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Credit Suisse Gold Supply And Demand Forecast; And Why Clients Should Sell Their Gold To CS
Cutting straight to the chase:
Our analysis of the gold market leads us to take a bearish stance with regard to the gold price in 2010. In 2009 we reasoned that the main drivers of the gold price were significantly linked to the trade weighted dollar, increased investment demand, central bank purchases and market sentiment. The increase in investment demand for gold ETFs, in our view, had an “accelerating and reinforcing effect” on market sentiment and the safe haven status of gold which resulted in upward pressure on the gold price which rose 24.6% during 2009. We do not expect the 2009 rate of investment in ETFs to continue at the same pace in 2010.
We are of the view that the gold market will likely be dominated mainly by the demand side of the equation in 2010. We believe that the likely decline in investment demand for ETFs, year on year, will play a pre-eminent role as a swing factor in our supply-and-demand balance in 2010. Jewellery, industrial and dental demand will likely strengthen marginally year on year. The secondary supply of scrap will depend on the gold price but will likely remain above 50% of mine supply. Central banks will likely become net purchasers while de-hedging will reduce significantly as the major players in this arena accelerate their 2009 de-hedging activities. Our calculations show a large oversupply of around 420 tonnes in our supply-and-demand equation for 2010.
In summary, we believe that the steam has run out of investment demand as the economic environment has and is changing to the positive. Muted investment demand coupled with a change in market sentiment and a projected large oversupply in the supply equation all point to a downward correction in the gold price from the highs reached at the end of 2009.
Such optimism, even as the global economy is poised on the edge of the double-dip. On the other hand, we wonder who Credit Suisse recommends its clients sell their gold to? Could it be... Credit Suisse?
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on Mon, 01/18/2010 - 10:24
#197194
Sentiment in the gold market is one-sided---only bullish---which makes it vulnerable as the public realizes that the euro is actually worse than the dollar as a currency... When gold decouples, yes, I expect a big rally... Before that, there will be tears in gold land as the euro heads to 1.
And to all those experts that have been forecasting $5000 gold since 1980---wake up, it was the mother of all bear markets for 20 years-
Yes--we were in inflation for those 20 years and central banks were dumping gold "browns bottom"
Gold is a non-starter in inflation,it does hold its buying power,but i would sell gold and buy real-estate--
Deflation--hyper-inflation--currency collapse--that's when you want gold--
Today we have deflation--I also see currency's collapsing--just little guys for now--but--what happens when it starts infecting the majors?
GBP/Yen--for starters--then comes the real flight from paper--
btw--i'm always long gold--but i do expect a nasty downdraft--
As a hedgeoff--I'm long USD and short gold at 1188--
Once again Master Bates--makes assumptions--
Gold doesn't depend on the dollar falling--
It will trade and compete "with" the dollar--
For instance all of 2005 and again in the last quarter of 2008--
It will do so again--just wait for equitys to crash,then as soon as the wrong sided hyper-inflationists are flushed,you'll see gold-- trade with the dollar and compete as a currency,then you'll see gold decouple and kick everythings ass--
Just my call on it--
chumba, mr bates needs your appropriate attention most haste, por favor....:)
Ok good debate/conv. everyone, I'm off.. Have a great day :)
"projected large oversupply"??? You have got to be kidding? Even at 420 tonnes, this is a small amount. The entire gold market is small. India swallowed 50% of that amount in one mouth full! Do you think China is going to sit on the sidelines? Think again.
As far as ETFs are concerned - they trade paper. They push and pull demand by pushing and pulling piles of paper around. Watch out when the next crises occurs and everyone shows up at the window demanding physical delivery! The TSWHTF big time!
How does that go? Oh yah. "Old Mother Hubbard went to the..."
China has already offered, tried to steal the balance at $1,000.00oz.
And China is not buying a lot of Gold from outside markets.
They have the largest known reserves in the world, far cheaper for the Commies to get their own, from themselves, than purchase open market.
