Monday, August 22, 2011

Inflation adjusted Gold Price

I guess this is a bubble you fuckin CNBC muts.


  1. Looks like Blythe is going to bury the COMEX floor in short paper today. Come on you sweet thing keep it up I'm looking for some bargin prices!

  2. clearly a bubble, buy equities

  3. hi, I have question, appreciate if anyone can shed some lights on..
    My wife and I want to buy house ( great Toronto area).. She says we should buy now as the high inflation is coming, the house price will continue to go up for a while. The interest rate now is still very low (2% variable) and during high inflation, our mortgage debt will be worth less, (we maybe able to pay debt with some physicals we stack)

    If we wait till high inflation ( or hyper inflation) comes, the housing price may eventually crash, but the interest rate may be going to the roof, and we may not be able to afford the monthly payment..

    Thanks for your input..

  4. @highway,

    do you need a house?
    is it for an investment?
    is it for a place to live?
    have you factored the 30 year price for renting vs owning?
    how secure are your jobs?
    were else could you put that money a see a better return?
    are you aware that the world is going to shit and the most property is in a bubble?

  5. @malcolm. these are very good questions..
    we need a house.. ( actually my wife needs the house more than I do).. We are renting now..
    So If we have to buy a house to live for 20-30 years for example, shall we buy now, or later?
    (Alternatively, we can buy more and water etc, but i think we a place to stack all these stuff)

  6. Later...seriously...later.

    If you are so worried about interest rates to being higher in the future, there is one solution: Put a bigger down payment.

    You have to remember that money in interest doesn't improve your assets one point. It is the price of servicing the loan, which is only beneficial to the company/person giving the loan, not the borrower. Not that there is anything wrong with that, considering they are taking a risk.

  7. The good news is the gap in silver has been closed and the bad news is the same.

  8. it looks like a hurricane might FINALLY make a direct hit on miami. They have gotten off scott-free for 70 years. I want to see those hurricane proof skyscrapers deal with 120mph sustained winds, and pocket tornados. I want to see all the stolen wealth in the marinas of miami and fort lauderdale and palm beach deal with 30 foot storm surge.

  9. @highway,

    you need to sit down with a calculator, some interest rates, the loan principle, the amount your looking to put down, and figure out if you could take the down payment put it in to PMs, and receive a 20%+ return on your investment, or risk losing 20% in the housing market has a down turn and your stuck with a depreciating investment.

    The North American housing market still has a way to go before hitting bottom!

  10. Do you mfer's know who is a leading marine insurance company??? It's my favorite short, Travelers Insurance. Do you know who was wasting all their excess reserves buying back stock while bragging about less than expected hurricane damage the last 2 seasons??? Travelers. HUBRIS. Just like Hartford Financial they will have their day of FULL SHAME

  11. @Commodityworldnews,

    havent watched the news, it summer here in the GPNW :)

    I will check out the weather channel, could happen to a nicer city, that might just take out some of that depressed properties.

  12. Another suckers rally today.
    Now that the retail investors have been all but driven from the markets and all we have left are the algo driven HFT computers we can expect yet another irrational (if not short lived) rally in the markets today. In part the delusional will interpret the fall of Kaddafi as the harbinger of some new stability for North Africa. The TV pundits have already started with the lollipops and roses meme for the aftermath in Tripoli. I wonder if In-Trade has a bet on how long it will take for it to fall apart into chaos if not outright tribal warfare.
    But never mind that, everyone is anticipating the DJIA to be up today following the European markets and a lowering in the gold price on the London markets. The flurry of emails filling my in box on all the supposed “hot buys” has become one of my favorite forms of entertainment. They all can be summed up in one sentence: “This is the bottom you have to buy now or get left behind by a resurging market!” I guess they would have us ignore that each new “rally” has a half life even shorter than the previous one and is followed by an even larger decline. They’re trolling for suckers but I’m not one of them. As far as I’m concerned the fine print disclosure statement, or as they see it “get out of jail free card” is no pass for the criminal nature of this activity of preying upon the scared and uninformed.
    If one willingly jumps into a tank full of sharks knowing full well that you might get eaten it’s one thing, but when the sharks are chumming the waters to entice the unwilling and uninformed to jump right into their greedy jaws it’s quite another.
    But then it is just this kind of criminal fraud that got us into this mess and not a single one of these rapacious monsters of Wall Street has seen a single day in jail never mind in court, why then should we expect them to change their behavior. The SEC and the CFTC are staffed with former and future employees of the very institution they are allegedly regulating so don’t expect any justice any time soon. And when the pressure does begin to mount you can bet that the worst of them will already have left and be residing in Liechtenstein or someplace else with no extradition treaty and safely out of reach.

