Gold, Silver Futures Fall on Speculation Euro Rally May End
By Pham-Duy Nguyen
Nov. 15 (Bloomberg) – Gold fell the most in more than a year on speculation the euro’s rally against the dollar may end, reducing the appeal of the precious metal as an alternative investment. Silver also declined.
The euro dropped against the U.S. currency after rising close to a record yesterday. Before today, gold gained 28 percent this year, reaching a 27-year high last week, and the euro rose 11 percent against the dollar. Losses accelerated after the price breached previous areas of technical support.
The euro tried another test of the new high and failed, and gold came down with it,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. There was a technical breakdown and the funds just piled in and sold.‘’
Gold futures for December delivery fell $27.40, or 3.4 percent, to $787.30 an ounce on the Comex division of the New York Mercantile Exchange, the biggest percentage drop since Oct. 3, 2006. The price has declined 5.7 percent this week.
“The U.S. Federal Reserve added a total of $41 billion in temporary reserves to the banking system on Thursday, the biggest single day of such injections since September 2001.”
It seems to me that giving enormous power to someone who is immune to the wishes of voters in a Republic is a prologue to chaos.
What if the person(s) running the Fed want jobs at an international bank when their term is over? Will they do things that such a large bank might favor?
[/quote]
Given the level of economists who are Fed Board Governors, I don’t think you need to worry too much about lack of job prospects in their case.
“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Lord John Maynard Keynes (1883-1946), renowned British economist.
What’s sad about Keynes is that he HAD the capacity to know better, but he helped in the process of destruction. “Theirs is the guilt beyond forgiveness.”
— Ayn Rand
[quote]Headhunter wrote:
Falling dollar could push gold to record high
By Javier Blas and Chris Flood
Published: October 30 2007 20:23 | Last updated: October 30 2007 20:23
For a moment this week, it looked as if a sliding dollar and surging oil prices would drive gold through $800 dollars an ounce for the first time since 1980.
Precious metals traders say that a move above this psychologically important level and towards the nominal record high of $850 an ounce reached in January 1980 is likely if an expected cut in interest rates today by the US Federal Reserve leads to further dollar weakness.
But gold is also used as a hedge against inflation and the metal is partly seeing demand boosted by fears that global inflationary pressures are building �?? a concern that becomes ever more intense as oil approaches $100 a barrel."
With gold > $800, oil near $100, foreclosures skyrocketing, and the S&P 500 price-earnings ratio very high, I think we’re screwed. Thoughts, anyone?
[/quote]
Thoughts? I’m thinking God Damn It! I should have bought in to gold instead of adding to mutual funds last time I invested. Tangible investments it will be for awhile.
[quote]texasguy2 wrote:
Thoughts? I’m thinking God Damn It! I should have bought in to gold instead of adding to mutual funds last time I invested. Tangible investments it will be for awhile. [/quote]
You can roll your 401(k) or Roth IRA into gold backed assets.
[quote]texasguy2 wrote:
Headhunter wrote:
Falling dollar could push gold to record high
By Javier Blas and Chris Flood
Published: October 30 2007 20:23 | Last updated: October 30 2007 20:23
For a moment this week, it looked as if a sliding dollar and surging oil prices would drive gold through $800 dollars an ounce for the first time since 1980.
Precious metals traders say that a move above this psychologically important level and towards the nominal record high of $850 an ounce reached in January 1980 is likely if an expected cut in interest rates today by the US Federal Reserve leads to further dollar weakness.
But gold is also used as a hedge against inflation and the metal is partly seeing demand boosted by fears that global inflationary pressures are building �?? a concern that becomes ever more intense as oil approaches $100 a barrel."
With gold > $800, oil near $100, foreclosures skyrocketing, and the S&P 500 price-earnings ratio very high, I think we’re screwed. Thoughts, anyone?
Thoughts? I’m thinking God Damn It! I should have bought in to gold instead of adding to mutual funds last time I invested. Tangible investments it will be for awhile. [/quote]
Too late now. The speculators are bailing out. Buy again in a year or two when it is down to $ 400/oz. Hold on for a decade or two and you will make some money. Eventually.
Thoughts? I’m thinking God Damn It! I should have bought in to gold instead of adding to mutual funds last time I invested. Tangible investments it will be for awhile. [/quote]
Too late now. The speculators are bailing out. Buy again in a year or two when it is down to $ 400/oz. Hold on for a decade or two and you will make some money. Eventually.[/quote]
This is a big deal Lifty…funny they aren’t raiding the Franklin mint.
mike[/quote]
As far as I know the Franklin Mint isn’t printing paper money, claiming it is backed by gold when it isn’t and claiming its dollars are interchangeable 1:1 with a US dollar.
You are right that todays political structures depend on fiat money.
The flexibility you mentioned though is the flexibility of a common thief.
Since there are laws against simply disowning people and political resistance to tax increases diluting their money is an attractive option.
I could handle my finances more flexible by stealing and yet this is universally seen as wrong.
How come this “moral” flexibility is a plus when it comes to governments and does it not set a dangerous precedent?
That’s the whole reason for putting control of the interest rates in the hands of an independent central bank rather than in any of the political branches.
There remains the risk of the political branches simply printing more dollars, but most wouldn’t risk doing something so transparent for which they would be easily blamed.[/quote]
But this means only to put the central planning in the hands of a hopefully wise and benevolent planner.
Yet we know, and this is accepted for all other goods, that noone has more information than the market which is why central planning does not work.
While I do think that an at least semi-independent Fed is better than nothing the fundamental is flawed.
The money you lose today would be worth more tomorrow. So not only do you lose the money you’re risking, but the built-in gain of purchasing power from deflation.
It could also reverse the current understanding of the time value of money - in general, people value a dollar today higher than a dollar tomorrow due both to inflation and to the enjoyment of consumption.
Deflation would also increase the cost of consumption today - not a good thing for economic growth.[/quote]
But that would also mean that deflation encourages saving.
That saving would lead to a faster rise in investment goods and therefore production and wealth.
Shifting money from consuming to investing does also have advantages.
Other countries have a much higher saving rate than the US and they do fine economically.
