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Post by unlawflcombatnt on Jul 19, 2010 14:14:48 GMT -6
The parallel paths of gold, silver, and the Dow Jones are interesting. It appears that all are largely speculative--with movement being determined by some combination of computer trading, group-think, and mass hysteria.
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Post by jeffolie on Jul 19, 2010 14:42:05 GMT -6
"The parallel paths..." of those below will move together in decline for a while longer.
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Housing prices will decline significantly before the mid-term elections.
Stock prices will decline significantly before the mid-term elections.
Metals prices will decline (silver will decline a higher % than gold) significantly before the mid-term elections.
Consumer spending will decline significantly before the mid-term elections.
S&P 500 companies earning from the EuroTrashLand will decline significantly before the mid-term elections.
Oil prices and the Commodities Research Bureau Index will decline significantly before the mid-term elections.
The Labor participation rate will decline significantly before the mid-term elections.
Obama's approval poll ratings will decline significantly before the mid-term elections.
'The feeling of hopelessnes will be common by the end of October'.
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Post by agito on Jul 19, 2010 22:29:08 GMT -6
yeah- this caught my attention as well. IF gold really was an inflation hedge- you'd think it would move counter to the DOW. seeing it in synch means the inflation protection isn't true, or this is something fishy going on (which i'm not going to rule out as much as I already believe gold is not protection against inflation).
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Post by unlawflcombatnt on Jul 20, 2010 3:08:13 GMT -6
I think over the real long run (like the last 10 years), gold has been somewhat of a protection against inflation. But on the other hand, clearly much of its increased current value is from speculation, not inflation.
I'd say most of the increase over the last 3 years has been speculative. Most of the increase from 2001 to 2007 was mixed between speculation and inflation.
There's been a huge amount of Governmentally un-acknowledged inflation over the last 10 years. But Gold has undoubtedly overstated that inflation. By how much is impossible to tell.
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Post by jeffolie on Jul 20, 2010 8:18:25 GMT -6
Gold is best as a safe haven to protect against a currency collapse, not as an inflation hedge. Inflation and the devaluing of a currency are not quite the same thing in the mind of investors. For example all throughout the 1990s gold sat undisturbed around $320 and ignored 10 years of 'some' inflation. see this inflation adjusted gold chart: inflationdata.com/inflation/images/charts/Gold/Gold_inflation_chart.htm
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