Here’s a interesting take: Marc Faber says that Gold has permanently eclipsed the $1,000 level:
“Gold won't fall below $1,000 an ounce again after rising 27 percent this year to a record as central banks print money to help fund budget deficits, said Marc Faber, publisher of the Gloom, Boom & Doom report.
The precious metal rose to all-time highs in New York and London today as the dollar weakened. The Dollar Index, a gauge of value against six other currencies, has declined 7.9 percent this year and today fell to a 15-month low. News last week of bullion purchases by the Indian and Sri Lankan governments raised speculation that other countries would follow suit.
"We will not see less than the $1,000 level again," Faber said at a conference today in London. "Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold."
China will keep buying resources including gold, he said.
I have no idea if that will be the case — never say never — but it sure makes for interesting cocktail party chatter . . .
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Source: Gold Price Won't Drop Below $1,000 an Ounce Again, Faber Says Zijing Wu Bloomberg, Nov. 11 2009 http://www.bloomberg.com/apps/news?pid=20603037&sid=az6qQ8ZuXg9M
Can you say Gold Bubble? This feels like Oil at $140 a barrel.
Of course gold can pull back below $1K/oz. The dollar could also rally to new all-time highs. It’s just not very likely. Like Dow 10,000, the fact that a round number has been exceeded means nothing if you discount the superstition attached to round numbers. It is also interesting to note that gold is nowhere near its historical high in real terms "” the latest “high” is nominal.
I can say this for certain: Gold will always have value somewhere, to someone (or better yet, anywhere/everywhere to anyone/everyone).
It’s interesting to note that all players involved in the issuance of fiat scrip (it is, after all, nothing but), hold gold (and as you note, some are increasing their holdings) as an assets. That fact alone should clearly demonstrate its relative value as a store of wealth.
I’m sure Dr. Faber will be delighted when learning of his new name… [BR: Heh heh -- I'll fix]
Karl Marx: “For the bureaucrat, the world is a mere object to be manipulated by him. ”
Groucho Marx: “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies. “
Citigroup credit card story. 25 years, never late, 7k limit……..charge 1100 bucks for some carpet, get denied……….hmmmm…….got flagged for possible fraud, now never charge more than 100 bucks at a pop, of course every 2-3 years a big purchase, ac unit etc., never any problems, happened twice yesterday, also for some furniture, yet, they had no problem with 50 bucks for lunch, lol, i guess the crooks can’t get carpet but can eat well………….i’d say the whole thing was weird…….man when that cc get’s denied, them sales folks look at you like, ahhhhhhhh, you’re the problem we are all in this mess…….now of course around 4 oclock get an electronic phone call, “if these charges are real, press 1″ , i don’t blame them for the diligence, it was just weird there was no way to get it rectified on the spot, and then they allowed other charges, that’sa life
Well, I think we are now in a somewhat different form of stagflation. No, not exactly like the Arthur Burns/Jimmy Carter variety, but something different. The stag part is wages and reimbursements. To see work weeks at 33 hours and huge jumps in productivity…when this is thought about it is deflation and in this Mish and others have it right. But the inflation is coming in the price of gold and other needed commodities, as well as the price of energy, and the huge increases in taxes to the individual. This is the stagflation of the individual and small business owner here in the United States, not the multinational corporation or the mindless spending of our national government. These two entities get more of a pass this time, at least until it gets to the 9th inning of this farce. People keep saying “Gold can’t keep going up”…well if the hollowing of the dollar continues, that action may well continue to get a reaction in the price of commodities and energy.
B in T
From Mish’s website:
Email From Dr. Mike Vasovski
“Dear Mish
Since learning about Congressman Ron Paul in early 2007 as a result of hearing him in the debates, I am now fully convinced that a commodity back/sound money currency is the only way for us to prosper and remain free Americans.
I am fully invested in American Eagle gold coins in my IRA retirement accounts, a fact that can be checked at FEC.gov under my personal disclosure statement. I practice what I preach.”
