Great headline, Larry. Kudos!

I swear on My life that when I seen that the very very first word that came to My mind was Ray. It was a no brainer Doc. Then I thought Ray isn't going to like this. Thanks for the Kudos btw.

Larry

If one follows the principle of Supply and Demand and global production is in demand which could lead to less gold on the market which, in turn, leads to even higher gold prices...

...why is this a bad thing for Ray?

Did I miss something in my economics class 15 years ago?

global production is in decline*

"All the gold, in California,
is in a bank in the middle of Beverley Hills
in sombody elses name.

So if you're thinkin
of California
It dont matter at all where you've played before
California is a whole new game."

...Alabama

Gee...the supply is getting low....and the demand is growing.....oh no! that means the price will go up. And Ray is sitting on his stash of gold. So when he sells it he will make a lot more than he paid....Gee sucks to be Ray! Right!

Supply and demand, fools!

Yup, and when the price gets high enough, "somebody" will discover a big gold mine. Gold has little intrinsic value (more than diamonds but less than oil)people are buying in on the presumption that what they buy really exists (unless its in their basement)and somebody will actually show up with it on their doorstep when the world falls apart and there will actually be a demand for it. Since the biggest real users of gold are bling and electronics, unless Dell or your local gangsta comes knocking, maybe the demand will be a little less than what the salesmen tell you.
I'd rather corner the market on canned meat and veggies.

Ray won't sell his gold until the Dow goes below 1400.

Gold has little intrinsic value (more than diamonds but less than oil)people are buying in on the presumption that what they buy really exists (unless its in their basement)and somebody will actually show up with it on their doorstep when the world falls apart and there will actually be a demand for it. Since the biggest real users of gold are bling and electronics, unless Dell or your local gangsta comes knocking, maybe the demand will be a little less than what the salesmen tell you.

I don't know if you're high or retarded...

Did I miss something in my economics class 15 years ago?

Yep, you missed the part about foreign exchange rates. It's not that gold is going up, it's just that the dollar is going down. An ounce of gold will still buy you same as it did a year ago. One ounce of gold worth of cheap crap from China.

Supply and demand my ass. Now we know the educational system in America is FUBAR.

I've always wondered why the results of mining or oil drilling or other tapping of natural resources is called "production". Nothing was produced. It was already there. It was just taken out of the ground. Nobody made anything.

Just a thought.

Sorry Ray. the Gold Has Run Out : +(

If Ray has been buying gold like he says he has, why is this bad for him?

Larry, sometimes you are really stupid.

I think gold will go higher than 5k.

Ray will be bummed when the moon factory Bob found finally starts sending the gold that it's mining to earth.

(By the way, Ray, I know that's you standing at the corner of my building with a pair of pliers in your hand, eyeing the gold crowns on my teeth. Please go away, you're creeping me out.)

Gold has little intrinsic value (more than diamonds but less than oil)people are buying in on the presumption that what they buy really exists (unless its in their basement)and somebody will actually show up with it on their doorstep when the world falls apart and there will actually be a demand for it.

Wow, apparently Northgay knows more than the entire Reserve Bank of India, who just bought 200 metric tons of gold.

I swear on My life that when I seen that the very very first word that came to My mind was Ray. It was a no brainer Doc. Then I thought Ray isn't going to like this. Thanks for the Kudos btw.
#2 | Posted by LarryMohr

Why does Larry hate gold?

The title is misleading because 99% of all the gold ever mined still exists. Beyond what new buyers the headline attracts, it doesn't mean much beause mining increases the total gold supply by about 2% a year.

Silver is an entirely different matter beause it has widespread industrial uses. It is the silver supply that is running out, because for the past 30 years, more has been consumed than produced. It's the buy of the century.

The biggest reason of all to own either metal is because the federal government is spending itself into bankuptcy. They'll destroy to dollar to postpone the day of reckoning.

Ray won't sell his gold until the Dow goes below 1400.
#8 | Posted by LetUsPrey

Nope. The time to sell is when the crowd who have been critizing me wish they listened.

Wow, apparently Northgay knows more than the entire Reserve Bank of India, who just bought 200 metric tons of gold.

I know enough not to live in India.

They'll destroy to dollar to postpone the day of reckoning.

Dropping the value of the dollar increases exports and decreases imports. Why do you think China refuses to value the yuan at its real level? Ray, if the US goes bankrupt, who you gonna sell your gold to? Stand on the corner waiting for some saudistani to cruise by in his Rolls?

