Gold at $36,000 ?

[Andy62]

http://www.cnbc.com/id/37352471

[Free]

I think what we need to keep an eye on, is the Dow/Gold ratio, which I think will eventually reach parity. Whether that is Dow 36000, and Gold 36000, or Dow 3000 and Gold 3000, it will eventually be 1:1.

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=391641&t=01006124249416869148

[MikeNY]

I expect a pull back in Gold, right now the Gold to Silver ratio is 60 to 1 and historically is 16 to 1.

But inflation looks baked into the cake for the long run. The US has debt and unfunded liablities of 130 Trillion Dollars and that alone will sink the ship. That 130 trillion includes unfunded Social Security, Medicare and Medicaid liablities. The US has used the Social Security surplus for Social Engineering and to fund Debt and massive Welfare Programs spending. This will become a crisis and pit one part of society against another, not just generational but along ethnic and racial lines possibly.

The 600 Trillion Derivitives is a timebomb unless we are careful. Usually an Empire falls when it owes 90% of GDP in Federal Debt, the US owes 92%. The US has more costly Social Engineering than Europe and less fairness in the system.

The Liberal Congress sought to change the ethnic profile of the US as part of Social Engineering with the 1965 Immirgration and Nationalities Act. In the past multiethinic States usually end up like Bosnia. There are few exceptions. In Southern Italy you had the only exception, but the people were one Relgious group, had a common enemy, Turkey. You had Native Italics, Native Greeks, Albanian Catholics and Byzantine Romans (really Greeks), the Byzantines were accepted as Italians. There was intermarriage and trade among the Groups as well as a common history, religion and enemy, as far as I know that might be the only multi-ethnic State that did not become Bosnia. But these people had also been intermarrying for millenia and that really is quite different.

I see the worst case senario for the US as Argentina 2000 to 2010; but there are US Retiree's living there and moving there, as an alternative to Florida and use it as a cheap place to live. They many times live in gated communities. Crime is a problem there; but if Retirees feel safe to live there then it is liveable. The US is on the same path as the Soviet Union and spending $1 Trillion a year on Military Operation and Forces overseas, add to that the Socialist Spending and we are in trouble.

As Gordon has pointed out and wisely observed Soicalism is how the European Upper Classes have maintained power and control, the US has accepted that now. We seem to have a Presidental Crisis brewing, the Obama Regime offered Joe Sestak a bribe and that is a Federal Crime, we may well soon see a Special Prosecutor investigating Obama and Gang. The News Media does not want to handle this issue but Sestak has openly admitted this. Obama is the new Nixon, just more of a crook. We won't have a Woodward or Bernstein this time the Press is to Corrupt and Political merely a Propoganda arm of the Obama Regime.

[Andy62]

At this point I don't think anybody can predict what is going to happen except we are in for a wild ride. I hold my breath when I think what might be in the portfolios of those European Banks. The class structure at work.

[MikeNY]

http://articles.moneycentral.msn.com/learn-how-to-invest/is-gold-the-next-bubble.aspx
Is gold the latest bubble? If it is, it may be far from its peak. But gold remains a high-risk and potentially dangerous speculation.Wall Street Journal Article.


http://www.marketwatch.com/story/europes-latest-fashion-rage-the-austere-look-2010-05-27?pagenumber=1
Europe's latest fashion rage: the austere look
Commentary: Continent walks a slimmer government project runway

This is a sad article; sad because it predicts a future less than bright! it argues that in 2008 they should have let banks fail, Companies fail and washout out the rot. Our Banker's are ham and egger's and incapable at best. Here is a quote " "The best scenario is to stabilize the system now and go into a long period of stagnation in which debts can be repaid slowly," Das said. "But almost any minor problem now can just cause the wheels to really come off the bus, because people have never been through a period that's anything like this. There are no mechanics that can fix the problem now. We could very well have another day like May 6 when the Dow is down 1,000 points and the interbank market shuts down, and there is no confidence left in the paper that allows it to get going again."

The Endless Obama Recession! Here is the USA the Dumbama Regime is attempting to spend more and bailout more losers. Let them fail!

