Gold's Inevitable Declines (Elliott wave analysis dating back to 1932)

[new_trader]

Always remember, Gold is a lousy hedge against inflation. The fact that so many people think it is, is a reflection of if many people say so it must be true.

Case in point is this - Look at how much inflation the world has had since 1980? A lot. But Gold is far far cheaper today than it was in 1980, even at the top of around $850. If you'd invested in Gold in 1980 you got hit with a double whammy of losses, gold lower and inflation higher. You'd probably have lost about 70% of your purchasing power.

Also, from a historical perspective Gold was around $140 in 1880 (not a typo) but 50 years later it was around $30. Again, some hedge against inflation...

You do understand that the practice of hedonics and substitution makes Government inflation figures practically worthless. Also, why do choose the very top of a bull market to state your case against gold? What about the run up in prices from 1971 to 1980 or is that one of those ugly little facts that ruins your beautiful theory? How many people bought all of their gold right at the very top? This is something only ‘the public’ does.

Also, I’m not sure how accurate inflation figures are from 1880 but the world was going through the Industrial revolution which resulted in an increase in productive capacity. The increase and efficiency of supply brought global prices for goods down and so the price of gold followed. The USA was on a fixed gold standard from 1880-1914 so I would say this was more an indication of deflation than anything else.

 

[new_trader]

The chinese have only a third of their money in dollars. If the dollar collapses, I dare say they can afford the loss. It would be a mistake to think the chinese are playing the same game as the americans or have the same world view. For all we know a dollar collapse might be good for the chinese with their inscrutable plans. The biggest casualty will be joe blows on the american streets because they get robbed blind in broad daylight, as will most of us.

Where do you get your 'facts' from?

 

[BeginnerJoe]

Where do you get your 'facts' from?

They have 1 trillion in US treasuries, and have 3 trillion total foreign reserves. That makes the 1/3 number. So what is your estimate for their dollar asset holding ? As for the chinese plans, these were always unexpected and inscrutable in the past. No reason for these to be different now.