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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: tyc:> who wrote (66249)	7/16/2009 1:04:51 PM
From: stan_hughes	Read Replies (2) of 78416

It isn't my depth of conviction of an opinion that's at play here, it's simple arithmetic Let the pre-9/11 US money supply = X Let the amount of available above-ground gold = Y Hint for beginners: Since all the gold ever mined could fit inside a 20-metre-sided cube, for mathematical purposes Y is a constant -- onlygold.com Formula: X/Y = the intrinsic value of gold in USD I'm only citing 9/11 as a take-off point because it was immediately apparent thereafter to the gold market that the combination of post-9/11 military adventures and having to deal with the tech crash was going to result in a massive credit expansion, and therefore the dilution of the underlying value of the USD, which is exactly what happened. In examining this decline in value, do not be fooled by looking at something like DXY which only compares the USD to other fiat currencies (mostly Yen & Euro) which are just similar vehicles for debasement of purchasing power So how much bigger do you think X is now than it was in 2001? And with literally trillions of dollars in deficits piling up day after day and the need to finance all that spending with new dollars, how much bigger do you think X is going to be in 6 months? In 1 year? How about in 5 years? Or in 10 years? Do you think that the US will soon raise interest rates to sop back up all that newly created money, i.e. will they commit economic suicide by raising the interest expense carry on their trillions of dollars in government debt? Fat chance they do that anytime soon -- so eventually all that money is going to end up circulating in an economy that isn't much bigger than it is now, and if you remember the 1970s, you already know what will follow This is still a no brainer, gentlemen -- just time your acquisitions at regular intervals to filter out the trading noise, and hang on to what you buy

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