Gold target $2061.61

[theo]

I agree with everything Camaro said save the comment about gold being fairly valued when compared to other assets. I will admit that gold is far closer to fair value than it was 10 years ago, but believe it still has a way to go. Of course gold doesn't suffer nearly as much price manipulation as silver as it is way too big of a market.

However, gold's price is suppressed in other ways. We have a national debt of almost 16 trillion, several rounds of QE and a growing derivatives bubble; yet fewer than 1 in 50 investors have significant money in PMs. Why? IMHO the mainstream investment community, not to mention banking and government officials, have consistently attempted to discredit gold. If an investor is concerned about inflation most advisors will gently push them toward "respectable" inflation hedges like oil, natural gas and agricultural commodities. People who do put assets in gold are labeled "gold bugs," yet I've never heard other investors labeled "oil bugs" or "agri-bugs."

Having said all that, it may not be reasonable to expect to gain a lot of wealth by buying gold. To paraphrase what as already been said, to purchase gold is to invest in cash by other means.

[fb101]

I wonder if this topic title is still valid - Anybody know?

[68Camaro]

Valid, yes. Timing? Uncertain. Without market manipulation, certainly this year. As soon as India straightens out its internal gold issues I believe they'll be buying physical again hand over fist. I believe every sovereign government (except ours and another small handful) is looking to expand their holdings.

[beauanderos]

Having said all that, it may not be reasonable to expect to gain a lot of wealth by buying gold. To paraphrase what as already been said, to purchase gold is to invest in cash by other means.

I think I would choose to disagree with the first part of this statement. I think incredible wealth will accrue to those who are "in" precious metals from an early stage. PM's will, of course (absent manipulation), normally keep pace with inflation, but for those who recognized the trend early, precious metals have significantly outperformed inflation in this last decade (the demand factor skewing the dollar down/gold up relationship). As money flows increase in volume into gold, this trend may well continue, handsomely rewarding (think legal pyramid scheme) those who bought early and continue to hold.

[68Camaro]

Having said all that, it may not be reasonable to expect to gain a lot of wealth by buying gold. To paraphrase what as already been said, to purchase gold is to invest in cash by other means.

I think I would choose to disagree with the first part of this statement. I think incredible wealth will accrue to those who are "in" precious metals from an early stage. PM's will, of course (absent manipulation), normally keep pace with inflation, but for those who recognized the trend early, precious metals have significantly outperformed inflation in this last decade (the demand factor skewing the dollar down/gold up relationship). As money flows increase in volume into gold, this trend may well continue, handsomely rewarding (think legal pyramid scheme) those who bought early and continue to hold.

Need to differentiate those who bought early (I agree - they will hit the lottery - yourself included) from those who bought later, or who have yet to buy. The later you buy-in, the more it is just wealth preservation. Seems like theo is talking about from this point forward.

[beauanderos]

I still think the dynamic holds true for the first ten percent who wise up and jump in. After that... well too late to the party and the punch is all gone.

[theo]

I agree that, compared to the rest the country, anybody already signicantly invested in physical PMs will do well. And of course those wise few (not me!)who got in ten years ago are aleady doing very well. However, I believe the dollar is over-valued due to its reserve currency status. So although our purchasing power will likely be considerably above that of the average American; this gain will be countered, at least in part, by the fact that the average American's purchasing power will likely decline against much of the rest of world, especially developing nations rich in resources with younger populations. The working age people in this country (especially the young) are long on expectations and short on needed skills. Beauanderos, I believe this is something you have observed yourself.

[beauanderos]

I agree that, compared to the rest the country, anybody already signicantly invested in physical PMs will do well. And of course those wise few (not me!)who got in ten years ago are aleady doing very well. However, I believe the dollar is over-valued due to its reserve currency status. So although our purchasing power will likely be considerably above that of the average American; this gain will be countered, at least in part, by the fact that the average American's purchasing power will likely decline against much of the rest of world, especially developing nations rich in resources with younger populations. The working age people in this country (especially the young) are long on expectations and short on needed skills. Beauanderos, I believe this is something you have observed yourself.

Theo, I wasn't arguing with you, merely expressing a devil's advocate stance that opportunity still exists to protect oneself, and PROFIT, from precious metals, even at this stage. The average complacent American (busy playing on their iphone, buying things they don't need and building more debt) will be lost in the inevitable continuing decline of the dollar due to the DC decay... moral rot at the center of our administration, both within Congress and the presidency, notwithstanding the able assistance of the Fed. Outsourcing will continue, American's standard of living will spiral evermore downward. BTW... the good corners for begging are already taken.

[theo]

I basically agree with your last post, its just that I view the purchase of PMs as a more of a defensive measure. However, I hope you are correct about the profit. Your last line says it all. Frankly I will be happy to keep my lights on and food on the table and, perhaps, help a few of those who can't.