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Thread: Time to Admit That Gold Peaked in 2011?

  1. #1

    Time to Admit That Gold Peaked in 2011?

    Interesting article...

    Time to Admit That Gold Peaked in 2011?

    "According to some analysts, on an inflation-adjusted basis, gold has already matched its 1980s peak—but is that really true?"

    Continued...
    "Paper money has the effect to ruin commerce,oppress the honest, and open the door to every species of fraud and injustice"

    ~GEORGE WASHINGTON



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  3. #2
    Of course it peaked in 2011. Any chart will demonstrate that there was a peak.

    Of course gold will go up some more in terms of the number of FRNs it will take to buy a set amount. The same is true of everything else in all the world except used VCRs and landline telephones. It's called 'currency devaluation'.
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    Amash is wrong...

  4. #3
    IF you adjust for inflation, it still hasn't reached the 1980 peak which would be equal to over $2400 an ounce today. But yeah, I have been saying gold peaked a while now (while others said it would continue to rise and even possibly go to $5000 an ounce). As of this moment, gold is $1305 or 32% below its peak of $1900.


    http://inflationdata.com/Inflation/i...tion_chart.htm
    One thing we can say about Trump: Least Boring President Ever.

    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    “People want to believe that something is the biggest and the greatest and the most spectacular,” Trump wrote, or at least his ghostwriter did. “I call it truthful hyperbole. It’s an innocent form of exaggeration – and a very effective form of promotion.”

    I am Zippy and I approve of this post. But you don't have to.

  5. #4
    See that roughly 2 year correction between 1974-1976 (before the real blastoff)?

    That is the similar correction from the last secular bull market in gold.

    This time it's 2011-????

    The evidence so far point towards an even longer and more powerful secular bull then that of the 1970's. I surmise that this secular bull will last more like 20-25 years as opposed to 14-15 years like the last one (yes the last one dated back towards the mid 1960's and not just 1971 with the official delinking of the dollar from gold).

    This leads me to believe that this cyclical bear in the middle will be a bit longer then the last one. 3.5 years as opposed to 2 years, for example.


    Quote Originally Posted by Zippyjuan View Post
    IF you adjust for inflation, it still hasn't reached the 1980 peak which would be equal to over $2400 an ounce today. But yeah, I have been saying gold peaked a while now (while others said it would continue to rise and even possibly go to $5000 an ounce). As of this moment, gold is $1305 or 32% below its peak of $1900.


    http://inflationdata.com/Inflation/i...tion_chart.htm
    "Like an army falling, one by one by one" - Linkin Park

  6. #5
    I don't think anyone ever thought it was going to totally shoot up until people lost confidence in the dollar. Time will tell.
    ================
    Open Borders: A Libertarian Reappraisal or why only dumbasses and cultural marxists are for it.

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  7. #6
    If Democrats gain control of the federal government in the next two election cycles, I bet it will peak yet again.
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  8. #7
    My PHYSICAL Gold holdings have very little to do with trading paper profits and more to do with security and protection. I bought most of my gold at 1650 and feel great about the purchase. Benefits of holding physical pms:

    1. It is private wealth as no one knows about it.
    2. It holds value in virtually every society in any historical age through time.
    3. Because of 1/2, I have tremendous peace of mind about any oh s*** scenario.

    Edit: PMs are only part of a portfolio. Diversification and investments over time are very likely to pay off in the long run.
    Last edited by jclay2; 05-06-2014 at 05:04 PM.

  9. #8
    Quote Originally Posted by nbruno322 View Post
    Interesting article...

    Time to Admit That Gold Peaked in 2011?

    "According to some analysts, on an inflation-adjusted basis, gold has already matched its 1980s peak—but is that really true?"

    Continued...
    Nah it is not 1980 , yeah , gold has leveled out , until the next economic crisis , maybe.



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  11. #9
    Quote Originally Posted by jclay2 View Post
    My PHYSICAL Gold holdings have very little to do with trading paper profits and more to do with security and protection. I bought most of my gold at 1650 and feel great about the purchase. Benefits of holding physical pms:

    1. It is private wealth as no one knows about it.
    2. It holds value in virtually every society in any historical age through time.
    3. Because of 1/2, I have tremendous peace of mind about any oh s*** scenario.

    Edit: PMs are only part of a portfolio. Diversification and investments over time are very likely to pay off in the long run.
    Paper money , is paper , when things go South, and they always do.

  12. #10
    I think the ratio of the monetary base to price is a good indicator.

