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When people start dumping their gold it's because they are moving back to other forms of monetary security or investment.
This is hardly a bad thing, especially in these economic times of gloom and doom predictions, it shows a renewed faith in markets and their performance.
people who bought at low prices are selling for the profit..maybe going into real estate.. If it drops the ones who bought high will probably dump it too.
Actually, pointing out that conservatives are pumping gold is disingenuous. There are many many many liberals who were pumping it, including Soros, Buffet, and many hedge fund managers. Now that gold has downward pressure Soros bailed with a tidy profit. Gold, just as any equity or commodity is pumped in the direction the big players wish it to move. Add the bad economic news from big consumers of industrial and investment grade metals, like China, and you have the perfect storm for a plunge. For the big players, it's the ultimate pump and dump. They are now creating a new LOWER entry point.
Because the world monetary entities (FED,EU,WMF) are printing money ad nauseum, inflation is being kept in check. Once inflation re-enters (and it will) and interest rates start climbing, gold will skyrocket again. The likes of Soros are only double dipping on timed peaks and valleys.
First of all, Buffet NEVER "pumped gold". In fact, he ridiculed gold bugs.
"Yesterday I noted the comment of Charlie Munger, Vice-Chairman of Berkshire Hathaway [BRK.A BRK.B] comment that “civilized people don’t buy gold”. They are not simply involved in a zero-sum game in which the goal is to outsmart the computer system in the trading markets. They invest in productive businesses that add value to society...
...When we took over Berkshire, it was selling at $15 a share and gold was selling at $20 an ounce. Gold is now $1600 and Berkshire is $120,000. Or you can take a broader example. If you buy an ounce of gold today and you hold it at hundred years, you can go to it every day and you could coo to it and fondle it and a hundred years from now, you’ll have one ounce of gold and it won’t have done anything for you in between. You buy 100 acres of farm land and it will produce for you every year. You can buy more farmland, and all kinds of things, and you still have 100 acres of farmland at the end of 100 years. You could you buy the Dow Jones Industrial Average for 66 at the start of 1900. Gold was then $20. At the end of the century, it was 11,400, and you would also have gotten dividends for a hundred years. So a decent productive asset will kill an unproductive asset..."
Secondly, the argument CONSERVATIVES made was that "printing money ad nauseum" was the REASON there would be inflation so your statement "printing money ad nauseum" is what is keeping inflation in check is "*ss backward".
Ken
Last edited by LordBalfor; 04-16-2013 at 01:09 PM..
So that dismisses the Austrian school of economics, or that one Economist? Also, if something hasn't happened yet, does that mean someone is wrong? This isn't the weather channel.
It wasn't just "one economists" - where have YOU been for the last 4 years? Austrian economists in general were in agreement on those same basic predictions. Plenty of OTHER such economists and "talking heads" I could have quoted, that particularly one was simply the first one that popped up.''
If it hasn't happened in 4 years - and in fact the exact OPPOSITE has happened - then yeah, it means they were WRONG.
First of all, Buffet NEVER "pumped gold". In fact, he ridiculed gold bugs.
Secondly, the argument CONSERVATIVES made was that "printing money ad nauseum" was the REASON there would be inflation so your statement "printing money ad nauseum" is what is keeping inflation in check is "*ss backward".
Ken
OKay, remove Buffet from the post, and the point remains the same. EVERYONE was pumping gold. To blame this on conservatives is an idiotic notion.
In this case we are experiencing low inflation as a result of hyper-liguidity which is a parasite on the middle and lower classes; causing lower demand. Even though the cost of goods, commodities, staples is actually inflating, nobody is buying.
"The big difference this time is falling family incomes. Going back well before the onset of the 2007-09 recession, household incomes were stagnant even before adjusting for inflation. Take higher prices out of the equation, and you wind up with a multi-year decline in many families’ buying power."
"As for monetary policy, it is so easy it is actually counterproductive. Rates are so low that many savers have seen their interest income wiped out completely. Little wonder that inflation is gone with the wind."
If the economy does manage to pull out of this malaise, if people start purchasing again; we will start seeing inflation, or worse, hyperinflation. When this happens (and it will) metals will skyrocket.
It wasn't just "one economists" - where have YOU been for the last 4 years? Austrian economists in general were in agreement on those same basic predictions. Plenty of OTHER such economists and "talking heads" I could have quoted, that particularly one was simply the first one that popped up.''
If it hasn't happened in 4 years - and in fact the exact OPPOSITE has happened - then yeah, it means they were WRONG.
Ken
Oh, so the new threshold is 4 years to assess economic predictions. So by that measure, the Keynesians were wrong and Keynesianism is debunked because we had a housing bubble.
Oh, so the new threshold is 4 years to assess economic predictions. So by that measure, the Keynesians were wrong and Keynesianism is debunked because we had a housing bubble.
There goes an entire school of economic thought using your standards.
First off, BERNANKE was wrong about HOUSING. The Austrians were wrong about virtually EVERYTHING.
Secondly, there's nothing intrinsic to Keynesianism in Bernankes' opinion on housing - it's just an opinion on HOUSING.
The Austrian's predictions however revolve around the CORE of their BELIEF'S and the entire approach of the Austrian school.
All, in all, it shows there is something wrong with their model. Does the Austrian model have value? Of course it does - as does the Keynesian model - but that's not the way Austrian fans on this board approach it. To them it's a RELIGION and anything that hits at Keynesian theory is heresy.
The fact is, the Austrian fans on this board don't believe in the Austrian model because they understand economics (few - if ANY - economists really understand economics, that's WHY they can't AGREE), they believe in it because it validates their POLITICAL beliefs - and they've spent the last 4 years crowing about how the Keynesian approach wouldn't work but instead would lead to the collapse of the US dollar, hyperinflation and other stoopid nonsense. The fact is however, NONE of that happened - and it's becoming increasely clear that none of that is GOING to happen.
It's a simply fact that the Austrian model - which has "printing money always leads to high inflation" as one of it's CORE PRINCIPLES - didn't work this time around. It wasn't even close. That truth may hurt, but that doesn't change the fact that it's THE TRUTH.
In this case we are experiencing low inflation as a result of hyper-liguidity which is a parasite on the middle and lower classes; causing lower demand. Even though the cost of goods, commodities, staples is actually inflating, nobody is buying.
"The big difference this time is falling family incomes. Going back well before the onset of the 2007-09 recession, household incomes were stagnant even before adjusting for inflation. Take higher prices out of the equation, and you wind up with a multi-year decline in many families’ buying power."
"As for monetary policy, it is so easy it is actually counterproductive. Rates are so low that many savers have seen their interest income wiped out completely. Little wonder that inflation is gone with the wind."
If the economy does manage to pull out of this malaise, if people start purchasing again; we will start seeing inflation, or worse, hyperinflation. When this happens (and it will) metals will skyrocket.
There's a DIFFERENCE between folks like Soros and the wingnut conservatives. Soros (and folks like him) recognized that gold was a speculative bubble and decided to ride it make profits then jump out when the risk of collapse got too high. Wingnut conservatives however, BELIEVE the silly "the dollar will collapse" nonsense. That's a big difference - and you notice, Soros GOT OUT before the crash, while those silly and ignorant wingnuts rode gold down - and many of them will CONTINUE to ride it down because - in spite of all the evidence to the contrary - they can't face the fact that their expectation of hyperinflation and a US dollar collapse were nonsense from the very beginning. Your post is a case in point.
Ken
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