I'm just saying if you asked the same thing 2 weeks ago, the answer should not be different, yet the data would indicate something completely different. That alone shows it is useless to look at something like that.

Twenty to thirty years without being allowed to change allocation at all during that time? On average, I would expect stocks to win. There are other considerations, of course, where +$EV isn't the right metric for deciding what is "better".

The key is to be able to determine the difference between fake growth and real growth. Under fake growth, gold will probably be better. Under real growth, stocks. It all comes down to whether you think the economic conditions are favorable or not. Will wealth be created or destroyed. Long term, that almost always will be true that there will be some real growth (and a lot of fake growth with it). I'll hold gold when I want to retain value, and stocks when I want to gain value. Simple as that.

Which is just as lol as you picking 12 years. We could go back much further if you want to, but I am guessing you won't want to do that. I understand the allure of gold, it just doesn't make much sense for most people. And the people who tend to own a lot of it tend to also own guns and think the world is coming to an end.

That makes sense. I do get your point about the time frames being arbitrary.

By "fake" you mean unsustainable, or multiple expansion, or fertilized with QE?

If you wanted (all of a sudden) to retain value, you don't even glance at the price of gold in real dollar value compared to where it normally is before deciding how to retain value? Seems just a bit too simplistic.

The latter. When it looks like addition of wealth but it actually isn't, that's what I'm referring to fake growth.

Where it is "normally"? That's a poor way of looking at it. But you are correct that the price can deviate from that, and speculative bubbles can and will form. And being the last to get your money in there is going to obviously hurt you, as the advantage will be priced in and it will go away. It can be hard to identify such situations, though. Plenty of people thought $1K was a speculative bubble, now its far below the "new normal". The concern is when people are buying just to buy and get rich quick. That's a good time to sell off into something not so hot. But it's not as simple as it sounds.

We have only been off a worldwide gold standard for about 40 years. Prior to that the world had been on gold standards for thousands of years. I don't understand how this isn't relevant. The demand for gold as a currency can't end so quickly, I don't buy into that. There is certainly more demand than just jewelry/electronics as some have said. Especially if the 3 major currencies keep running this race to the bottom.

It's somewhat equivalent to a smoker who smokes for 20 years then quits for a day and claims to be off the stuff....or a coffee drinker, drug user etc... there is a reason things are used for so long and its tough to quit them cold turkey. IMO gold will somehow be connected to a major currency again at least a few more times in the future.

I personally am heavily invested, have been for quite a few years and will be for probably another 5 years minimum. Maybe It will turn out to be a bad investment, or maybe not. Time will tell.

Like I said, you should really read the thread from the beginning because your comments are pretty indicative of someone who has skipped to the end with no real context for why people are buying gold. And plus, you seem to be under the impression that it's some small fringe group of doomsayers driving the entire physical, ETF, and futures gold market. They're not. http://www.zerohedge.com/news/2013-0...ate-disconnect

Gold would not surprise me if went to $1000 per ounce. Imagine 1 cubic foot of gold in your room. Is that really worth $20,000,000 dollars to you? 1 cubic foot of cement might have more utility as an anchor.

If you look at the other metals tin, copper, zinc, iron ore, aluminum, they are all testing their cost curves. No reason silver and gold can't test their cost curves either. When this thread gets to page 2 or 3 then it might be time to buy gold.

It's on page 52 ...

Gold and silver are doing fairly poorly, is it because donks are being lured into stocks?

Still time to buy? Is gold being manipulated lower? What happens when the trillions from QE3 dry up?

This just, is, not, true.

maybe bitcoin is biting into the gold market eh

Please explain your reason(s) for saying this.

I am not an expert on money or economics nor a historian, but I think it's safe to say that going back say 2000 years ago (to the time of the Roman Empire) silver & gold were the fundamental form of currency & store of wealth. Sure, there were (and still are) other forms / stores of wealth (i.e., spices, salt, cattle, camels, stocks, etc.) but the one thing that was universally accepted as money was gold & silver. Yes, if one goes back far enough in certain times/cultures other things were accepted as money (rare shells, etc.) but I don't think anyone here is talking about what money was 10,000 years ago among some tribe on some island somewhere.

