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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 393.24

+1.1%

Dec 11 4:00 PM EST

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To: TobagoJack who wrote (93619)	8/17/2012 2:28:14 AM
From: Haim R. Branisteanu	1 Recommendation Read Replies (3) of 218464

My second toughs on gold, do not be surprised TJ, <gg> After analyzing some gold stock and their expenses to mine and process the rock containing the ore induced me to rethinking the pricing of gold. True gold cannot be eaten or used for any other purpose useful life sustaining purpose, but it is widely popular and as such can be disposed of it in barter trade relative easy if compared to other stores of value. The main issue that changed my mind is the cost of extraction, meaning that 1 ton of rock contains in most places few grams of gold. The expense associated with extracting this gold includes lots of energy (crude oil), lots of work, (wages) and very substantial investment in equipment (cash and forgone interest income). Therefore I presume similar to polished diamonds gold pricing is highly dependent on the cost of extraction and not it’s useful value. As such it could be a quite useful barbaric relic during times of upheaval relative superior to paper assets but inferior to investments in agricultural land or forests over many years. The main drawback is that holding gold is generating expenses and no income as opposed to paper assets or investments in agricultural land or forests. As such gold can be a good investment in transitory times, and its performance would be over few years as any other speculative and volatile asset. After arriving to this conclusion do I go out and buy gold? Not really but I would look more positively toward gold as an valid investment venue, as in the medium term it should appreciate in correlation with inflation expectations

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