Gold is a conundrum for sure If it does track money supply, as it does indeed seam to.The miners seem so damn cheap.
Golds "replacement cost if you own a mine in Australia is 900AUD, but that means little with so much in reserve around the world.
Is the future value of Gold dependant on what the Eastern Central Banks and populations want?
If US housing does indeed start to move and their is optimism in the economy from cheap energy what effect will that have on Velocity of all the money that has been injected already? 3 trillion bouncing around outside of ETF's or where-ever the hell it has been hiding.
Fuel for a bubble is there, but were is it heading next? High Yield plays made sense, until the valuations increase.
Farmland rocks, but is illiquid and not easy to maintain yield.
Is Gold still the ultimate reference point for common valuation, or is it too volatile?
Going to be interesting to watch - we all wish we knew. Anyone who is sure, is probably deluded or just lucky for picking the right side of the argument.
All I know is buying value cheap is a good idea - trouble with Gold is, it is,(or was) the reference point, so how the hell do you know when it is cheap? We know that below production cost is cheap, but not if Central banks decide to purge. Really there is only guessing, by the time it really is stupidly cheap, the gold bugs would all be broke.