    MB is in millions of dollars:

    1960 MB/Gold price = 1414
    1970 MB/Gold price = 2183
    1980 MB/Gold price = 195
    1990 MB/Gold price = 736
    2000 MB/Gold price = 2006
    2010 MB/Gold price = 529

    Average ratio = 1177 for these data points

    Currently the MB is 3,930,646 so you would need a gold price of $3,340 to have an average MB/Gold price ratio.

    So in other words gold needs to rise to $3,340 to keep catch up to all the money printing if my math is correct.

  13. #11
    The Monetary Base (MB) is cash plus excess reserves banks have- today excess reserves is a huge percent of that number.

    The price of gold should be nearly three times what it currently is because banks are not lending out money but are keeping it in excess reserves? How does that work? How do bank reserves impact the price of gold? (reserves are monies not circulating- money needs to be spent to impact prices)

    And actually your own list shows that the monetary base to the price of gold is all over the place and not a reliable predictor. If it was, the ratio should be fairly consistent- not ranging from 195 to 2,183 which is a pretty huge variation. There is no correlation between the two.
    Last edited by Zippyjuan; 05-07-2014 at 12:01 PM.
    One thing we can say about Trump: Least Boring President Ever.

    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    “People want to believe that something is the biggest and the greatest and the most spectacular,” Trump wrote, or at least his ghostwriter did. “I call it truthful hyperbole. It’s an innocent form of exaggeration – and a very effective form of promotion.”

    I am Zippy and I approve of this post. But you don't have to.

  14. #12
    Quote Originally Posted by Zippyjuan View Post
    The Monetary Base (MB) is cash plus excess reserves banks have- today excess reserves is a huge percent of that number.

    The price of gold should be nearly three times what it currently is because banks are not lending out money but are keeping it in excess reserves? How does that work? How do bank reserves impact the price of gold? (reserves are monies not circulating- money needs to be spent to impact prices)

    And actually your own list shows that the monetary base to the price of gold is all over the place and not a reliable predictor. If it was, the ratio should be fairly consistent- not ranging from 195 to 2,183 which is a pretty huge variation. There is no correlation between the two.
    I'm trying to predict the FUTURE price of gold. That's why the ratio changes. If it was always the same ratio it would be useless as a predictor!

    As far as the excess reserves, again I'm trying to predict the FUTURE price of gold. Eventually that money is going to get out unless you think they fed gave the banks the money with the stipulation they NEVER spend it.

    It seems to me like your predictions of gold prices are based on looking at a squiggly line and trying to guess whether it will go up or down. Am I right?

    One other point. I'm not saying that the monetary base is the ONLY predictor, only that it's the most important. And the fact that the most important predictor of future gold prices has gone off the charts leads me to the easy conclusion that gold is also going way up.

  15. #13
    that's not what all the ads are saying on the radio!!!!

  16. #14
    Realistically we should be discussing the dollar as it bounces down there stairs to worthlessness.
    “[T]he enshrinement of constitutional rights necessarily takes certain policy choices off the table.” (Heller, 554 U.S., at ___, 128 S.Ct., at 2822.)

    How long before "going liberal" replaces "going postal"?

  17. #15
    Quote Originally Posted by Madison320 View Post
    I'm trying to predict the FUTURE price of gold. That's why the ratio changes. If it was always the same ratio it would be useless as a predictor!

    As far as the excess reserves, again I'm trying to predict the FUTURE price of gold. Eventually that money is going to get out unless you think they fed gave the banks the money with the stipulation they NEVER spend it.

    It seems to me like your predictions of gold prices are based on looking at a squiggly line and trying to guess whether it will go up or down. Am I right?

    One other point. I'm not saying that the monetary base is the ONLY predictor, only that it's the most important. And the fact that the most important predictor of future gold prices has gone off the charts leads me to the easy conclusion that gold is also going way up.

    If you can't use it to predict prices in the past, it likely won't be useful to predict prices into the future. If the ratio changes all of the time, it is impossible to say what it could or should be in the future.

    You are right that the monetary base COULD possibly lead to higher prices on things including gold in the future, but how much depends on how quickly it is released. If reserves trickle down over a long period of time, the amount of circulating money will only slowly increase and have limited impact on prices while if it was all released and spent at once, it would have a dramatic impact on prices. So even knowing the size of the base still makes it difficult to predict any prices of anything in the future.

    It seems to me like your predictions of gold prices are based on looking at a squiggly line and trying to guess whether it will go up or down. Am I right?
    Isn't that what you are trying to do by looking at a monetary base chart?

    From 1980 to 2004, the monetary base was rising. What was the price of gold doing those 20+ years? Falling. The base has nearly always been rising in fact. Has the price of gold always been rising? I don't think so.