That's why they did not snag the other offering leftovers from the IMF.
People into ETF's are Investors,Specualtors........
Or sadly misinformed.
Because if the SDHTF, they will not be recieving anything but PAPER...............
Perhaps they need more physical gold to cover the PHYSICAL demand as more people realize the possible fraud, or at least the huge risk, in paper gold (huge risk with ETFs like GLD, etc). As more investors and those seeking to maintain the value of their wealth buy and hold physical gold, demand for the product will remain high.
Ask yourself this, why did Barrick buy their hedge book if the price/demand for gold was going down?
Master Bates sez--
What I do see is deflation, as the demand from the consumer sector has been overextended for some time and tapped out. Our situation is different than in 1982 where a decade of pent of demand existed. People already have their second bathroom and granite countertops. With deflation, the prices of all assets - including gold - will decrease."
Damn--wrong again--
Last time we had deflation-30's---and i do agree we are "in" deflation and will be for a long while yet--
Gold out performed everything--
As Shocker explained above--about the POG being irrelevant--which i agree with--
Compare gold in the 30's with CPI and you'll see what he/she meant--
I guess we know what Mr. Bader does in his spare time and it ain't twiddling his thumbs! My WAG on gold and dollar is that the dollar will strengthen, if only b/c the other currencies, ie. Pound, Euro and Yen, will suck wind more than we will in '10. That will temporarily deflate the price of gold. That's the time to buy, IMHO.
Gold should be a part a part of everyone's portfolio (5%-10%) not 100%, unless you're a speculator. And what's up with the comparison of the housing bubble? For god's sake, the market was so over-heated and prices so out of wack, only someone not thinking in reality would buy in at those prices. Of course, what was their risk? Zero, pretty much. Near-zero interest rates, zero down.... A chance to own a McMansion on dollar-meal budget.
Gold is and always will be a form of currency. Period.
Masturbates .. is it too much to ask that you go? away?
the repetitious SPAM is nauseating
Argue with logic, reason, facts. Even if a particular proponent goes away, the argument still remains.
I am Chumbawamba.
Seeing that it was almost there last month at this time and has hit 1.42 before, several times, the answer would be yes.
The real question for speculators though is, of course, WHEN?
It's funny how those who didn't predict "the highs reached at the end of 2009" are now predicting lower prices for Gold in 2010. Don't bother reading the report. Here is a concise analysis of it:
BULLSHIT.
No you're right. There will be a selloff. This is going to be a really good fairy tale. They got their best bullshit artists on it. Then the rotting CRE corpse will start pumping out methane gas, Tax season will turn into bond season. The IMF will be under fire for squirelling away Haiti funds to IBM or some damn shit casue they think IBM can keep the chinese from hacking the crap out of their computer systems.
Don't put too much faith in any correlations now Andy. The Gold market is a wicked mistress - it has a record of latching on to whatever correlations that favor its advance at the moment. For example Gold and USD rose together at the beginning of 2009, and when the dollar started falling later in the year, guess what, Gold started rising in an inverse correlation to it.
It's a bull market - plain and simple (in Gold and Gold alone i.e.).
GG,
Were not these SAME people saying the correction DOWN would not happen until Mid 2010?.I think so..........fickle aren't they.
All I remember is $1,500.00, mid 2010...............
How can gold be a bubble when almost no one of the ordinary people owns any gold (except a ring or so). I don't know anyone IRL who invest in gold - or even mentions it in a conversation (except if they just sold some scrap gold - which is the opposite of bubble forming). Not one single person. Those who even know the current price, most don't, think it is very expensive. Compare with the .com-bubble, when everyone, even the librarians, nurses and taxi-drivers owned .com stocks, talked .com-companies, owned options in these companies. And the stocks where always considered cheap at whatever price. And no one thought these shares could loose value. It wasn't even on their radar. No fear at all, no talk about a bubble at all.
With gold, all I hear is talk about bubble. Gold seems more like a wall of worry.
