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Gold “Bargain of Lifetime” As Gold Standard Inevitable, Possibly Within Year - $10,000/oz Looms
Support for gold is at $1,612/oz and resistance is at $1,663/oz and $1,684/oz.
Gold climbed on Thursday on concerns that the Fed could employ more QE in a further attempt to stimulate the economy. The Fed said that the economic conditions "are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014”.
Continuing ultra loose monetary policies and negative real interest rates continue to support gold.
The Fed has already engaged in 2 rounds of asset purchases near a massive $2.3 trillion, to drive down interest rates and in a vain attempt to stimulate the US economy. QE helped push up both equity and commodity prices by providing cheap money to investors who placed it in riskier assets.
Thus, QE is leading inflation pressures and there is a risk that the Fed, like other central banks, continues to underestimate the risk of inflation.
Bernanke said US monetary policy was "more or less in the right place" even though the central bank would not hesitate to launch another round of bond purchases if the economy were to falter.
Investors will examine efforts by Europe to solve the debt crisis after ECB President Mario Draghi called for a "growth compact" but put the blame on euro zone governments to sort out their economies.
The eurozone debt crisis is far from resolved and the next stage of the crisis could be even more volatile than the recent Greek saga.
Gold Standard Inevitable, Possibly Within Year - $10,000/oz Looms
Reuters TV have interviewed John Butler who says a return to the gold standard is "inevitable" possibly as soon as within the year and $10,000/oz gold is on the cards.
Jamie McGeever interviews Butler in the Goldsmith Hall in London about his opinions propounded in his new book, ‘The Golden Revolution : How to Prepare for the Coming Gold Standard.’
Butler has 18 years’ experience in the global financial industry, having worked for European and US investment banks in London, New York and Germany.
The book says that the era of paper currency is coming to an end and a return to a gold backed dollar is basically inevitable.
McGeever starts the interview by saying that far from gold being expensive at $2,000/oz, gold may be “the bargain of a life time” especially “if the world returns to some form of gold standard.”
Butler says that this “could happen as early as next year” due to BRIC nations dissatisfaction with the dollar reserve standard, “they will start to move formally back to gold”.
There are many ways that this can happen according to Butler including one country becoming a first mover, surprising the world and the United States, by pegging its currency to gold
He points out that Russia may be the country who could do precisely that.
This could lead to a run on the US dollar and financial assets and could see the dollar lose 20% in 24 hours as investors pour into real assets such as oil and gold. This could lead to a depression in the U.S.
There could be a Bretton Woods style “crisis meeting” where the U.S. decides it must reinstate the gold standard or else the dollar “may lose its reserve status entirely.”
Gold at $5,000/oz should happen and possibly over $10,000/oz in that scenario as gold will be a “de facto monetary asset in cross border balance of payments transactions”.
Reuters’ McGeever acknowledges how the “gold market is tiny” compared to “trillions and trillions of dollars worth of cash and assets sloshing around the world financial system.” He asks how can countries back “all of that” against such a “tiny and finite amount of gold?”
Butler responds by saying that “the amount of gold is finite by weight or volume, it is not finite by price.”
If gold is going to be remonetised it is entirely reasonable that “gold’s price will rise by an order of magnitude.”
Butler correctly points out that if gold were to rise to over $10,000/oz then in fact what you would have is a market capitalisation of gold, as it were, vis-à-vis the money supply and credit volume generally which is in line with a longer term comparison – it implies stability.
It is another must watch video and shows how consciousness regarding the value of gold as a finite asset and currency is gradually shifting with obvious ramifications for all who wish to protect and grow their wealth in the coming years.
Far from gold being a speculative bubble, as suggested by less informed economic experts and financial advisors, it may remain undervalued at below $2,000/oz and may be destined to reach much higher levels as gold reasserts itself as the global currency par excellence.
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"So why not take your winnings? Why push your luck?"
Gold bars ARE The winnings. The cash is what is not worth keeping hence the reason to be rid of it.
A bewildered shuckster asked:
I did take my winnings every time I traded Federal Reserve Notes for gold.
Also, you mentioned further above that you never received education in critical thinking and that you're not really sure what it entails. Here are some resources to get you started:
Straight and Crooked Thinking (from the Wikipedia description): Straight and Crooked Thinking, first published in 1930 and revised in 1953, is a book by Robert H. Thouless which describes, assesses and critically analyses flaws in reasoning and argument. Thouless describes it as a practical manual, rather than a theoretical one.
Link to free pdf version:
http://neglectedbooks.com/Straight_and_Crooked_Thinking.pdf
Some other helpful links:
http://en.wikipedia.org/wiki/Argument
http://en.wikipedia.org/wiki/List_of_cognitive_biases
http://en.wikipedia.org/wiki/List_of_fallacies
http://www.nizkor.org/features/fallacies/index.html
http://www.infidels.org/library/modern/mathew/logic.html
"So why not take your winnings?"
Still don't know the difference between a short term investment and a store of wealth do you? I don't "invest" with gold, I safely store some of my wealth there when times are good, and gold and silver are cheap. Some of the PMs I have came from my grandfather and some of mine will go to my grandchildren. Some people think short-term, some think long term. Apparently one's definition of "Winning" varies.
As I stated to him above, there is no reasoning with someone who equates gold bullion to Apple stock. The terms and definitions of currency, money, value, etc. are not equivalent in our deliberations. Sigh...
