• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Price of gold declines 30% in 1st half of 2013

ReformCollege

Banned
DP Veteran
Joined
Jul 10, 2012
Messages
4,136
Reaction score
915
Gender
Male
Political Leaning
Slightly Conservative

gavinfielder

DP Veteran
Joined
Sep 24, 2012
Messages
1,748
Reaction score
756
Location
Sacramento, CA, USA
Gender
Male
Political Leaning
Libertarian - Left
It is quite ironic that gold has significantly more market volatility than the US dollar.

I mean really, when's the last time the dollar fell 30% in two quarters? :lol:
 

RabidAlpaca

Engineer
DP Veteran
Joined
Feb 4, 2012
Messages
21,376
Reaction score
27,506
Location
American Refugee in Europe
Gender
Male
Political Leaning
Independent




Yep, you totally proved Austrian economics completely wrong with a single drop in a massive uptrend. It's only up 1,800% in the past 40 years.
 

austrianecon

DP Veteran
Joined
Dec 2, 2012
Messages
7,316
Reaction score
1,339
Gender
Undisclosed
Political Leaning
Libertarian
It is quite ironic that gold has significantly more market volatility than the US dollar.

I mean really, when's the last time the dollar fell 30% in two quarters? :lol:
Two things people have to understand.. Gold ETFs vs Physical Gold. The market is full of ETFs. ETF is paper with the promise of gold backing. So when you have a decline of 30% that's due to ETF shorting gold to cover. JP Morgan has sold 93% of all gold sold from Feb to April.
Jamie Dimon Has Issues (or Meet The Idiot Selling Gold) | Across the Street

So it's not that simple. Something is rotten in Denmark and it's JP Morgan.

USD had a 19% lose against the EURO from Sept 3rd 2003 to Feb 15th 2004 and Sept 2004-December 2004 US dollar lost 15%.. so over 6 quarters US lost 30% against the Euro.
 

Kushinator

I'm not-low all the time
Supporting Member
DP Veteran
Joined
Jan 2, 2006
Messages
20,742
Reaction score
8,148
Location
Venice Beach, FL
Gender
Male
Political Leaning
Independent
Yep, you totally proved Austrian economics completely wrong with a single drop in a massive uptrend. It's only up 1,800% in the past 40 years.
In nominal terms, the price of gold has increased by 927% since 1973 ((1242.4-121)/121). In comparison to the S&P 500; the S&P index has increased by 1468% ((1614.08-102.9)/102.9) in the same time frame. This also ignores dividends! Gold doesn't generate cash flow.
 

specklebang

Discount Philosopher
DP Veteran
Joined
Jan 13, 2012
Messages
11,524
Reaction score
6,769
Location
Las Vegas
Gender
Undisclosed
Political Leaning
Other
Undoubtedly, gold is not the single best investment. But it has its purposes. Like anything else, you must buy at the right time and be patient. But gold (and PMs in general) are portable wealth while stocks are paper wealth.

We all hope the gold never becomes needed as currency - but if it does, then it's good to have. Keeping 5% of your net worth in PMs is a reasonable strategy.
 

head of joaquin

Banned
DP Veteran
Joined
Oct 19, 2012
Messages
12,029
Reaction score
3,530
Gender
Male
Political Leaning
Progressive
Yep, you totally proved Austrian economics completely wrong with a single drop in a massive uptrend. It's only up 1,800% in the past 40 years.
Want to compare gold to the S&P over the past 30 years? Do you really want to be that humiliated?
 

Occam's Razor

Banned
DP Veteran
Joined
Jan 30, 2011
Messages
2,069
Reaction score
1,122
Location
Oregon
Gender
Undisclosed
Political Leaning
Other
Two things people have to understand.. Gold ETFs vs Physical Gold. The market is full of ETFs. ETF is paper with the promise of gold backing. So when you have a decline of 30% that's due to ETF shorting gold to cover. JP Morgan has sold 93% of all gold sold from Feb to April.
Jamie Dimon Has Issues (or Meet The Idiot Selling Gold) | Across the Street

So it's not that simple. Something is rotten in Denmark and it's JP Morgan.

