正文
I have never said this is the end of the gold run. I sense this may befor this leg. Were you watching this stuff in the early 1970's like Iwas? Did you see it run to $200 an OZ on the last day of 1974, the lastday Americans couldn't own gold and it fell to $100 or 50%? Did you buyand hold from the last time it hit $800? If you did, you did worse thana stock that lost 50% and paid a 4% dividend for the next 27 years.
Theproblem with deflation is it has to occur after much lending andinflation. Lending is done by sureties called banks. If the bank can'tbe a surety, it cannot lend. See what happens if the financial squeezecontinues to develop? People are going to start trying to sell stuff topeople that don't have any money. You might forget that the havenot owethe haves and the haves are going to realize the havenots cannot payand not lend them any more. It is going to have a double effect in thatit is going to devalue the assets of the haves and in a lot of cases,destroy the value entirely. The haves have money because they hoardedit, not because they kept spending when the picture got bleak like adrunken sailer. Watch this stuff. There are high rollers that will bebroke in a month.
Now you talk about $250 gold. That is 20%above what it peaked at in 1974 and 1/3 what it peaked at in 1980. TheDow was 800 or so when gold hit $800. Gold hasn't kept up with oil,which was $12 a barrel when gold was $250. It hasn't kept up with a lotof things. It is just as vulnerable to a credit crunch as the stockmarket. The point that it appreciated in relative value in thedepression is mainly because the dollar was linked to it and the dollarappreciated 400% against everything. If gold sold for $250 in the late1990's as it apparently did, then the idea that it could go back thereisn't that far fetched. Soybeans sold for $13 a bushell in 1972 andthey are finally back there as well. It would be absurd to say that theCPI or any other inflation measure declined from 1972 wouldn't it? Thenif it is merely inflation that determines these prices, why weresoybeans trading as low as $4 a bushel in 1998? it sure wasn't weakdemand, as there were 3 billion people in 1972 and 6 billion in 1998.
Theproblem with deflation is it has to occur after much lending andinflation. Lending is done by sureties called banks. If the bank can'tbe a surety, it cannot lend. See what happens if the financial squeezecontinues to develop? People are going to start trying to sell stuff topeople that don't have any money. You might forget that the havenot owethe haves and the haves are going to realize the havenots cannot payand not lend them any more. It is going to have a double effect in thatit is going to devalue the assets of the haves and in a lot of cases,destroy the value entirely. The haves have money because they hoardedit, not because they kept spending when the picture got bleak like adrunken sailer. Watch this stuff. There are high rollers that will bebroke in a month.
Now you talk about $250 gold. That is 20%above what it peaked at in 1974 and 1/3 what it peaked at in 1980. TheDow was 800 or so when gold hit $800. Gold hasn't kept up with oil,which was $12 a barrel when gold was $250. It hasn't kept up with a lotof things. It is just as vulnerable to a credit crunch as the stockmarket. The point that it appreciated in relative value in thedepression is mainly because the dollar was linked to it and the dollarappreciated 400% against everything. If gold sold for $250 in the late1990's as it apparently did, then the idea that it could go back thereisn't that far fetched. Soybeans sold for $13 a bushell in 1972 andthey are finally back there as well. It would be absurd to say that theCPI or any other inflation measure declined from 1972 wouldn't it? Thenif it is merely inflation that determines these prices, why weresoybeans trading as low as $4 a bushel in 1998? it sure wasn't weakdemand, as there were 3 billion people in 1972 and 6 billion in 1998.
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