How can the USD and other fiat currencies not be a bubble? They have no fundamental value what so ever (just like worthless .com-companies could for a while buy you a lot of stuff, their true value of 0 was eventually realized). Fiat currencies give zero return. They are constantly diluted. Fiat currencies are completely useless for all applications: it can't be used in industry, nor as jewelery. Most of them are just digital. They can at best be used to snort. But that's about it. Also, you could extract some joules of energy from them.
Someone said gold cant be used in the industry? This is nonsense. Gold is VERY usable- But the price prohibits its use in many areas. It is more valuable as a monetary metal.
china is the biggest gold producer, in the world,. and they keep every ounce. lately, I've been amazed @ the amount of real assets, I can aquire, with little pieces of green paper, which are printed for 2 cents apiece
People think Au is expensive, yes.
They think gasoline is too.
Wonder when they figure out that's the real value of their dollar dropping?
People look at the DXY or the Euro cross and think the dollar is STRONGER TODAY WOO HOO. Meanwhile, the price of every commodity keeps going up. Has anyone looked at the fkin price of MILK lately? Or examined a $.99 bag of Doritos? There's hardly any IN THERE anymore! Freakin candy bars cost $1 or $1.50. I used to get these as a kid at $.25. A prepared box of Hamburger Helper used to be a challenge for me to eat by myself when I was consuming 4 or 5000 calories a day during my bodybuilding years, but now, jeezus...it barely feeds two preteen kids.
Meanwhile we keep hearing about strong dollars and deflation and "flight to (relative) quality." Look the flight to quality is underway, to real things.
The principal moneychanger class over the eons loved gold so much that they named themselves after it, and the others after silver or diamonds lol. Gold is intergenerational wealth, period. It's been wealth like this for longer than the FRN has EXISTED. Longer than the US has existed.
Crikey, if you MUST have an industrial use, buy Pt or Rhodium. Or Iridium or any of any number of rare metals with industrial uses.
Ordinary people aren't buying gold; you are correct, they are selling it. Cash4Gold is people getting what they think is a good deal on gold being so "high." If anything, the proliferation of scrap buyers is a sign of the reverse. People couldn't buy enough .com or housing at ANY price, but now they are rushing to SELL gold because it's "so high." As if the masses are good judges of "value" lol.
Someone says bullishness is too high in gold, then why is JPM so massively short?
According to everything, hither and yon that I've read, gold will either rise or fall.
Any possibility it could just stand relatively still, varying within 1-5% for the next 50 years?
its simple if people around you in your community continue to default on debt the price of Gold will continue to go up if they dont the price of gold will go down.
So just watch whats actually happening in reality rather than markets so far it is clear to me that people will continue to default on debt such is the nature of interest.
Also the governments of the world must default it is more or less a mathematical certainty.
I was into gold at its rock bottom way before most anyone would even mention it and these are the reason I was in it and these two events have yet to accure.
So when the promise behind the money fails thats when you will know what Gold is worth and thats not saying it will be worth anything but these is a high probability it will.
my first purchase was 10 maple leafs at $285 ea...anyone else beat this?
Not here.
My first purchase was 10 maples at 700.
Coin dealer told me to go "all in" at that time,
should have listened to him.
Dollar cost averaged in to 141 ounces.
my averaged cost is $900
Should have started much sooner, I sat
around and thought about it since 04......
look at it this way, if you feel down on your timing. if you went all in when gold was 300, you would be up 4x in FRN. on the other hand, if you went all in TOL when gold was 300, and only started buying gold when it hit 700, you would be up 16x in FRN. if the "real" gold explosion ever comes, you have certainly not missed it yet.
Thanks!
Don't get me wrong, I am happy with the performance
so far. Many of my friends who got in around 300,
stopped buying around 500, thinking it was too high.
I am actually ahead of them due to quantity..
Back in 04 I just couldn't see how bad things were
going to get. In March of 08, when Bear failed and
Lehman dropped in half same day (no idea of why the
reserve fund kept lehman paper after march 08),
it was obvious to me we were in big trouble.