…this is about his endorsement of sound money candidates for the 2010 election. It is not whether this guy is a gold bug or not, but it is about what seems to be the upside-downing of America. Not long ago, people who put their entire retirement in gold would be laughingly called “lifetime workers”…now there is more than a small chance this fellow has taken a radical solution as a conservative response to government policy….
…Worth thinking about…
B in T
[...] morning, here’s what I read from Dr. Marc Faber: "Gold won't fall below $1,000 an ounce again after rising 27 percent this year to a record as [...]
Though not a gold bug per se, I would recommend (to people that bother to ask) at least 10 – 30% of ones portfolio be in gold/silver or other precious metals. What I keep seeing in my travels, is a general distrust in our government and monetary system. Gold and silver (in ones hands) tends to give people a feeling of worth and value – as it has been for thousands of years.
"Gold won't fall below $1,000 an ounce again…” Faber
This ranks right up there with real estate never goes down; derivatives are good; debts don’t matter, Reagan proved that…. and various other stupid comments.
As a gold owner and investor for years, IMHO gold will go higher long term. But to say it won’t go below $1,000 ranks right up there with all time stupid comments.
gold, silver and platinum have significant volatility, the miners even more so…with that -the numbers speak for themselves – against major currencies – from James Turk – this is not a change in trend, this is an 8, now 9-year trend
Gold % Annual Change USD AUD CAD CNY EUR INR JPY CHF GBP 2001 2.5% 11.3% 8.8% 2.5% 8.1% 5.8% 17.4% 5.0% 5.4% 2002 24.7% 13.5% 23.7% 24.8% 5.9% 24.0% 13.0% 3.9% 12.7% 2003 19.6% -10.5% -2.2% 19.5% -0.5% 13.5% 7.9% 7.0% 7.9% 2004 5.2% 1.4% -2.0% 5.2% -2.1% 0.0% 0.9% -3.0% -2.0% 2005 18.2% 25.6% 14.5% 15.2% 35.1% 22.8% 35.7% 36.2% 31.8% 2006 22.8% 14.4% 22.8% 18.8% 10.2% 20.5% 24.0% 13.9% 7.8% 2007 31.4% 18.6% 10.4% 23.0% 17.9% 17.5% 24.7% 21.5% 29.2% 2008 5.8% 32.5% 32.4% -1.1% 11.9% 30.4% -14.9% 0.2% 44.3% Annual Average 16.3% 13.3% 13.6% 13.5% 10.8% 16.8% 13.6% 10.6% 17.1% 31-Oct-2009 17.7% -8.7% 4.0% 17.8% 11.3% 13.7% 16.7% 13.1% 4.8%
Silver % Annual Change USD AUD CAD CNY EUR INR JPY CHF GBP 2001 -0.1% 8.5% 6.1% -0.1% 5.3% 3.1% 14.4% 2.3% 2.7% 2002 4.8% -4.6% 4.0% 4.9% -11.0% 4.3% -5.0% -12.6% -5.3% 2003 24.0% -7.3% 1.4% 23.9% 3.2% 17.7% 11.9% 11.0% 11.9% 2004 14.3% 10.2% 6.5% 14.3% 6.4% 8.6% 9.6% 5.4% 6.5% 2005 29.6% 37.7% 25.5% 26.3% 48.1% 34.6% 48.8% 49.3% 44.4% 2006 45.3% 35.3% 45.3% 40.5% 30.4% 42.6% 46.7% 34.8% 27.5% 2007 15.4% 4.1% -3.1% 8.0% 3.5% 3.2% 9.5% 6.7% 13.5% 2008 -23.8% -4.7% -4.7% -28.9% -19.5% -6.2% -38.8% -27.9% 3.8% Annual Average 13.7% 9.9% 10.1% 11.1% 8.3% 13.5% 12.1% 8.6% 13.1% 31-Oct-2009 44.2% 11.8% 27.4% 44.3% 36.3% 39.2% 42.9% 38.6% 28.4%
If he thinks gold has reached a permanently high plateau, Marc Faber must have some special insight into the growth in Indian weddings.
