It was a period driven by money inflation and now we have the opposite.
The money injections are diluting the real values of intangibles, gold is gold and cannot be diluted, it is the real tangible.
That is absolute incoherent rubbish.
Yes we have had a servere correction along the wa
If this is the "real factor" then please explain how gold fell from 850-260 in the first place during the largest inflationary period of the last 200 years?
The HIDDEN Gold Wars
In the early 1980s, when world stock markets boomed in tandem everywhere in the world, Gold reached the $500 level twice. The first time was in early 1983, just as the global boom was getting started. The second time was at the end of 1987, two months after the infamous crash of October 1987. From $499 in December 1987, Gold fell throughout 1988 and dipped below the $400 level in January 1989. Gold has only ever regained the $400 for four very short periods since then.
Gold traded as high as $422 in December 1989 - January 1990.
It reached as high as $415 in the lead up to the Gulf war in August 1990.
It reached $408 in August 1993.
And finally, Gold reached a high close of $414 in February 1996.
But Gold's history in the years since the 1987 crash is that at all the actual crisis points, the Gold price has not risen, it has fallen. The best single example of this phenomenon remains Gold's performance on January 17, 1991, the day that the "air phase" of the Gulf war began. On that single day, Gold fell $30 from its previous close. In fact, it fell $40 from its intra-day high. Gold had been rising in the months leading up to the war. As soon as the war started, Gold plummeted.
The Gold price has failed to respond to the fact that Gold demand has exceeded newly-mined Gold supply in every year since 1988. It has, consistently done the opposite of what all of its previous history shows that it "should" do. Why has this happened?
From Overt To Covert
As we have documented in this series, in the 1960s and 1970s, governments fought Gold in the open. They announced what they were going to do before they did it. Of course, they failed miserably. But people in government, just like the rest of us, are quite capable of learning from their mistakes, The first thing they learned was that the best way to "fight" Gold was to go underground. They did so, with great success.
The plan adopted was to fight Gold on their own ground. In order to do this, they greatly expanded the ways in which Gold could be traded. More important, they introduced and developed an indirect market for Gold, they invented a Gold "derivatives" market.
The Paper Blizzard - "Derivatives"
Forward and futures markets were not, of course, an invention of the 1980s. What was an invention of the 1980s was the massive increase in paper trading instruments. These instruments, which became known as "derivatives", were first developed in the currency and debt markets. They then spread into the equity markets and into the Gold market.
The advantage of "derivatives" in the paper markets was twofold. First, they provided more and more leverage for more and more aggressive trading. Second, and far more important, they provided a method to hugely expand the amount of money in circulation without expanding the "money supply"! The traditional measures of money in circulation (M1, M2, M3, M...) expanded much more slowly. What did expand was the blizzard of "derivative paper" using paper money as its underlying "asset". This was one of the main reasons why "inflation" (defined as rising prices) slowed down.
The advantages of a Gold derivative market were similar. Governments learned in the 1960s and 1970s that it was impossible to meet an increased demand for Gold with physical Gold. They needed a paper substitute. Gold "derivatives" provided that substitute. With more tradeable alternatives to physical Gold, it became far easier to control the Gold price. But on top of the derivatives themselves, other specific mechanisms were developed to help control the price of Gold.
One of these methods was forward selling by Gold mining companies. This practice began with Gold's retreat from the $500 level in the wake of the 1987 crash. By the mid 1990s, Gold companies everywhere, but notably in Australia, were routinely forward selling years worth of their projected Gold production.
As the performance of Gold in the fifteen years between the market crash of 1987 and the start of the current $US Gold bull market in 2002 illustrates, these mechanisms worked very well indeed.
In my opinion the majority of recent gains have been from the sheeple following the hype. I've just returned from a major shopping centre in which there was a stall paying cash for gold. Surely this is a sign that a correction is due?
Yes the physical possession is the only sure way. The Gold ETF thread could not even be bothered with. The physical backing to many, particularly the US is said to be very dodgy indeed. Perth mint should be sound enought, but the rest would not touch them.
Gold in the Limelight
Courtesy of www.adenforecast.com
Gold is soaring, hitting new record highs almost daily. This C rise is going strong. Our initial $1200 target level for this year's rise has nearly been reached, but gold could go higher.
This is good news for all of us who have been invested in gold for the past eight years. But even for those of you who invested in more recent times, gold has been a good and profitable investment.
We feel strongly that this will continue in the months and years ahead. And there are many valid reasons why.
Most important, the unprecedented monetary policy currently in force is inflationary. The same is true of the weak U.S. dollar, negative interest rates, rising oil and commodities. Gold buying by central banks is also boosting the gold price higher.
Even though gold is still relatively unknown in mainstream investment circles, it’s starting to attract some attention. As this interest grows, momentum buying will pick up and the exchange traded funds are another big positive, simply because they make it easy to buy gold. The improving economy is another positive factor.
The Aden Sisters have always been bullish on gold but conservative.
While I'll agree with the first part about being bullish, I'd question the 'conservative' part.
Nearly 30 years ago the Aden sisters were predicting gold at $4,000 within a short period of time. I thought their credibility had gone out the door with the 20 plus year bear market that followed.
brty
Sinner'
One of the things that I abhore is the notion of shorting. It is nothing short in my view of legalised criminality. It is probably why we disagree as our outlook is so different. I believe when the whole financial system finally collapses (as I beleive it will) that shorting (and some Government questions arising allready) will be outlawed. It goes against democratic free/value markets.
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