LOL, I made you think.

You read Armstrong but you still did not get what he meant there.

You do not measure gold with fiat currency. You measure gold with its purchasing power to other commodities. Otherwise, you'd be frustrated with the gold prices.

Money's value floats. It is driven by supply and demand. That is the same for fiat currency, that is also the same for gold.

It is entirely possible gold could drop below $1000, or maybe $500, as long as FED did not intervene the market.

But then we would be in deflationary spiral. The job market will be so bad you would see north of 25% unemployment. And milk would be $1.5 gallow and gasoline would be $1.5 gallon. Housing market would be complete busted. Stock will tank 80%. The entire leveraged bankind sector would be belly up.

Possilbe, yes. Likely, no. Because government revenue would be busted that it would face hard time to pay for the interests on debts.

The question is, Can FED tolerate deflationary spiral with debts largely purged?

Remember, debts = money.

LOL

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• By the way, if gold dropped below $1000 -天下多蚤- ♀ (408 bytes) () 05/14/2012 postreply 06:22:28