OT, what to do with unsold mcmansions? empty house parties, hire cops at security guards http://bit.ly/3Ektk3
Gold Bubble? That’s ridiculous, I mean gold is just 10% above its’ all-time high. Has anyone looked at supply and demand fundamentals for gold? Anyone read Paul Tudor Jones’ gold analysis, what will likely go down as the seminal piece for this next leg of the gold bull run? Regardless of what the media and government wonks think, paper money is just that, paper – and paper burns. With the amount of debt and unfunded obligations outstanding, there will be trillions more of those paper/electronic dollars created over the next 10-20 years. In addition, emerging market central banks have their currency reserves woefully overweighted to paper currencies, particularly dollars – on average they have about 3% in gold while western central banks have approx 35% of reserves in gold. Sure, gold might very well have sharp and violent corrections, but the Indian Central Bank along with the breakout about $1033 sets a pretty solid floor. Is it going to $2000 tomorrow? I doubt it but I suspect that it is going to go a lot higher, a lot faster than the mainstream thinks. Has anyone been calling copper in a bubble? Copper went from $1.25/lb to over $3.00/lb… Now everything that rallies is a bubble…
B in T
I cannot see any way around the scenario where commodities inflate while wages and discretionary incomes stagnate. The USA is no longer the center of the global economic universe. Growth will go elsewhere and once global growth ignites, commodity prices will rise but our high structural unemployment rate will keep wage hikes subdued. The average Joe will be paying more for anything that is traded globally. Thus food, gas, electricity (coal), things made of metals. They will all go up relative to the value of the dollar on the global exchange.
It will take many more quarters of productivity growth to offset these declines in living standards. Even then, it looks as though the benefits will accrue more to profits than to wages, and thus more to investors and not to workers. Glad I am not having to start out in this world. It is going to be tough on our children.
Yes, and with all forms of government deciding that property taxes are the pot of gold at the end of the rainbow, why would anyone in this environment want to get back into property in a big way? Gold makes sense, even if it is a distorted sense from what we’ve known in the past.
B in T – It’s called a reduced standard of living for Americans. We have over-consumed for years and the damage has been done to our currency – that’s the exact thesis that Jim Rogers, Marc Faber and Peter Schiff have posited for investing in commodities and Asia NOW – to maintain your purchasing power…
http://online.wsj.com/article/SB125798515916944341.html?mod=WSJ_hpp_MIDDLTopStories
NOVEMBER 12, 2009.Returning Workers Face Steep Pay Cuts
Many Bouncing Back From Layoffs Struggle to Recoup Earning Power as Wage Erosion Threatens to Slow Economic Recovery
If you look at the price action, gold does not look like it is in a bubble. It looked more like a bubble in 2005 and last year when it was ripping off $40+ single day moves. Look at the chart – do you see a parabolic blow off top forming or a steady rise in price typical of a bull market? Even with the strong gains over the past few months I still see the later. People have been bad mouthing gold for years and over that span, how have equities worked out for you? Here’s a hint – if you have been wrong about gold over the past few years you have forfeited your right to predict where it is going. Faber has a pretty good track record so he is allowed to pontificate. Will gold go below $1,000 an ounce again? Maybe, and if it does I will just buy more.
Just think of gold as a neutral currency that can’t be rapidly produced and you get a better understanding why big money (Central Banks, Hedge Funds, etc.. hold gold).
I guess the good doctor is more positive on gold’s outlook than he was last week.
Last Friday, Faber was quoted by the Business Intelligence-Middle East staff as saying:
“Even gold may be due for a short term correction, he says.
‘I should also mention some concerns (for now of short-term nature) I have about commodity prices including gold. A large number of commodities including oil, the CRB Index, and gold broke out on the upside in early October,’ Faber said.
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