USD had a 19% lose against the EURO from Sept 3rd 2003 to Feb 15th 2004 and Sept 2004-December 2004 US dollar lost 15%.. so over 6 quarters US lost 30% against the Euro.
Ya something's rotten... there are far more ETFs than there is physical gold to cover them. Same with silver. Leave it to the bankers to figure out how to inflate PMs.

Undoubtedly, gold is not the single best investment. But it has its purposes. Like anything else, you must buy at the right time and be patient. But gold (and PMs in general) are portable wealth while stocks are paper wealth.

We all hope the gold never becomes needed as currency - but if it does, then it's good to have. Keeping 5% of your net worth in PMs is a reasonable strategy.
I prefer the terms "real wealth" and "fiat wealth".

Someone else mentioned that gold has lost ground because fears of inflation haven't been realized.... yet.

Quantitative Easing IS inflation, massive inflation. The only reason it hasn't hit us yet is because interest rates are so low. Once interest starts to rise and capital begins to be pulled out of the system, the level of inflation will become painfully clear very quickly.

Many balked when predictions held that gold would reach $2000... true it didn't quite make it, but considering it was $900 when those predictions were made, pretty close. The new projections are $3000-$5000 in ten years. That's some hyper inflation.
 

gavinfielder

DP Veteran
Joined
Sep 24, 2012
Messages
1,748
Reaction score
756
Location
Sacramento, CA, USA
Gender
Male
Political Leaning
Libertarian - Left
Quantitative Easing IS inflation, massive inflation. The only reason it hasn't hit us yet is because interest rates are so low. Once interest starts to rise and capital begins to be pulled out of the system, the level of inflation will become painfully clear very quickly.
What economics are you studying? It sure isn't any school I've ever heard of.
 

specklebang

Discount Philosopher
DP Veteran
Joined
Jan 13, 2012
Messages
11,524
Reaction score
6,769
Location
Las Vegas
Gender
Undisclosed
Political Leaning
Other
Well, I won't make any friends with my POV but here it goes.

At first glance, it would seem obvious that if you print up trillions of dollars that it should cause inflation. But for that to happen, you have to distribute that money around. That has not happened.

Most of that money was shuffled back and forth with a chosen few taking commissions. So yes, billions were "made" but those billions probably reside in the Cayman Islands and serve the purpose of making fabulously wealthy people feel even more fabulous.

In the meantime, wages are getting lower, the real cost of living is rising and robotics make every worker more productive. We manufacture and import plenty of ****. But its a case of fewer people chasing increasing amounts of goods. You need your money just to survive. For all the cries of "class warfare" this President, just like the last one, has made a better world for billionaires. So there is almost no risk of inflation. Since the Fed controls interest rates, and we are so indebted, don't look for interest rates to rise in this decade.

I know, I know. It defies logic. But really, thats the situation. It won't turn around. We'll get by.

So I still am an advocate of owning PMs. They're pretty if nothing else.


Ya something's rotten... there are far more ETFs than there is physical gold to cover them. Same with silver. Leave it to the bankers to figure out how to inflate PMs.



I prefer the terms "real wealth" and "fiat wealth".

Someone else mentioned that gold has lost ground because fears of inflation haven't been realized.... yet.

Quantitative Easing IS inflation, massive inflation. The only reason it hasn't hit us yet is because interest rates are so low. Once interest starts to rise and capital begins to be pulled out of the system, the level of inflation will become painfully clear very quickly.

Many balked when predictions held that gold would reach $2000... true it didn't quite make it, but considering it was $900 when those predictions were made, pretty close. The new projections are $3000-$5000 in ten years. That's some hyper inflation.
 

gavinfielder

DP Veteran
Joined
Sep 24, 2012
Messages
1,748
Reaction score
756
Location
Sacramento, CA, USA
Gender
Male
Political Leaning
Libertarian - Left
Well, I won't make any friends with my POV but here it goes.