You all mock Ray about his position but the guy has been right on gold all along. LAR doesn't get it because he thought the terminal production of gold would be bad for Ray--- it'll only make Ray's gold position all the more valuable. And DINGMASTER doesn't have a clue either when he says gold is only going up because of the cheapening dollar--guess what, gold is de-coupling from the dollar and has been going higher even when the dollar strenghtens. And another thing, gold has been rising against other currencies. Why is that important; because countries along with educated people like Ray (and myself) see the handwriting on the wall and have no confidence in any currency-- gold in itself is becoming a currency play. Folks, then wait until inflation comes back and the morons (Pelosi, etc.) in Washington along with their lemmings get a public option with another 3 trillion added to the deficit. If you think gold is high now YOU AIN'T SEEN ANYTHING YET. Ray will be sipping pina coladas on some island while you critical lemmings will be trying to make enough money to pay the taxes that all this will cost.

You have a valid point northguy3. If gold suddenly rose to 5,000 that would mean a whole wheelbarrow of dollars wouldn't by a bag of groceries. Who would want dollars? Of course those holding gold would have profited, but we are not on the gold standard, our money is our standard. If gold were to rise 500% Things would get so bad, a bag of groceries would be worth more then all the gold in Beverly Hills if your hungry. For that reason alone it won't happen. You can only make money when you sell gold, not when you buy it. Smart investors will pull the plug when the timing is right and they are gambling on a lot less profit then 500% per transaction.

I look at gold just like I viewed the oil market in 2006. It was hyped up by speculators, not supply and demand. At least you could burn oil to get energy. Gold and all that glitters is just eye candy. You can't eat gold. Even if the gold production dropped to nothing, it would still just be eye candy.

What people who invest in gold must learn is the trick of buying low and selling high. For every winner there is a loser. Sitting on gold long term is a fools quest.

Investing in foreign currency is much wiser. You can leverage great profit every day even if the market never moves more then a few percent up or down every day. Also foreign currency is far more liquid when the market is going up or down. Try selling gold when gets in a long term downfall. Anybody here remember the fortunes lost when the Hunt brothers rigged the silver market? I rose every day for a few weeks then tt dropped 500% over night.

The same people that had the wisdom to buy gold 4-5 years ago will also have the wisdom to sell it at the right time since they understand economics and what is actually happening in this country and globally-- people through the ages have always turned to gold as a store of value in uncertain times. Going back thousands of years gold was always used as the medium of exchange when other things such as fiat currencies were found to be worthless.

#19--- the situation today is different then in the 70's when the Hunts cornered the silver market--- gold should do much better this time around because the difference today is the unbelievable debt we along with the world have---back in the 70's Americans actually had savings.

Dropping the value of the dollar increases exports and decreases imports. Why do you think China refuses to value the yuan at its real level? Ray, if the US goes bankrupt, who you gonna sell your gold to? Stand on the corner waiting for some saudistani to cruise by in his Rolls?
#17 | Posted by northguy3

The whole point of buying gold is because the US is going bankrupt. If the dollar doesn't become worthless it will be close to worthless.

Which would you rather have? Worthless dollars or tangibles like gold and silver?

Ray, if the US goes bankrupt, who you gonna sell your gold to?

The highest bidder. Considering the alternatives, this is a problem I'll be happy to deal with.

If you look at a graph of worldwide assets you would see a curvilinear increase, however, gold as a percentage of those assets has a horizontal line and decreasing percentage. That is about to change.

Try selling gold when gets in a long term downfall. Anybody here remember the fortunes lost when the Hunt brothers rigged the silver market? I rose every day for a few weeks then tt dropped 500% over night.
#19 | Posted by RingMaster

Ringmaster doesn't get it. It is the dollar that has been in a long term downfall. When the Federal Reserve opened for business in 1913, it took $20 to buy an ounce of gold. Today it takes $1100 to buy that same ounce of gold. That's over a 98% loss in value against gold.

The feds are close to the point where they won't even be able to pay the interest on their debt. That leaves the printing press. 2% to ground zero.

When one owns gold (and silver), they would perversely hope that Pelosi's plan would pass--man, would gold soar---but if you care about this country you pray wiser heads will prevail and we actually come up with a plan to control costs and budget deficits.

...in 1913, it took $20 to buy an ounce of gold.

So what? In 1913 you could buy a beer for nickle. You could buy an acre of land for $20.

I am not saying that gold is a bad investment, I am saying it doesn't matter if the price of gold goes up or down. What matters is what you buy and sell at. If you think putting all your assets in long term gold investments will be a hedge against inflation, go for it, but it doesn't change the fact that the price of gold is due in part to the fluctuation of the dollar in the global currency market. Watch what gold does when the dollar goes up again. Every thing in the financial world is charted and they all go up and down (including gold). Just remember that. If it was all totally predictable, there would be no winners and no losers in the money markets.

