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  #1  
Old 11-04-2010, 01:10 PM
Pooka
 
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Gold prices again...

Yesterday Gold was dropping quick.

Today it is up $45 an oz.

When they took place in the past Republicans claimed the only reason was because no one had any faith in the Dems and they feared for the future.

Now that Republicans are in power in the House it looks like investors are really scared about the economy. That is, if you go with the Republican logic on this.

But all political hype aside... What is making the price of Gold jump like this? Is something going on overseas that could have caused it? It is the Fed buying bonds making people worried about inflation?

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  #2  
Old 11-04-2010, 01:15 PM
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Quote:
Originally Posted by Pooka View Post
Yesterday Gold was dropping quick.

Today it is up $45 an oz.

When they took place in the past Republicans claimed the only reason was because no one had any faith in the Dems and they feared for the future.

Now that Republicans are in power in the House it looks like investors are really scared about the economy. That is, if you go with the Republican logic on this.

But all political hype aside... What is making the price of Gold jump like this? Is something going on overseas that could have caused it? It is the Fed buying bonds making people worried about inflation?
easy question.

answer- speculation. pure speculation.
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  #3  
Old 11-04-2010, 01:28 PM
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Originally Posted by benhogan View Post
easy question.

answer- speculation. pure speculation.
In part based on the Federal Reserve Banks announcement that they are devaluing the dollar by printing up 600,000,000 more in magic money to buy up US Treasury debt!
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  #4  
Old 11-04-2010, 01:42 PM
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Thumbs down *** It sucks when they don't even say "Thank you!" ***

Word on the street is that the FED, just recently, made a $2T (yep...Two TRILLION) loan to an "un-named entity" and no one is fessing up as to who, or what, that "entity" is...

That's OUR MONEY (Credit of the United States Of America) being handled by a non-Government Entity (Federal Reserve) making a "loan" to someone/something without forwarding the details to the public.

Anyone really still wondering who really pulls the strings in this nation?

It certainly isn't the citizens anymore!
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  #5  
Old 11-04-2010, 01:44 PM
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Its a bubble and totally based on speculation. Now that the market is moving around a lot I'd expect its about peaked out.
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  #6  
Old 11-04-2010, 01:45 PM
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Originally Posted by Billybob View Post
In part based on the Federal Reserve Banks announcement that they are devaluing the dollar by printing up 600,000,000 more in magic money to buy up US Treasury debt!
yes people are scared that their dollars will be worth less.

Historically, back when societies used real gold for money, the king would gather them up (the gold coins) and recast them with some 'lesser' metal mixed in i.e. "devaluing" the money. This was done mostly to pay his army. Of course, the people were smart enough to catch on somehow and they started charging more coins for the same goods (to get the same amount of gold content). Hello, inflation was born.

With Ben (the other Ben, not me)basically printing money he is doing the same thing as those old kings.
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  #7  
Old 11-04-2010, 01:56 PM
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The problem with this gold mania for those who are planning to use it (the gold) as a currency if economic Armageddon comes (whatever that is) is this...

1. Most gold ownership is not direct ownership i.e. most folks who want to own gold buy shares of mutual funds or etf's that hold gold. They don't really possess the gold, they own the rights to them.

2. You can buy gold bars (expensive) or gold coins (not as bad since you can buy them in smaller quantities- some in vending machines). However, if Armageddon comes (think natural disaster (Katrina) or economic disaster (a big bank going belly up)), your local merchant will be reluctant to accept money (or gold). He will likely insist on taking a commodity (bottled water or beer) in exchange.

3. Lastly, if you decide to sell your gold bar or gold coin, you have to get it appraised or sold to a dealer who will buy it wholesale.

In any situation, I think holding actual gold or shares of gold is a sucker's bet. Just my two cents.
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  #8  
Old 11-04-2010, 02:00 PM
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Point 4. You have gold, I have guns, now I have gold.
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  #9  
Old 11-04-2010, 02:02 PM
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Originally Posted by Hatterasguy View Post
Point 4. You have gold, I have guns, now I have gold.

good point. i'm surprised i missed that one.

that is actually interesting, in Armageddon (total chaos) does happen, a whole different set of economic rules apply (or lack off).

I never thought about that. A shotgun is cheaper than an ounce of gold.
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  #10  
Old 11-04-2010, 02:07 PM
Pooka
 
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From my old University days... A quick lesson in inflation.

When a Roman Ceasar was once informed of his decision to make coins with less Gold was going to cause inflation, his replay was, 'Yes, but I get to spend them first!" I don't know if that is true, but the Prof threw that out to demonstrate the thinking of some Monetary Policy makers, one of today's which, oddly enough, was in my class at the time. He was an Oldsmobile nut.

And... The price of eggs in Colorado mining camps went to $1 per egg. This was because Gold was everywhere and eggs were scarce. The price increase was the result of too many nuggets chasing too few eggs. The lesson here was that if production does not keep up with the money supply you will get inflation since you will have more Dollars chasing fewer products.

I am betting BillyBob called this one right. Obama and Bush ran up the deficit, but in both cases the promise to pay is there as soon as the money is earned. The Fed is running up the money supply based on nothing but their ability to do so, and if this does not kick the economy into gear inflation will surely follow.
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  #11  
Old 11-04-2010, 02:15 PM
Pooka
 
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The owners of the BIG oil company once floated a plan to stock a bunker with food, water and gold so a few of us could continue operation of the company if total war broke out.

We pointed out that all it would take to defeat this plan would be a quality weapon, a box of ammo, and the will of the owner to use both. We also pointed out that there would likely be no shortage of all three if total war did break out.

What made them abandon the plan was the speculation that those of us who had access to the supplies would just use them for ourselves and not to continue company operations.

I tell you, there is just no trust left in this world.
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  #12  
Old 11-04-2010, 02:46 PM
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Quote:
Originally Posted by benhogan View Post
good point. i'm surprised i missed that one.

that is actually interesting, in Armageddon (total chaos) does happen, a whole different set of economic rules apply (or lack off).

I never thought about that. A shotgun is cheaper than an ounce of gold.
When your talking about Armageddon might makes right, gold will still have value, but at the end of the day he who has the guns will make the rules.
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  #13  
Old 11-04-2010, 03:21 PM
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Quote:
Originally Posted by Hatterasguy View Post
When your talking about Armageddon might makes right, gold will still have value, but at the end of the day he who has the guns will make the rules.
Those who have the capacity and the intestinal fortitude to use the force available to them will make the rules! Paper targets and tin cans don't fight or shoot back!
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  #14  
Old 11-04-2010, 03:24 PM
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Originally Posted by Hatterasguy View Post
When your talking about Armageddon might makes right, gold will still have value, but at the end of the day he who has the guns will make the rules.

I gotta give you that one.

Imagine James Bond saying to a woman......"I don't want stinkin' dollar bills, give me Gas, Grass or Ass...."
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  #15  
Old 11-04-2010, 05:30 PM
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Quote:
Originally Posted by Billybob View Post
In part based on the Federal Reserve Banks announcement that they are devaluing the dollar by printing up 600,000,000 more in magic money to buy up US Treasury debt!
Quantitative easing.

NOT, qualitative easing.

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