Gold

[ENP]

I know that the USA has been essentially creating money out of thin air but has the NZ government too?

Zimbabwe had hyper inflation in recent years but that didn't cause our paper money to become worthless however. With 6 month TD's at 5% it's not a bad deal.

Look forward to your thoughts.

ENP

[Skol]

Gold is up but_ _ _
Bernanke says interest rates will stay low for an extended period;
The XGD is level pegging;
The USD is up;
No hyperinflation;

So why is gold going up?

Lots of gullible punters chasing a finite amount of gold-thats why.

I was reading in the WSJ this morning that some big investment houses are parking cash in gold at the moment.

Has it occurred to you guys that they might be pushing gold higher then drop it like a hot brick?

[Lego_Man]

Dunno about that Lego. I reckon all you have is talking piece for the mantle or the makings of some very pretty fishing sinkers.

One can hardly carry it around any more than one can shave off a slither to buy some milk and fags.

One would be far better off with a back yard full of Veg, a safe full of guns and a water tank full of gasoline if the **** really did hit the fan.

Well, i've got one out of the last 3 things you mention. But not really for apocalyptic reasons.

[ENP]

Why did the gold price essentially not change in value from 1982-2003?

That's 21 years and the price was roughly the same. Over that 20 years, how much did inflation change? How much more money did the Federal Reserve/USA print?

I don't understand why the gold price has jumped so much since 2003 because there was inflation between 1982 and 2003 not just the last 7 years.

Explain please.

[Skol]

Why did the gold price essentially not change in value from 1982-2003?

That's 21 years and the price was roughly the same. Over that 20 years, how much did inflation change? How much more money did the Federal Reserve/USA print?

I don't understand why the gold price has jumped so much since 2003 because there was inflation between 1982 and 2003 not just the last 7 years.

Explain please.

It's a bit like the '87 sharemarket crash, once bitten twice shy. So many suckers got their fingers burnt in the 1980 gold crash that it has taken 30 years for a new breed of suckers to buy the hyperinflation/worthless USD story.

JB Murc will have another explanation though.

[JBmurc]

It's a bit like the '87 sharemarket crash, once bitten twice shy. So many suckers got their fingers burnt in the 1980 gold crash that it has taken 30 years for a new breed of suckers to buy the hyperinflation/worthless USD story.

JB Murc will have another explanation though.

I really can't be bothered atm I'll let the market do the talking posted doz's reason why its going higher already

[drillfix]

Why did the gold price essentially not change in value from 1982-2003?

Everybody has a theory ENP.

Here is mine, basically its a combination of psychology and definition of real and surreal.

You see, back then in the time of the "enter the computer main stage" things were alot more simple, honest (compared to these days) and a company seemed to be a company.

These days, or building up to these day, Gold is something that "still" remains real, it was real before, it was real not so long ago, and it is very real now.

As the world seems to replace a new technological phone or computer, TV, whatever consumable every 3 months, it has to continually compete and have prices reflect the time of life of that product. As in to make it, sell it fast and then super-seed it, or its a loser. The market, people and the psychology gets thrown into the waiste paper basket.

Now Gold on the other hand IMO demonstrates that it has put an emphasis on psychology to worth, value, something that will last and wont just go away.

With regards to the price of it, well the cost of getting it becomes more, in line with a current world psychology, IMO

I had a punch line in my head to finish on but since I have written the above, I have forgotten it...LOL

Anyway, if I remember I will edit this, but thats just another one of the million theories out there. :P

[upside_umop]

Expected inflation

Its all about expected inflation, isnt it?

Inflation was overpredicted in 1980 (as evidenced by gold price staying flat for so long). Now, people think inflation will return with a vengence. Whether it will or not is upto the individuals opinions. Gold is believed to be a store of value, therefore should move with relative pricing of goods, ie inflation.

Productive use?

Gold may have been worth something back in the day, but its productive use is very limited. (One productive thing I can think of isidnt they use gold as a core for Hiroshima bomb?) But because its not overly productive, and just a 'believe,' I believe we will slowly move away from gold, as evidenced by its peak back in 1500's and never really recovering.

Gold standard vs Current Monetary system

A memorable quote that I heard, here on sharetrader I think was "why would you want the money supply controlled by geological factors?"

Thats basically what would happen if we were to bring gold in as the standard. The current monetary system is much better than the gold standard for this reason alone. The only thing holding back the monetary system we have now is its inequality thats it created...it needs a framework that doesnt provide distortions. Distortions are evident given the rapid rise in debt and the passing on of this debt to the next generation (along with plenty more, but to me this is a main concern).

A few other things to consider are:

-Markets are highly inefficient in the short term (momentum effect, herd mentality etc)
-Markets are highly efficient in the long term (mean reversion to fundamentals etc)

[Skol]

Only you skol... only you could talk about not holding any airline stocks then a couple days later start bragging about how one airline stock is rising... VBA back to where it began the year, and significantly less than where it was just one month ago... Who cares mate

Still got the NAVs trackers?
Where I am at the moment there's an ad on TV that should help you out.
If you call 1-800-296-1428 there's a prayer for you. in addition there's some miracle spring water and an annointed faith tool. (whatever that is)

Wonderful things happen apparently, gets people out of debt, money turns up in the mail etc.

[peat]

gold is breaking out on the upside - the bubble continues.... even George Soros said if you see a bubble buy it.