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

To: UncleBigs who wrote (50621)	1/21/2006 2:19:06 PM
From: Claude Cormier	Respond to of 110194

--- do not look at gold as money. Gold is a like any commodity. The price will be determined where supply and demand intersect. That is a point of view that I have to respect as many believe that such is the case. Furthermore its use as money is not widely spreaded. It is more a store of value. But I still believe that gold is much more than a commodity. Commodities are consumed. Gold is saved or accumulated as a store of value. Central Banks have no zinc, lead or copper... they buy gold to diversify their foreign reserves. All the zinc, lead and copper produced in recent centuries has been consumed and hardly recoverable. The 140,000 tons of gold are mostly with a good portion of it in gold bars. The portion in jewelry is easily transferable and therefore usable as money. The recent purchases by South Africa, Venezuella, Russia and other countries cleary where not done because they consider gold a commodity. If the economically advance countries do not hoard gold as much, it is because they think their fiat system will hold the line forever. We know that this is impossible. --- Where is gold's demand? It's 70% in jewelry. How will gold jewelry sales perform in a recession? Probably not real good. Will investment demand make up the difference? Maybe. First, a large portion of those buying gold jewelry are in Asia and you certainly know that this is how wealth is transfer in India and elsewhere. A recession will not stop people from buying gold. Look at India. Demand is far greater than in the USA. But its GDP is relatively much much smaller. India is growing fast now, but there were period when it was pale compared to US economic growth. Still India accumulates much more gold. Everything is a perception. My perception is that gold is much safer than some fiats (and this includes the USD) for the coming decades. ---Gold is a speculation. It should not be viewed as a core savings vehicle. I think anymore than a 10% position in gold is a speculative gamble.Lets review this affirmation in 5-10 years from now.