Archive through November 29, 2005

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archer

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Post Number: 1142
Registered: 11-2002

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Saturday, November 26, 2005 - 10:44 am:

Yes gold is an inflation barometer
"inflation is caused by an increase in the quantity of money"
Interestingly enough the U.S govt (FED RES)just 2 weeks ago
announced its intention to stop publishing the M3 figures
Basically that means it does not want people to know how
much new money it is pumping into the system,but dont worry
the rising price of gold will keep you informed
http://www.321gold.com/editorials/chapman_d/chapman_d_112305.html

glenn

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Post Number: 32
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Saturday, November 26, 2005 - 11:01 pm:

Had this posted on another forum I frequent... all of my questions asked, and then answered:

What Most People Don’t Know About Gold 11/23/05

By Doug Casey
November 23, 2005

www.KitcoCasey.com Email Article

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[ed. Note. In the following article, legendary speculator Doug Casey steps back for an important historical perspective on gold. You can learn more about Doug’s renowned International Speculator newsletter, which each month focuses on providing unbiased recommendations on the world’s most profitable junior gold, silver and metals exploration and development companies by clicking here. ]

What Most People Don’t Know About Gold
By Doug Casey

Historically, gold has never been viewed as a speculation. It was simply money: cash in the most basic form. It was a medium of exchange and a store of value. People did not accumulate gold because it could make them wealthy, but because it was a convenient, liquid way to keep the wealth they had.

It’s only very recently, since 1971—when the U.S. government proved unable to keep the price at $35—that gold has been viewed as a speculation. In those days gold was an ideal speculation, with minimal risk but a huge upside.

Gold has been in a free market for three decades now; the frenzy of the ‘70s that took the metal from $35 to more than $800 disappeared, and was followed by a 21-year bear market. As a result, an entire generation of investors has grown up thinking that gold is not only not money but an investment dog. Their thinking is about to change. I believe that not only will gold again be used as money, but that it has entered a new long-term bull market.

Before looking at where the metal’s price is likely to go over the next few years, however, it’s worthwhile to consider some of the fundamentals… fundamentals that not 1 in a 1,000 people understands.

The Questions. Any discussion of gold always comes back to certain basic questions: Why is gold money? Why is gold valuable? Why can’t money be whatever we say it is? (The last question is usually asked by government officials because they don’t know the answers to the first two.) Why does gold give rise to all kinds of controversy not associated with, say, platinum or lead? Why is the stuff an emotional, political statement for those who love it and for those who hate it?

The Answers. Over thousands of years, in billions of transactions by millions of humans, many commodities have been used as money: stones, salt, cattle, and seashells among them. But wherever gold was available, it tended to displace other media of exchange. Like any successful money, gold never needed to be decreed “legal tender” by a government; it was recognized as the most desirable money by common consent because of its unique properties.

Certain materials have proven especially well suited for certain uses. Aluminum is good for airplanes, bricks for construction, paper for books, and gold for money. If bricks were used for airplanes and aluminum for books, the results would be as suboptimal as when paper is used for money.

In fact, the properties required of money were first described by Aristotle in the fourth century BCE.

It is durable. It won’t evaporate, mildew, rust, crumble, break, or rot. Gold, more than any other solid element, is chemically inert. This is why foodstuffs, oil or artwork can’t be used as money.

It is divisible. One ounce of gold—whether bullion, coin, or dust—is worth exactly 1/100th of one hundred ounces. When a diamond is split, its value may be destroyed. You can’t make change for a piece of land.

It is convenient. Gold allows its owner physically to carry the wealth of a lifetime with him. Real estate stays where it is. An equivalent value of copper, lead, zinc, silver, and most other metals would be too heavy.

It is consistent. Only one grade exists for 24-carat gold, so there is no danger of owning 24-carat gold varying in quality. Twenty-four-carat gold (pure gold) is the same in every time and place since gold is a natural element, unlike gems, artwork, land, grain, or other commodities.

It has intrinsic value. Gold finds new industrial uses each year. Of all the metals, it is the most malleable (able to be hammered into sheets less than 5-millionths of an inch thick), most ductile (a single ounce can be drawn into a wire 35 miles long), and the least reactive (it can stand indefinite immersion in seawater, does not tarnish in air, and can withstand almost any acid). Next to silver, it’s the most conductive of heat and electricity and the most reflective of light.

These superlatives make gold uniquely well suited as a medium of exchange and a store of value. Arguments that gold’s value is “mystical” are silly; it is simply one of the 92 natural elements.

One important last point was not listed by Aristotle, probably only because he lived before the creation of paper and banking.

Gold cannot be created by government. Gold can, of course, be debased with impurities or falsified in weight, and governments strapped for revenue have tried those tricks. But a trader can protect himself with a pair of scales or a vial of acid, although a familiar and trustworthy hallmark of a coin saves him that trouble. Unlike currency, gold cannot lose value because of government mismanagement. On the contrary, it tends to gain value because of government mismanagement.

