Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
For what's worth, this analyst thinks gold could drop to $500/ounce. I don't think it will go THAT low, but I DO expect it to drop to $1,100/ounce or so.
Regarding interest rates - sure, interest rates will rise at some point - that's NOT the "end of the world", nor does it mean gold will benefit. A modest rise in rates will be handled just fine and there's just no reason to intelligently assume that a rise in rates will be either excessively sudden or excessively high.
Same with inflation. At SOME point, inflation WILL pick up - but again that's not the "end of the world", nor does is mean gold will benefit. As long as the rise is neither excessivly sudden nor excessively high, a modest rising of interest rates will cool the inflation off - as it typically does - without doing an major damage to the economy.
The problem you guys seem to have is that you are Drama Queens - you base your plans on the worst-case scenario even though that scenario is outlandishly unlikely. The fact is, with interest rates at HISTORIC LOWS, the Fed had NEVER been in a better position to tackle an appearance of inflation. The prime rate could be doubled or tripled and interest rates would STILL be pretty reasonable.
Yes, the debt IS high - as is the deficit, but as a percentage of the total economy NEITHER is a record - and we dealt with those much higher (again, as a percentage of the GDP) deficits and debts back then and we'll deal with both the deficit and the debt now. You folks have wayyyyyyy too little faith in your country.
Ken
I faith in the nation.
I DON'T have faith in the politicians.
What the heck do you think will happen to debt service when interest rates "normalize"?
"Conventional wisdom" didn't see the crash of 2008 coming.
Um, you DO understand don't you that you just made my point? "Conventional wisdom" is WRONG about gold. It is neither a hedge against inflation nor a safe haven.
What the heck do you think will happen to debt service when interest rates "normalize"?
You just proved my point - you are not basing your investing decisions on the DATA, but rather on your POLITICS - that's a poor way to invest.
Regarding any rise in interest rates - the majority of the debt is at FIXED rates, so a rise in rates will have little effect on the existing debt. At the moment we've got debt that is REALLY cheap - in fact, we pay LESS on the debt today than we did under the Reagan Administration.
New debt we take on after rates rise, of course is another story, but with the deficit falling rapidly, new debt probably won't be excessive by then - that's why it's so significant that the deficit is falling so rapidly NOW (ie BEFORE rates begin to rise). The lower we can get the deficit down before we have to raise rates, the far better off we'll be, so it's GREAT news that the deficit is falling so rapidly.
Um, you DO understand don't you that you just made my point? "Conventional wisdom" is WRONG about gold. It is neither a hedge against inflation nor a safe haven.
Ken
The "conventional wisdom" is that gold is a useless metal that has no real value and serves no purpose except for insane preppers.
If investors ignored the conventional wisdom more often there would be a lot more rich people around.
You just proved my point - you are not basing your investing decisions on the DATA, but rather on your POLITICS - that's a poor way to invest.
Regarding any rise in interest rates - the majority of the debt is at FIXED rates, so a rise in rates will have little effect on the existing debt. At the moment we've got debt that is REALLY cheap - in fact, we pay LESS on the debt today than we did under the Reagan Administration.
New debt we take on after rates rise, of course is another story, but with the deficit falling rapidly, new debt probably won't be excessive by then - that's why it's so significant that the deficit is falling so rapidly NOW (ie BEFORE rates begin to rise). The lower we can get the deficit down before we have to raise rates, the far better off we'll be, so it's GREAT news that the deficit is falling so rapidly.
Ken
Dude, no one said anything about basing INVESTMENT DECISIONS on politics.
This is about WEALTH PROTECTION.
I don't base a purchase decision about buying Coca-Cola stock on what Barack Obama had for breakfast. Please learn the difference between an equity and a store of value.
The DATA is firmly on my side.
Regarding bonds and interest rates...apparently you don't understand the relationship between bond crashes and institutional investing.
Well with the dip in price the big guys are buying like crazy. Central Banks are breaking records apparently. Gold council reports largest reserves in about 50yrs. Many reserves are being drained and request for possession of the real thing are not being fulfilled. Gold Rout for Central Banks Buying Most Since 1964: Commodities - Bloomberg
Well with the dip in price the big guys are buying like crazy. Central Banks are breaking records apparently. Gold council reports largest reserves in about 50yrs. Many reserves are being drained and request for possession of the real thing are not being fulfilled. Gold Rout for Central Banks Buying Most Since 1964: Commodities - Bloomberg
Yeah, I know about that - that's what brought about the partial price recovery. That's old news now though. That buying has tapered way off and prices are back in collapse mode.
Ken
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
