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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: jitka who wrote (90570)	10/14/2009 6:24:51 PM
From: Real Man	2 Recommendations Respond to of 94695

I see. Personally, I don't trust an analyst who calculates gold price from money supply, especially with such accuracy. That is not to say that gold can't drop. It can, and there as well may be good reasons for that. I just don't think such calculation, or whatever number it spits out, makes sense. I can do some calculation like that and end up with a $10,000 per Oz number. What's even more surprising, I believe that silly number could be reached in the next 3-5 years. -g-

To: jitka who wrote (90570)	10/15/2009 5:59:24 AM
From: Real Man	Read Replies (1) \| Respond to of 94695

Gold mania top price above 10,000 per Oz is derived from Fed's balance sheet being entirely backed by Fed gold at the top of fear of currency devaluation. It happened before. Gold price in a bull market is driven by fear of currency debasement, as investors flock into gold en masse for protection. You can't measure it by money supply. In the last stage of a gold bull gold ceases to be a commodity and becomes a currency of last resort. It is for that very reason that Central Banks hold it. Central banks, as printers of currencies, try to avoid that outcome at any cost. Right now we have a threat of gold decline due to another substantial IMF selling for that very reason - to suppress gold price, because they know if it starts really soaring, it will be difficult if not impossible to stop it. Given the breakout above 1K, gold is the best performing asset right now. If only money managers start taking it seriously as an asset, a currency, it will move a lot higher. GLD is a major holder of gold with only a market cap of 35 billion. Trillions can flow into inflating asset in a mania. Message 26020567