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One could presume that stock prices will be higher five years from now. I am not so sure about three.
You are looking at this from the perspective of someone who had known nothing but the bull market that started in 1982.
The mid-1960s through the 1970s was a flat time for stocks and the 1930s were 10 years of declines. Point: we really don't know what will be 5 years from now.
You are looking at this from the perspective of someone who had known nothing but the bull market that started in 1982.
The mid-1960s through the 1970s was a flat time for stocks and the 1930s were 10 years of declines. Point: we really don't know what will be 5 years from now.
The price of any asset is primarily based on supply, demand, future expectations on the value of the asset and the markets "perceived" value. The moment the preception of value of gold changes so will its prices.
ANY ASSET OR COMMODITY IS SUBJECT TO INFLATION UNDER THE RIGHT CIRCUMSTANCES. Especially when demand exceeds supply.
Also the value of gold has increased from about $270 to $295 an ounce in August 2001 to current prices of over $1650 an ounce today. Sorry but the cost to produce gold has NOT increased by over 7.5 times it's August 2001 prices. What's changed? For one worldwide commodity demand has gone up in the last decade as indicated by prices for just about everything from cotton, to basic metals. Second the current economic stability starting with the financial crises of 2008, the first Greek debt crises of 2010 and the current combination of the economic slowdown in the United States, QE2, the sovereight debt crisis in Europe and the possibility of a worldwide econonic slowdown has driven up the value of "Safe Haven" investments.
There is nothting about the fundamental value of gold that has changed in the past 10 years. What has changed in the increasing economic uncertatinty aournd the world that has created an inceased demand for "SAFE HAVEN" assets. That has changed the PERCEIVED VALUE OF GOLD. At some point the worldwide economic situation is going to stabilize and the price of gold is going to decline.
The price of any asset is primarily based on supply, demand, future expectations on the value of the asset and the markets "perceived" value. The moment the preception of value of gold changes so will its prices.
ANY ASSET OR COMMODITY IS SUBJECT TO INFLATION UNDER THE RIGHT CIRCUMSTANCES. Especially when demand exceeds supply.
Also the value of gold has increased from about $270 to $295 an ounce in August 2001 to current prices of over $1650 an ounce today. Sorry but the cost to produce gold has NOT increased by over 7.5 times it's August 2001 prices. What's changed? For one worldwide commodity demand has gone up in the last decade as indicated by prices for just about everything from cotton, to basic metals. Second the current economic stability starting with the financial crises of 2008, the first Greek debt crises of 2010 and the current combination of the economic slowdown in the United States, QE2, the sovereight debt crisis in Europe and the possibility of a worldwide econonic slowdown has driven up the value of "Safe Haven" investments.
There is nothting about the fundamental value of gold that has changed in the past 10 years. What has changed in the increasing economic uncertatinty aournd the world that has created an inceased demand for "SAFE HAVEN" assets. That has changed the PERCEIVED VALUE OF GOLD. At some point the worldwide economic situation is going to stabilize and the price of gold is going to decline.
The cost just to extract gold is over $1,000/oz, and I don't think that counts getting permits, etc.
Lots of emerging markets are doing just fine but want to increase their holdings of gold anyway. Some even anticipate a partial return to the gold standard.
Also the value of gold has increased from about $270 to $295 an ounce in August 2001 to current prices of over $1650 an ounce today.
If you assume that the value of gold has remained constant then the value of the dollar is about 1/6 what it was in 2001.
Quote:
Originally Posted by JazzyTallGuy
Sorry but the cost to produce gold has NOT increased by over 7.5 times it's August 2001 prices. What's changed?
The world’s monetary base went from $3 trillion to $ 10 trillion over that time frame. That is about a 3 1/3 X on the monetary base.
Quote:
Originally Posted by JazzyTallGuy
For one worldwide commodity demand has gone up in the last decade as indicated by prices for just about everything from cotton, to basic metals. Second the current economic stability starting with the financial crises of 2008, the first Greek debt crises of 2010 and the current combination of the economic slowdown in the United States, QE2, the sovereight debt crisis in Europe and the possibility of a worldwide econonic slowdown has driven up the value of "Safe Haven" investments.
Quote:
Originally Posted by JazzyTallGuy
There is nothting about the fundamental value of gold that has changed in the past 10 years.
We agree there but the other things we disagree a bit about.
Quote:
Originally Posted by JazzyTallGuy
What has changed in the increasing economic uncertatinty aournd the world that has created an inceased demand for "SAFE HAVEN" assets. That has changed the PERCEIVED VALUE OF GOLD. At some point the worldwide economic situation is going to stabilize and the price of gold is going to decline.
You said it the price of gold will fall it is just a matter of when and how far up it will go first.
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