I would much rather place my money in gold and gold stocks then any other stocks in the market. As in the past gold and silver (and possibly commodities) are in an expanding cycle and financials and other stocks aren't--- because of our debts, this cycle should be longer then the 70"s--- when this cycle is over (if I live that long), I'll go back to the old stand-bys.

So what? In 1913 you could buy a beer for nickle. You could buy an acre of land for $20.
#26 | POSTED BY RINGMASTER

I thought my illustration of the declining value of money was pretty clear. If it can't sink in, that's your loss, not mine.

If it was all totally predictable, there would be no winners and no losers in the money markets.

The Federal Reserve is running the largest Ponzi Scheme in the history of finance. It gives the appearance of working as long as the Fed can keep the money supply expanding. This becomes more and more difficult as the debts mount and the dollar goes into decline. They can't sustain this for many more years. What you can't predict is as plain to me as the computer screen I'm writing from.

Like I keep saying. The feds have no control over their spending and they're lying big time about the state of the economy and their malfeasance. I quote Bloomberg.

Spending up.
"Spending for October declined 2.7 percent from the same month a year earlier to $331.7 billion, and revenue and other income fell 17.9 percent to $135.3 billion, according to the Treasury's budget data."

Tax collections way down.
"Individual income tax collections fell 29 percent to $61.2 billion in October from a year earlier, and corporate tax receipts last month were a negative $4.5 billion on the government's books, the statistics showed."

Unfunded liabilities soon to go into negative cash flow.
"In other categories, spending by the Social Security Administration rose to $65.2 billion last month from $59.2 billion; spending by the Department of Health and Human Services, which administers the Medicare and Medicaid health programs, rose to $85.9 billion from $76.5 billion and spending by the Defense Department rose to $67.8 billion from $66.1 billion, according to the data."

Deficits up.
"The excess of spending over revenue widened to $176.4 billion last month, compared with a deficit of $155.5 billion in the same month a year earlier, the Treasury Department announced today in Washington in its monthly budget statement. It was a record 13th consecutive shortfall and the fifth-largest monthly gap on record, the department said."

To those of you who wanted and voted for all those government freebies. Well soon you're going to pay for it.

I have often wondered what the ratio is of gold extracted from the ground versus gold replaced in the ground as jewelry or other gold items buried with the dead.

Supply and demand my ass. Now we know the educational system in America is FUBAR.

I'm aware that the dollar is going down.

But are you going to tell me that the "dwindling supply" of gold would have to do with the price of gold going up?

That's like saying the price of groceries from the store is going up because the buying power of the dollar is decreasing, and it has nothing to do with the price of oil.

But are you going to tell me that the "dwindling supply" of gold would have to do with the price of gold going up?

I am not saying that at all. What I said is that this current rise in gold price has more to do with the value of the dollar on the foreign exchange then it does on the traditional concept of supply and demand. As the dollar weakens speculators buy more gold and other commodities. I don't believe the dollar will keep going down forever. You do, that's the difference.

Every thing eventually reaches a point of equilibrium. Ask yourself what will happen if we return to taxing the super rich like Eisenhower did? The dollar will strengthen because debt get's paid off and there is less of it for capital investment. It's the speculation that is driving up the price. It's at a fever pitch already. Just watch out for the back side, because the richest players aren't going for the long run anymore, they are going for the suckers money and quick profits just like they do in the stock market.

They know you can't spend gold until you sell. Once the panic to sell sets in it will be to late. The price goes up and down and always will. We shall see won't we?

Yes, ringmaster, everything goes in cycles but this cycle is far from over. The fact that banks are now buying gold in large amounts should send you a message. I'll say it again that your link of the rise of gold to a depreciating dollar is very simplistic--- if that is true then why is gold rising against other currencies that are appreciating against the dollar--- I have a feeling that you along with others (that didn't see this economic debacle coming) now don't understand the reasons gold is and will continue to move higher. Actually, you're probably currently acquiring an education.

Matsop

Reading into Ringmaster, he harbors the illusion that inflation can continue forever when basic mathematics says that's impossible; this cycle almost a hundred years old. As you say, he'll get his education the hard way. It's going to take hard times to break the faithful from their religious devotion to the State.

Another way of looking at the state of the economy is the way my grand-dad described it to me 40 years ago. He said back in the old days a working man made a dollar a day and a pair of Levis cost a dollar. He said everything was still pretty much the same and gave examples of other prices that were essentially equivalent to the early 1900s. Keeping on with his blue jeans economics, you can compare working 8 hours now at minimum wage equals $58 which would be maybe $40 take home which is the price of a pair of Levis.