In June of 08, moved retirement funds to 100 cash
and that turned out to be a good move
Very obvious now that things are going to get much worse.
Only consideration now is whether or not to liquidate
retirement funds, take the penalty and tax hit,
and convert to Au.....I like the no counterparty risk
aspect of Au...a lot
Whats really interesting about this 'report' is the lack of analysis that was done. There are more drivers that impact the price beyond those mentioned by the authors. How about the supply/demand curve being impacted by massive net short positions by the commercial banks? How about overlaying that on their graphs of the price when it broke above $1,000. That's a far more interesting - and enlightening - graph than any that are in this obviously very vigorously researched 'report'. what a joke.
Good point. What is the net shorts of CS? Not that a large investment bank would ever issue a research report to favor their short positions, what am I thinking?
Fact: Money supply increasing= positive for gold
Fact: production has been falling since 2001 = positive for gold
Fact: Central banks increasing their purchases of gold = positive for gold
Buy on dips as there will be some, especially if it dips below $1,000
how about the miners strike in south africa, which cut production, by 25% last year
Woah now. Don't you know you're not allowed to mention things that might be, dare I say, bullish for the price going forward? I mean, its in a bubble. Everyone is saying it - must be true...
Deflation, the decline of prices related to assets. So far I've seen none of that. My extra Value Meal has nearly doubled in price in three years, thanks to minimum wage increases, food prices continue to see-saw depending on availablity and whether the company needs another few cents per pound. Car prices seem to continue to rise, unless you want to strip it bare. Oil prices are hovering around 80 and my taxes are going up. Yep signs of deflation are everywhere. At least my silver and gold are holding value. I don't believe the goverment CPI because what my eyes are seeing are significant price increases, not the piddly .1 and .2 percent the government acknowledges. Of course if the government were honest and accurate, they would have to pay more out because of all the COLA's!
on Mon, 01/18/2010 - 12:00
#197343
Deflation, the decline of prices related to assets. So far I've seen none of that"
Wrong--Deflation is decrease in money and credit supply--
seeing lots of that--
peak gold production:
http://www.businessinsider.com/peak-gold-is-happening-everywhere-2009-12#in-most-countries-the-production-trend-is-down-thats-really-the-case-in-1-gold-producer-south-africa-where-production-is-down-violently-1
http://www.businessinsider.com/11-ways-to-get-into-gold-2009-10
TA does call for $1300 gold and it is on an upward weekly channel as is silver and gdx. Commodities do not end quietly, they end in parabolic runs.
Anyway, why would anyone believe Wall Street analysts, they thought housing prices would never have a down year on a national basis.
Good chart. Now take that china line at 300 tons and drop it down to near zero. Now take that russia line at 150 tons and drop it down to near zero as china figures out why spend oil to get gold to make their assets less valuable and as russia figures out why not just milk oil if america is going to run 3 wars.
Funny,
They use data about gold ETF to make their point. I can simply put the whole analysis in question by one simple fact.
People and fund managers are aware of the potential fraud in ETFs, some of them stopped buying them, but not necessarily because of the lower interest in gold. They just know better the risks involved in buying ETFs. The demand for gold may remain strong for me ETF argument is not valid. I would never buy ETF gold if I want to preserve my wealth. The gold price will be driven up not necessarily by investors which buy because it will be going up, but because of people who want to preserve their wealth. This what people are not taking into account.
best,
Radek
my take?
Gold will be part of the int'l trade settlement of the future. So will food, oil, computer parts, anything.
IOW, production backed international barter not built on fiat debt itself predicated upon perpetual growth.
Is gold more useful or valuable than oil? No. Value is whatever two participants assign. Arab nations should not stockpile gold as they produce oil for trade. Food producers should not stockpile gold because they produce food for trade.
