# The future of gold?



## Harold_V (Apr 21, 2011)

http://money.msn.com/investment-advice/why-gold-could-hit-5000-dollars-mirhaydari.aspx?GT1=33002 

Harold


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## Drewbie (Apr 21, 2011)

Whooop-whooop.

Once you see MSN/CNBC etc etc start to talk up gold, you know end times are near.


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## jeneje (Apr 21, 2011)

Drewbie said:


> Whooop-whooop.
> 
> Once you see MSN/CNBC etc etc start to talk up gold, you know end times are near.



Don't mean Hard Times..... :mrgreen:


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## Fournines (Apr 21, 2011)

Drewbie said:


> Whooop-whooop.
> 
> Once you see MSN/CNBC etc etc start to talk up gold, you know end times are near.



That is a sell signal for sure.


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## Claudie (Apr 29, 2011)

Today nearly hitting $1570.00 per troy ounce, but Silver lags behind, even falling some. Some are saying to sell off Silver by the end of May. Some are saying that by the end of June, both Silver & Gold could climb rapidly, or go down fast. I've come to understand that someone is always saying something. :|


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## eeTHr (Apr 29, 2011)

From the viewpoint that the metals are remaining at about their same value, but the dollar and other currencies are merely diminishing in value, and with Bernake continuing to print more paper money, how could the metals _not_ go up?


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## Claudie (Apr 29, 2011)

When (if) the dollar is virtually worthless and a loaf of bread costs $135,000, and gold is at an almost unimaginable price in US dollars, will I be able to pay my mortgage off and get change from one ounce of gold? How would the banks deal with that, if something like hyperinflation causes the dollar to drop in value to next to nothing, like has happened in some other countries?


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## Barren Realms 007 (Apr 29, 2011)

Claudie said:


> When (if) the dollar is virtually worthless and a loaf of bread costs $135,000, and gold is at an almost unimaginable price in US dollars, will I be able to pay my mortgage off and get change from one ounce of gold? How would the banks deal with that, if something like hyperinflation causes the dollar to drop in value to next to nothing, like has happened in some other countries?



The banks can't change the price you paid for your house. So if your house cost $135,000 and and ounce of gold goes to $145,000 then you can sell the ounce and pay off the house. And use the other $10,000 to buy a loaf of bread.


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## Anonymous (Apr 29, 2011)

Claudie said:


> When (if) the dollar is virtually worthless and a loaf of bread costs $135,000, and gold is at an almost unimaginable price in US dollars, will I be able to pay my mortgage off and get change from one ounce of gold?


Unfortunately it is not a matter of if,but when the dollar is virtually worthless.It is an inevitable fact that will come to pass,thanks to our goverment continuously printing money to buy people,and goods,and services.Did you know that if the U.S. government were to shut down,IRS refunds stop immediately,however we still have to pay taxes and everyone in congress continues to get paid.It is just a simple fact,that the U.S. will have to find a new monetary system,or it will fully collapse,which may happen reguardless.


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## Barren Realms 007 (Apr 29, 2011)

mic said:


> Claudie said:
> 
> 
> > When (if) the dollar is virtually worthless and a loaf of bread costs $135,000, and gold is at an almost unimaginable price in US dollars, will I be able to pay my mortgage off and get change from one ounce of gold?
> ...



I guess when that happens you will make an effort to pay your debts.


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## goldenchild (Apr 29, 2011)

Barren Realms 007 said:


> mic said:
> 
> 
> > Claudie said:
> ...



:lol:


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## Claudie (Apr 29, 2011)

I can't imagine the financial institutions or government allowing for one ounce of gold to cover a mortgage. I would think they would lose too much money that way, but maybe they plan on foreclosing on them all before that time comes. They already have a good start. :|


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## Harold_V (Apr 30, 2011)

eeTHr said:


> From the viewpoint that the metals are remaining at about their same value, but the dollar and other currencies are merely diminishing in value, and with Bernake continuing to print more paper money, how could the metals _not_ go up?


That's my view, exactly. It's the reason we should not rejoice. What it's telling you is that your money is no longer any good---that it now requires a whole lot more of it to make the same purchase it made years ago. A good way to look at this is that an ounce of gold (or silver) still contains 480 grains of metal. 

Clearly, the only people that stand to gain are those that hold precious metals that are on "the rise" (more accurately, just reflecting the fall in buying power of currency).

One thing troubles me in all of this. For years, as long as I can remember, workers have demanded more and more pay, often with the strings attached that they perform less work. I like to call it getting paid unearned money. It happens at all levels, and through all crafts, vocations and professions.