At first glance, it would seem obvious that if you print up trillions of dollars that it should cause inflation. But for that to happen, you have to distribute that money around. That has not happened.

Most of that money was shuffled back and forth with a chosen few taking commissions. So yes, billions were "made" but those billions probably reside in the Cayman Islands and serve the purpose of making fabulously wealthy people feel even more fabulous.

In the meantime, wages are getting lower, the real cost of living is rising and robotics make every worker more productive. We manufacture and import plenty of ****. But its a case of fewer people chasing increasing amounts of goods. You need your money just to survive. For all the cries of "class warfare" this President, just like the last one, has made a better world for billionaires. So there is almost no risk of inflation. Since the Fed controls interest rates, and we are so indebted, don't look for interest rates to rise in this decade.

I know, I know. It defies logic. But really, thats the situation. It won't turn around. We'll get by.

So I still am an advocate of owning PMs. They're pretty if nothing else.
I agree with enough of that to say it's absolutely correct.

Of course, that has no bearing on the gold market. Gold can still inflate and deflate all it wants to independent of the dollar. The only people who define general price inflation solely on the value of gold really have no business in economic policy.
 

GottaGo

Rock and a hard place
DP Veteran
Joined
Dec 2, 2012
Messages
5,635
Reaction score
4,910
Location
Miles to go before I sleep
Gender
Undisclosed
Political Leaning
Independent
Well, I won't make any friends with my POV but here it goes.

At first glance, it would seem obvious that if you print up trillions of dollars that it should cause inflation. But for that to happen, you have to distribute that money around. That has not happened.

Most of that money was shuffled back and forth with a chosen few taking commissions. So yes, billions were "made" but those billions probably reside in the Cayman Islands and serve the purpose of making fabulously wealthy people feel even more fabulous.

In the meantime, wages are getting lower, the real cost of living is rising and robotics make every worker more productive. We manufacture and import plenty of ****. But its a case of fewer people chasing increasing amounts of goods. You need your money just to survive. For all the cries of "class warfare" this President, just like the last one, has made a better world for billionaires. So there is almost no risk of inflation. Since the Fed controls interest rates, and we are so indebted, don't look for interest rates to rise in this decade.

I know, I know. It defies logic. But really, thats the situation. It won't turn around. We'll get by.

So I still am an advocate of owning PMs. They're pretty if nothing else.
I agree with you, other than the inflation.

Being that inflation is happening, as evidenced by even just the basic costs of groceries, clothing and fuel. Those that like to grab out the charts and graphs, note, large goods have remained stationary or even dropped in price, because no one's buying them. The cost of basic living has inflated, causing additional ripples across the economy, and as those who live hand-to-mouth well know, the dollar has devalued across the board, causing the effects of the initial inflation to be felt even harder among the lower income groups.
 

imagep

Villiage Idiot
DP Veteran
Joined
May 7, 2010
Messages
24,399
Reaction score
10,426
Location
Upstate SC
Gender
Male
Political Leaning
Independent
It is quite ironic that gold has significantly more market volatility than the US dollar.

I mean really, when's the last time the dollar fell 30% in two quarters? :lol:
Yet all the gold standard nuts will tell you that we should affix the value of the dollar to the value of gold, claiming that doing so would somehow stablize the purchasing power of the dollar. Ha!
 

austrianecon

DP Veteran
Joined
Dec 2, 2012
Messages
7,316
Reaction score
1,339
Gender
Undisclosed
Political Leaning
Libertarian
Yet all the gold standard nuts will tell you that we should affix the value of the dollar to the value of gold, claiming that doing so would somehow stablize the purchasing power of the dollar. Ha!
Wow.. fixing the dollar to gold would require gold not to be privately traded in the form of ETFs. Today, 1oz of gold is traded twice. You have a long position and a short position and you may not even own the physical gold for that trade. So you have trade position in which people own no gold but paper acting as gold. It's why gold is up and down all the time.
 
