$2184 new target for gold, page-4

This cry of gold is below its inflation adjusted price has been done to death and is well hackneyed.

I am very supportive of gold and I believe it will go up but not because of the inflation adjusted price but because of other fundamentals.

My point in this is that gold did hit $800+ in 1980 but it got there on a very quick rise and fell back to circa $400 just as quick. I have a feeling that people are trying to peddle that the inflation adjusted trade is based on the $800 figure and nor a more average rise to $400.

Given that all the figures coming out of the government agencies are all screwed up and golds rise in the 79-80 period was way above the then inflation rate then I have to ask the question:

What was the real price of gold in 1980 in inflation terms and what is the real inflation rate from 1980 to present?

We really need to know these figures so we can compare apples with apples.

On the gold front I do believe it will go higher simply because of the structural problems we have in global finance.

Finally if I could us this analogy; if I bought a rare 60 year old vintage car with an original price tag of $2000 and it sold for $250,000. Assuming an average inflation of 5% I cannot argue that the price of the car was too high and should be $32,000 due to some inflation maxim. The price is what it is because of it's rarity and what the market will bare and future value. And so it goes for gold. The use of inflation as a tool for calculating the price of gold I believe is an invalid one as is the inflation adjusted price argument. This is a very different argument from why gold will go up which could be due to, inter alia, inflationary pressures.

Cheers
BW