One model pegs gold’s fair value at $800 an ounce

[reddirtcoins]

http://www.marketwatch.com/story/the-in ... beforebell

[theo]

"If the 10-year Treasury yield rises to 5%, gold will fall to $471 an ounce and if that yield rises to just 4%, from its current 2.8%, gold will still plunge — to $831."

Didn't gold enjoy its first run up to $800 when the ten year was well into double digits?

It is true that rising interest rates will inhibit the creation of money through debt. However with the current level of public debt an increase in interest rates is a double-edged sword. High interest rates might decrease private debt accumulation; but unless there is a huge decrease in government spending, new gov't bonds will still have to be issued and muturing bonds will have to be rolled over at the higher interest rate. Servicing this debt will force more money creation. Also, the government would be forced increase its spending on welfare and food stamp programs to address to inevitable unemployment and proverty caused by the increase in interest rates.

Secondly, these models are assuming transparant markets that simply don't exist. We don't have anything like the information required to make such correlations predictive. For example, how much gold does the Fed/U.S. Gov't actually hold? Whatever number they claim is suspect because there has been no audit in 40 years. Also, how much money is the Fed actually creating? They say it is 75 billion a month; but if it were more the Fed would not be legally required to admit it. Without the answers to these and other questions the Ivy league economists who create these models are no better than monkeys throwing darts.

[cupronickel]

If interest rates are allowed to rise, then the interest on the federal debt becomes unmanageable. This would lead to a default, rising taxes, slashed spending, who knows.

[Tourney64]

Banks will turn in all this interest free money they have been earning big profits on.

[68Camaro]

A "model" is just a fancy name for a series of assumptions. I can create a series of assumptions that show gold as valueless, or worth $1,000,000 per ounce. Look at the assumptions and assess how likely you think they are. Don't get all blinded by the fact that someone cloaked their assumptions in many-syllable words and called it a model.

[fansubs_ca]

You know when I read the subject line my initial reaction was:

#1: Is she blond?

#2: Is that what Cash4Gold offered her for her Gold?

Then I realized that was an unfair comment, Cash4Gold would try
to avoid paying out that much.

[mongo]

Fact- Over the course of human history any country that has printed fiat money the value of that money has gone to ZERO. With the Federal Reserve printing a mere 75 billion a month (formerly 85 billion a month). How long do they think it will take before our dollars are worth ZERO? So when the value of the dollar goes to ZERO whats an ounce of gold going to be worth? Inquiring minds want to know. This is a no brainer. Why yes i do watch alot of Mike Maloney videos. Why do you ask?
Regards
Mongo