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Ukshep

Goldholics Anonymous

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 Ukshep    19,938

With the rising global political tensions, gold has gotten a bid over the past week. But is that what is driving the price?

Over the longer term, I would argue that real rates are the most determining factor affecting the price of gold. Too many investors believe inflation drives gold prices. They recount the great bull market of the ‘80’s and incorrectly assume inflation caused the monstrous rally. Well, inflation was important, but the ultimate determinant was the fact that inflation was considerably higher than interest rates.

The next great bull market (‘01 to ‘11) occurred during a period of relatively low inflation (especially when compared to the roaring inflation of the late 70’s.) Yet these two periods did have one thing in common. During the early 2000’s, interest rates were once again lower than inflation, pushing real rates to negative levels. At the peak of the gold bull run, the US 30 year treasury was yielding 100 basis points less than inflation!

http://www.zerohedge.com/news/2017-04-13/goldholics-anonymous

This is a decent read I believe. Given all the purchasing of gold as of late. It does make sense that demand in these trying times are driving up the worth. But if doom does not occur. You can imagine a massive drop back to the real rates... Heed that. But hey isn't this what we would expect from shtf scenarios?? I'm serious. Many theorized just this would happen!

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 Guitar Doc    1,227
1 hour ago, Ukshep said:

With the rising global political tensions, gold has gotten a bid over the past week. But is that what is driving the price?

Over the longer term, I would argue that real rates are the most determining factor affecting the price of gold. Too many investors believe inflation drives gold prices. They recount the great bull market of the ‘80’s and incorrectly assume inflation caused the monstrous rally. Well, inflation was important, but the ultimate determinant was the fact that inflation was considerably higher than interest rates.

The next great bull market (‘01 to ‘11) occurred during a period of relatively low inflation (especially when compared to the roaring inflation of the late 70’s.) Yet these two periods did have one thing in common. During the early 2000’s, interest rates were once again lower than inflation, pushing real rates to negative levels. At the peak of the gold bull run, the US 30 year treasury was yielding 100 basis points less than inflation!

http://www.zerohedge.com/news/2017-04-13/goldholics-anonymous

This is a decent read I believe. Given all the purchasing of gold as of late. It does make sense that demand in these trying times are driving up the worth. But if doom does not occur. You can imagine a massive drop back to the real rates... Heed that. But hey isn't this what we would expect from shtf scenarios?? I'm serious. Many theorized just this would happen!

In the run up to 2012 there were a lot of businesses which made big on the scare. Preserved food companies did very well as well as the usual weapons sellers.

So they could be pumping gold, pumping and dumping. Pump the price up and get out before everyone realizes it is just hot air not real substance. Then you buy when it bottoms knowing it will always come up slightly from the bottom price. If you have billions you can make many millions doing something like that. Sort of thing Soros does.

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 Ukshep    19,938
1 minute ago, Guitar Doc said:

In the run up to 2012 there were a lot of businesses which made big on the scare. Preserved food companies did very well as well as the usual weapons sellers.

So they could be pumping gold, pumping and dumping. Pump the price up and get out before everyone realizes it is just hot air not real substance. Then you buy when it bottoms knowing it will always come up slightly from the bottom price. If you have billions you can make many millions doing something like that. Sort of thing Soros does.

Worth all that effort for chump change though (to them that is)

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 RetiredRogue    139

Back in 1995 I bought "the poor man's gold" silver. I bought 1,000 silver eagles one ounce coins cost was around $6.00 a coin . Primarily for a hedge against our money going south. There have been times I could have made some real profits on those coins, but I still have them.   I bought them for bartering purposes "when/not if" our American dollar is devalued. Just trying to cover my A$$.............  

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 Uncle Nobby    1,262

i have never had an investment work out for me, not even when i put my last bit of inheritance $$ into gold and silver, a few years ago, and then watched it all drop in value as the corrupt manipulators played it like a fish on a hook. bastards.

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 Bobbers    199

I've been a fan of precious metals as part of an overall strategy for a long, long time.  As a "store of value" rather than a real profit maker.  To me it's no different than watching the prices of ammunition go up and down due to market forces...lol.

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