Hello russwinter, <<CAU ... But that's a lot of ifs and ands. It's just a rank speculation now, in a bubble environment. Bubbles can end a abruptly>>
I lurk here because of the interesting discussions between familiar names. I do not own CAU. I am, for the fun of it, making a comment about gold, speculation, bubbles, probabilities, and ‘abruptlies’ :0)
I feel there is no 'correct price' for gold. It costs what it costs for getting ones grubby hands on it, whether by complicated way of searching and mining finance.yahoo.com , or by the fun method of looking and scavenging finance.yahoo.com and the companies, like all companies, are valued on the basis of cash flow, embedded call option on underlying reserves or unopened chests of coins, hopes, competing wagers, etc. … but also based on immediate necessities.
An example of a ‘immediate necessity’ is, I suppose, the lone parachute in an airplane that is spiraling down into the mountain, or the last full tank of air in a deep scuba expedition, or the final tankful of gas in a lost Gobi desert auto rally :0)
How much is gold worth when the monetary system is at the event horizon of collapse, as was the case in Argentina, Iraq, Russia, Zimbabwe, US after the civil war, … ?
Gold is worth what it is worth at any moment;
Speculation in gold is a wager on the health of paper monies;
Bubbles are speculations gone wild, when rationality divorces from probabilities;
Probabilities are a function of time horizon; and, as to abruptness, it could go either way, abruptly up or down.
So, I think most of the time gold is simply insurance, and when necessary, gold is a financial life saver, much similar to the functions of reset buttons and backup disks on our PCs.
Chugs, Jay |