Gold is useful as a SURPLUS mechanism for those countries, though, in the event they need things. So would the SPR be. Or the gas pumped under the ground in storage. That's like a savings account to smooth out droughts or refinery fires, etc. Nothing says a nation could not stockpile oil or LNG or grains or iridium as a surplus fund in case their primary exports hit a production glitch.
Either way, trading is migrating toward real things as opposed to paper promises
I agree, but to a lesser extent. It will certainly be a part of it. The question remains to be seen if its the king, or just one of many princes in a commodity basket backed currency. I'm all for it being the sole item, but govts will want others. Especially countries that are rich in commodities other than gold.
Gold is the wealth of ages. What happens when the oil runs out or we have moved on? The Arabs will happily give up their Oil for Gold. That is what has been keeping the system together!
The $ is backed by Oil which is sold to acquire Gold. That in a nut shell is the global economy.
Yeah, keep buying all those dollar denominated assets. We'll see who is feeling good in ten years. I'm 100% gold/commodity positioned. Diversification are for the weak minded that are too unsure of whats going on to place their money on the obvious
I'm unsure what's going to happen, but I am diversified, inc. decent physical PMs.
I think it is not prudent to be 100% in anything unless you are really loaded. Even then...
I've been calling a $1,045 floor for gold since the day it was disclosed that India bought 200 tonnes at that price. So call it a possible $100 point downside and thousands of dollars to the upside. Got gold?
Hey Trav7777,
While I agree that the future has gold as actual money ( for international debt settlements anyway) the question is whether its only gold, or if its a basket of commodities including gold. Govts will want to make it a basket rather than only gold so they can still try some funny business with the accounting. Commodity rich countries, like Brazil, will likely want to see a multi-commodity based basket as opposed to straight gold due to the wealth of natural resources they have. Same idea for other countries like Russia and others.
I see it this way:
Nations will trade real things with one another. Sound debt instruments, letters of credit, real bills, etc. They will hammer out commodities arrangements, etc. Trade will happen the way it used to and did for 100s of years. Tea for silver for example. Gold's use is in value density as a surplus asset. If, for example, a grain exporter had a drought but still needed oil, the trade could be settled in debts against future production or else surplus gold saved. If a nation has significant gas or mineral assets, those could be traded.
The future of contraction will revolve around real things, not debtmoney. Debtmoney can only exist parasitically in a growth environment, which we have left now. If you were faced with a person of declining income, would you increase lending unsecured to him? No. You'd take collateral or else real things, cash up front, etc.
That's the future. We have a legion of insolvent sovereigns who've made promises that could only be satisfied if world growth doubled and even then it's a spotty proposition, especially in the case of medical and retirement entitlements. The US would have to grow like crazy for our debt load to be justified.
So, the future holds a place for gold but it is in my mind no different than any other real thing. If oil were practicably stockpilable, I'd stockpile that. I mean, gold, rhodium, platinum, who cares? It's all about what's easiest. Gold has density and it doesn't corrode, but could a big platinum producer stockpile that and use it as a trade settlement? Of course.
A commodity-backed currency regime is Real Bills Doctrine. But only backing with commodities is foolish; Real Bills envisions notes against all real things, manufactured goods, intellectual property, anything. Software even.
That is what trade is supposed to be, not the issuance of synthetic bullshit debt instruments for real things. That is the post-BW US debtpaper racket. As long as we could continue the credit ponzi, there were new borrowers to pay the previous borrowers' interest and those who purchased the paper got paid. But now that ponzi has inflected, so why would anyone take debt that required a ponzi in exchange for real stuff?
I see it this way:
Nations will trade real things with one another. Sound debt instruments, letters of credit, real bills, etc. They will hammer out commodities arrangements, etc. Trade will happen the way it used to and did for 100s of years. Tea for silver for example. Gold's use is in value density as a surplus asset. If, for example, a grain exporter had a drought but still needed oil, the trade could be settled in debts against future production or else surplus gold saved. If a nation has significant gas or mineral assets, those could be traded.