    The price of gold really is most closely related to economic confidence. It rose in the 1970's to 1980 because inflation was rising. Once inflation started heading down, the price of gold did as well. It soared again with the economic collapse of 2007 and as it eased, the price again started to head down.
    Last edited by Zippyjuan; 05-07-2014 at 12:40 PM.
    One thing we can say about Trump: Least Boring President Ever.

    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    “People want to believe that something is the biggest and the greatest and the most spectacular,” Trump wrote, or at least his ghostwriter did. “I call it truthful hyperbole. It’s an innocent form of exaggeration – and a very effective form of promotion.”

    I am Zippy and I approve of this post. But you don't have to.

  18. #16
    Quote Originally Posted by Madison320 View Post

    1960 MB/Gold price = 1414
    1970 MB/Gold price = 2183
    1980 MB/Gold price = 195
    1990 MB/Gold price = 736
    2000 MB/Gold price = 2006
    2010 MB/Gold price = 529

    Average ratio = 1177 for these data points

    Zippy, you made me realize something. Lets look at those numbers and see if they were actually a good predictor.

    1970 - MB/Gold ratio was 2183 which is double the average. The price of gold skyrocketed in the 1970s. Check.
    1980 - MB/Gold ratio was 195 which is way below average. The price of gold dropped like a rock in the 1980s. Check.
    1990 - MB/Gold ration was 736, which is slightly below average. The price of gold dropped slightly in the 1990s. Check.
    2000 - MB/Gold ratio was 2006, which is double the average. The price of gold more than doubled in the 2000s. Check.
    2010 - MB/Gold ratio was 529, which is somewhat below average and the price of gold fell. Check.
    2014 - MB/Gold ration is 3024 which is TRIPLE the average and STILL climbing rapidly. What do you THINK is going to happen to the price of gold? Check Mate!!



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  20. #17
    The ratio changed BECAUSE the price of gold changed. But what about the monetary base which is the premise here? The monetary base was increasing the entire time which is what you were trying to say was the true indicator of future gold prices- even when the price of gold was falling. Which still says nothing about what the "true" ratio should be or what the price of gold ought to be in the future.
    One thing we can say about Trump: Least Boring President Ever.

    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    “People want to believe that something is the biggest and the greatest and the most spectacular,” Trump wrote, or at least his ghostwriter did. “I call it truthful hyperbole. It’s an innocent form of exaggeration – and a very effective form of promotion.”

    I am Zippy and I approve of this post. But you don't have to.

  21. #18
    Quote Originally Posted by Zippyjuan View Post
    If you can't use it to predict prices in the past, it likely won't be useful to predict prices into the future. If the ratio changes all of the time, it is impossible to say what it could or should be in the future.
    I was going to reply to all the other stuff but if you don't understand this, the rest is useless.

    If the ration of A to B remains constant, that ratio is useless as a predictor. Don't you understand that?

  22. #19
    Quote Originally Posted by Zippyjuan View Post
    The ratio changed BECAUSE the price of gold changed. But what about the monetary base which is the premise here? The monetary base was increasing the entire time which is what you were trying to say was the true indicator of future gold prices- even when the price of gold was falling. Which still says nothing about what the "true" ratio should be or what the price of gold ought to be in the future.
    Huh? I give up.

  23. #20
    Quote Originally Posted by Madison320 View Post
    I was going to reply to all the other stuff but if you don't understand this, the rest is useless.

    If the ration of A to B remains constant, that ratio is useless as a predictor. Don't you understand that?
    If the ratio of the price of apples to bananas has been two to one and the price of a banana goes from a dollar to two dollars, then you can expect the price of an apple to probably go to $4. If I can get four apples for one banana one week and seven apples for a banana the next week and one apple for five bananas the week after that, we can't look at what the price of an apple is and guess how much a banana will be because there is no fixed price ratio.

    If you are saying that because the price of apples went up, (the monetary base) we know how much bananas should be (gold) you can't. In your list it was sometimes 200 to one, sometimes 2000 to one. They did not move together at all. That means that the "proper" price for gold could be anywhere between $600 an ounce and $6000 an ounce. And nobody can say for certain where along that span it should be.

    If one banana was one apple and the price of apples doubled and bananas did too, the ratios stays the same. In this case, we can guess what apples will sell for if we know what happened to bananas because the ratio of prices stayed the same. IF apples were $1 and bananas $1, if the price of apples went to $2 then the price of bananas will probably go to $2 if the ratio stays consistant.

    Or let's go even simpler. If the monetary base can predict the price of gold, then when the monetary base increases, the price of gold should increase. Since at least 1970 (actually since 1913 when it started being measured), the monetary base has been increasing nearly every year. Has the price of gold increased nearly every year since then?
    Last edited by Zippyjuan; 05-07-2014 at 01:25 PM.
    One thing we can say about Trump: Least Boring President Ever.

