I hope your opinion is correct; but I personally doubt it under...

First 222 Last

Share
Profile

Follow
mainholm

2,805 Posts.

619

27/03/23

13:17

Post #: 66975664
Share

Originally posted by Maccajohn: ↑

I disagree with you as we are not dealing with a normal situation. Just look at the charts below. In a crisis POG does very well. It almost doubled from 2009 to 2011 and in 2020 which was a much smaller crisis (ie not a banking crisis), POG still went up a lot in 2020.

If the banking crisis gets worse, a recession occurs later this year and the Fed stops raising rates or even reduces them late this year and into next year then the US dollar index will fall a lot, inflation is set to be sticky then POG will be set to increase significantly.

Go back to the 1970’s and early 1980’s - it’s just another example and a similar situation to now (ie high inflation, high interest rates) but a more extreme example of what happened to the POG. The difference now compared to the 1970’s which also had high inflation is that the whole is flooded with huge debts in public and private sectors.

A boutique fund manager (Collins Street) is setting up a gold fund focused on junior miners as they are very under valued and they believe there is not much time to get into gold stocks before they soar.

However, no one can predict the future and how big a crisis we face now. The really big issue is that there is so much debt around and that could make the situation over the next few years a lot worse than in past crisis.

Expand

I hope your opinion is correct; but I personally doubt it under the current world order.

If the POG was not being manipulated it would never had sold off so sharply in 2013, plus the many other times that the POG tries to run up to true market equilibrium.

Anyway, the chart you posted just reinforces the breadcrumb effect that TPTB give to the peasants by allowing the POG to slothly increase in increments. You know............. up down up up down up up up down down up down down down up down repeat the cycle or something like that!

If the scarcity principle was allowed to do it's natural work and true market equilibrium was being discovered then the POG would be a few multiples (if not many multiples) higher than the present $1970 odd USD of today.

Since the criminals unpegged the USD from gold we have all been taken for the saps that we most likely are, in the main.............. whatever whatever.

Regardless, I still believe there is a role for gold in one's portfolio as insurance for the day when the tide goes out and the emperor is found swimming with no clothes on. Gold miners can provide low premium insurance benefits in this regard, but only god knows when the tide will turn.

ALK Price at posting: 73.3¢ Sentiment: None Disclosure: Held
7 Upvote

0 Great analysis

Reply