The future of contraction will revolve around real things, not debtmoney. Debtmoney can only exist parasitically in a growth environment, which we have left now. If you were faced with a person of declining income, would you increase lending unsecured to him? No. You'd take collateral or else real things, cash up front, etc.
That's the future. We have a legion of insolvent sovereigns who've made promises that could only be satisfied if world growth doubled and even then it's a spotty proposition, especially in the case of medical and retirement entitlements. The US would have to grow like crazy for our debt load to be justified.
So, the future holds a place for gold but it is in my mind no different than any other real thing. If oil were practicably stockpilable, I'd stockpile that. I mean, gold, rhodium, platinum, who cares? It's all about what's easiest. Gold has density and it doesn't corrode, but could a big platinum producer stockpile that and use it as a trade settlement? Of course.
A commodity-backed currency regime is Real Bills Doctrine. But only backing with commodities is foolish; Real Bills envisions notes against all real things, manufactured goods, intellectual property, anything. Software even.
That is what trade is supposed to be, not the issuance of synthetic bullshit debt instruments for real things. That is the post-BW US debtpaper racket. As long as we could continue the credit ponzi, there were new borrowers to pay the previous borrowers' interest and those who purchased the paper got paid. But now that ponzi has inflected, so why would anyone take debt that required a ponzi in exchange for real stuff?
However, its not that gold is more valuable than other commodities or what you want to store excess profit/money in, but rather look at what has been and still is money for the history of mankind. Sure, oil is one item people look at now, but what happens if they actually do move off oil for energy at some time (the world) in the next 50 years. Oils utility as a store of value would then be greatly reduced.
The utter uselessness of gold at any price near the current level for anything other than store of value actually argues positively for the role of being used as money. In addition to the fact that it has been used for exactly that for 1,000's of years.
And for all those that keep using the idea that the 'market' and populations decided to not use gold anymore is ludicrous. It became illegal to settle debt in items other than FRN's (or paper dollars). Try doing it this year with your IRS tax debt and see who comes knowcking on your door for breaking the law. Yeah, the market decided they no longer wanted to use gold. Good one. Ought to take that act on the road...
I run an electroplating company and typically pay $50 to $100 over spot for gold as a potassium salt. I apply it to customers' products and charge them for the trouble. I don't buy gold except as I need it. I don't buy it on the dips and I don't store it, simply because of the volatility of the price and the absolute cost of warehousing it. I mark it on a multiple of today's price, plus overhead. I can't say exactly why, but I feel Master Bates is correct. I think we will see another downturn in gold price, perhaps only as a means of shaking out as many people as possible. I think that gold will then march upward slowly to $1800 or so in five years. I must say that the central banks hoarding gold means something. Kind of the like the "excess reserves" at my local branch of B of A. I think both are a hedge against the next wave of RE trouble and related credit implosion. The big guys see something coming. Finally, remember you can't eat gold and you can't safely trade in gold unless you have enough infrastructure to provide for domestic safety. If the SHTF, and you go to the local souk to trade gold for beans, you can bet on some banditos following you home to find the rest of your stash.
How much to plate one of my 99.5 ounce tungsten
bars???
If we get a currency re-issue, PM's will be
sold at the local coin dealer for the new issue.
Same problem though, thats where the 308 with
the Holo Site comes in. (I highly, highly recommend
Holo-Sites. Eotech) Instant target acquision
and neutralization.
A few friends with similiar thinking will be quite
valuable.....
Huh?
Are you aware that people do precisely this in Argentina and Zimbabwe?
WTF are you going to trade for your beans that the banditos WON'T follow you home to take???
They're NOT going to steal your huge mattress stash of priceless FRNs?
One thing to consider about Gold - philosophically.
Has anyone ever considered that Gold is not the Means to wealth preservation or accumulation but rather the Object of wealth preservation and accumulation?
If I were a criminal bankster, I'd far rather put my ill-gotten and well-stolen loot in GOLD rather than the third vacation McMansion, the fourth Porsche, the second yacht, etc.
All of the above can go away rather quickly if the "wrong shit" happens.
