why would all these roselyn capital like companies be trying to buy dollars and get rid of gold? Even if they're just the mediator it would mean theres more demand for dollars than there is gold, wouldn't it? If gold is at an all time high and the dollar is pretty low, its likely that gold could tank. Sure its more likely the dollar will tank but I just feel like all these people are ready to cash out on their cold while the prices are inflated. Seems sketchy to me if they need advertising.

12/16/2009 5:52:14 PM

Let me see if I can get past your poor post structure at find a point...

Are you asking why people are selling gold when the price of gold is at an all-time high? Is that really the question, here?

12/16/2009 5:56:11 PM

I'm asking why they are being so obvious? who are they fooling or am I missing something?

straight from the ad

Quote :

"like you, i'm worried about the falling dollar but gold always goes up"

Quote :

"invest in gold, I got in 10 years ago and its the smartest move I ever made, now its at an all time high"

It just sends me the message that they are trying to "cash out" at your expense. If they were so worried about hte dollar, and confident in gold always going up, why would they be PAYING GOLD FOR YOUR DOLLARS?

[Edited on December 16, 2009 at 5:59 PM. Reason : manufactured gold in the next 10 years?]

12/16/2009 5:59:09 PM

Are you asking why people are selling gold when the price of gold is at an all-time high? Is that really the question, here?

12/16/2009 6:01:31 PM

I understand why they're selling it but at the same time they are telling you how great and promising it is so they can sell it to you. Kind of hypocritical.

12/16/2009 6:04:40 PM

You're asking how advertising works?

12/16/2009 6:06:33 PM

Quote :

"who are they fooling"

There's always going to be someone to fool. No matter how terrible a deal something might be, there will almost always be some idiot group of consumers looking to take that terrible deal.

For example, this website belongs to a web designer: http://www.webking.com/computer-services/index.html
Looking at it, you'd think he caters only to the criminally insane or mentally retarded, but surprisingly, people have hired him. For further examples, pyramid schemes, Nigerian Prince emails, and all that sort of thing have fooled plenty of people. I don't know why, but sometimes people just can't recognize when they are being scammed.

There are are people who thrive on selling bullshit, and there are chumps that fall for it.

12/16/2009 6:09:26 PM

Some people are selling because they think there's a gold bubble. I don't think there is a bubble. Very few people actually own gold. It's not like the housing bubble or the tech bubble, where you can just keep building houses/creating companies, yet still somehow expect the value of those to go up indefinitely. There's only so much gold. Point is, there's a lot of different kinds of people in the gold market, and a lot of those people are traders looking to make some money off ETFs. People that bought bullion aren't selling though. They're long gold because they know it can only go up.

Anyway, there's going to be massive devaluation of the dollar during the next few years. If you understand anything about the kind of deficits we're running or how the federal reserve works, you should know that. Having (and storing) any kind of commodity is a good idea, not just gold, because those assets will be going up in price. You might think you're playing it safe by keeping cash in the bank. Well, you're not - in fact, you're losing money, because the rate of inflation is certainly more than the interest you're getting from keeping it in the bank. Central banks all over the world are buying gold. They understand what's coming. Eventually, no one is going to be buying bonds from the treasury except the federal reserve, and at that point, there can be only one outcome: inflation on a massive scale.

I would have told you two years ago to buy gold, and I wish that I had money back then to buy some. If you buy gold now, you're going to be glad you did in 5 years. You can write it off as lunacy, but gold has stood the test of time, and it's not going anywhere.

12/16/2009 7:52:36 PM

On that same logic, wouldn't taking out massive loans also be beneficial?

12/16/2009 7:56:18 PM

...Taking out massive loans creates interest. Buying gold does not.

12/16/2009 8:12:44 PM

This gold fever smacks of the baseless hysteria that led to skyrocketing gun sales earlier this year.

THE FED RATE IS AT ZERO, WITH ALMOST NO INFLATION, PEOPLE.




[Edited on December 16, 2009 at 8:38 PM. Reason : ]

12/16/2009 8:33:06 PM

gold spiked in the early 80s as well (at actually a higher price, inflation-adjusted, than today). and then it fell for years.



[Edited on December 16, 2009 at 8:36 PM. Reason : pic]

12/16/2009 8:35:20 PM

^^^but if the dollar falls off like many are saying or even if inflation outruns the interest then the loan is "free" at worst.

If I take out a 10k loan and buy 10k loaves of bread then hyper inflation occurs and a loaf of bread costs 10k then I just got 9,999 loaves of bread for free because I only owe "a loaf of bread" worth of money back when I borrowed enough for 10k loaves of bread.

[Edited on December 16, 2009 at 8:38 PM. Reason : see]

12/16/2009 8:37:44 PM

By first-level growth approximation the most probably value for gold in 2019 is exactly the price of gold in 2009 squared divided by the price of gold in 1999.