    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    “People want to believe that something is the biggest and the greatest and the most spectacular,” Trump wrote, or at least his ghostwriter did. “I call it truthful hyperbole. It’s an innocent form of exaggeration – and a very effective form of promotion.”

    I am Zippy and I approve of this post. But you don't have to.

  24. #21
    Quote Originally Posted by Madison320 View Post
    I was going to reply to all the other stuff but if you don't understand this, the rest is useless.

    If the ration of A to B remains constant, that ratio is useless as a predictor. Don't you understand that?
    Let me try to simplify it even more.

    What number would come next in this series: 14, 21, 2, 7, 20, 5?

    That is your series shortened by two digits. You said it would be 12 since that is the average of them. But since the numbers look random it could be anything. 12 is no more likely than any other number.

    You can use the past to try to predict the future if there is a pattern. (Still doesn't mean the prediction will come true though). The numbers you posted of the gold/ monetary base ratio don't have any sort of pattern at all so the monetary base is not related to the price of gold.
    Last edited by Zippyjuan; 05-08-2014 at 01:02 PM.
    One thing we can say about Trump: Least Boring President Ever.

    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    “People want to believe that something is the biggest and the greatest and the most spectacular,” Trump wrote, or at least his ghostwriter did. “I call it truthful hyperbole. It’s an innocent form of exaggeration – and a very effective form of promotion.”

    I am Zippy and I approve of this post. But you don't have to.

  25. #22
    Gold didn't do anything. 1oz of Gold is still 1oz of Gold. It was a dip in the value of the USD.

    I suspect the USD will be double-dippin' fairly soon...

  26. #23
    Quote Originally Posted by ctiger2 View Post
    Gold didn't do anything. 1oz of Gold is still 1oz of Gold. It was a dip in the value of the USD.

    I suspect the USD will be double-dippin' fairly soon...
    If the price of gold only reflects the value of the USD, would you say that the value of the dollar was rising from 1980 to 2004 (as well as from 1934 to 1972- see chart of gold prices in an earlier post)?

    Has it again been rising since 2011 (when gold peaked at $1900 an ounce- at this moment it is below $1290 an ounce)?
    Last edited by Zippyjuan; 05-08-2014 at 11:45 AM.
    One thing we can say about Trump: Least Boring President Ever.

    Donald Trump: 'What you're seeing and what you're reading is not what's happening'

    “People want to believe that something is the biggest and the greatest and the most spectacular,” Trump wrote, or at least his ghostwriter did. “I call it truthful hyperbole. It’s an innocent form of exaggeration – and a very effective form of promotion.”

    I am Zippy and I approve of this post. But you don't have to.

  27. #24
    Quote Originally Posted by Matt Collins View Post
    If Democrats gain control of the federal government in the next two election cycles, I bet it will peak yet again.
    'Gain'? Don't you mean 'retain'?

    So why do you think the next two election cycles under Democrats would make a difference between now under Democrats? Or did you forget we were under Democrats? Or were you merely scratching an itch to say something bad about Democrats without actually meaning anything at all?

    Quote Originally Posted by ctiger2 View Post
    Gold didn't do anything. 1oz of Gold is still 1oz of Gold. It was a dip in the value of the USD.

    I suspect the USD will be double-dippin' fairly soon...
    The value of gold has never been any more constant than the value of the FRN. The thing that makes it a far superior hedge against inflation is that gold's value goes up as well as down.
    Last edited by acptulsa; 05-08-2014 at 12:32 PM.
    Quote Originally Posted by Swordsmyth View Post
    Ron is wrong...
    Quote Originally Posted by Swordsmyth View Post
    Amash is wrong...



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  29. #25
    lol... keep dreaming...

    This $#@! is just getting started. The lack of movement has been caused by manipulation, plain and simple. GOFO has been negative more than 50% of the time for over a year now, the USDX was drowning towards sub-79 and gold's been frozen nearly the entire time.

    Look at the physical sales worldwide! The paper markets are a joke.

    The day is going to come where someone finally fails to deliver and that's when this entire PM Ponzi scheme will collapse and I strongly suspect it will end up being the greatest financial scandal of the 21st century. The politicians will line up to say the suppression by the PPT and ESF was all done in the name of "national security" and that will be the explanation as the USD finally collapses in value to the Yuan, Euro, and Gold.
    Last edited by NoOneButPaul; 05-08-2014 at 04:30 PM.
    It's just an opinion... man...

  30. #26
    “It's tough to make predictions, especially about the future.” Yogi Berra



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