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Gold/Mining/Energy : Gold & Gold Stock Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (22634)	11/4/2010 8:30:24 AM
From: carranza2	Respond to of 29622

Exactly. All the economic studies dealing with Gibson's Paradox use more realistic measures of inflation. Even when long term interest rates are used, the case for a gold bull is still very, very strong when long term interest rates are part of the calculation. The gold price model breaks down only when long term rates are compared to CPI. In my view, this is not a valid way to deal with the model because of the manipulation of CPI. I don't think CPI as formulated now even existed when the studies were made. Shadow Government Statistics, a very detailed and in-depth observer, has inflation at 8.5%. Sounds about right. Using long term rates and SGS's measure, we are still looking at about a 20% rate of return on POG. I think this is about right. All dependent, of course, on a lack of government interference.