When the maker of a given product has to pay unreasonable fees for production (unearned wages), the cost is passed on to the consumer. The consumer, in turn, demands more pay, because they "can't live on such small wages", which, in turn causes the maker to raise his prices once again. It never ends. 

Net result?

We're living it, folks. The unearned money bubble has burst. 

Economic systems, globally, are a pyramid scheme. 

Harold


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## Oz (Apr 30, 2011)

Harold_V said:


> One thing troubles me in all of this. For years, as long as I can remember, workers have demanded more and more pay, often with the strings attached that they perform less work. I like to call it getting paid unearned money. It happens at all levels, and through all crafts, vocations and professions.
> 
> When the maker of a given product has to pay unreasonable fees for production (unearned wages), the cost is passed on to the consumer. The consumer, in turn, demands more pay, because they "can't live on such small wages", which, in turn causes the maker to raise his prices once again. It never ends.
> 
> ...


You mean kinda how this is happening? http://www.businessinsider.com/nikki-haley-blasts-obama-over-boeing-decision-2011-4


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## element47 (Apr 30, 2011)

Harold, I disagree with *part* of what you said. I agree that we are *possibly* seeing the front crest of the demise of *unearned* money...but that is a more ephemeral part of your post. There are layers and layers and layers of this type of thing in our economy and they will take a long time to unwind, should they unwind. Certainly, we are not about to lower the pay of politicians who relentlessly work to restrict our rights and confine our various abilities to make a living and form new business ventures. No, there is somehow this inherent claim on our labor and our incomes to fund our creeping incremental imprisonment. And we are not about to reduce ethanol subsidies, for example...an endeavor that doesn't pass a 5th-grade math test in terms of its economic or energy viability. And quite frankly, any substantial reduction in the various transfer payments the government pays out will create civil unrest if it goes far enough.

The ever-increasing demands of labor for higher wages...this we are not, IMO, bound to see. That is the foundation of the so-called "wage-price spiral" type of inflation. This occurred in the 70's and it sucked. Prices for everything just sort of doubled over some number of years. 

No, as you previously wrote, IMO, we are seeing flat-out dollar deterioration. I believe (and I'm saying "I believe" to emphasize that this is my opinion) that the result will be about the same; that prices will basically double over some period of time; but labor will have scant opportunity to boost its' wages this time. Hence, the overall standard of living will just simply decline in the US. I find it kind of disgusting that we have 45 MM people on food stamps. I find it equally disgusting that a "mild" boost in gas prices is throwing people over the edge into food panic. We are indeed a fragile society when it takes so little to toss people over the edge into wondering where their next meal will come from.


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## Harold_V (Apr 30, 2011)

You likely know I'm not sympathetic of the union cause, Oz. I am proud to say, I have never in my life been associated with a union, nor would I have been. I have no use for them, not in any way. I see them as one of the most corrupt and destroying powers of our time. 

Boeing workers, here in Washington, are making far beyond their worth---something that is most likely to be hotly contested---but the facts speak for themselves. Machining is dying in the US, because workers expect to be paid as if they are doctors.

One does not get ahead by demanding unearned money. One betters their position in life---and becomes more valuable to an employer, for which you are better rewarded. 

Or, you can play sports or pretend you're a singer. <very heavy sigh>

We really need to curb this conversation. It is not in keeping with the forum policy. 

Harold


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## Oz (Apr 30, 2011)

Well I guess that unions do venture into the realm of politics, but your commentary reminded me of that article I had read, so I looked it up. 

Getting back a little closer to the topic of golds future/value…

The problem is that goverments and the media have very effectivly trained people to think in terms of fiat currencies being the denominating value when deciding what something else is worth.

The truth is that the paper is actually worthless, unless people can be convinced of its value. It is a confidence game. One needs to start with a denominating value that has some intrinsic value in the first place if you wish to find honest pricing of other commodities such as fuel, food, or housing.

As of market close this evening the dollar is only worth 1/48th of an ounce of silver, and 1/1565th of an ounce of gold.


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## Drewbie (Apr 30, 2011)

Claudie said:


> Today nearly hitting $1570.00 per troy ounce, but Silver lags behind, even falling some. Some are saying to sell off Silver by the end of May. Some are saying that by the end of June, both Silver & Gold could climb rapidly, or go down fast. I've come to understand that someone is always saying something. :|



The reason silver didn't follow gold up this time was because YET AGAIN, an exchange raised margin requirements on silver contracts, forcing a bunch of highly leveraged players to sell off silver to meet the margin.

Oldest trick in the book. Don't let that fake you out into selling silver too soon.

