I think 2009 will be a watershed year. I don't see any major wallet forces that will make it into a banner bull year. If everyone takes a wait and see attitude for sure it will be reflected in the price of stocks. They will wait, you will see. The only burning question in what will be a dismal dry year is, will gold stocks or some gold stocks differentiate as they did in the 1930's? Is this hold on for gold, a back up fingernail dig at the edge of the precipice, or is gold poised to stride away from the bases, money metal that it is? This is an economic question. Gold is cut loose largely from the payment standard it once had, but countries are arguing over their currencies. Russia, Europe, the US, the Chinese, as to primacy. They are not arguing about gold, some are hoarding it in reserves. Particularly the Chinese. No matter what is said out of London, people like gold and that sentiment is unlikely to change in hard time as prices of mere goods fall. Nobody ever believed gold was a good, or commodity who had any sense. When you hear people talk like that, they can't look you in the eye. Gold is money and it has been since the pharaohs smoked up in their pyramids. (Yes, the pyramids were a huge hash stash, now you know. "Do you see a pyramid out there Ramses? No, all I see is some stars a lame camel. Well I got it, let's build one.." (mad giggling))
The argument for gold comes up lame at times, but so does the argument against it. Everybody who does not know and does not have figure one tells us that Roosevelt fixed the price of gold to make it 35 dollars. He didn't do that. He started buying gold before that, and it had already reached 32 dollars in London the year before all on its own.
This may give us some clues as to where gold is going. We see some parallels today.
"The task of keeping the sterling price in line with $35 became increasingly difficult, as the private market for gold grew. As early as 1961, the BoE found it had to sell occasionally from reserves on the fix to hold the price at $35. This lead to the creation of the gold pool - an alliance between central banks around the world to maintain the $35 level. The pool worked well until 1965, when private buying of gold begun to exceed mine supply, forcing central banks to sell gold reserves into the market to hold the price steady. In 1968, when the Tet offensive in Vietnam touched off a tidal wave
of buying, the pool lost 3,000 tonnes trying to hold the price down." |
