future of gold, page-6

Im not saying gold is a bad investment or that quantative easing isn't going to do damage, all im saying is that gold isnt ideal to use as a currency.

The implications for quantative easing, in my opinion, will be result in high inflation rates. Something like which was experienced in the 70s after the US governemnt pretty much did the same thing to fund the Vietnam War.

But the collapse of the US dollar in my opinion is unfeasible. Some foresee China selling all of their US bonds and buying gold. Sure, good plan if you have someone buying these bonds and plenty of spare gold so prices do not collaspse or increase exponantially, but both are not the case. China's superannuation is the American people paying off their bonds and therefore China also has a vested interest in keeping the US dollar at a stable level. For instance, if China holds US$1 trillion (RMB7 trillion)in US bonds and they sell off a large proportion collapsing the US dollar, they would have possibly RMB3.5 trillion aftewards. When you are the market you cant sink it!

The fact of the matter is that gold is a store of wealth and is seen as a hedge for times of uncertainty for centuries. As long as people put value on it, it will behave in this way.

Yes I think the price of gold will go up as a hedge against the coming inflation but I do not think we will see a return to gold backed currencies.