Initially, U.S. currency was backed by gold & silver--U.S. Constitution, Article 1, section 10:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts"

So when the govt began issuing paper money it was backed by real gold and silver.

In 1913, the Federal Reserve System was created by Congress--a private company, owned by member banks, and controlled by the bankers. The bank notes were redeemable for gold/silver.

The U.S. mint made silver coins through '64, then reduced the silver content to 50%, and then finally in 1970 silver coins ceased. In 1971, the govt ceased allowing foreign banks to redeem US dollars for gold.

This was when the gold standard ceased.

Today the U.S. dollar is the world's reserve currency. Why is this? One reason is because of the PetroDollar system. In 1973 (right after U.S. went off gold standard) Nixon got Saudi Arabia to agree to only accept U.S. dollars for oil. By 1975 all of the members of OPEC agreed to sell their oil only in US dollars. Every nation in the world started saving US dollars so as to be able to buy oil. With such high demand for dollars the currency strengthened. On top of that, many oil-exporting nations like Saudi Arabia spent their US dollar surpluses on Treasury securities, which further strengthened the dollar and provided a wealthy pool of lenders to support US government spending.

This is changing, and when inevitably the U.S. dollar is no longer the world's reserve currency, then everything is going to change, fast.

The reason that the dollar is the world's reserve currency (something has to be according to the law of one price) is it's the world's largest economy backed by a long running stable democracy that just happens to be the world's only superpower.

You do realize that you should probably look at how the dollar did from 1973 to maybe around 1982.

Also, the petrodollar thing is a complete myth. I know that you aren't a historian, so you are forgiven for reading a couple of articles from some nutters and not realizing how silly they are.

The reason why things (all of them) have a USD price is because it is the current reserve currency of choice, not the other way around.

This is a gold-related thread and I shouldn't have derailed it by bringing up the topic of petrodollars--I apologize. However, I'd still like to hear from Grizy regarding his comment.

ukjw: Prior to that the world had been on gold standards for thousands of years.

Grizy: This just, is, not, true.

"�Although gold and silver are not by nature money, money is by nature gold and silver." Karl Marx

"Paper money eventually returns to its intrinsic value - zero."€� - Voltaire

+1

And yet there are hundreds of years of history against you. I understand that our monetary system is confusing. But that doesn't mean you should hold a lot of gold. It is a store of value at most, it is most certainly not an investment.

History is against gold?

Recent history for sure, Friday was pretty brutal for those long gold

You just quoted guys from before the 20th century. Both were guessing without any real data to work with. This is like quoting Bill Gates in the 80's about how much memory people would need in the future "Why would anyone need more than 56KB?" DUCY?

Google: Metals and Mining Commodies 101 (a pdf).

Go to page 17, and look at Exhibit 80.

The budget has been balanced the last 2 months. Congress is hopefully cutting more and the war in Afganistan ends next year.

IMO, gold is going nowhere for at least 3 years. However, if a liberal "ruin the country" congress is elected and they start passing jobs bill, unemployment and te price of gold will rise.

Last month we had a 138B deficit, with total spending at 336B, the fourth highest spending month ever.

http://www.fms.treas.gov/mts/mts0513.pdf

You can say the same thing about gold for the 1800s except the super power was Great Britain.

They only picked gold standard because they ran out of silver, which was the reserve currency backed by the previous super powers China and Spain.

Even in Roman times the coins were worth more than the gold and silver they were minted on. The coins had value because the Roman empire backed them.

The Mongol Empire btw backed its (paper) currency with silver and silk, not gold. Japan is another interesting example. They used gold coins... the gold coins were tokens for rice, which was the actual currency of trade.

From TreasuryDirect

Debt to the penny.

April 1st 2013 16.792 trillion
June 14th 2013 16.739 trillion

http://www.treasurydirect.gov/NP/deb...8&endYear=2013

http://www.treasurydirect.gov/govt/r...opds052013.pdf
May $16.738 trillion

http://www.treasurydirect.gov/govt/r...opds032013.pdf
March $16.771 trillion