So why not take your winnings? Why push your luck? Raw speculation that the market will climb higher? I invested all my savings in Apple in 2009 and doubled it (with the help of margins). I was too cocky to sell out and kept buying. Then one day it dipped and my gains were wiped out and replaced with losses. I wish I would have know to just take the winnings, but all I could see was dollar signs. And I paid dearly for it. For my experience, I lost a considerable amount of my life savings to that point when I should have had a solid 20-30% gain, easily. But I didn't listen to my instincts and to what wiser people were saying. Oh well, just saying...
All you see are dollar signs. That right there sums up everything you don't know about what is happening.
I don't know anyone who would buy gold from me. No one. No one I know uses, no one I know gets paid in it. No one I know would even be interested in buying it if I wanted to sell. Tell you what. I'm going to try to sell an imaginary ounce of gold on craigslist for $1300. If gold is in fact worth $1600, it should sell quickly. I'll get back to you and let you know...
You must either be blind, or not know how to read. I can't drive through town without seeing a dozen "we buy gold" signs. Nevermind dealers, pawnshops, ebay, etc.
You are totally correct shuckster!
I happen to own an original Picasso worth $14,500,000, but I personally know NOBODY who is interested, or able, to buy it from me. No one! No one I happen to know even appreciates it, or would want it if I gave it to them for free, or would know if it were genuine in any case. From all this, I can only conclude that this old crappy painting is worthless. Good thing that trash day is tomorrow --- I just hope the garbage men will be willing to take the damned thing from the curb. Maybe I will toss the rare 1930s African art that I inherited from a great-uncle into the pile as well --- I mean, nobody I know of would want that shit either!
I hope you get to look back some day on your comments and realize how goofy you sound. It's obvious that you are totally out of your element in a discussion of gold/money. I'd try to refute some of your "arguments" but we have no common vocabulary.
lol, this coming from the day trading college student.
Christ, listen to yourself. You are telling people NOT to examine arguments based on their own merit, but rather to take your own views based on faith. You are about as biased as they come, little boy.
There are a couple of these fucktards over in the chat room saying the same kind of useless shit.
They.Do.Not.Get.It
That's gonna leave a mark.
Maybe a scar, for life.
critical thinking isn't encouraged in schools anymore, don't hold your breath Tom.
I didn't go to public school, I went to Catholic school. We never spent any time talking about "critical thinking". We learned about history and facts, something public schools seem to be highly challanged in these days. Anyways, so I guess your premise is correct - I don't know how to "think critically" - whatever that means. I research and look for credible evidence. If I can't find it, I dismiss the premise. Gold bugs are not credible. They come from two classes. Warren Buffet's who running the system and leading the sheep to be sheered, or low lives who work at call centers and try to play on old peoples' fears. "Monex" - what the hell is a Monex? Is that a rollex? They get these crusty old WW2 vets to try to sell to their buddies by tricking them into believing the government has no plan for the future. The plans are written, they just can't be discussed amongs the public, for strategic reasons only. Anyways, credibility is key
' I didn't go to public school, I went to Catholic school. We never spent any time talking about "critical thinking". '
That explains it all.
By chance did you even "learn" that evolution is "just a theory"?
Education is not allowed in schools any more, so don't expect a whiff of intelligence or social skills from most. As for Catholic school, either the priests fudge pack your values into the toilet, or the nuns beat it out of you. Only the strong survive. The original " Hunger Games ", religious style. No wonder the Shuckster is such a fucked up individual, philosophically speaking. Been there, done that, got the T-shirt - but kept the embers of critical thinking alive and well, nursed back into full flame on leaving "school ". Lets get ready to rumble - the wheels are coming off the fiat cart soon.
thinking isn't encouraged in schools anymore, don't hold your breath Tom.
That's more like it.
I disagree. Critical thinking is not teachable. It's like art, you have talent or not. And don't under-estimate your (or my) public education. I read ZH for a reason.
Critical thinking is very teachable. There is a nice website to help with that too. Just go through some of the sequences: http://wiki.lesswrong.com/wiki/Sequences
Completely false assertion; critical thinking is definetely teachable. How good you get it will be limited by IQ, which hereditary, but the art of critical thinking is nevertheless teachable.
This article is gold porn. I prefer naked women, but I won't judge. It makes sense to have some percent (10%?) in real assets, but the point is to hedge. If you swing for the fences, you may also whiff.
well in that case...
Charlize Theron painted in gold?
So what "reasonable" percentage of your assets are denominated in or reley upon the $ or some other fiat currency?
how about this, any accepted fiat enough for 6 month expenses, at most 12 months as new inflow is coming...diversify the rest in various physical incl physical PM, esp while it's hardly suppressed :D
“Children who know how to think for themselves spoil the harmony of the collective society that is coming.” — John Dewey, 'father of progressive education.'
You'll have to figure that out for yourself. And it depends on if and when you see fiat imploding.
In prison, they trade with cigarettes. If we're all going to prison, wouldn't it be smart to stock up on cigarettes?
When have sheep ever been encouraged to think by their herders?
No shit! When has school ever involved thinking? It's all training.
Absolutely! Training to do something that is considered useful like a dog trainer does with dogs. There is also the indoctrination phase whose purpose is to make the subjects believe in their masters. This indoctrination phase continues after the subject leaves school for the rest of his/her life. This is the reason TV is so important.