It's simple (imo) - if central banks and major western governments continue to keep interest rates artificially low and spend like drunken sailors, gold will probably blow WAY past $1900. But if they go Austrian School and let the economies fend for themselves...gold may never hit $1900 again in my lifetime. Anyone want to guess which way they will go? For my wallets sake, I hope it's the former. For my countries sake, I hope it's the latter.
Gold should increase in value over time. We don't want dollars to be an independent investment vehicle.
BTW - I added 'in my lifetime' to 'gold may never hit $1900 again.' For the record, from 1833 to 1918, gold went up a total of 6 cents. I realize those are VERY different times...just sayin... http://www.nma.org/pdf/gold/his_gold_prices.pdf
since when do investments go straight up? Have you forgotten the stock market crash of 1987? Since 2002 there have been several corrections.....only a fool would expect an uninterupted climb. But then again, I can't expect the ignoramuses that are still in a stagnant DOW to understand that!
I can virtually guarantee you that gold will blow away past 2,000 and beyond.....in 2008 it fell back to 700 from a high of 1050....thats a one third correction. This is how precious metals are, but you know, if gold does go to 1200 ( which I doubt) then what a heck of a buying opportunity that is!
you know, if gold goes to lets say 1500 or lower, I think even you should buy some, make up for your losses in the DOW!
gold was fixed by the US government back then as the dollar had gold backing...today no currency is backed by gold,,,,,this is a totally different era!
I agree completely. I was just trying to propose a relatively balanced opinion. But I am a glass-is-half-empty kind of guy. And these ding-a-ling central bankers have disappointed me in the past. Now watch they go and do it again and go all Austrian School on me just when I am counting on them not to...LOL. I can see a bloomberg headline: 'After a meeting of the G20 - in a shocking turnaround - all of the leaders have taken a dramatic stance and have decided to abandon all fiscal stimulus, let interest rates rise 'naturally' (as they called it) and agreed to immediately take decisive steps to balanced their respective countries budgets.' NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO....or at least....not until after I have made my money in precious metals you ding dongs.
something else to consider.......in the past 10 years on average gold has gone up about 25% per anum.....this year it has already gone up twice that amount so a correction was in order as it got ahead of itself!
Actually, for the record, it's averaged 46.825% per year over the last 10 years. http://www.goldprice.org/gold-price-history.html And it's still up 26.25% for the year. http://www.goldprice.org/gold-price-history.html BTW - even silver is STILL up 78% for the year: http://silverprice.org/silver-price-history.html
so if it were to go to 1200 then it won't stay there long.......just long enough for me to buy a few maple leafs
So when you "said it before and I will say it again.......gold will keep on climbing until interest rates finally rise....its that simple!" what you really meant was it going down 15% means "keep on climbing" But then again, you can't expect ignoramuses who say things like "gold will keep on climbing" to say what they mean.
Actually, if gold averaged 46.825% per year, and it started at $272 an oz., it would be at $12,664 per oz today.
Got it. So when you wrote a few days ago, "gold will keep on climbing until interest rates finally rise....its that simple!" you really meant to say "it's due for a correction to go down." Lest any ignoramuses would be confused by what you actually said.
Good point...my mistake. I meant that it has made anyone that has invested in gold for the last 10 years an average return of 46.825% per year.
That is not accurate either. The arithmatic average annual return might be 46% percent. And often an arithmetic average will approximately a compounded return. But over 10 years with that high of return the arithmetic average isn't close to the compounded ROR achieved. Anyone who has invested in gold for the last 10 years had an average return of about 20% per year. Not that that is bad at all.
You are talking about compounded. I am not. If you make 468% in ten years...then that means your average (non-compounded) return per year was 46.8% over those ten years. Compounded return is good for telling you how well something has performed. Non-compounded is good for telling you how much money you have made/lost. Personally, I am FAR more concerned about how much I have made or lost then how well the item in question has done on a compounded basis. Though many others do not and I will endeavor to include that differentiation from now on. Plus, I realize bacardi's initial point was probably based on compounded interest...which I failed to take into account when I commented.
No it doesn't, because you are taking a compounded return to calculate your average. For example, suppose I start with $100 and invest it and make 10% per year: Year 0 - $100 Year 1: $100 + $10 interest = $110 year 2: $110 + $11 interest = $121 year 3: $121 + $12 interest = $133 What is the average annual growth? 10% What is the total growth after three years? 33%. You are taking that 33% compounded growth, and dividing that by 3 to get an average of 11%. But the actual average growth is really 10% right? So you see the error. Carry it out another 7 years and it magnifies. You stated: "I meant that it has made anyone that has invested in gold for the last 10 years an average return of 46.825% per year." That is absolutely wrong. Their average return would have been nowhere near 46.825%. In fact it was about 20%. Compounded return tells you your average ROR. Non compounded is only good if your interest doesn't compound. You should be FAR more concerned about making sure your arithmetic is correct so you don't make errors about how much the investment has made, like thinking gold has averaged a 46.8% return over the past 10 years.
This is why I do not bother reading your posts (I thought today I would give it a shot - mistake) - you will argue about anything and go on and on and on it seems for no other reason then you seem to like to argue. Okay... If you take the gold price of 10 years ago ($272.20) and add 48.5% of that ($132.017), to that total every year for ten years - you will get (roughly) today's price. It's called simple (or non-compounded) interest. http://www.financeprofessor.com/introcorpfinnotes/simplevscompound.htm You disagree? I really don't care much. Have a more complete day.
Suit yourself. You mean if you don't add the interest to the value you started with every year? What kind of investment does that? When you get a return for a given year, it is based on the value of the start of the year, not on the value 10 years ago. If gold started at $272 and grew by 46.8%, we'd have: Year - Price per oz increasing 46.8% per year 2001 272.00 2002 399.36 2003 586.37 2004 860.93 2005 1,264.06 2006 1,855.96 2007 2,725.02 2008 4,001.00 2009 5,874.47 2010 8,625.20 2011 12,663.94 Just a tad more than the current actual price.
Oh Gordon Bennett!!! 'If you take the gold price of 10 years ago ($272.20) and add 48.5% of that ($132.017), to that total every year for ten years - you will get (roughly) today's price.' 48.5% of 272.2 (the price of gold ten years ago) is $132.017. Got it? You then add $132.017 to $272.20 ten times (representing ten years). Got it? Or - $132.017 times 10 equals $1320.17...then add $272.2 equals $1592.37..which is (roughly) today's gold price. Got it? It's called 'simple interest' (or non-compounded interest). http://www.financeprofessor.com/introcorpfinnotes/simplevscompound.htm Got it? No? Oh well...I give up. And btw - I am sure many people prefer compound interest. But the people that put out goldprice.org include the simple interest return of gold/silver...so obviously some people are interested in it sometimes. Even if - and I realize this maybe hard for you to fathom - even if Iriemon is not. http://www.goldprice.org/gold-price-history.html Have a more complete night.
gold will keep climbing until interest rates finally rises correct.....but it wont go straight up......did the DOW go straight up in the 80's? Have you forgotten the market crash of 1987? So as gold rises it will corrrect as it is now.....sometimes small corrections and other times large violent corrections...thats just the way it is!
