re:["Does anyone have a link comparing the POG at its
peak at the 1980 peak to the POG today using the value
of the dollar as it was in 1980?? Would the POG at its
peak in 1980 be the same as $2000 or $3000 today??"]
Kpain, don't take this personally, because you're only
asking an honest question in response to a concept that
is being pushed by the gold bug newsletter community.
In all due respect, you're seeking an answer to the wrong
question....that in time - will only cost you money, and
a lot of it.
Ask yourself this...
Why didn't anyone ever wake up in the middle of the night
from 1981 to 2001 ( for over twenty years) and
slap themselves on the head and say...
"Hey, if you reprice gold in 1980 dollars and adjust
it for inflation, gold should be trading at $2,158.72?"
Because it's a fallacious argument created by very
creative, and talented copywriters writing for the
gold bug newsletters. And the only people who ever
bought a single ounce of gold based on that reasoning,
are their "doomed by their own DNA" readers whose
capacity for belief - is only limited by their burning
desire to become rich beyond their wildest dreams, by
being vindicated in their belief - that they, and only they,
possess this magic formula.
(Gene Schwartz would be very proud of whomever originated
this mechanism.)
If that was a legitimate pricing, or valuation mechanism
in the market, don't you think that someone would
have stepped in - sometime during the two decades
of the 1980's and the 1990's and "repriced gold for inflation"
sometime before it collapsed from $850, all the way down to
$251.95?
And the same for Oil...
If the market ever bought a single barrel of oil based
on that line of thinking - we would never have seen
that now infamous cover from "The Economist" magazine in
March 1999 predicting $5 Oil, and Oil would never have fallen
to eight dollars a barrel.
If "things" should be repriced in "old dollars" for inflation,
then given our present ramping inflation - condo's in
Miami and San Diego should be selling for much higher prices
today, than they were two years ago - correct?
And why shouldn't we be repricing tech stocks from March 2000,
and NASDAQ 5000 levels for inflation ?
Is anyone today making the argument that the NASDAQ should
be repriced for inflation, and thus if repriced from 2000 -
should be trading around 6,271 and not 2,271?
Of course they're not.
The NASDAQ was as much of a speculative bubble at 5,000 in
March, 2000... as was gold at $850 in January, 1980.
And that's why being able to accurately assess levels of
sentiment and speculation relative to the fundamentals,
will always be so important.
There are a lot of reasons to own and hold gold here, and
there are a lot of reasons that gold may one day see $2,000,
but repricing it for inflation from 1980 - is not one of them.
S.O.T.B. |