Not so with Gold.
Thus endeth the sermon.
KptLt laughing swordfish
9er Unterseeboote Flotille
why do people continue to argue that deflation is dollar positive? perhaps in an unleveaged system, but not in the one we live in. deflation = default which means every social net that is invested across the complex will converge to zero. Inflation of deflation the FRn converges to zero. If deflation were dollar positive, BErnanke wouldn't have risked and lost the balance sheet of the USA. Lunacy.
As an aside lots of trolls of late - Job creation via Sunstein
Sell your gold when the world is no longer run by banksters and their sycophants. IOW, you've got a while.
Arianna Huffington feeding the fire...
http://www.huffingtonpost.com/arianna-huffington/hope-has-been-a-bust-it...
"The Gold market is a wicked mistress - it has a record of latching on to whatever correlations that favor its advance at the moment".
Exactly!!
If you are sitting on a bunch of EUROS right now, and the EURO comes under pressure this year - what are you going to buy? Definitely NOT dollars - the rest of the planet despises the dollar & all the "baggage" attached to the dollar!
CS / GS (all banks private/central/cartel) are scared shitless that the whole planet will dump paper & they will do everything they can to discourage/prevent Gold purchases!!
The velocity of GOLD is zero! If the citizens of the planet stockpile GOLD, the Deflationary death spiral cannot be broken! NO amount of paper printing can then break that cycle!
What would you expect CS/GS (et. all) to say?
As a side thought: when does the US mint come back on line - it has been shut down for 45 days now - I believe. The average citizen CANNOT even buy bulk gold in the US right now from the mint!! Doesn't that bother you guys just a little bit?!
Doesn't that bother you guys just a little bit?!
It bothers me a lot, and has been the subject of letters to my federal senators in the past. The Mint is required by law to produce and sell gold and silver coins sufficient to meet demand. They are breaking the law. If a government agency can break the law when it becomes too hard to follow it, then why can't I?
The Google Charts are pointing to a very tough year economically. I learned a long time ago to watch behavior and action above all else. I do the action test when out in the real world. Full Post here..
http://thegreatloanblog.com/
Not Just[ Jumbo Loan](www.thegreatloan.com "Jumbo Loan") Talk Either.
dollars were halfed in price just in 2009 alone. - moentary base more than doubled - from 800 billions to 2 trillions. It slowly sips into economy. When it gets trhough, there will not be dollar anymore, just toilet paper.
I prefer gold, that can not be printed 300% just in one year.
That's besides any other rumors regarding tungsten and 30 years of manipulation.
There were 10 years of rumors regarding Madoff, Enron etc and in the end it turned out true. In gold the stakes are much higher, better to listen the rumors and analyze.
I'm glad someone is out there trying to argue against gold/silver. I've posed the question to every person I know, why aren't they buying, just to understand why people don't believe in it. All I've gotten from about 50 people regarding gold/silver is:
1) Its price is too high.
2) Its price is even higher than the last time I checked.
3) I tried to buy it but its premiums are too high.
4) Can't afford it.
Only one person answered with #3. If only gold/silver would drop the price down signficantly or even crash it, I'd be very happy. I guarantee you I'd be hitting every coin shop and coin show then to buy as much of it as I possibly could.
When gold rises it is not necessarily due to demand. If the underlying currency devalues itself and creates more dollars, the price of gold will rise. Now I know you will probably say that money supply+credit is actually shrinking, but then again the Fed's money supply indicators were very misleading during the last decade as the housing bubble soared to incredible heights. The reason being that most inflation is not counted on the Fed's books. The $700 trillion OTC Derivatives bubble allows most of that inflation to go unreported. For example that derivatives bubble, also props up the whole us treasury market, which supports the dollar. There are also the massive short positions in the price of gold and silver by only a few major players (ahem JP Morgan), it is questionable as to whether those positions are even coverable, considering how large they are. JP Morgan alone has an uneconomical short position of up to a third of all silver's annual production.