[Andy62]

Obama is using the same M.O. that he used in Chicago. There he delivered all of those fringe groups to the Daley Machine to build their power by expanding their electoral base. On a national scale he is floating debt to bring aliens and others who don't presently have the vote into the electorate so they will be indebted to him and under his control. "A man with a plan."

[MikeNY]

What do our resident Gold Experts think of shares in Gold Mutual Funds? Just bought more today and own Canadian Gold stocks to. I have physical Silver, US Silver Dollars, 1/2 Dollars, Quarters and Dimes in a safe deposit box at the Bank. My theory is Gold has a place but as stocks or funds. If Hyperinflation comes comes, the stock market will inflat with Gold and Silver.

Anyones opinions and thoughts are welcome.

[Free]

Mike, I am not sure exactly what you are referring to, in terms of a "Gold Mutual Fund" can you be more specific?

I believe we will have "Asset Deflation" as we have "Monetary Inflation". What that means is that the stock market could go to 30,000 in Dollars, while the Dollar is devalued by 90%. Your portfolio will look like it has appreciated, and the government will tax you on this phantom gain, however, the 30,000 Dow will only be equivalent to a 3000 Dow, in today's value.

I also feel that Gold funds, that are valued in Dollars, will suffer the same fate, seeing massive appreciation in terms of that Dollar, but in real terms not have the same real appreciation that true physical metals will. Eventually, the physical market, will decouple entirely from the "paper" markets, and in the end, those holding physical, will be the only ones left with real gains, and wealth preservation.

[Andy62]

I really don't think there will be a problem with what happens to the currency as long as the undlerying value of the asset is there. There are also dangers in holding the metal physically. That family in Florida where all of the members were killed a few months ago was because the robbers believed that they had a lot of money in their safe. Handling, storing, or moving precious metal involves it's own risk

[Free]

I don't advocate holding precious metals at home, or if you do, certainly don't tell anyone about it!! That family, had a lot of activity, coming in and out of their house, so that sort of thing happens.

As for the "underlying asset of the currency" what exactly do you mean by that? What is the underlying asset of the USD? It used to be Gold, but hasn't been for many decades. For that matter, do you know for certain that the GLD etf, actually contains enough physical metal, to back up the price of the fund? Do you know that they do not "Lease Out" their metals?

Lastly, in a collapse of the financial system, will any of these funds deliver to you, your assets in the form of physical precious metals, if the currency has collapsed, or devalued? Will you even be able to contact them, or will they be on a "Bank Holiday"? Will your brokerage, that holds the certificate be closed, or out of business? I think the best way to hold precious metals is outside of the financial system entirely.

[Andy62]

The underlying asset would be the gold itself. If we go into a total collapse of the kind you are describing then we will be in extreme civil unrest and ammunition will be more important than gold. I know that there are some experts starting to predict the extreme case though.

[MikeNY]

Free I mean a Mutual Fund that owns shares in Gold and Silver Mining Co's and some hold actual ounces of Gold. Yeah the reason for keeping silver in a safe deposit box at a Bank is safety.

Gordon I hope we never get to the point where ammo is more valuable than Gold. I foresee the worst case senario is the US becomes Argentina in 2000 or South Africa. Both places have high crime rates, economic problems and some instability but and this is an important but; American Retiree's traveled to and bought homes and live in both Nations, and did from 2000 on! If it is safe enough for a Retiree Community then you can survive! Now I know most Americans buy into Gated Communities, with Security or into Condo Building that have Security. But Senior Citizens moving there for a higher standard of living for less says you can survive.

If the Obama Regime has it's way we shall continue with the Obama Recession, that he planned for years with ACORN and engineered to crash the US Stock Market through manipulating the Mortgage Market, so that Wall Street could get Billions and his friend's packaged Mortgages that were worthless and sold to Wall Street. Just remember that Saturday Night Live skit on Obama's friend's Herbert and Marion Sandler!

God bless the USA we are all living in interesting times thanks to the Obama Gang. The ride be rougher than we expect.

[Free]

I agree with you guy's, I hope I never have to use my Gold, and that it just becomes a decent return for moderately inflationary pressures. This Fall is certainly going to be interesting.