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« BoE Governor warns deflation is now 'possible' | Main | Gold in 2015: The State of the Gold Market »
Monday
Jan122015

Gold v Dollar

Posted on January 10, 2015 by 


The typical sales job of the gold promoters has spend so much energy in selling gold as a hedge against inflation and thus gold will rise with the fall of the dollar, that they have so distorted the role of gold that they are driving potential investors away who look upon the gold crowd as a bunch of idiots wrapped up in a cult. Gold has been holding sideways in dollars as it rises in other currencies. Here is a typical chart they used to sell gold.

Eventually, the mind numbing delusion created by this group of gold promoters masquerading as analysts will break apart at the seams causing their heads to explode. Gold will rise with the dollar in the end-game for it will be seen in each country for what it truly is – the hedge against government NOT inflation. The way these people have hurt so many investors is criminal. If they sell gold, it is a conflict of interest and that prevents them from ever telling the truth and just being impartial. The relationships they have touted are just nonsense. The brainwashed cling to false ideas because they have lost so much they dare not admit a mistake. Such is the variety within human nature. It just is what it is – nothing more.

This does not mean that gold will outpace the dollar. It will lag and at times fall.

Is the bottom really in? Is this rally the real deal or another head fake? Have you plenty of cash to take advantage of the coming bargain prices?

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Reader Comments (6)

Yes ,and of course none of you can see what is right in your face every day ;the manipulation of the price by JP Morgan

January 13, 2015 | Unregistered Commentersilver bug

Interesting but I think I missed your point. I agree that gold marketing is often done badly but most of the marketing is centered around hedging against inflation, which it has actually done fairly well, even at $1200 an ounce. It is still the only currency that did not decline last year.

But the biggest reason to buy gold, is to hedge against anything that causes great fear in world, the greatest of which, sadly comes from government, which I take it, you do not agree with. There are tons of reasons to fear the governments, especially in the land of the free, whose freedoms and liberty have been egregiously exploited.

You know what the reasons are, and most people buying gold know what the reasons are, and in my case. I do not care what the heavily manipulated price is, especially in US dollars, which are great wallpaper.

Anyone in Russia who own gold are hanging on to their wealth and making a profit as well. Same with Euro gold and Jap gold. There is no reason that the US dollar is going up other than it is the least worse choice. It is rising on safe-haven demand, among other reasons, such as the perceived notion that the US economy is recovering or that unemployment is down to 5.6%. If that were true, interest rates would already be up by now.

But the US has five times the money supply that it did prior to 2008 and the national debt and unfunded liabilities are over $100,000,000,000,000, which is mathematically impossible to ever repay. The deficit is 105% of GDP.

By contrast, Russia has debt of merely 10% of its GDP and its currency has been monkey-punched down, mostly because of fear, which was largely a result of fear-mongering and propaganda from the US government and government censored presstitutes.

Fact of the matter is that the US is deathly afraid of losing the reserve currency status, knowing full well that there will come a day of reckoning for having emptied the vaults at Fort Knox over the past 60 years, since anyone has ever even seen all that gold, while China and Russia and many other central banks have been increasing their stocks of gold.

Call it what you will but what I see is a whole lot of fear creeping into the markets, and for good reason... forced government and bank bail-ins, stealth inflation, rapidly declining standard of living, rampant unemployment, ebola, the euro crisis, airliners being shot down over Ukrainia, Putin refusing to kowtow to the US and NATO, the increase of militarized forces, the increase in the militarizing of the police, police killing citizens, the US talking about actually winning a nuclear war with Russia, bla, bla, bla.

Gee! what else could be a possible reason to be fearful? Gold and silver is the strongest and longest lasting currency the world has ever known. When the tipping point comes, no amount of government and Wall Street manipulation will keep the price down.

Market sentiment drives the price and when fear takes over, there is no limit to the heights it could reach. Wheelbarrow loads of $100 bills will not buy even a gram of gold.