  13. is it just me, or does anyone else want AIG to go to zero again?

  14. Lebeder,

    Looks like I got my wish"

    reefman said...
    I'd like silver to retest $42.50 for a while.
    August 21, 2011 6:49 PM

    Good. This is very healthy. It's necessary to fill those gaps and test and retest old resistance/support levels. $42.50 is now strong support going all the way back to May time frame. Also we are out of the Kumo cloud for real this time.

    Now then, on to conquer $44 again.

  15. @JWMJR - enlightening commentary on the buying flurry in today's market. Thank you.

    FIS (uranium) is down to year's low $0.50 anyone buying?

  16. From J Rickards interview with Turk (below). Rickards made a very interesting comment, one that I've not heard before that places a value on gold relative to dollar inflation. Given gold is a safe haven (see 10 year chart - no doubt) what is the true value of gold corrected for monetary inflation? Compare the price of gold against M1 (money in motion) in 1980 vs today:

    > On the assumption that M1 is 100% backed by gold (10,000 unencumbered tons in US reserves) and compared with M1:
    > In 1980 gold was ~$800 vs M1 @ $200B = $650/oz (so gold was in a bubble)
    > Today gold is $1,870 vs M1 @ $2Tril = $6,500/oz ($4,600 off peak or 72% - undervalued)
    > Assuming gold continues to follow M1 and M1 doubles in a couple years - so could gold to +$13,000 and beyond.
    > Remember gold is not an investment it does not yield a dividend or a profit. Gold only reflects the purchasing power of a currency.
    > If silver is at 20:1 - do the math!


  17. Suze 'I love 5% dividends even when my stocks are going to zero' Orman on Saturday said she has sold all her Silver and thinks Gold is going upto 2100oz.


    Even my wife gets it!

  18. I may have gotten lucky and taken an epic trade by buying puts on travelers last week considering the hurricane news is pushing hig down 3.5% from where it opened, and travers down 2% from where it opened this morning.

  19. @malcolm Buy cheapest house you can find in the best neighborhood ( that you are happy to live in indefinitely ). Put as little money down as you can, get a fixed rate mortgage ( these rates are stupid low, do not risk an ARM, despite what Bernanke says )

    Use the rest of your cash for investing in PM's. If you have enough PM's, you will soon own your house.

    A house is no longer an investment, it is a place to live.

    If you can rent the same house for alot less, then rent.

  20. this is the straw thats breaking the camel's back in the market today,0,7290462.story

  21. I have been reading sgs for awhile.. and I swear I do not come away with any info pertaining to a support level for silver as TPTB control what ever number THEY you anyone to say there is support at such and such..IMHO is a mistake...please enlighten me if I am offbase

  22. @Garry,

    I total disagree with buying at this juncture. We still have, by some estimates 10% to 30% downside in real estate. I considered buying two years, decided against, and today I am very happy I didnt.

    But each individual needs to do an analysis, remember housing has several distractions:
    fed, state, local taxes, maintenance,repairs, water, gas, sewer bills,payment on the interest and principal, home owners insurance, location dependent, illiquid, ect.

    Renting: rent, utilities and renter insurance

    Yes, people should not look at living in a home as an investment, how did that start anyway?

    I mean it wasn't until government backed programs to entice people into home purchasing, prior to 1950's, most people rented.

    Personally, I intend on paying cash when I do buy.

  23. dan,

    just buy phyzz and you will have you support level!

  24. Hi guys, need help. The Kitco iPhone app is giving gold prices $30 above the Kitco website price. And silver is either up a buck or down a buck. I don't know whether to be happy or pissed. Can anyone shed a bit of light?


  25. Okay, things seem to have fixed themselves ... perhaps my Kitco website page wasn't refreshing ...

  26. I heart that chart.

  27. Few years back had a CNBC-watchin boss at *cough* (hellsfargo) who laughed when I mentioned gold and silver were about to really take off (~$800 & $10, respectively). She cut me off, waved her hand and pronounced both were in a bubble.

    I already knew she was an idiot so was testing her. She convinced me timing was better than even I thought so bought more. And found a better job.