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.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (13022)	5/1/2004 12:00:59 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 110194

as i mentioned elsewhere, consider that gold has no yield. this is a disadvantage in a world where fiat currencies are priced with a positive real yield. thus in the 20th century, average yield on 90-day bills (basically the risk-free return on cash) was 4.1%, making for a 57-bagger on cash last century. this contrasts with a 3.2% inflation rate for the century, so a compound real return of 0.9%. (source: Triumph of the Optimists) yep, when is the last time you heard a goldbug tell you the US Clownbuck was a 57-bagger? instead, they simplistically opine about "all currencies go to zero" and "USD lost 95% of its purchasing value". that's like talking about stock returns without looking at the dividend yield. so it is not surprising that cash "outperformed" gold last century. BUT, HAVING SAID THAT, i'm not sure gold will "outperform" the USD this century. IN FACT, as long as cash is priced with a negative real yield i think gold has a good shot at kicking cash's butt.

To: gregor_us who wrote (13022)	5/1/2004 12:01:08 PM
From: orkrious	Read Replies (3) \| Respond to of 110194

So, I'm curious. Is it your view that Gold works no matter what happens? yes, although I do not pretend to have the intellectual capacity of many posters on this thread. <ng> I remember fleck long ago talked about gold being the only money that had no debt attached to it, and I think that makes incredible sense. in a deflationary meltdown, it is the only asset (including us dollars) that has no debt attached to it. dollars are an asset of the us gov't (worthless really) that is debt laden. the same goes for the other huge market in this country, housing. all assets bought with credit will suffer. in inflation gold will hold its value and the miners that have leverage to it will do very well. I think gold will do even better in a deflationary environment than an inflationary one. a chart of homestake mining in the 30's bears this out. stagflation. I think gold will do equally well there too, as you get the best of both worlds. <g> I do agree with the posters on this thread that oil is money too. however, saville some time ago compared gold to the crb over different periods of time, and on average during commodity bull markets, gold outperformed the crb. my guess is gold outperforms oil, BWTFDIK?

To: gregor_us who wrote (13022)	5/1/2004 12:04:36 PM
From: russwinter	Respond to of 110194

<Is it your view that Gold works no matter what happens?.> As I know you are a thinker and like to dig deeper on these matters, I have just the tonic for you to understand the special role gold holds as value or money. That is beyond today's important obvious: isn't someone else's liability. Read Peter Benstein's terrific book, "The Power of Gold: The History of an Obsession". amazon.com That obsession and reverence seems to have started with the cavemen and has never really ended, it's quite eternal in human affairs. In my mind, Bernstein shots down big time the claim that gold is a "barbaric relic". Something to do with the human psyche I would guess.