Why Gold is falling?

sigh. that people chose gold is not ‘strange’ at all. gold as a unit of monetary exchange meets the requirements of a money like durability,very low inflation (due to mining). most of the gold that has been mined still exists on earth. its practically everlasting. governments have historically gone off the gold standard for the usual reasons (war,profligate spending or forced redistribution of wealth ). it wasnt the gold standard that was the problem, it was the govt’s tendencies towards unpopular and expensive wars. au contraire, with net banking etc, implementing a very low inflation based monetary system becomes much more easier. most opposition to gold money is ideological more than anything else. how to return back to honest money? - heres how. http://www.fee.org/publications/the-freeman/article.asp?aid=4848. if this doesnt work, allowing competing currencies within a country would be more preferble. if the Fed’s monopoly over issuing dollars is broken, it is reasonable to expect that people will prefer the issuer that least debases the currency. this isnt such a bizzare idea . its been tried out in the 1800s in the US. private mints existed and flourished.

madanalyst Wrote: ------------------------------------------------------- > Few days ago NY Times reported these figures, > > http://www.nytimes.com/interactive/2008/07/20/busi > ness/20debt-trap.html > > Yup its including everything … its not the $9.5 > trillion figure that office of debt and treasury > happily reports … ok, but it is misstated as the debt figure is a running total, but the savings is per year. That saving figure does not include an individuals equity. I agree totally that the pattern is horrible for future prospects, but those #'s are not a complete picture. Just tink of the 20 ppl you know- how many have $400 in equity and 100k+ in liabilities? I know many w/ 400k+ in liabilities, but they have 200k+ in various retirement accts + their equity. There are a lot of ppl in extreme situations, but I don’t the average american is 25000% levered.

20 ppl you know?. thats not the smartest way to identify the average american.is it? if you are a cfa aspirant and working in the financial industry and possess an university degree you are probably the top 20% of the country…if your total household income is 100000 plus, you are in the top 20%. does equity include home equity?.cash?.stock market holdings?. -all these are subject to inflation related losses.

akanska … you are correct that one series is a running total and other is just an yearly number … think about this … if we dont have debt, then from where will the equity that people have will come from (means lack of demand) … isnt this is same mistake that creators of CDO were doing … okay okay … you dont have income and you dont have savings … you are broke and a street bum … but … since you will have equity in your house … I am ready to issue another NINJA loan … its all look like a big mess … isnt it … it has to stop someday … at this point nobody is willing to sponsor another war for america … and america’s allies are giving up … first gulf war sponsored by saudia (still paying its debt ) … second by china ( owns more than trillion dollars worth of treasury and only have about 1 ton of gold) … and what about the third … ???

of course it [using your 20 friends] it is not, I was just highlighting the fact that even basic reasoning should have alerted him to re-consider his interpretation of the data. He posted that the average american had 100k in debt and 400 dollars in savings. When I looked at his source it was clear that the savings was a per year# (not including many assets) while debt was a total#. In the same series one can also read that the median household cc debt is 4,000. There are a lot of outliers here, and I just get very doubtful when I see these extreme figures thrown around. There is a lot of “data” out there. my statements are not defending the standing of American’s propensity to consume- just a note on media “statistics”. edit- clarification

IMO, gold is falling because: 1) Economy slowing down will hopefully lead to lower inflation, which lowers the demand for gold as an inflation hedge… 2) There are some ‘deflation’ fears…the logic there is that the trillion (or if Roubini is to be believe, 2 trillion) dollars of credit losses will shrink money supply to a much greater extent than the money the government can print… lower money supply…lower inflation…lower demand for gold…

The real reason is because John Embry has been off. Once he comes back from vacation and hits the BNN circuit full force, it [Gold] will easily add on another $60. Although the US Feds likely firm stance on monetary policy could also be a factor. That sad, I’m willing to bet on the former over the later. Willy

Plus I believe money supply expansion has slowed markedly of late in the US, that may be something that gold bugs have their eyes on.

how can that be verified, pox americana?. the fed doesnt publish M3 anymore.with all these bailouts, there is definitely more monetary expansion happening.

Syd_RE Wrote: ------------------------------------------------------- > IMO, gold is falling because: > > lower money supply…lower inflation…lower > demand for gold… Wait till the festival season rush in Oct/Nov from SE Asia, demand should pick up soon

http://timesofindia.indiatimes.com/Business/Gold_may_hit_Rs_15k_ahead_of_Diwali/articleshow/3547495.cms

After the financial crisis do you still see a rush for gold jewellery in S Asia?

Irrespective of any financial crisis demand for gold surges in Oct-Nov. Anyway Asian markets are still giving the best returns.

Which Asian markets? Most I know are down 30-60%.

Dsylexic Wrote: ------------------------------------------------------- > > how to return back to honest money? - heres how. > http://www.fee.org/publications/the-freeman/articl > e.asp?aid=4848. > This article is from 1995 and contains the line: "First: All inflation must be stopped as of a certain date. That means calling a halt also to all expansion of credit through the Federal Reserve and the commercial banks. " Imagine what this crisis would be like if the Fed hadn’t been able to expand credit facilities?

the derivatives mushroom cloud was no where in the picture in 1995 .different story