Its not, hence the price crashing lately. It peaked on a belief of inflation due to QE which didn't occur and its now sunk due to a belief of deflation with QE scaled back.
Why is deflation good for gold?
Why is deflation good for gold?
No champ, my first 5 kilo blocks of siver I purchased for $800 each.
Gold to me is just the "bell weather", it will become so valuable that Krudds and Co's will sieze it in the national interest.
Note Sinclair again this morning calling $50,000 gold, he was correct the last time when he called $1650, for two years prior, from $800.
But for me...
I just plodalong, so we will see.
I would guess that Unc means if we get deflation the game is over. After trying to pump prime the system with a few trillion dollars and getting deflation still there will be another banking crises and a flight to gold as the only protection against wealth disappearing - Cyprus style.
Well done TH, couldn't have said it better myself
They desperately want just 2% 'target' yet QE just maintains flatline? The point is, if there's just the slightest contraction there's nothing left in the professors armory, no more bazookas, because everyone and the drovers dog knows how the system works & is rorted for eg the Irish bankers tapes, so no more bailouts for the TBTF's.
The bail-in model template was a success and will be seen again. Government deposit insurance is worthless, even here.
Once the effects of the spike in interest rates starts to really have an impact in the highly leveraged $300T interest rate swap market then that's the start of the end game.
The next one will be QEWhateverItTakes.....let alone the &%^$^# taper....
PS TH I think you've hauled him over the coals enough about the 100 to 1?
The Great Comex Paper Gold Dump: Online Real-Time Physical Gold Price Datasource
Still looks like Gold Equities leading Gold:
Canada really took off overnight. Looks like the Aussie mid caps.. err I mean SMALL cap goldies will be up at least 10%-20% come monday.
Yes, there was something happening on Thursday with gold equities even before gold was still to fall another $60. Just end of year house keeping to improve the ledger or something more substantial?
What platform/software is that chart from?
Interesting chart here from APF comparing the gold price movements to the classic 'bubble' pattern... two different views.
This perspective is how I "value" gold. i.e. "What is the price I must pay, to save in an asset which is not just another claim on somebody elses future cashflows".
While I can understand the perspective, I don't understand how you use that value gold.
Unless we get goods and services being quoted in gold ounces, gold has no value aside from the amount of fiat currency we can get in return.
There are two different kinds of commodities and we need to understand the price formation process differently for each one. The first one I’m going to call, a consumption commodity and the other type I’m going to call an asset.
.......
So, now that I’ve laid out this background, the price of a good in a consumption market goes where it needs to go in order to bring consumption in line with production. In an asset market, consumption and production do not constrain the price. The bidding process is about who has the greatest economic motivation to hold each unit of the good. The pricing process is primarily an auction over the existing stocks of the asset. Whoever values the asset the most will end up owning it, and those who value it less will own something else instead. And that, in in my view, is the way to understand gold price formation.
... Money is an associated value in our heads. It's not a physical item.
Yet for the last 30+ years, the fully fiat dollar, a purely symbolic token currency, has been behaving as if it actually is an item of value equal to the real goods and services the US has received through its perpetual trade deficit. Understanding how this was even possible is the only way to understand how it will end.
The price of gold is going down. That is what the charts, newspapers and pundits are all saying. What I think they are deliberately not saying is that the value and desirability, as opposed to the price of gold, is going up and will go up further.
Make no sense? Well I think it does if you remember there are two types of ‘gold’ for sale. One is metal, the other is paper. It is paper gold that is being dumped not the metal. The metal is being bought at a fair old rate. But because there is so much paper gold around and the major sellers and market makers in paper gold prefer metal and paper to be confused, even thought to be identical (their trade depends on this confusion), no one seems to be pointing out the very different dynamic happening in paper and metal gold.
Paper gold is being sold. And those selling it are the likes of Soros Fund Management LLC and BlackRock Inc. As Bloomberg reports today,
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