The only way silver or gold are going to loose value now is if somehow they miraculously come up with a plan to save the USD from eventual destruction. Good luck with THAT.


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## Claudie (Apr 30, 2011)

Harold_V said:


> eeTHr said:
> 
> 
> > From the viewpoint that the metals are remaining at about their same value, but the dollar and other currencies are merely diminishing in value, and with Bernake continuing to print more paper money, how could the metals _not_ go up?
> ...



I'm not so sure I would blame the working class bottom of the income here. Isn't it the executives of the oil companies, financial institutions, and utility companies that get ridiculous bonuses? Like the BP executives and the enormous safety bonuses they received last year after the biggest oil spill in history. Wells Fargo is reporting record profits again while more homes are being foreclosed on than ever before. The presidents wife has more personal servants than any first lady in history, while more American people are on food stamps than ever before. It's like the big guys are playing a game to see just how big of a spread they can get between the rich and the poor. I for one am having a hard time these days figuring out the value of a dollar. I bought one gallon of Clorox bleach yesterday, it cost me less than a gallon of water did. Steak is less expensive than ground beef. Milk & gasoline are basically the same price. It confuses me.... :|


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## Harold_V (Apr 30, 2011)

Claudie said:


> I'm not so sure I would blame the working class bottom of the income here.


Please note that I tried to include everyone in my comments. I draw no lines. Many Americans (from all walks of life) have an attitude about deserving a ride beyond their worth. More for less has become their credo. In general, we have lost our way. 

Harold


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## patnor1011 (Apr 30, 2011)

Lets take look at our society. Out of 5 woman one is claiming to live as single mother. State pay her 150 euros weekly + 25 for every child, accomodation, phone, health care. Second one is unemployed. Third one is OAP. Fourth is a children. Only fifth one working. We come to state where one people work and pay tax to feed 4 other who are "dependant" on system. 
Unions? I am getting heart attack everytime I heard that word. As everyone knows country is bankrupted and four country biggest banks are essentially privatised. When govt recenly hinted that they need to cut 20% jobs in them (some of them have branch in every village) Unions went in media spitting fire and threathen to fight to protect jobs. Jobs which are not jobs but waste of taxpayers money yet they demand govt to protect them and squeeze private sector to capitalise those banks and protect jobs. Funny thing is that private sector workers have Unions too. Maybe its time for Ireland to go and get printing press  Recent EU bailout is non repayable as country cant even repay interest on that loan. Same thing happened with Greece and Portugal and it is coming down on Spain, Italy, and most of 3/4 of EU countries. Guess where it take Germany when nobody will afford to buy their cars. Weak currency is not only USA problem anymore. Most of so called western countries are coming to an end of era.


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## firewalker (Apr 30, 2011)

Barren Realms 007 said:


> mic said:
> 
> 
> > Claudie said:
> ...




What does this have to do with the future of gold or gold refining, I was just wondering.


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## Drewbie (Apr 30, 2011)

firewalker said:


> What does this have to do with the future of gold or gold refining, I was just wondering.



Because gold is money. Real money.


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## 4metals (Apr 30, 2011)

> What does this have to do with the future of gold or gold refining, I was just wondering.



For one thing as the price of gold climbs, so do the margins refiners profit. Large refiners have been paying 99.75 to large collectors, since gold was under $750. It has doubled but because everyone is so flooded with work they don't feel the need to compete with each other and they're all happily raking in the profits. 

The smaller guys who sell the one or two ounce lots are getting 98%, I wonder how low the price of gold was when they began offering that rate? Their margins are up as well.

When the demand to buy fine gold is up the refining rates among the large refiners come down to get more gold in, Now there is so much coming in I guess they're happy with what they have.


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## goldenchild (Apr 30, 2011)

Looking at this from the view of a hobbyist refiner and possibly a small scale refiner... Many are speculating gold will continue to rise while others feel there will be a sharp drop in the price of gold. Besides sitting on a whole bunch of gold bought at its peak, would a sharp drop be such a bad thing?

The media keeps pounding into everyone's heads that gold is as at an all-time high. 1000! 1100! 1200! 1500! and so on. Because of this everyone is in a frenzy to buy and sell/refine gold. This is very apparent with the madness of eBay and the number of people wanting to "refine" gold. How many new members do we get per week now as compared to when the forum was relatively quiet in 2007 and 2008? It's so "easy" and can make you rich.

Well. If there was a sharp drop the media would then bombard the public with "gold at an all-time low" "investors losing millions in gold ventures" and so on. It would now be a bad thing to buy gold/refine. There would be less incentive for people to start up and it wouldn't appear so "easy" anymore. This in turn would make getting scrap at a more profitable price possible. First thing coming to mind. eBay.

