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Old 12.08.2011, 14:20
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Fiat Currencies

Lex seems to think that some goldbugs may view the metal as a good investment because fiat currencies are threatened - http://www.ft.com/cms/s/3/c13c2dd0-c...#axzz1UbkrMFC6 (apologies for the paywall).

Does anyone agree? Seems a bit crazy to me, but hey, it's Lex.
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Old 12.08.2011, 14:32
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Re: Fiat Currencies

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Lex seems to think that some goldbugs may view the metal as a good investment because fiat currencies are threatened - http://www.ft.com/cms/s/3/c13c2dd0-c...#axzz1UbkrMFC6 (apologies for the paywall).

Does anyone agree? Seems a bit crazy to me, but hey, it's Lex.
can you pm/email/quote the article?

gold and other PMs have had a good run but i sold recently as while i thought they would go higher (and they have) i also thought that there was a risk that i wouldn't be able to realise the gains in the event of a rapid liquidation event. so it really depends on how much risk you want to take. imo, the large and low risk gains have already been made (from 300gbp to 1000gbp). the reward/risk is now much less, imo.

oil i am bullish on in the long term, but i would want to see a hard landing in china play out before i invest.
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Old 12.08.2011, 14:33
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Re: Fiat Currencies

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Lex seems to think that some goldbugs may view the metal as a good investment because fiat currencies are threatened - http://www.ft.com/cms/s/3/c13c2dd0-c...#axzz1UbkrMFC6 (apologies for the paywall).

Does anyone agree? Seems a bit crazy to me, but hey, it's Lex.

yes i do.

The purchasing power of fiat currencies has always fallen in the long term. Just check any chart out for that and see the price of things in the past compared to today, thats an easy reflection of the loss in purchasing power. Fiat currencies collapsing is nothing new though, its happened in many countries in the past and will continue to happen. Do note that some currencies are sounder than others but the end game is the same.

I have no affiliation to that website by the way. Pure co-incidence. Thought you were talking about me though
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Old 12.08.2011, 15:23
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Re: Fiat Currencies

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Lex seems to think that some goldbugs may view the metal as a good investment because fiat currencies are threatened - http://www.ft.com/cms/s/3/c13c2dd0-c...#axzz1UbkrMFC6 (apologies for the paywall).

Does anyone agree? Seems a bit crazy to me, but hey, it's Lex.
What other reason would one have to buy gold? I mean the protection against currencies losing value is the only reason??
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Old 12.08.2011, 15:38
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Re: Fiat Currencies

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What other reason would one have to buy gold? I mean the protection against currencies losing value is the only reason??
The belief that there is a greater fool to pay a higher price tomorrow than the price a fool pays today.
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Old 12.08.2011, 15:46
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Re: Fiat Currencies

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The belief that there is a greater fool to pay a higher price tomorrow than the price a fool pays today.
But that is not specific to gold?
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Old 12.08.2011, 16:08
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Re: Fiat Currencies

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But that is not specific to gold?
As people who bought CHF on Tuesday know very well!
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Old 12.08.2011, 16:40
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Re: Fiat Currencies

Gold is in a bubble at the moment. Its just not natural for any commodity to gain 300% in 4/5 years. A correction has to come (just like in the early 1990s)

Ultimately gold is no different to a currency or any other asset. It is only worth what others consider it to be worth.
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Old 12.08.2011, 16:47
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Re: Fiat Currencies

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Gold is in a bubble at the moment. Its just not natural for any commodity to gain 300% in 4/5 years. A correction has to come (just like in the early 1990s)

Ultimately gold is no different to a currency or any other asset. It is only worth what others consider it to be worth.
Gold is not a bubble; the fact is the us$ is collapsing - a sort of negative bubble.

If you look at the price of gold in CHF (This is a Swiss forum) the price of gold has roughly doubled in 4/5 years; 100% increase.

Last edited by marton; 12.08.2011 at 17:13.
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Old 12.08.2011, 17:05
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Re: Fiat Currencies

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Gold is in a bubble at the moment. Its just not natural for any commodity to gain 300% in 4/5 years. A correction has to come (just like in the early 1990s)

Ultimately gold is no different to a currency or any other asset. It is only worth what others consider it to be worth.
http://www.cbo.gov/doc.cfm?index=12050
"asset bubble: An economic development in which the price of a class of physical or financial assets (such as houses or securities) rises to a level that appears to be unsustainable and well above the assets' value as determined by economic fundamentals. Bubbles typically occur when investors purchase assets with the expectation of short-term gains because of rapidly rising prices. The increase in prices continues until investors' sentiment changes, often resulting in a sharp decline in demand and in asset prices."

Is it in a bubble? Is it as big a bubble as the fraudulent CDO-fest based on the US, UK, Spanish, etc. housing price bubble, whose collapse caused the current economic crises? Or as big as the dot-com burst near the end of the last Millennium?

An opinion as to why it is not a bubble.

http://www.fool.com/investing/genera...-a-bubble.aspx

Gold appears to be regarded as an effective hedge against fiat currency inflation. If currencies were pegged to a fixed gold rate, they could not be artificially inflated by printing presses.

If the below graph is accurate, how can gold be in a bubble? Looks to me like it is cheap versus previous highs.



Look at the inflation-adjusted price of gold (from http://inflationdata.com/inflation/i...tion_chart.htm):

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Old 12.08.2011, 17:15
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Re: Fiat Currencies

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Gold is not a bubble; the fact is the us$ is collapsing - a sort of negative bubble.

If you look at the price of gold in CHF (This is a Swiss forum) the price of gold has roughly doubled in 4/5 years; 100% increase.
I assume you hold some gold, I think your just trying to justify holding your investment.

BTW I usually agree with everything you say!
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Old 12.08.2011, 17:33
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Re: Fiat Currencies

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I assume you hold some gold, I think your just trying to justify holding your investment.

BTW I usually agree with everything you say!
I do hold some gold, for some years now...

It is currently my only investment.....

Flattery will get you everywhere
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Old 16.08.2011, 21:38
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Re: Fiat Currencies

I believe the graph explains a lot. We could be in a situation as in 1980. Who says that the gold price won't go down? Gold does not do anything and it's worth whatever people believe it is worth. If people start panicking, the gold price may very well collapse.
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Old 17.08.2011, 08:37
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Re: Fiat Currencies

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I believe the graph explains a lot. We could be in a situation as in 1980. Who says that the gold price won't go down? Gold does not do anything and it's worth whatever people believe it is worth. If people start panicking, the gold price may very well collapse.
Set your stops accordingly...
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Old 17.08.2011, 09:47
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Re: Fiat Currencies

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Set your stops accordingly...
Cash out now if I were you...
When it crashes you're stops ain't gonna do $H!T!
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Old 17.08.2011, 13:10
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Re: Fiat Currencies

I get the feeling that some people 'talk' the price of gold down because they did not have the foresight to buy any.
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Old 17.08.2011, 13:21
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Re: Fiat Currencies

Anyone wanting to watch the gold price in CHF here is a site which goes back 10 years...
http://zkb.is-teledata.ch/html/chart...RT_TIMESPAN=5D
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