And that is because Gold is not an investment, it is insurance against the inevitable breakdown in the global paper monetary system. It is a safe-haven and cannot be printed at will to make the banks rich and enable the governments to spend money like a drunken sailor.

It is the only currency that is honest and does not have an offsetting liability that comes with it. And it is also the only currency that keeps governments honest and keeps them from cooking the books.

It's easy! How much is the budget? How much gold is in the vault? Oops! Sorry! We're short. Maybe China will lease us some of our gold back.

And that's that! Gold and silver is not a stock. It is not an investment to make a profit with, although anyone holding it to the end will make a huge profit. It is currency. It is money. Period!

Gold and Silver Reigns Supreme as Non Inflatable Money.

January 13, 2015 | Unregistered CommenterRonald West

Ronald,

Gold was the go to place when fear approached, but the world has been in a poor state for the last few years and gold has gone down.

Gold going up in Russia only applies to Russians, for Americans it is a different story as the usd has outperformed gold for the last 2 years.

January 14, 2015 | Registered CommenterGold Prices

silver bug,

I'm not saying that there is no manipulation but I am trying to get close to the bottom before investing, as you know I'm of the opinion that this bear market is not over yet.

January 14, 2015 | Registered CommenterGold Prices

You're not listening! I know that you and Silver Bug are smarter than I am but the USD price of gold is irrelevant to me because the USD is doomed. The US dollar is wallpaper and the whole world knows that. I don't care if the USD index goes to 200, it will be short-lived.

I just know that when the global currency collapse comes, I'm going to need some gold to buy food with. What are you going to use for currency when all of the paper currencies are finished? Bitcoin? Paypal? Federal Reserve Notes? Your debit card and Visa card will be useless too.

So when there is no functioning currency, you will need some gold and silver, or you will not be able to trade, unless you have barter-able goods that are useful, like food, guns and ammo, batteries, power generating equipment, electric heaters, solar panels, wiring, short wave radios, horses, cattle, seeds and fertilizer, auto parts and tires, gasoline. Gold however, simplifies transactions and may even save your life.

This doesn't mean that we should not be hopeful. I still believe in using the other half of my income for other investments in case I am completely wrong. All I'm saying is that nobody can go wrong by having some gold and silver to use as currency if all currencies fail because when that happens, nobody will accept paper money.

I also think that Silver Bug is right in the sense that gold and silver may take another dump but who cares? I don't. It's just another buying opportunity. I only buy gold. I am not a trader. And I never sell it.

I hope that I am wrong because the alternative is much worse. If I end up with a bunch of nice, shiny, pretty metal that I don't need, Oh well! I'll make jewelry or something. But somehow, I don't think so.

January 25, 2015 | Unregistered CommenterRonald West

I forgot to mention in response to your rebuttal of my comparison of Russians doing very well with having gold and you said that that only applies to Russians, and that the USD has outperformed gold. Of course, in that sense, you are correct, however, I am Canadian and my gold and silver has outperformed the Canadian dollar, so I wasn't wrong. And it has also outperformed the Euro. And most people in the world are not Americans.

The USD is an anomaly, owing to the fact that it is the reserve currency (for the moment) and that the Fed has abused that privilege so egregiously and has whipped the world into accepting the USD hegemony with it's military might and propaganda. The best it can now offer is 2% on its long-term bonds and is quickly headed to zero.

And as I write this, for the past week, gold has risen in near lock-step as the USD index has risen, and this I attribute to the Fear Factor that is sweeping the world, which you say has passed.

I know there seems to be a lot of complacency with respect to gold, with so many Black Swans in the world, and gold has not responded the way it should but when the appropriate Black Swan lands, I have no doubt that gold will respond appropriately and do its job, as it has done for thousands of years.

The USD may be flying high today but that can change in a heartbeat. Too many are putting their faith in the USD but as soon as they realize that they have been duped, and interest rates are not going up because of... QE4, the trajectory will change for the USD and Gold respectively.

January 25, 2015 | Unregistered CommenterRonald West

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