A sharp drop could also revive the jewelry industry. This in turn means more purchasing of jewelry at retail. Then, when John and Jane get tired of their jewelry and want to buy more they sell it. So there is an overall increase of scrap gold in circulation. Since we are usually on the bottom floor of buying scrap we can make profit whether gold is at $1500 an ounce or $800 an ounce. I for one wouldn't mind gold going back down to $1000 an ounce. Maybe I over simplified this but that's how I look at it.


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## Anonymous (Apr 30, 2011)

goldenchild said:


> I for one wouldn't mind gold going back down to $1000 an ounce.


Well it works great for those of us that get our material for nothing,or next to nothing.


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## 4metals (Apr 30, 2011)

I agree that a lower price of gold will help keep what little of the jewelry manufacturing industry that is still in the US here longer. The industry left town for cheap labor but the price of jewelry didn't drop. Then again when the garment industry left the states prices didn't go down until everybody left town and there were price wars to keep market share. 

But the higher prices go, the harder engineers look for suitable inexpensive replacements for all the precious metals. Every computer component made today has less precious metals than its predecessor. 

Face it the refiners of today are being supplied by people scrapping anything containing precious metals. How much is left out there? That's the big question.


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## qst42know (Apr 30, 2011)

> I agree that a lower price of gold will help keep what little of the jewelry manufacturing industry that is still in the US here longer. The industry left town for cheap labor but the price of jewelry didn't drop. Then again when the garment industry left the states prices didn't go down until everybody left town and there were price wars to keep market share.



Those left holding the bag so to speak when prices drop (large holdings) will likely look to the retail market to recoup their losses and that won't be run through the expensive US manufactures. A few might find some design work for a time.


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## dtectr (May 1, 2011)

> Drewbie: Because gold is money. Real money.



In the late '70s, when the threat of nuclear annihilation was a very real threat, one of the many post-apocalyptic novels I read haled the day that propaganda leaflets were air-dropped by the new acting government. 

The dispersed, surviving population now had the backbone of a new, solid civilization - currency!!! Valued far above metals or natural resources, which were useless in everyday life, the leaflets were to become ...
>
>
>
Toilet paper, the supply of which had disappeared in the intervening months.

The question really is - what will we NEED in the years to come?

Wish I knew ...


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## Oz (May 1, 2011)

Like it or not, as refiners we deal with commodities. The problem of late has been that the currencies of the world (being fiat paper) that commodities are priced in have become increasingly unstable in their worth. 

I care not if one is Republican, Democrat, Socialist, or living in a Dictatorship. The whole globe is going through a financial crisis and the value of paper currencies is dubious at best given the solutions available and being implemented by various governments. This is not something that will go away soon considering all of the bad debt that is out there. I have heard of no government that is not just trying to paper over these bad debts, instead of just letting things fail that should fail based on obvious insolvency. The papering over just creates more bad debt and further reductions in a currency’s value.

So what is one to do if everything is priced in a currency they are not sure of as to retaining its value? 



dtectr said:


> The question really is - what will we NEED in the years to come?


This is a good question. It matters not if your labor produces fine gold and silver or washing machines and cars. The question is what your labor and the products you produce will buy as to what you that you need to live. 

I strongly suggest that in today’s world if you are producing a commodity with your labor, you learn to place its value not on how many pieces of the local paper currency it is worth, but on how much of something you need daily such as bread or fuel to determine its worth. Are the things “you” produce holding their value compared to the things you need? Only then will you be comparing equal things as they will all have intrinsic value based on the raw materials and labor needed to create them. After all, there is virtually zero cost to a government to produce the paper we are forced by fiat to use, therefore its value is easily diminished by producing it in excess at their whim and fancy. 

Make no mistake my friends, there is little changing the value of commodities or finished goods in the world today. Prices are going up almost exclusively because the value of paper money is going down. We see this first in the pricing of precious metals because they have long been considered money and some are falling back to it as security against paper money devaluations. If you think food and fuel have been going up lately, wait until you see the same rate of inflation you have just seen in gold and silver work its way through the system and show up in the price of things you NEED daily.


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## Drewbie (May 1, 2011)

Oz said:


> I have heard of no government that is not just trying to paper over these bad debts, instead of just letting things fail that should fail based on obvious insolvency.



Iceland, I believe.

The citizens stood outside parliament with various implements of destruction, making it known that if the government decided to bail out the banks instead of making them pay for their greed, there would be no end of trouble for the politicians.

So the govt there didn't rescue the local banks, they collapsed, and things went pear-shaped for a short while, and now they're in recovery.

If only...


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