Gold within a hair of new record high in $s (Metal of Kings)

As I said before, personal anecdotes are irrelevant unless you are willing to provide some proof that it matters. While it's important to you, it's not to anyone else looking to discuss holding gold.

I shouldn't keep having to say this, but conditions prior to 1971 have nothing to do with where we are today. The US government defaulted on the $ then, and hence this is when we went completely fiat. This is when the Gold - Oil - USD was established. While the rest of the world hates it, and Vladimr Putin addressed it again just yesterday, this is what the world dances to. This is why Gold is different than all other PMs and isn't just a commodity like a bag of sugar.

I agree that Silver might be like a bushel of pork bellies, but not gold. I've given the exact reason.

 

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Have a nice day.

 

heh heh. I understand.
:rollling:
BTW, there's no way I'd ever put all my savings into PM's

 

Sure central banks don't bother with silver, but how could they? They'd have a real hard time getting enough silver to account for their wealth, and if they did it would squeeze the market. The US did used to have a silver standard, so it's still a monetary metal (not for that reason though, just an example) even if it's not fulfilling that role explicitly in these cases right now. The reason is that gold and silver are inexplicably bound to each other albeit with wild swings in the pendulum throughout history. We can get into the reasons why this came about, but with today's mentality it seems to be more important just that it has always been the case as opposed to why.

I agree with Cloud's line of thinking that speculation is more to do with your level of knowledge about something than anything else. As in you are hoping for chance to go your way, instead of understanding why it will if it does.

 

I understand where you are going with that thought, but to me, (without any bad connotations to words):

Investing - Understanding a market and putting money in with the expectation of growth that will yield increased returns

Speculating - Intelligently buying an asset believing it will be worth more at some point in time

Gambling - Blindly buying an asset with little information hoping it goes up

To me a lot of "investing" and "speculating" is really gambling, the line between them is level of education and understanding of the markets. This is what I am trying to say I guess. If you wish to put "investing" and "speculating" into the same boat because of some connotations "speculating" can have, that is fine. To me they are both worthwhile ways to use money intelligently, with the alternative of blindly buying in either case is really gambling.

 

Indeed it is. Ignoring the facts behind Gold's unique role in the world economy, assuming that Gold = Silver = Pork Bellies, not understanding what really drives Gold, supporting decisions by euphemisms, one-liners, and simple insults directed to anyone who disagrees is what an uninformed speculator does and not an informed investor. (not saying you did any insults, BTW) Even good gamblers do more homework than this.

I really don't mind if there is disagreement on what I posted about the relationship between Gold, the USD, Oil, the central bankers and governments, but not offering any logical counter argument doesn't lend credibility to any disagreement. In fact, it only proves what I keep stating.

 

I hope this question is in line at least a bit with the thread topic.. it seems to me that gold and silver have been moving together these last number of months, and of late have separated ways. What might (emphasize might) be the cause, and does anyone think they will or will not get back together? Just curious, though what more experience investors, speculators, and gamblers might be thinking.Lucy

 

silver is more plentiful, cheaper, and has more volitility. You know despite all the beickering, it's all good and there's nothing wrong with having gold. would I put all my eggs in one basket? **** no.

 

It's a good question.

Statistically Gold & Silver have not been moving together. In the past 12 months, silver has had a percentage change in value as great as 232%. It's ranged from $14.91 to $49.53 and currently sits 20% down from its high.

On the other hand during this same period Gold has changed value by 35% and closed today at a new high.

So based on this, there is no correlation between their movements.

 

Chinese cartoon that humorously, but very clearly, explains why gold will continue to rise.

[video=youtube;oLRpP-CRc3s]http://www.youtube.com/watch?v=oLRpP-CRc3s[/video]

 

Me neither!

 

Nor I

 

Above ground available scrap silver is between 500 million and 1 billion oz. Gold is over 7 billion oz. Beneath ground silver has historically been approx. 17 times more plentiful, however due to epithermal deposition, as I've stated before, beneath ground silver will become increasingly rare. Due to these factors it appears to me that silver is far less plentiful than gold, which is one reason why I am weighted so much into silver. Also as I've stated before silver seems to take direction from gold, and then moves harder than gold along that path.

Based on my research this year's volatility in the silver market is due to high frequency trading and margin hikes more than fundamentals, and should not be considered to be the cause of consistent longterm factors.

 

Considering that mine production of silver in 2010 alone was 735.9 million ounces, I would say that there is a lot more than 500 million to 1 billion ounces of "scrap" silver available.

http://www.silverinstitute.org/production.php

 

I think this increase is over a bunch of non-sense again. The budget gridlock you're seeing in Washington is taking it's toll. Everybody's worried that they might not raise the debt ceiling and Moody's is threatening to drop the US credit rating (which in reality should have been done 20 years ago). So there's panic. Pretty soon they'll raise the debt ceiling by a few more trillion so we can get by until next year and all the idiots will be happy again. Then everything will be alright for a while. Then you'll see PMs drop back again over false confidence and idiots. 2012: Wash, rinse, repeat.

 

It does seem to be like a dog-and-pony show, with all of us as a literally captive audience. But how long can a country continue to run deficits in the trillions of dollars before it finally has to pay the piper?

 

I fully expect them to raise the limit. Both parties are simply posturing. Not raising the limit will absolutely force Washington to deal with the real issues of the economy. Since neither side really wants to do this, then they will go on with borrowing and printing money.

Hence, relative to Gold, gold prices will continue to rise. Silver? Who knows, the fundamentals are different.

 

While you are right about mine production, yearly demand exceeds that by about 200 million oz.

http://www.chrismartenson.com/blog/screaming-fundamentals-owning-gold-and-silver/59850

The reason supply and demand are exactly the same is because the demand that isn't met by mine production is pulled from available scrap to meet the need. Based on this trajectory silver will be in a legitimate shortage in the next 3 to 5 years.

 

I've been hearing that "silver demand exceeds mine production" for at least the last 30 years. But one thing that we must bear in mind is that about half of this demand is in the form of easily recoverable silver-- coins, bars, jewelry and silverware. When the price of silver is high, these items come onto the market to meet the demand for industrial silver.

 

Another difference between the easily recoverable silver now compared to the 1980s boom - is its utilitarian and sentimental value. Bullion coins and silver bars that we have now don't carry as high a utilitarian value as a silver serving dish, candlestick, tableware or etc like that melted in the 80s boom. Also these bullion coins and silver bars don't carry the same sentimental value as a family heirloom passed down from previous generations.