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 : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (42183)	11/2/2008 12:41:50 PM
From: RJA_	1 Recommendation Respond to of 217854

>>>>Also, why would gold do well in deflation<< >>This is a myth, whose basis is the excellent performance of gold during the Great Depression. But during that deflation, gold was official money, so by definition it performed excellently, since everything else deflated compared to money. Now gold is not money, other than in the imagination of gold bugs, so it will deflate during deflation, like any other commodity. You are correct, that gold was money... and the US government guaranteed to buy and sell it at $20/oz and then $35/oz in 1932... but not to US citizens so no longer money in the US, as folks could not own it... but it was money internationally until 1971 for the US and until roughly 1999 for Switzerland... at least, gold backed the Swiss money. So the question is -- as currencies are debased world wide, will it become money again? And certainly, currencies are being debased world wide. See Fed and Treasury Total Money: (nowandfutures.com): See also attached Fed "Reserves" graph from Cumberland: And in that respect, since human nature has not changed much in 2000 or 5000 years, I would guess, history would be on the side of gold and silver. But I do not know for certain this is to be true because prediction is difficult, especially in regards to the future... <g>.

To: KyrosL who wrote (42183)	11/2/2008 4:50:47 PM
From: energyplay	Read Replies (1) \| Respond to of 217854

If enough people with money decide that gold is money, then it will be money. But people can change their mind... The whole gold market is small - maybe 40 billion in market cap for the miners, and X billion for gold sales. This is a tiny percentage of oil sales, mortgages, coal sales, steel sales, foreign exchange, etc.

To: KyrosL who wrote (42183)	11/3/2008 2:33:02 AM
From: NOW	Read Replies (1) \| Respond to of 217854

From Fred Sheehan via Marc Faber: • England, inflationary periods — the purchasing power of gold: 1623–1658: –34%, 1675–1695: –21%, 1702–1723: –22%, 1752– 1776: –21%, 1793–1813: –27%, 1897–1920: –67%, 1933–1975: –25%. • England, deflationary periods — the purchasing power of gold: 1658–1669: +42%, 1813–1851: +70%, 1873–1896: +82%, 1920– 1933: +251% The raw numbers are not worth much, to the investor or to the preserver of capital. Gold has been a much better hedge against inflation than is shown above. For instance, during the inflationary period of 1933–1976, gold lost 25% of its purchasing power but prices rose 1,434%. (As to what might have kept pace with inflation, “crime” comes to mind, which was the conclusion of many a corporate boardroom and trading desk.)