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Old 03-31-2006, 02:04 PM   #6 (permalink)
aceventura3
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Location: Ventura County
Quote:
Originally Posted by host
<a href="http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum&sid=abJD2CVu7kHk">On Nov. 10, 2005, the Federal Reserve Announced that it would stop posting M3 money supply data.</a>

On Nov. 10, 2005, the price of an ounce gold, quoted in U.S. dollars, was <a href="http://www.kitco.com/gold.londonfix05.html">$467.00.</a>

Today, gold traded as high as <a href="http://www.kitco.com">$588.00</a>

Gold, silver, and other commodities (for example....petroleum) are in competition as stores of intrinsic
value, with fiat, paper currencies. Since all paper currencies are supported only by the ability of various
governments to convince those holding their "paper", that it is "worth" "such and such" amount, it is easy for more and more folks to make a risk comparison between this "paper" and hard assets, and gradually, hard assets are winning. The rising inflation trend in the U.S. and in the rest of the world, is demand influenced, but not in the sense of too many dollars chasing too few manufactured goods. Rather, there is an increasing loss of faith in the stability of paper currency. The Fed is increasing interest rates to slow the flight from the dollar into non-paper stores of value, such as gold, and to attract the continuing need for $3 billion in new, daily investment flow into the U.S.

The "smart" money recognized why the Fed will no loneger disclose M3 data, and they are buying more gold.....

Yea-but, wasn't gold trading at about $580 in the 1980's?

If people are loosing faith in "paper" currency why are interest rates so low in this country? Why is inflation so low?

I am not a doom and gloom kinda guy, and I think the obsession some have with finding the negatives in a mostly strong and dynamic economy will lead them to lost opportunity. I am going to stay invested in equities.

It is interesting - there are several posters who feel the bottom is falling out of the economy, that we are headed toward disaster - yet I would bet that they are not taking any action to prepare for that disaster. For example - selling "paper" assets and buying gold - selling real-estate prior to the bubble bursting - stock piling non-perishable food - or buying wet-suits to prepare for global warming. Do they really believe or just full talk?
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