Last edited:

ReformCollege

Banned
DP Veteran
Joined
Jul 10, 2012
Messages
4,136
Reaction score
915
Gender
Male
Political Leaning
Slightly Conservative
Dow Jones is up more than that during the same time period.
Apples to oranges much? Gold is a commodity and in many ways a currency. The Dow is a collection of stock (ownership) in real companies with cash flow and profit. A better comparison would be comparing gold to the bond market, which it has outperformed over that same time frame.
 

imagep

Villiage Idiot
DP Veteran
Joined
May 7, 2010
Messages
24,399
Reaction score
10,426
Location
Upstate SC
Gender
Male
Political Leaning
Independent
I agree with you, other than the inflation.

Being that inflation is happening, as evidenced by even just the basic costs of groceries, clothing and fuel.
Food yes, but no to clothing and fuel. I sell clothing, and we have actually lowered our prices, as have the manufacturers that we purchase from. the cost of a gallon of gas is cheaper today than it was 5 years ago (seriously, look it up). Other than the stock market and food, I really can't think of much that has significantly increased in price during recent years. I do hear that real estate is going back up though.

I believe that the inflation rate that the guberment presents is very accurate.
 

imagep

Villiage Idiot
DP Veteran
Joined
May 7, 2010
Messages
24,399
Reaction score
10,426
Location
Upstate SC
Gender
Male
Political Leaning
Independent
Apples to oranges much? Gold is a commodity and in many ways a currency. The Dow is a collection of stock (ownership) in real companies with cash flow and profit. A better comparison would be comparing gold to the bond market, which it has outperformed over that same time frame.
Stocks are also commodities in a way (every share of a particular company and issue is identical), and in many ways a currency just the same way that gold is. In reality, I can't pay for my electric bill in either gold or stocks, they have to be converted to cash first. Stocks and gold are both very liquid and easily converted to money.
 

austrianecon

DP Veteran
Joined
Dec 2, 2012
Messages
7,316
Reaction score
1,339
Gender
Undisclosed
Political Leaning
Libertarian
Stocks are also commodities in a way (every share of a particular company and issue is identical), and in many ways a currency just the same way that gold is. In reality, I can't pay for my electric bill in either gold or stocks, they have to be converted to cash first. Stocks and gold are both very liquid and easily converted to money.
Not every share is identical.
 

specklebang

Discount Philosopher
DP Veteran
Joined
Jan 13, 2012
Messages
11,524
Reaction score
6,769
Location
Las Vegas
Gender
Undisclosed
Political Leaning
Other
Food seems to have risen disproportionately but my evidence is purely anecdotal. Sure, the hand-to-mouth lowest income people are more affected than millionaires but for the middle class majority it's just annoying and keeps you from buying other, more frivolous things. So it all averages out and consequently we see low inflation which does not lead to hyperinflation.

(maybe)





I agree with you, other than the inflation.

Being that inflation is happening, as evidenced by even just the basic costs of groceries, clothing and fuel. Those that like to grab out the charts and graphs, note, large goods have remained stationary or even dropped in price, because no one's buying them. The cost of basic living has inflated, causing additional ripples across the economy, and as those who live hand-to-mouth well know, the dollar has devalued across the board, causing the effects of the initial inflation to be felt even harder among the lower income groups.
 

austrianecon

DP Veteran
Joined
Dec 2, 2012
Messages
7,316
Reaction score
1,339
Gender
Undisclosed
Political Leaning
Libertarian
Every share of the same issue is identical.
Again, not true. It's paper maybe the same but stocks issued aren't issued at one time (even in an IPO) rather they do it in parts. The early buyers of a IPO or issue is actually Brokers or the underwriters. Then it's the public. The public didn't get Facebook at $38 a share but rather got it at $40-$45 and when it started to fall, underwriters were picking up the shares sold by the public after the drop after the underwriters dropped the earnings forecast for Facebook.

Every issue and IPO is a pump and dump scheme. Brokers get the profit.
 
Top Bottom