Thus you should buy gold. I'm sure this statement holds for the historical prices of every asset class.

12/16/2009 8:46:18 PM

Are you asking why people are selling gold when the price of gold is at an all-time high? Is that really the question, here?

12/16/2009 9:10:03 PM

There is also perhaps the more obvious response that for every buyer of gold there is a seller of gold, and vice versa.

12/16/2009 9:14:33 PM

Quote :

"THE FED RATE IS AT ZERO, WITH ALMOST NO INFLATION, PEOPLE."

I don't know about "almost no inflation." There's definitely some inflation, as the latest PPI numbers reveal. The thing is, a lot of the newly created money isn't even in circulation yet. Banks are just hoarding the money and not lending it out to make it seem like they're not insolvent, at least on paper. if the Federal Reserve creates 100 trillion dollars but it doesn't make it into circulation, the value of the dollar doesn't go down. Once that money becomes available for spending, there will be inflation.

12/16/2009 9:55:37 PM

I too, always buy things after they have gone up in price.

12/16/2009 10:00:45 PM

Just like the rampant inflation in Japan over the past 2 decades?

12/16/2009 10:03:26 PM

Quote :

"WITH ALMOST NO INFLATION, PEOPLE."

this could change with a quickness once banks quit sitting on their reserves. The monetary base was doubled at the end of 2008, the only reason we're not feeling those effects now is that it hasn't begun to circulate.

12/16/2009 10:20:14 PM

But this is what happens during deflationary spirals. Unemployment goes up, consumers stop spending, mfgs stop making, banks stop lending (because there are no credit worthy borrowers), go back to step 1 until enough of the bad debt is purged from the system that banks feel safe lending to companies that won't to grow and hire, reversing the cycle.

With the rate they are printing, the risks are certainly greater to have inflation rather than disinflation, but this simply isn't going to happen until that money does indeed flow. On top of that, the Fed does seem to think they can pull in the liquidity when they need to and have been taking steps to try it out.

What is more likely to happen is a stagflation scenario where unemployment remains high while consumer goods prices stay low with energy and commodity prices get driven up by emerging markets thirst for these resources.

12/16/2009 10:29:24 PM

I think Japan is a fair comparison, up to a certain point. We're basically doing what they did. In the mid 1980s, the central bank of Japan had easy credit policies. They slashed rates, and there was a housing boom. Then there was a bust. Japan then spent the 90s trying Keynesian spending programs, and not a single one helped them escape the recession. Apparently, the American politicians didn't learn from this, because they're setting us up for our own "lost decade," though I think things will take a turn for the worse much sooner than 2019.

So, you might look at Japan's situation, compare it to our own, and think "Well, they had all these spending programs, and so do we, so we're just going to have deflation...right?" I don't think so. We'll keep the high unemployment, I'm sure, but Japan was never forced to monetize the debt. They have a ridiculously high debt to GDP ratio, but a lot of that debt is taken from their post office savings accounts. They aren't depending on foreign creditors or money creation. We are.

[Edited on December 17, 2009 at 8:57 AM. Reason : ]

12/17/2009 8:54:36 AM

Quote :

"How does the Fed do that? They buy long-term Treasury bonds. Banks can hold reserves in cash or bonds. Many were holding bonds, because there is an inverse relation between interest rates and the value of bonds. If interest rates fall, bond owners take a capital gain. Rates have fallen a lot over the past 14 months. But now rates are near zero. So banks are happy to sell bonds. When the Fed buys t-bonds, it takes money out of its account at the Treasury (and that account is NOT part of the money supply) and transfers it to the accounts of banks and other entities. Say Fed buys a $1 million dollar bond from Bank of America. BoA has no more wealth than before, but it suddenly has an extra $1 million in cash it needs to invest. The Fed has been increasing the money supply in just this way for the past year or more, at a rate of 10% per month. (I didn't stutter, 10% per month, biggest sustained increase ever, in absolute terms). So, why aren't we seeing the RETAIL credit market unfreeze, since the WHOLESALE credit market, described above, has plenty of cash? Again, two reasons. First, banks are still trying to avoid risk. And it is not clear that recession is over, in the real world. So banks are borrowing money from the government, at 0%, and then buying NEW federal debt, which pays 3%. That's a guaranteed 3% real return, with no risk. So the Fed buys up debt to increase the money supply, to get the banks to lend. But the banks just buy more government debt, lending to the government instead of lending to small businesses or even large businesses. And the government is having to borrow more and more to finance the deficit being used to bail out the banks. But the banks are just using the bail-out money to buy more of the debt being used to finance the bail-out! From the taxpayer's perspective, you'd be better off playing the "3-card monte" games in Times Square."

http://mungowitzend.blogspot.com/2009/12/banks-not-lending.html

[Edited on December 17, 2009 at 11:09 AM. Reason : .,.]

12/17/2009 11:07:26 AM