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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: mishedlo who wrote (66777)	7/25/2006 9:32:24 AM
From: Mike Johnston	Read Replies (1) of 110194

You are being really selective with your time frames. Yes , gold did collapse from 800 to 250, but that was a correction of the previous advance from 50 to 800. And your observation that gold lost tremendous purchasing power since 1980 is correct. An Ounce of gold probably lost 90% of purchasing power between the top in 1980 and 1999. One must remember however that gold only traded above 800 for a couple of days, and it was less than a month that it traded above 550, it was a blowoff. And unbelievable amounts of gold being dumped by CB's, hedgers and speculators in the 90's, could not drop gold back down to $50 ! Gold must really rise to north of $2000 to make up for lost ground and catch up with inflation. If we take 70's as a guide a tenfold advance would be a reasonable expectation in a gold bull market, which would project around $3000. If it is still around $600, 5 years from now, in the face of 10% annual inflation, then i will admit that gold will have failed as a store of value.

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