounds not spectacular at first sight and I am sure Mac Donalds sells much more Ham- and Cheeseburgers measured in tons per day....

But if ZKB continues to sell only 2 TONS OF PHYSICAL GOLD A DAY MULTIPLIED TIMES 200 TO 250 BUSINESS DAYS....this give already something like 400 tons.....being sold just by a little tiny bank an average US citizen never heard, since such an average US citizen can even not make the real difference between Switzerland and Sweden....well at least most of them know...its not in the United States of America...(hopefully!)....

Ok what is so special about this little tiny ZKB: well they have an ETF on Gold...the only ETF by the way which is not only physically backed by Gold....NO NO NO...if you have such ETF's you can excercise them and you get real, real physical Gold....not like with COMEX which tries to convince you that physical Gold exercise is something bad....one shouldn't do..!

Hey you know the best, there is now another little Swiss private bank which will just do the same....another ETF with real physical Gold backing and if one exercises he/she gets real physical gold....

So, if you can't get physical Gold in the US. There are two excellent banks, which don't need rescue-money, without loosing money playing around and loosing money in the so-called sub-prime-debt (in Europe sub-prime-debt-people are normally called homeless!), no CDS no nothing tihsllub-positions. You can trust them!

Cheers, silverman

Last edited by silverman; 10-21-2008 at 12:39 AM.
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Old 10-23-2008, 05:15 AM   #18
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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no offense but you cannot compare thailand to america. '
I wasn't comparing, I was contrasting.
My point was to show (1) that in Asian countries people are close to having gold as a monetary standard. If the global economy crashed and paper money, ATM cards, credit cards became useless, people in Asian countries would be able to cope. Also (2), I was indicating that there was no shortages of physical gold around here. Always refreshing to have another perspective don't you think?

"expendable wealth for the average person there is about what a homeless person here is." Hee hee, you're funny.
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Old 10-23-2008, 01:40 PM   #19
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

Where I live in Vietnam, gold plays a similar role to what Shokdee describes in Thailand. Gold shops are everywhere selling in units from 0.12 ounces (this is called a "chi" in Vietnamese) up to 1.2 oz. bars.

Seriously, anyone wishing to acquire a moderate amount of gold might just want to travel to Southeast Asia for vacation and buy some gold. I believe anyone can walk out of Vietnam carrying $10,000 in gold, no questions asked.

Gold here sells for around 10% over the international spot price (currently it's around $105 per chi), just because after years of warfare people have have learned to distrust paper currency and thus they are willing to pay a premium for "real money".

So, you could easily fly out of the country with 12-13 ounces. Once you factor in the planet ticket, you've probably spent 20-25% above spot price for your purchase. But then again, a net price of $900 per ounce may seem very small by 2010.
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Old 10-23-2008, 09:35 PM   #20
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

gold is selling at an alltime high in other foreign currencies. it is priced relatively low in us dollars because the dollar is artificially pumped up. that is why there is a run on gold here. if you devalued the dollar to where it was in march, gold would be about $1200. if it was $1200 then there probably would not be the demand for it in the us. that explains some of the shortage. there are not equal supplies of commodities to match consumption all over the world so invariably there will be times when there are shortages geographically even when there is an abundance elsewhere. bananas are cheap and plentiful in south america but sometimes the stores in the us run out.

Namaste'
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Old 10-24-2008, 09:22 AM   #21
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

If things crash, Gold will be useless for a while.

My grandpa remembers people giving him Gold Rings for Chickens in Greece in 1930's.
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Old 10-24-2008, 10:16 AM   #22
shokdee
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)


Around here we have plentiful bananas too.

Seriously, anyone desperate for physical gold just send me the money and I'll buy it for you.

As the price of gold rises, people in Thailand sell off the jewelery they bought when the price was low. So the higher the price goes, the more comes back to the shops and stocks go up. On the other hand, if the price drops, then people with spare cash buy whatever they can afford. It's a very sensible system.

"My grandpa remembers people giving him Gold Rings for Chickens in Greece in 1930's".
Thanks for that info. Confirms what I wrote earlier about using rings, individual links from necklaces, etc as currency. Having a stash of KrugerRands or some bars might not be that practical if the financial system crashes.
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Old 10-24-2008, 11:02 AM   #23
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

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gold is selling at an alltime high in other foreign currencies. it is priced relatively low in us dollars because the dollar is artificially pumped up. that is why there is a run on gold here. if you devalued the dollar to where it was in march, gold would be about $1200. if it was $1200 then there probably would not be the demand for it in the us. that explains some of the shortage. there are not equal supplies of commodities to match consumption all over the world so invariably there will be times when there are shortages geographically even when there is an abundance elsewhere. bananas are cheap and plentiful in south america but sometimes the stores in the us run out.

Namaste'
Hi Taxmaster

For those of us in the UK I guess this is all a little bewildering.

The USD price of gold is dropping but so is the pound against the dollar so gold is actually going up now from 446 (london fix) to 451 today - so its more or less holding its value.

My question is that with the inflation expected in both the US and the UK, say the price of Gold in US will go up to $1200, so what about the currency differentials.

If the USD collapses the gold will rise to $1200 - but surely if the USD collapases then so will every other currency?

Actually looks like the pound is collapsing before the USD - from 1.71-1.51 this week.

There is alot of advice here to buy gold, but that seems now to have been directed at the US citizens. What would the advice be for those of us in the UK?

I am just trying to get my head around it.

Are there any forums like this one that are UK centric?

Thanks, t.

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Old 10-26-2008, 03:13 AM   #24
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

relatively speaking, purchasing gold should be to preserve wealth, not necesarily to make money. if all currencies go down, then the relative value of gold will be the same. in 1920 when gold was $20 per ounce, it took about 25 ounces to buy a new ford, today at $800 per ounce, it takes about 25 ounces to buy a new ford. right now the price of paper gold is somewhat deflated for 2 reasons. first is that gold's price fluctuates on a yearly cycle and gold tends to go down in october and early november. it increases in price in late november. second, the dollar is being artificially pumped up for several reasons, but it will only be temporary. once the inflation factor kicks in from all the us dollars being printed, then the dollar will fall like a brick, inflation will take off and gold will rise to new highs.

Namaste'
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Old 10-26-2008, 04:51 AM   #25
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Default Re: Why Gold Is Dropping When It Shouldn't (by Alex Wallenwein)

Not sure I see a pattern of gold increasing from October to November. Perhaps in the last 6 years that is true.

http://goldinfo.net/londongold.html
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