Randy, gold is a comodity, just like (almost) any other, and in large amounts (like $10M) is not very portable either. And, it is very often subject to confiscatory government regulation, even in USA. So, I guess, people wised up, and don't buy tons of gold, after having government confiscate it at low prices (or for nothing in some countries) in the past. The cost of production has been going down in recent years, which is not too bullish. Newmont, for example, has average production cost of about $200 now, and it still goes down.
Look at T bills and notes, they went up quite a bit in recent months, even with huge neww corporate issuance. Some smart money has bought whole lot of them. it a panic time, bonds and bills will dip down some, because of panic selling, but if economy slows down they'll be going up in price. Corp. bonds may lose, in week economy they can be downgraded and can even defalt, even if interest rates go down.
Joe
BTW, bonds and bills were at all times' low in 1980-81, in 87 they went down a bit for a couple of months giong into the crash, but 87 is not a good model for current situation, 29 is much better. |