The $20 for an ounce of gold in 1913 adjusted for inflation equals $436 in today's economy. It looks to me that the $1100 price of an ounce is easily explained by supply and demand.

If somebody made $1 a day in 1913 then it would take 20 days to make enough to buy an ounce of gold. If somebody was making a measly $8 an hour today and worked for 20 days that would be $1280 gross, enough to buy an ounce of gold. Wow, that is weird, I would have thought that the value of gold would have gone way beyond that.

Huh (scratches head) both gold and blue jeans still cost the same as they did in 1913. Therefore, what? Buy blue jeans?

Wow, that is weird, I would have thought that the value of gold would have gone way beyond that.

The point missed is that gold is a good proxy for consumer prices. An ounce of gold will buy today approximately what it did in 1913, but a dollar will buy 98% less. That was the past. In the present, there is a new dynamic building up as the masses lose faith in fiat currencies as a store of value. The era of fiat currencies is coming to an end. When the gold rush comes, you can sit on the sidelines if you want. This time, it's not coming down.

"Dropping the value of the dollar increases exports and decreases imports." - NorthGuy...

Its a little more complex than that....

As this recession accelerates the obliteratation of manufacturing, and small business, there is less and less to export.

They're hoping by depreciating the dollar they'll decrease the trade deficit by making our products more price competitive and increase exports --- if our median wages continue to slide and our standard of living continues to slip, that is a possiblity. As the dollar depreciates, more and more there is the danger of importing inflation since oil and other major products sre priced in dollars. The developed countries are deleveraging and having their standard of living depreciating while the developing countries are expanding and seeing their standard of living expanding.

The irony is the lower the dollar sinks the more likely manufacturing will return to the U.S.; if we don't obliterate ourselves with deficits and debt before that happens.

The era of fiat currencies is coming to an end. When the gold rush comes, you can sit on the sidelines if you want. This time, it's not coming down.

You guys would make my laugh if it wasn't so depressing. There is no way we will ever go back the gold standard. If every currency in the world were to suddenly go back on the gold standard three fourths of the world would be shit out of luck because the vast majority of the worlds gold is held by a handful of countries. Sorry Ray, it just doesn't work that way in the real world. Gold may well hit 1500, but it will collapse. What goes up goes down in the real financial world. You and matsup best enjoy your fantasy while you can.

I'll continue making money in the FOREX the old fashioned way, by charts and analysis. I do however have a practical investment in silver. Real silver, not the paper investments some bank is holding for you somewhere in Kansas. Don't you ever wonder why, if all the gold brokers keep insisting gold is going to skyrocket thy are pushing you to buy their gold more then ever?

Like I said already the money in gold or any commodity is in buying and selling, not sitting on it, wishing on a star. Obviously neither one of you is a professional investor, why would I want you to educate me? I'm no pro, but I actually make money at it and have for years. In fact my best year was 2009 when the stock market hit DJIA hit 6500.

You guys would make my laugh if it wasn't so depressing. There is no way we will ever go back the gold standard.
#40 | POSTED BY RINGMASTER

You're not educating me. I've been with this subject for forty years. We're in the early years of a commodity cycle and the last years of a dollar asset cycle.

After this dollar standard fiasco, there is no way fiat currencies will be trusted again. The next generation of currencies has to to be a based on a commodity standard at minimum. Though I know every nation will resist it for as long as they can.

When it comes to the choice between trusting government to manage money or gold, this is a no-brainer for me. At least we agree on silver.

#40---- Okay, Dingmaster, try this one on for size---I handle my own investments and got out of the market in the fall of 2007 and went into 80% cash--began buying back in March of this year-- so, big guy, I didn't lose capital like you and 95% of investors-- currently, I'm in a number of stocks but my biggest positions (only buy and hold ) are silver and gold and related stocks. I also have been doing my own chart analysis for years and have been extremely successful because I don't go with the crowd (ala people like you). The world currencies over the next few years will adjust and the dollar will not have the pre-eminent position it has had in the past-- the rest of the world will see to that since they will never allow us to carte blanche print money again and place them at risk like we did recently.

You talking out of you ass and you know it matsop. At any rate I don't care to debate any more with a cheap shot artist like you. Find somebody else to insult.

Why does Larry hate gold?? I didn't say that I did. I wouldn't be able to eat worth a shit without gold. I just find that Gold lust usually finds people under a bunch of dust. I don't know You know.

Larry