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To: Dinesh who wrote (88341)3/25/2010 9:32:38 AM
From: SoberRead Replies (1) | Respond to of 118717
 
Even without a total collapse of the financial system, it is not hard to imagine the dollar doing what it has always done historically, and that is reduce its current value thru dilution.

Dilution is necessary as the GDP increases, but beyound that it has a negative effect on the value of the dollar. And of course, the decrease of the dollar value works particularly well for the government, because it can pay off earlier debt with cheaper dollars... a nice trick as long as you can manage it.

With all the things we will need to pay for in the future, I rather suspect that more dollars will again need to be " printed ", and I will be able to tell my grandchildren how a new GTO cost 6K in 1964, and how they cost 64K in 2010, and now in 2025 ( should I live so long ) they cost over 100K, and he won't believe me.

Gold and silver will go from $ 35 in 64, to 1,000 in 2010 and probably 2,000 ( possibly way more ) by 2025. Not that gold will be any better than it is today, but that the dollar will be worthless.... I mean worth less.

Of course, with that being said, all company stock will have to be worth more as well, since they are also measured in dollars. Hence, one of the factors driving the market higher today.. ( just one... the other being good earnings relative to such crappy earnings a year earlier..)

On the outside chance that the CFTC rules in some way favorable to gold and silver, I think that silver will outperform gold due to silvers price making it more available to the average person.

An interesting production on the changing importance of the CFTC can be found in this frontline program that describes why Brooksley Born should be a national hero, or at least a great role model for young women.

It is well worth watching the several episodes if you missed it when it was aired.

pbs.org

Sober