Gold will go down to $700 in the next 5 years?

Indeed.

However unless gold is returned as the currency, then any new fiat based currency is just a shifting of the decimal point. Like slapping perfume on the pig. Otherwise re-denomination only serves to steal wealth from a predetermined portion of the population so it can be handed over to the rest.

 

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This theory is easy to test. Gold has risen about 4X in price over the past 8 years or so, and about 7X since the millenium. Price levels have perhaps doubled, which is somewhat worse than published government statistics. So if gold is an inverse reflection of the currency, then buying power of the dollar should be much lower. So it is obvious that there is a lot more going on with the gold price than a reflection of the currency. There is a speculative premium in the price too. This isn't a bad thing. It just is.

 

May as well ask: Will the supply of US FRNs be cut in half in the next 5 years?

 

Might go to zero if everything is mandated to be electronic.

But more seriously [or not], it might if the bond market collapses. The debt is the money and the money is the debt and deflation can be precipitated by defaults and a crashing market. On the other hand, the Fed has the power to inflate if they desire it beyond all reason. That's why I always say that the probability of deflation or inflation is 50/50 depending on policy decisions not yet made.

 

But Cloud you are not factoring in increase consumer demand for gold, IIRC jewelry imports jumped from 4 bill to 33 bill for Gold in India between 2000-2010. Also increasing production costs, which from what i read has gone up more than 2 folds thank to increasing fuel costs.

 

So some actually expect a "new" fiat currency for the US?? Don't wait up for that IMO.

 

I don't have to watch.

I know what will happen to the price of gold.........


It will go down, and it will go up.



And then wind up exactly where I will lose money

 

The change in relative value of gold and the dollar includes everything you mentioned. What it all indicates is that there is more going on in the price of gold than just an inverse relationship to the purchasing power of the currency. People buy and sell gold for other reasons, as you indicate.

 

I think a "more likely" outcome, if [and that's a big IF]anything happens at all, is that there will be a new Bretton Woods type agreement where the major currencies in the world are tied to SDRs and SDRs will be said to be tied to gold even though that won't last more than a day because there is too much money to be made by manipulating it.

 

None of that will occur. It will go on as normal, with everything moving to electronic transactions.

Heck, even the slot in Vegas have gone coinless/paperless. Well, you put your bill in, and when you cash out (if you have anything left) you get a receipt to take to a designated location to cashout. I would not be surprised if you can transfer funds from an account to a slot machine nowadays.

Summarily, so long as the world is now so intertwined and interdependent, no major failures will occur, or if they do, the governments will make it all look good even though nit may not feel good (i.e. US housing market/economy 2006-present).

 

When you think back in 5 year increments, was anything predictable? Five years ago nobody thought we would have QE1,2 and 3. Five years before that everyone thought real estate was a sound investment. Five years before that tech stock were a sure path to wealth. Five years before that $250M annual deficits were considered unsustainable. Five years before that nobody expected the stock market to crash [1987]. Five years before that Business Week magazine prounced the stock market was dead when the Dow was 800. And so on. I don't know what is going to happen five years from now, but I'll bet we won't just go on as normal.

 

Normal as in governments will not let big industry or finance fail or suffer any ill consequence of their acts.

PS how do you just quote part of someone's post?

 

Gold is going to the moon according to Martin Weiss!

http://www.moneyandmarkets.com/new-era-of-monetary-explosion-what-will-happen-50695

Hysteria??



[TABLE="width: 656"]

New Era of Monetary EXPLOSION!
What will happen?


by Martin D. Weiss, Ph.D.




[/TABLE]

 

I just start with "Reply with Quote" and highlight and delete. It helps focus attention on the comment I'm replying to.

 

I tried that before, let's see if it works now. Presto!

 

You just have to be careful that you don't delete the [/Quote] at the beginning and end. It's a low tech solution, so I like it.:smile

 

Frank tell me when you're buying or selling so I can do the opposite .

 

And let me know when you are buying or selling so I can do the opposite of you AND Frank. :devil:

 

And then, after the intents are known and calculated as sums subtracted from fractional roots of their tangents, I will do the diametrically opposed opposite.