Comments on: Why You’re Wrong If You Think Gold at $2000/oz Is Unlikely… or Worse, Just a Bubble

By: MoneyEnergy

MoneyEnergy — Wed, 02 Dec 2009 05:45:05 +0000

@Matt – this recent article by Niall Ferguson has some numbers projections about the debt, which is correlated with inflation via the increase in the money supply: http://bit.ly/6HF4mY — I don’t agree with some of Ferguson’s political framework and assumptions, but the central economic points seem valid. Not sure these numbers will help or not with your question, but could give a rough idea. Could also extrapolate based on debt-GDP levels back in 1980 when gold spiked.

By: Matt SF

Matt SF — Tue, 01 Dec 2009 00:47:08 +0000

I think Dave brings up an important point that I’ve been asking and haven’t (yet) found a suitable answer:

What price does gold have to reach today (in 2009/2010 U.S. Dollars) to equal the amount inflation adjusted damage to the dollar by 10 years from now? The USD will certainly experience inflation sometime, so how do we know if the cost of inflation isn’t already baked into the price of gold already?

I’d love more info on this if anyone else has seen the projections.

By: MoneyEnergy

MoneyEnergy — Tue, 01 Dec 2009 00:33:09 +0000

@Dave – it may not be rational in absolute terms, but neither are many investment decisions being made by certain arms of the government. But it all makes sense within respective contexts. Current indicators also say the U.S. will never be able to pay back its debt – it will only happen with greatly inflated dollars. That’s not fair to anyone else, either – so no wonder some nations would rather own gold.

By: Dave

Dave — Mon, 30 Nov 2009 19:52:55 +0000

There is NO rational justification for gold prices to exceed the marginal cost of production for a prolonged period of time. In the short term, gold can carry any sort of fear premium. But current prices say that the US dollar is only worth about 30 cents. Nonsense. The States should quietly empty out their reserves and buy back some of their dollars from foreign nations with overpriced gold. Then when the pendulum swings again, they can buy back the gold with overpriced dollars.

By: tungsten bug

tungsten bug — Sat, 28 Nov 2009 19:15:51 +0000

gold is only a fiat form of tungsten

great site

By: Daniel

Daniel — Sat, 28 Nov 2009 01:04:11 +0000

If you’re in/around Vancouver – you can check out http://icanhazgoldbug.com for several places to buy/sell gold and silver bullion, including price comparisons between the varying shops.

By: MoneyEnergy

MoneyEnergy — Fri, 27 Nov 2009 22:47:12 +0000

Yes, if even Sri Lanka’s central bank is getting in on greater gold purchasing, the likelihood of gold slumping back even down to $800 again seems really unlikely. Even if the USD rallied again due to stock market moves – the fundamentals will prevent many from jumping out of gold too soon, I believe.

By: Matt SF

Matt SF — Fri, 27 Nov 2009 19:48:34 +0000

Gold at or above $2000/oz is definitely a good possibility. I’d bet on that versus gold taking a hit, and falling back to $500/oz within the next year.

Only thing that scares me, though, is the severity of the downside once the bubble pops… if it even exists! ; )