Just buy GOLD

or Register to post new content in the forum

13 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Nov 29, 2009 9:38 pm

So here we are another financial crisis (dubai) and what happens--a central bank intervenes and provides liquidity aka PRINTING MONEY to paper over all our problems.  Folks- the powers that be are telling all of us that paper money will be debased unless and until the world shows real economic growth.  By printing money they infuse this cash into the financial system and it has to go somewhere.  That somewhere is stocks/commodities etc. 

 
Back in 1980 gold was 800 and the dow was 800, a 1 to 1 ratio.  Back in the mid 30's i believe gold was in the mid 30's and the dow was mid 30's at around a 1 to 1 ratio.  I believe that will happen again.
Nov 29, 2009 9:52 pm

Lmao!  Clown.

Nov 29, 2009 9:56 pm

Back in 1980 gold was 800 and the dow was 800, a 1 to 1 ratio.  Back in the mid 30's i believe gold was in the mid 30's and the dow was mid 30's at around a 1 to 1 ratio.



 
 
You may want to have a better understanding of the Dow, it's history, and how it is priced before you say this to anyone ever again.
Nov 29, 2009 10:08 pm

with all due respect, you obviously don't know what you are talking about.  Gold peaked at around 850 in the early 1980's and the dow was also.

Nov 29, 2009 10:09 pm

so gold is going to 10k or the Dow is going to 1k? Tell us oh wise one!

Nov 29, 2009 10:15 pm
ccmachine:

with all due respect, you obviously don't know what you are talking about.  Gold peaked at around 850 in the early 1980's and the dow was also.



 
 
I'm not arguing that the Dow and gold have not been the same price in the past.  I am stating your attempt to draw a pricing relationship between the two is simply wrong.
Nov 29, 2009 10:21 pm

If I had to guess I would say that gold hits $3000 and the dow will be mired in its current trading range.  Maybe the ratio will hit 3 to 1, so the dow will be around 9000 when gold hits 3000.

Nov 29, 2009 10:40 pm

dude u said u were short gld

Nov 29, 2009 10:40 pm
ccmachine:

If I had to guess I would say that gold hits $3000 and the dow will be mired in its current trading range.  Maybe the ratio will hit 3 to 1, so the dow will be around 9000 when gold hits 3000.



 
 
This is a far different statement than the Dow and gold reaching parity.  Using a term such as "ratio" implies that you feel there is some direct relationship in the price of the Dow and the price of gold.  Again, you are making comparison when you don't understand the underlying components of your comparison.
Nov 30, 2009 7:53 pm

Primo-

There have been a few periods in history where stocks have gone nowhere for long periods of time.  The two periods that I can think of are 1966-1982 and during the Great Depression.  The 1966-1982 period ended when inflation peaked and interest rates peaked and gold peaked.  Once Paul Volcker killed inflation we had a 20 year period of a rising bond market and PE expansion and an epic bull market.  That's the history.  That period also ended when gold and the dow jones was at parity or close enough.  What this parity represents is an extreme movement towards hard assets versus paper assets.
 
I believe that there are a lot of similarities with the 66-82 period and the current period.  We don't have the inflation yet, but it is my opinion that we will have inflation after all the moneyprinting gets through the system.  Stocks have gone nowhere for a decade and we potentially will have some kind of staglfation.
 
 
Nov 30, 2009 9:02 pm
ccmachine:

Primo-

There have been a few periods in history where stocks have gone nowhere for long periods of time.  The two periods that I can think of are 1966-1982 and during the Great Depression.  The 1966-1982 period ended when inflation peaked and interest rates peaked and gold peaked.  Once Paul Volcker killed inflation we had a 20 year period of a rising bond market and PE expansion and an epic bull market.  That's the history.  That period also ended when gold and the dow jones was at parity or close enough.  What this parity represents is an extreme movement towards hard assets versus paper assets.
 
I believe that there are a lot of similarities with the 66-82 period and the current period.  We don't have the inflation yet, but it is my opinion that we will have inflation after all the moneyprinting gets through the system.  Stocks have gone nowhere for a decade and we potentially will have some kind of staglfation.
 
 


 
 
Do you know what the difference is between an ounce of gold during the great depression and an ounce of gold today?  There isn't a difference, it is still the same weight of the same metal.
 
Do you know what the difference is between the Dow during the great depression and the Dow today?  I'm too lazy to look it up, but I would bet you money virtually all if not all the components have changed.  The way the index is calculated has changed.  At its' inception, the Dow was calculated by simply adding the stock prices of the components and dividing by the number of components.  This  is far different than the way the Dow is calculated today.
 
Let me give you an example.  Dow component ABC and XYZ both have a market cap of $100 billion.  ABC closed on Friday at $20, XYZ closed at $100.  On Monday, ABC dropped $10, wiping out $50 billion in market cap, wealth if you will, while the other components closed flat.  On Tuesday, XYZ dropped $10, wiping out $10 billion in market cap while the other components closed flat.  The Dow finished both days about 80 points in the red.  How is this possible, how can the Dow be down the EXACT same amount for a $50 billion and a $10 billion loss?  It is in the way the Dow is calculated.  It is price weighted on a scale.
 
Your statement is false on its face because you are comparing two things that are priced in very different ways.  You are under the misconception that the price of the Dow and subsequent moves in the index are indicative of it's value.  If you had said the the value of all the worlds gold (or some static quantity of gold) and the market cap of the Dow (still false as you would have to assume the same components but let's assume for a moment) were at parity in the past and today's economic climate suggests a return to parity, you would have an argument.  However, using the price of the Dow in the 30's compared to gold and the price of the Dow in the 80's compared to gold to substantiate your argument is simply wrong.  The market cap (value) of the Dow can rise while the index drops and vice versa.  The price of gold only rises as value rises, and will only fall as value falls.
Nov 30, 2009 9:32 pm

I will stop posting as I obviously have no clue.  Except me and my clients have been in gold for 8+ years and have enjoyed nice returns.  Thanks for all the feedback, I will repost when the ratio is around 3.  It will probably be in 4-6 years from now, I hope you are all around then.

Nov 30, 2009 10:13 pm
ccmachine:

I will stop posting as I obviously have no clue.  Except me and my clients have been in gold for 8+ years and have enjoyed nice returns.  Thanks for all the feedback, I will repost when the ratio is around 3.  It will probably be in 4-6 years from now, I hope you are all around then.



 
You are the one that told me that I didn't, correction, obviously didn't know what I was talking about.  The fact that you purchased an investment that has appreciated in value does in no way lend credence to your assertion that past bear markets have resulted in parity in the price of gold and the Dow so this one will.  Is it possible?  Of course it is.  Will this mean that the ratio between the value of gold and the underlying value of the Dow will be the same as during the depression or the 80's?  No.  Not even close.  If this information upsets you so much that you will no longer post, so be it.  I find that to be a weak response, offered simply because you are unable to dispute it.