Depends on the method used. If they're using nuclear fusion the positive implications for society far outweigh any crash in price. If they're filtering sea water that still speaks of a huge technological advance and while the price would crash it is not an infinite supply of gold.

if someone could counterfeit gold effectively on a large enough it would have happened already. maybe in a the future, but not anytime soon imo.

The historical method if for the currency is to become worthless and then for a new currency to show up. Not sure why anyone expects that this model shall change. The USD has already lost 97% of it's initial value.

1502 and 34.32. Not quite what I expected

Still, I maintain my position and think it's a good time to buy both.

What's peoples favourite ways to expose to gold? The book I read gave a good summary of it, before the book I was interested in possible mining shares but he argues that mining companies are setup in quite complex ways with large hedge books, and plus most people don't know much about the mining industry.

He seemed to think EFT's where the best for individual traders by a long way. Physical gold comes with security risks, and physical gold in the shape of coinage or other collectables introduces new value measures that most people wont really understand or be able to measure accurately (IE coinage condition, year, limited editioins etc.).

There's benefits and detriments to every form. I think if you're fairly certain that gold will perform well, you can diversify within different forms of investments in gold, while still maintaining a heavy part of your portfolio in it.

Leveraging I think has the highest EV, but it also has the highest variance.

Physical is usually the safest, especially in the case of a financial collapse, but there's a cost and/or risk involved with safeguarding it, and the markups/transaction fees are also the highest.

Mining stocks I think will outperform the spot price by quite a bit, but there's a lot of risk there too. Mostly due to State intervention/controls.

The thing about mining companies is they have usually already sold a lot of gold in advance of mining it, as well as complex hedge books, is this the sort of thing people usually look at and try to assess when buying a mining company stock?

Gold is quite unique apparently in that if mining companies fail, IE a big mine shutting down for safety reasons, it doesn't have much affect on the price of gold as there are a lot of gold reserves. The mining company would obviously suffer though.

I guess. I don't buy them unless my broker recommends them. But I don't see why their books would be much more complex than any other company.

Might you be conflating value and price?

A year ago someone gave me an article arguing gold was a bubble (article was in newsletter for a reputable investment firm). It's so loltastic I've never been able to bring myself to throw it away. It argues that gold is a bubble, among other reasons, because of the

Can't make this stuff up.

got link?

I'm holding a hard copy in my hand right now. I've looked but can't find a copy on the internet.

Same article

LOLOLOLOL or aliens might come down and give us more gold!

Do you realize you're talking about alchemy? Has someone discovered a Philosopher's Stone while I wasn't paying attention?

http://chemistry.about.com/cs/genera.../aa050601a.htm

http://en.wikipedia.org/wiki/Synthes...us_metals#Gold

Well **** me, they did find one.

Gold miners do not have large hedge books, if fact, global gold hedging has steadily dropped from over 100 million oz in 2001 to 5 or 6 million oz in early 2011. Global gold hedge books are close enough to zero that their "large hedge books" are not a concern when evaluating the producers.

This is the main reason.

And......bump.

Hope you homies bought the dip down at $1487 a few weeks back.

For your reading pleasure



Gold Surges To Nominal Euro & Pound Record– Jim Cramer Critiques Warren Buffett On Anti Gold Bias

Cramer has his problems but he's spot on here imo:

Isn't that quite an assumption/results orientated way to look at it?

If Cramer is touting gold, I start to worry.

It also seems cherry-picked to start from 2000. I wonder if it includes reinvested dividends.

Gold nor BRK.A pay dividends

What are the effects on the debt ceiling being raised on gold? What will happen after that is announced? Or is this already priced in?

Also, what would be the effect on gold of a default? Which will not happen (officially).

Yeah, sure, a "gold vs. Nasdaq from 1995-1999" would look similarly cherry-picked. The point is that WB is knocking gold for no reason other than he really doesn't understand its role as a store of value and insurance against depreciating fiat currencies.