Gold just fell off a cliff..., page-133

Hi Joe

"Just looking left to right is the trend going up or down?"

The problem with using a ten year price histories for estimating future price movements is that the factors that influenced gold prices five or ten years ago, may not exist anymore. For example, in 2004, the US dollars was at historic highs and commencing a sustained bear markets. That isn't the case now. In 2009, everyone assumed that QE meant printing actual money that would flow into the board economy and generate inflation. They don't think that any more.

I don't think that old scenarios should be completely ignored, but an investor who weights them ahead of more recent observations is probably not very smart.

The projections I put in were applied to prices over the last three years and includes a lot of information from 2012-13. Things have changed since then. If I was to do the same exercise to the last twelve months, the projection would be much flatter. That, in part, is why I am not such a permabear.

Cheers