I believe folks ought to be called when espousing misunderstandings, and so, for the sake of folks who may choose to believe what you noted, here I go:
<<To me, gold is no different than stocks ...>>
… it is news to me that stocks of any particular company has a history of value-preservation over the centuries, across all continents, within most cultures;
<<To me, gold is no different than … copper … >>
… it is unusual to compare gold against copper, but some do;
<<To me, gold is no different than … real estate … >>
… it is quite strange to relate a fungible and very portable money to a fixed address for the tax collector;
<<To me, gold is no different than … ipods>>
… no comment necessary, but one, I believe you are mistaking gold for widgets, culture for pop culture, truth for spin, and sense for ... well, you get the picture
As to …
<<The demand for all of these assets exceeds supply due to credit growth>>
Yes and no, up to a point. Increase credit growth by 1000% per annum, i-pods demand and pricing and supply will not grow nearly as fast as the valuation for gold, I think.
Same for copper, and ditto for real estate, else there would never have been crisis such as “Fiat Money Inflation in France” achamchen.com (must read dusty books store in musty archives, or do free download).
Increase credit growth sufficiently, the demand for gold and its pricing will follow. Decrease credit to the tipping point, down goes everything, but gold will lag, I believe.
<<But how can you get housing, stock market and gold all weak?
Because the fuel for all 3 of these markets is running out (credit growth/liquidity)>>
Ah, I believe liquidity is still growing, and will likely, by pronouncement of spigot masters, be available in copious amounts, always, because the marginal cost is ‘zero’.
The cost of liquidity is tweaked at the margin, still cheap relative to many benchmarks, and dictated by the electorates, per “Fiat Money Inflation in France”, and all similar episodes before and since.
<<If gold continues to run higher even after housing and the stock market falter, then I will concede that gold is in a new bull market. So far that has not proven to be the case>>
The scenario described had happened per script each and every post wild credit orgy. As history does not end, and so the script is apparently difficult to altered.
Gold does not follow housing and paper assets down, I observe, if the down is a crisis. What you are convinced of, perhaps, is that there will be no crisis. Bad bet at the mo, I am guessing, and you are guessing the opposite.
Housing is consumption, with a fixed tax address. Stocks is a piece of paper, a bet, managed by insiders. Gold is a promise, by no one in particular, made good by all, each and every time, so far.
Housing is starting to wobble. Stocks, in aggregate, has gone absolutely nowhere for the year, relatively speaking, and yet, observe, by opening eyes, gold is up, up again, and then up once more worldmarket.blogspot.com , and in effect, giving the finger worldmarket.blogspot.com
There has been no innovation in finance for some time, and the credit-enhanced debacle will happen, again, and so gold will play its traditional role.
Ponder the word “traditional”, its explication, and get to know it implicit meaning
Concede is not necessary, because the truth, once apparent, does not forgive, but just punishes.
Chugs, J |