But isn’t that latter point largely academic, since gold isn’t presently used as money anywhere in the world? I think not. Even though the concept still receives little discussion, and none in “official” circles, gold is likely in the foreseeable future to reassume its traditional role as money worldwide. (And not just in bullion form, but in modern, safe and reliable bullion proxies and electronic transaction services such as those offered by goldmoney.com.)

I have no doubt that gold will again regain its traditional role of money, but only after it is trading at far higher prices than it is today. Wait and see.

Until then, there is nothing wrong with viewing gold as a speculation… which is doubly true of the gold shares we follow in our International Speculator newsletter. That’s because every $1.00 increase in the bullion price of gold translates into an exponential increase in the value of a mining company’s profits, or an exploration company’s blue sky potential.

Doug Casey

Smrt-trader

julles

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Post Number: 1578
Registered: 01-2003

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Sunday, November 27, 2005 - 12:01 am:

I would like to see the day come around when we all get to see a Gold chart in candlestick!

Robyn your a whiz with this sort of thing, Is it possible to convert? Can we help? In what way let us know if it is somehow possibly possible.

Julles , try hard please!

glenn

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Post Number: 33
Registered: 11-2005

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Sunday, November 27, 2005 - 12:14 am:

Like this?

http://futures.tradingcharts.com/chart/GD/M

Smrt-trader

julles

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Post Number: 1580
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Sunday, November 27, 2005 - 12:46 am:

julles

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Post Number: 1581
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Sunday, November 27, 2005 - 12:55 am:

Sorry Glen is it just you and me up at this time of night trying to solve all problems and get set for next week? We're a sad lot heh..

archer

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Post Number: 1144
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Sunday, November 27, 2005 - 08:53 am:

Glenn
That article was posted here on Nov 24th

glenn

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Post Number: 34
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Sunday, November 27, 2005 - 09:36 am:

Julles, whats missing on that chart that you're after? I'd much rather have it in IC than online, but it will do in the interim (you did see you can change it to candlestick down the page a little?). Ingot pointed out that gold_ax is available within IC these days... I'm not sure if that is simply the price in AUD or some index type measure. And no, I'm up trying to work out why Salmat got hammered so much Friday and whether its probably a good buy at these levels now. A growth stock with a 6.2% yield at current levels, mmm! :-)

And Archer, so it was! My apologies... the one link I managed to miss on this thread and it was the one I most needed to read! Thanks for posting it, and exposing to all how ignorant I've been ;)

Smrt-trader

archer

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Post Number: 1146
Registered: 11-2002

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Sunday, November 27, 2005 - 09:44 am:

My pleasure {;->

archer

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Post Number: 1149
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Monday, November 28, 2005 - 08:49 am:

This Pierre is one of the smartest CEOs ive come across
Newmont Forecasts Gold to Rise Above $1,000 on Asian Demand
http://www.bloomberg.com/apps/news?pid=10000080&sid=aotpaNV5Qtpw

kate

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Post Number: 205
Registered: 04-2005

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Monday, November 28, 2005 - 09:14 am:

I remember reading about 2 years ago that a number of Middle Eastern countries were buying gold for two reasons, the worry about the decline in the US economy and the real purchasing power of the American dollar and, so they would have a common currency to trade amongst themselves.
As this was two years ago I'm not sure if what I've written is 100% accurate, has anyone else read about this?

I also read recently that Russia (I think) was planning to double their gold supply, can anyone confirm that?

Should the above be correct as well as everything else that has been mentioned above there is obviously increasing demand.

What about supply, is it a short term problem which will be sorted out in the next few years now that gold is financially worthwhile to mine?

archer

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Post Number: 1151
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Monday, November 28, 2005 - 10:25 am:

Kate
Russia=yes
http://www.interfax.ru/e/B/politics/28.html?menu=1&id_issue=11424471

http://www.rferl.org/featuresarticle/2005/11/597C2113-BED1-4CD1-B73C-D3BBED33647 B.html
http://www.themoscowtimes.com/stories/2005/11/23/041.html
South Africa and Russia to increase gold holdings
http://www.aireview.com/index.php?act=view&catid=8&id=3104
Jewellery Demand rising
http://www.bloomberg.com/apps/news?pid=10000085&sid=ahG8CMWKewO4&refer=europe
Global production last year fell to an eight-year low of 2,464 metric tons, the second decline in three years
http://www.bloomberg.com/apps/news?pid=email_us&refer=canada&sid=aIvnVJdvmsqk

goldbug

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Post Number: 292
Registered: 02-2004

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Monday, November 28, 2005 - 11:40 am:

Fortune 500
Forbes 500
HP Designjet 500
Dreambox 500
S & P 500
Mercedes Benz 500
Daytona 500
Indy 500

and soon to be GOLD 500

get used to it ....

Regards

GB

kate

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Post Number: 206
Registered: 04-2005

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Monday, November 28, 2005 - 01:11 pm:

Archer, thanks for the links.
Couldn't find the exact info I wanted however found this little snippet while I was searching.

http://www.gold-eagle.com/editorials_05/demeritt060605.html

Goldbug, 500 is so common couldn't we have 750 instead?
Often wonder why you have Gordon Brown's picture under your name?