skol, i agree with you that some of the gold forecasts seem a little high, and perhaps wishful thinking, but the same could be said for some of the low forecasts. in saying that however i don't base my long-term investment decisions on price targets, moreso broader economic and political factors.
i am interested in the environment that fosters and sustains higher gold and silver prices, and for mine i believe there are many fundamental factors that do so (not including herd mentality....yet). i believe that the fundamental ingredients are still there to support gold prices and push it further, and as long as the right conditions continue to exist, and as long as they are strong i will continue to invest in gold.
sometime it's a matter of trying to read the chess board, and i can't see any moves which are going to cause a 1980's style drop in the near future. in my opinion there is too much uncertainty in fiat currency (and obviously good reason for that). given that fiat itself is a confidence trick, then it makes sense that people are interested in assets which are not diminishing in value so quickly, something tangible.
the standard retort from a non gold investor would be that intrinsically gold has no value like paper, or maybe less because it will cost even more to produce it. this is not really true given that gold and silver do have commercial uses, so gold will never be worth less than paper, but that's besides the point because what i'm getting at is that gold is functioning like a currency right now.
to a lay person that may not mean anything because it's unlikely in the future that people will ever go shopping with gold and silver coins. as a currency gold offers financial harbor and some sort of assurance for larger stores of wealth, ie hedge funds, sovereign wealth funds etc. it provides a little more of a guarantee than a paper IOU which are so popular between countries these days. for example, if greece had tonnes of gold, people would be less afraid to lend it money.
paper is gold's much poorer cousin. paper has only ever tried to replicate the properties that gold has held for centuries as the first true currency; and what makes a good currency:
* Acceptability
* Durability
* Portability
* Scarcity
* Divisibility
at the moment fiat is failing on some of the above. judging by the fed's actions it definitely isn't scarce, and probably becoming less acceptable (hint failed bond auctions).
it might be difficult for some to conceive the relevance of gold beyond a mom and pop investor level, but if you were a bank or a nation would you feel more comfortable lending to somebody that has some collateral, or someone who says "i'm good for it, trust me". i guarantee you that right now any banker would rather have a vault full of gold than notes.
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