Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Professor Dotcomm who wrote (82941)	3/6/2002 11:28:26 AM
From: E. Charters	Respond to of 116811

True average is based on price, times time-it-has-maintained-the-price. In other words the volume of the chart must be apportioned to the time as per Green's theorem. You try to draw a volume line such that there is as much volume difference above it as below it. On the Kitco chart that equates to 350 dollars exactly for 26 years. The above is 1409 versus below at 1376 for a trivial difference percentage wise. So the 350 average is true. But it's not constant dollars. On the 650 year chart you start at 1550 and try to do the same. The price in 1550 was about 650 dollars. One way to do it accurately is to draw long trend lines that are slanted that seem to show as much light as dark above and below them, then average the line and its time. So we see that from 1610 to 1790 the price fluctuated from 500 to 400 dollars. From 1780 to 1810 we could say it was from 300 to 650. from 1810 to 1860 we could say it was from 510 to 650. This is a weighted average of 477. If we add in all the other trend lines, and average them against their times, we get not far from that number. Even the modern line from 1910 to today would be almost 410 dollars, true area weighted or time weighted average. Try it with calculus averaging. The area of a triangle is 1/2 the height times the base. It is far more likely that the historic support price is in fact 450 dollars not 310. The all time rock bottom low for the past 650 years was in 1919 at 196 true dollare per ounce. That was one year after a war that killed perhaps 16 million and a flu that killed 18 million world wide. Is there anything that could drive gold back to its normal long term historical value of 2400 dollars before the Spanish worldwide glut of the stuff? Yes, I think there is. Worldwide currency collapse. It happened in Spain because of the gold glut, and it could happen again. What we have been doing is printing industrial currency or money to chase business that cannot possibly find customers. This money has been chasing stock in companies that have no customers. A fool like Hitler can see that a country's money cannot outstrip its production or inflation of one kind or amother will result. Since the money in modern times did not get into private hands but was loaned to brokers to take over companies and to other traders to invest in stock and bonds, it became an inflationary medium in those markets alone. Still it has ballooned to incredible proportions and must adjust. The air is out of the balloon. If looks like it has the same size as before but the outside pressures have not begun to adjust it to its previous size. Give it time. EC<:-}